Japanese game giant Nexon plans western expansion

Japanese game giant Nexon plans western expansion

Japanese game giant Nexon plans western expansion

A screenshot of ARC Raiders, a video game developed by Embark Studios, in this undated handout obtained by Reuters on June 3, 2022. ARC Raiders ? Embark Studios/Handout via REUTERS THIS IMAGE IS PROVIDED BY A THIRD PARTY. NO RESALE. NO ARCHIVES.

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TOKYO/LOS ANGELES, June 13 (Reuters) – The Japanese creator of one of the longest-running online role-playing titles, whose most popular video game has attracted nearly a billion registered users, is gearing up for global expansion and setting its sights on the West.

Nexon Co Ltd (3659.T) – little known outside of Asia – is one of the world’s 10 largest video game companies by market capitalization; its $22 billion valuation exceeds that of Take-Two Interactive, the company behind “Grand Theft Auto” or Roblox.

Last year it completed the acquisition of Stockