Nexon Co Ltd

TSE:3659

Earnings Call Analysis

Nexon Reports Record Q2, Optimistic Q3 Outlook

In Q2, Nexon saw record-setting revenue and operating income with 30% and 64% year-over-year growth, driven mainly by the success of Dungeon&Fighter Mobile in China. The First Descendant also performed strongly, particularly in North America and on consoles. For Q3, Nexon projects revenue growth of 15% to 26%, supported by its key franchises. Despite a couple of operational setbacks in China, the company expects Dungeon&Fighter to continue its strong performance. Additionally, plans to repurchase shares worth JPY 70 billion by 2027 were confirmed.

Record-Setting Second Quarter Performance

Nexon achieved record high Q2 revenue and operating income, with revenues up 30% and operating income climbing 64% year-over-year. This impressive performance was primarily driven by the outstanding success of Dungeon&Fighter Mobile in China, which launched on May 21 and maintained the top position for over 11 weeks. The company's success was also bolstered by the launch of The First Descendant, a new IP that quickly topped global grossing rankings on Steam. These achievements underline the efficacy of Nexon's IP growth initiative.

Strong Revenue Composition

Nexon's three largest franchises—Dungeon&Fighter, MapleStory, and FC—in aggregate experienced a robust year-over-year growth of 57%. Specifically, Dungeon&Fighter's revenues more than doubled due to the successful mobile launch in China, which revitalized interest among dormant PC players. MapleStory's revenue grew by 9% as well, benefiting from improved live operations and expansion into new regions and formats.

Future Outlook and Strategies

For Q3, Nexon expects group revenues to range between JPY 137.8 billion and JPY 152 billion, marking a 15% to 26% increase year-over-year on an as-reported basis. The company expects contributions from Dungeon&Fighter Mobile and The First Descendant to partially offset anticipated revenue decreases from MapleStory and PC Dungeon&Fighter. Overall, the combined revenues of the three largest franchises are forecasted to rise by 17% to 30% year-over-year.

Operational Expectations and Challenges

While revenue growth is anticipated, Nexon also expects increased performance-based bonuses and higher marketing expenses related to promotions for new titles and platform fees. For Q3, operating income is projected to be between JPY 46 billion, representing a 1% decrease to a 24% increase year-over-year. Net income for Q3 is expected to range from JPY 334 million to JPY 43 billion.

Strategic Initiatives and Capital Allocation

Nexon continues to focus on leveraging its established IP to drive growth, exemplified by planned updates and expansions for Dungeon&Fighter in China, aiming to improve the in-game economy and content. Additionally, the company announced a JPY 30 billion share repurchase executed between May and July 2023. A further JPY 70 billion in share repurchases is planned by February 2027, contingent on investment opportunities and market conditions.

Long-Term Vision

Nexon continues to expand its portfolio with new titles like ARC Raiders and THE FINALS, to be published in collaboration with Tencent for the Chinese market. The company’s IP growth initiative aims to boost revenue by leveraging current franchises while also creating new, sustainable IPs. With a commitment to maintaining high-quality content and stable service, Nexon is positioned to continue its strong performance well into the future.

Earnings Call Transcript 2024-Q2

[Junghun Lee, executive]

Thank you, Kawai-san, and good afternoon, everyone. I hope you had a chance to leave you the quarterly investor letter we posted earlier today. Today, I will start with a bit of context on Nexon's performance in the second quarter and the start of Q3. Uemura-san will follow with some financial highlights. Then we will devote the majority of our call to answering your questions.

We delivered record high Q2 revenue and operating income, up 30% and 64% year-over-year, respectively. Much of this success was contributed by Dungeon&Fighter Mobile in China, which launched on May 21 and sustained the top position for more than 11 weeks, making it one of the most successful mobile release ever in China.

This was quickly followed on July 2 by the breakaway success of a brand-new Nexon IP. The First Descendant, a release that shot to the top of the global grossing rankings on Steam in a week following the launch. Notably, the highest number of players are in North America and the console players make up approximately 60% of the mix, demonstrating wider support for The First Descendant across all platforms and markets worldwide.

The combined success of extension on the established IP, Dungeon&Fighter, and the breakthrough the introduction of our brand new IP, The First Descendant, gives us clear proof points and additional confidence in Nexon's IP growth initiative.

Our IP growth initiative is a two-part strategy. The primary component is leveraging the power of our established franchises to snowball growth with new experience on new platforms and in new markets. The success of Dungeon&Fighter Mobile in China is a proper proof point in this thesis. This will be followed by The First Berserker: Khazan, which is designed to introduce global audience to our Dungeon&Fighter IP. And we are currently developing multiple extensions on our MapleStory IP designed to energize the massive base of existing players and attract newcomers.

By leveraging the enormous scale of our player base and synergies within our studios and Live Operations teams we hope to unlock growth in revenue and operating income from our biggest IP.

On other elements of our IP growth initiative is our investments in all-new titles with the potential to expand our presence in global markets and become pillars in our IP portfolio. In addition to recent success of The first Descendant. This includes ARC Raiders, a promising producing new PvPvE extraction shooter in development and Embark Studios.

Today, Nexon and Embark Studios announced our partnership with Tencent to publish 2 Embark titles, THE FINALS and ARC Raiders, customized by Tencent to appear to the unique taste and preference of players in China.

Now I will hand the call over to Uemura-san to discuss our financial results and outlook in more detail.

[Shiro Uemura, executive]

In Q2, Nexon Group's revenue exceeded our outlook, driven by the strong performance of Dungeon&Fighter Mobile, which launched in China on May 21. Our 3 biggest franchises, Dungeon&Fighter, MapleStory and FC in aggregate delivered strong year-over-year growth of 57%.

Extending Dungeon&Fighter IP to mobile platforms and markets in China succeeded in acquiring new players and energizing strong interest from dormant players of the PC version. As a result, Dungeon&Fighter's franchise revenues more than doubled year-over-year.

For MapleStory, our efforts of improving live operations in existing games and extending its IP to new regions and new formats resulted in the growth of MapleStory IP. The franchise revenue grew 9% year-over-year in Q2.

Both FC Online and FC MOBILE exceeded our expectations. As expected, FC Online revenue was down versus a year ago quarter, which was a challenging comparison.

Operating income was above our expectations, driven by significant revenue outperformance despite higher-than-expected performance-based bonuses for contributions to great performances.

Net income exceeded our outlook as well, primarily due to operating income, outperformance and an FX gain of JPY 8.2 billion, primarily on cash deposits. As a result, revenue, operating income and net income all achieved record-breaking Q2 results.

Moving on to our third quarter outlook. We expect our group revenues to be in the range of JPY 137.8 billion to JPY 152 billion, representing a 15% to 26% increase on an as-reported basis or 8% to 19% increase on a constant-currency basis year-over-year. We expect contributions from Dungeon&Fighter Mobile and The First Descendant to be partially offset by revenue decreases from MapleStory and the PC Dungeon&Fighter.

We expect the combined revenues of our 3 biggest franchises to increase by 17% to 30% year-over-year.

We expect overall Dungeon&Fighter franchise revenues to more than double year-over-year, driven by a significant contribution from Dungeon&Fighter Mobile.

For the PC version of Dungeon&Fighter in China, we will continue to focus on improving the in-game economy and preparing appealing content updates. We expect Q2 revenue to grow sequentially and the year-over-year rate of decline to improve.

For MapleStory franchise, we expect its revenue to decrease year-on-year due to a challenging comparison with the year-ago quarter when the franchise achieved record high quarterly revenue, driven by the transformational PC version update in Korea and the launch of mobile version in China.

For FC franchise revenues are expected to decrease slightly year-on-year due to a tough comparison to record set in Q3 2023.

The First Descendant got off to a good start since its launch on July 2. While we expect the game to generate significant bookings in Q3, our revenue guidance reflects the expected deferral of slightly over 50% of its bookings.

We expect Q3 operating income to be in the range of JPY 46 billion, 1% decrease to 24% increase on as-reported basis or 10% decrease to 12% increase on a constant-currency basis year-on-year.

We anticipate increased performance-based bonuses for the contributions to great performances. We also expect increased marketing expenses primarily associated with the promotions for new titles, including The First Descendant, increased platform fees related to sales on Steam as well as higher cloud service costs and fees to creators in MapleStory world.

Accordingly, we expect Q3 net income to be in the range of 334 million to JPY 43 billion, 2% decrease to 22% increase on as-reported basis or 13% decrease to 9% increase on a constant currency basis year-on-year.

Finally, I'd like to provide an update on our capital allocation. We executed JPY 30 billion share repurchase in the market during the period of May 15 through July 19. The remaining JPY 70 billion worth of shares are expected to be repurchased by February 2027 by considering factors, including investment opportunities, financial conditions and the market environment.

I'll now turn the call over to Junghun.

[Junghun Lee, executive]

Thanks, Uemura-san. To summarize it, Nexon delivered a record-setting Q2 results and made a very strong start to the current quarter. We are particularly pleased with the launch of 2 new games, one on expectation on one of our biggest franchises, the second, on all new IP with potential to become a long-term contributor.

In addition to the immediate impact on revenue and operating profit, we think this speaks well of our IP growth initiative, a blueprint for leveraging our well-established IP and creating all new IP with potential to become new pillars. Finally, I want to highlight Nexon's plan to host out 2-hours Capital Market Briefing in Tokyo on September 3. The live event in Tokyo will be webcast and will include our financial objectives and shareholder return policy, combined with demos and details on our product plans. Details are posted to our IR website. We look forward to sharing our plans and to conversation with investors at this event. Operator, we are ready to take questions.

[Takanori Kawai, executive]

Thank you. Next, we would like to open up the lines to live Q&A. Q&A session will be conducted with Japanese English or English-Japanese consecutive interpretation. Please be noted that interpretation will come between your questions and our answers. Please hold for interpretation before you hear our answers. Our answers will also be followed by interpretation. So please hold until the interpretation finishes before moving on to the next question. For those of you who have more than one question, we will take your questions one by one. Now we'd be happy to take your questions.

[Operator]

[Operator Instructions] [Interpreted] We will begin taking your questions. The first question is from Mr. Seyon Park of Morgan Stanley.

[Seyon Park, analyst]

[Interpreted] I have two questions. First of all, with regards to Dungeon&Fighter Mobile, obviously, you've stated a very strong start for the first 2.5 months. I did read that. In your third quarter guidance, you are reflecting some normalization, and so I guess, does that imply that you are expecting the current daily gross things to come off from current levels? Or are you already kind of indicating that the current levels are -- which does seem to be a little bit below where it was for the first month, the current levels can be sustained? Ultimately, I think it'd be great to get a sense of how the management team feels about the outlook, the longer-term outlook of this game, whether this in your opinion has potential to be a multiyear franchise? That's my first question.

My second question is relating to The First Descendant. Obviously, a very good start. But over the past month, we have seen traffic on Steam come down maybe by about half or so from the first launch, and I just wanted to understand whether this is a natural cycle where those who have started the game and the noncore users are turning out or whether this kind of is resembling the path that we saw with THE FINALS where with each month, we saw a continued decline in traffic. I know it's still very early days, but your assessment of the situation would be most welcome.

[Junghun Lee, executive]

[Interpreted] Thank you very much for your questions, Seyon. I would like to answer the second part of your question, which is about The First Descendant.

So at first, we did see some churn from the casual users. However, if we look at the core user base, the metrics are still standing very solid.

So right now, more than 60% of our user base is coming from console, and that is why if you look at the, the actual number is actually much larger than the Steam traffic.

Also, when we look at the user base and all of our other metrics, the Western and European users are taking up more than which is really proving the global popularity of this title.

So personally, I believe that The First Descendant has a potential to maintain this great performance and also hold the potential to expand as a great IP franchise, and there are some reasons for that.

So as you know, The First Descendant is a shooter genre game. So if you look at the basic gameplay of the looter shooter genre, it has a lot to do with the RPG elements.

So when we look at the development team of The First Descendant, it really comprises, it is comprised of a lot of RPG genre veterans with more than 20 years of experience. And this is why I feel very confident The First Descendant will be able to sustain its service with many content going forward and for a longer time.

Adding on to that, because of the nature of game and nature of this genre, the core user base of this genre is very solid. Therefore, if we do succeed in supplying stable service, then I believe that The First Descendant will perform well in the longer term as well.

Now I'll move on and answer your question on the Dungeon&Fighter. It is definitely a title, which has garnered an explosive response from the user base after lunch.

With the launch of the Dungeon&Fighter Mobile in China, we were able to confirm how much love and interest and attention this Dungeon&Fighter IP is garnering in China.

Since this is such a long-waited game, we believe that there really has been some explosive growth in terms of numbers right after the launch. And even right now, the retention and satisfaction among core users are being maintained stably.

So as I have mentioned before, a couple of times already, for Dungeon&Fighter Mobile, we already have abundant volume of content in place, and also our experience of servicing this game in South Korea first helps us a lot in terms of accumulating expertise and know-how to operate our live service in China. This is why I believe that Dungeon&Fighter Mobile will be able to continue its stable service for time.

And also, Dungeon&Fighter is definitely an IP that is important, not only for Nexon but for Tencent as well. With the long-standing and a very powerful partnership with Tencent and under the collaboration with the Tencent team, we are working to continue to deliver high-quality content that can help keep players excited and engaged for the long term, and we are continuously making efforts in that end with the Tencent team. That's all for my answer. Thank you.

[Operator]

[Interpreted] Next question is Bokyung Suh from Bernstein.

[Bokyung Suh, analyst]

[Interpreted] So I'm Bokyung Suh from Bernstein. My question is not about Dungeon&Fighter, but about even longer-term IP strategy that you mentioned last time. So as of today, since the group level operating profit dependency to the Dungeon&Fighter IP it seems like more than half, which may create some concerns for especially 3- to 5-year long-term investors. So my question is, what do you plan in your mind, especially the non-D&F IP profit contribution and regional breakdown in long term such as in 2027 or 2028, and how you plan to achieve it?

[Junghun Lee, executive]

[Interpreted] Sure. I will be able to answer that question from my end. So the bottom line is that based on the assumption of in mind. We have a long-term -- mid- to long-term strategy to make sure that we have a sustainable level or lower level of revenue contribution from non-D&F titles and IPs.

And also just as a teaser here, we plan to share much more details during our capital markets that is slated for early September. So we would really like to have your attention and support for the events.

So if I were to give you just a brief peek into the strategy here, we have this IP growth initiative in place for our strategy, and it mainly has two parts. Basically, it is about utilizing our established and all new IPs and work on the vertical and horizontal expansions and growth.

So I would like to go over the vertical strategy first, vertical expansion strategy first very briefly. So basically, it is about utilizing existing infrastructure and existing so that we can expand those existing IPs into new games in a way that limits cost and risk and at the same time, take advantage of more opportunities of those games.

So already, this strategy is already in place in our franchises. If you look at the example of our Dungeon&Fighter Mobile launch in China, it has been the expansion of this IP to new platform new market and with new content.

Also, when it comes to the Dungeon&Fighter IP, we are also working on the third vertical Kansan, which is a game that we are focusing to introduce this Dungeon&Fighter IP to global players. We are currently producing the game on console, and we'll be able to provide further information in the near future.

Sorry, one question there. It is not only going to be on console, but we are also working on the PC version, too.

Also, when it comes to the MapleStory IP, as you know, we have MapleStory world and also MapleStory N, which has recently completed testing. As you can see from these examples, we are also pursuing a diversification of our portfolio of new titles for this MapleStory IP.

When it comes to this vertical expansion, it is not only about releasing new titles based on established IPs as I've mentioned, and there is another very important factor here, which is hyper-localization.

As you might have seen from our performance material this time, outside South Korea for MapleStory, we were able to record double-digit growth in all regions.

So when it comes to our strategic and core IPs, we thought that we would like to invest more in terms of investment and support for overseas fields, and we thought the support and investments that we would like to put in those titles could be equivalent to how we would invest in new title releases. So that has been the core direction that we have pursued internally in terms of localization. And this is the concept that we call hyper localization internally. So we have picked MapleStory as the exemplary case for this strategy. And I believe that this has translated into a very substantial performance as you have seen this quarter.

Secondly, I would like to talk a little bit about our horizontal expansion strategy. So simply put, it is about making the second or third next Dungeon&Fighter or MapleStory or other major IP franchises so that we can have more IP franchises in place.

So The First Descendant, which was released in July would be a great example case for this. And also from Embark Studio, our creators is being developed for both PC and console in order to appeal better for our global audience. I believe these two would be a great example of cases for this strategy.

Just as a reference and adding on to this, I believe this has been announced a couple hours a few hours before, but Nexon and Embark Studio has signed a contract with Tencent as a partnership contract. So that the first, THE FINALS and our creators can be localized and appealed to the local audience in China. That's all for my answer. Thank you.

[Operator]

[Interpreted] The next question is from Yijia Zhai-san of UBS Securities, please.

[Yijia Zhai, analyst]

[Interpreted] I have three questions altogether. The first question is on China Dungeon&Fighter Mobile. I understand that about a month after its launch, an update has been conducted. And as compared to your Korean version, I guess the timing at which you provide the update was very fast. So I want to know whether in China, the players have consumed the content faster. Is that the reason of this early update? And also, I understand that you mentioned somewhere that you already have more than 2 years' worth of content for this title. But given the speed at which the content is being consumed by the players in China, don't you think that in 6 months' time, you will no longer have the contents that are newly available to the players? And if so, I want to know the sustainability of this title as well as what will be the speed at which you will be developing new contents going forward.

And regarding your PC version of Dungeon&Fighter, this has been played by the users for more than 10 years. And right now, when you look at the mobile version of Dungeon&Fighter, it seems that you are seeing normalization. So I want to know whether there is any difference in the behavior of the players between PC and mobile. And this is the end of my first question.

[Junghun Lee, executive]

[Interpreted] I'll be able to answer your question. So I believe your question was about the consumption speed of Dungeon&Fighter Mobile content.

Since this is a title that has been developed under our collaboration with the Tencent team for a very long time, we believe that the current content consumption speed is within our expectation range by both Nexon and Tencent teams.

For the future, including in August and in September and for even shorter period, we are planning a lot of fun and major updates, and we are executing on those plans without making any changes. So I believe that in the second half of this year, we will be able to very fun content going forward continuously.

And very thankfully, Dungeon & Fighter Mobile is now being enjoyed by more -- by a lot of players, that being around tens and millions of players. So because of this large user base, if we compare this version with the PC version, we were able to see that our user base are a little bit more casual and more diversified when compared to the PC version.

So up to this point, this game has being supplied and provided based on a very long-term partnership with Tencent and our collaborative effort. So within this expected -- within this range of -- our expectations, sorry, we will be able to continue our live service and supply content in consideration of how our users play this game and enjoy this game without much issues. So going forward, we'll continue to provide stable service, and that will be all for my answer.

[Yijia Zhai, analyst]

[Interpreted] The second question, which is on The First Descendant. You mentioned that more than 60% of the players were in the west. And if possible, I would like to know some breakdown of the 40% by region. And another related question is, this title has been developed in Korean studio, and it was very popular in Western countries. I want to know whether the success of this title is somehow related to the relationship that you have with Embark, which is to say, for example, you might have learned about the western players behavior from Embark. And in that perspective, you were able to [indiscernible] the positive synergy impact with Embark.

And also regarding the user rating on Steam, this title is not rated that highly. And also, we are seeing a decrease in the concurrent user number. So as compared to other titles that has longevity of more 10 years, it seems that looking at different titles that have been looked in the recent years, you seem to have this tendency of dipping the number of the users all of a sudden. And I want to know why that is happening as compared to the long-life games that you have been providing so far?

And another part of the question is related to the deferred revenue. And I want to know how you plan to account for the deferred revenue going forward? Are you going to recognize the deferred revenue 50% that you the remaining 50% in Q3 or you have a longer time horizon? For example, you plan to recognize the revenue in the next 6 months or so or you might have a longer perspective. So can you tell me how you plan to account the deferred revenue?

[Junghun Lee, executive]

[Interpreted] So I'll be asking, we Uemura-san to give answers for the deferred revenue, and I will be able to answer the rest of your questions.

[indiscernible] to the traffic numbers, as I have shared earlier, based on the indices we are seeing right now, we believe that our core user base is in a stable position. And if you look at the PC and console numbers, they also look very solid at the moment.

Also for remaining 40% of the user base and their regional breakdown, even though we are unable to detailed numbers here, we are seeing many players from Asia and South American regions as well. And also, I believe that your question was also regarding the exchange or communication exchange between the mar team and The First Descendant team.

Within [indiscernible] Group, all the game directors, those who can produce games, including Embark and all the other global entities, they get together on a regular basis casualty and in a very shared their know-hows regarding service and game developments in a very comfortable setting. And also, these kinds of exchanges of game developers from different culture and different background is one of the key strategies that Nexon group is pursuing. So this is also a highly important factor for the company as well as an intended direction that we pursue.

Based on this kind of direction, including myself, the Nexon Group's leadership is also looking at a different at the same time. So instead of only focusing on a special region and the preference or episodes of the user base within that region, we would like to focus more on what our development teams are good at. So instead of focusing on merely the strategic condition, including the market condition and so on, we constantly would like to focus on the games and genres that we can excel -- center our games and designs around those. We believe and we are very confident that this will be the way to maximize our chance of, and I believe The First Descendant was also able to see such a success because we have focused on the core the stronger of looter shooter game.

[Shiro Uemura, executive]

[Interpreted] And so regarding your question on deferred revenue, of course, when items are being sold, we will post revenue. So accounting-wise, we try to categorize by item and defer some portion of the revenue. And as far as this title is concerned, we defer more than 50% of the revenue, and therefore, the actual revenue is higher than being deferred. And the longest time line that we have on mind regarding the deferment period is 18 months.

[Yijia Zhai, analyst]

[Interpreted] My last question is on China Dungeon&Fighter PC. So on a constant currency basis, there will be a decline year-on-year. And when you look at guidance for Q3, it seems that it is about the same as Q2. But regarding the comp that you have to look at for Q3, the number for the previous Q3 is not low at all. So given the fact that Y-o-Y declined on a year-on-year basis is being reduced. Is it correct to understand that you are on your rate recovery? And if so, I want to know what kind of time line you have on your mind regarding full recovery?

[Junghun Lee, executive]

[Interpreted] So regarding the recovery, I have mentioned this in the previous earnings call that we need to improve the in-game economy and which means that we have to recover the value of both. Regarding live operation, there are different KPIs that we have to look at. So gold is not the only parameter we have to go, but we need to factor in other KPIs as well. And if we only focus on gold, there might be a possibility of reducing the incentives players. And so right now, we are throttling the supply of gold and aim at striking the right balance of the game itself and the game itself is heading towards stabilization.

As mentioned in [indiscernible] earnings call, we will use a few quarters to attain stability.

[Operator]

[Interpreted] Next question is from David Gibson of MST Financial Services.

[David Gibson, analyst]

I just want to ask about D&F mobile China for the month of July, in particular. It appears you had a few server issues with access for consumers. You and growth vitality system, which ultimately added consequences and actually was suspended. You've apologize to consumers for errors you've given for coin. I'm just wondering whether all of that actually impacted the revenue run rate in July for D&F Mobile in China. In fact, was July revenues down versus June, I presume? And how did those things impact the number of core users?

[Junghun Lee, executive]

[Interpreted] First of all, I would like to start by saying thank you for your interest in the situation and Dungeon&Fighter Mobile. So first, I would like to say that it will be difficult for us to share the details behind the revenue decline in July when compared to June.

I believe that you are also aware of the details of incident in this issue. But under the close cooperation with the Tencent team, I believe that this incident actually has proven the potential of how we will be able to lead a stable live operation collaboration with the Tencent team.

Nexon is a team which has continued its live service for around 30 years now. And we believe that this incident has been one of those cases that could happen during this live service cycle. So nonetheless, our team has responded to this issue very quickly and with all of our hearts, so we believe that we will be -- sorry, we are seeing a stable trend in the user sentiment and user numbers as well.

So I would like to take this opportunity to extend our apologies for failing to provide stable service and content even though we had to do so. Going forward, we will do our best to secure and make sure that we have a great game quality and secure great user satisfaction for this game. Thank you very much.

[David Gibson, analyst]

Can you just clarify perhaps then what you've assumed for third quarter guidance to this gain? Are you assuming run rate similar to what you achieved in July? Or you're expecting a recovery. [Foreign Language]

[Shiro Uemura, executive]

[Interpreted] Well, thank you. As for the outlook for Q3, what we just announced or disclosed today, and we cannot comment on the specific numbers, but in comparison to the initial trend that we have seen, we expect some normalization. And as Junghun said earlier that in the case of mobile game, there are a lot of casual players. And so to some extent, we expect some normalization. But as long as we compare the content and also provide a regular update, we believe that we should be able to maintain this momentum and we endeavor to do so. Thank you.

[Operator]

[Operator Instructions] This concludes the question-and-answer session. Mr. Kawai, I would like to hand over to you any additional or closing remarks.

[Takanori Kawai, executive]

Thank you. If there are no further questions, I would like to take this opportunity to thank you for your participation in this call. Please feel free to contact the Nexon Investor Relations at [e-mail] should you have any further questions. We appreciate your interest in Nexon and look forward to meeting with you whether it is here in Tokyo or in your corner of the world.

[Operator]

That brings us to the end of the meeting. Thank you so much for your participation.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]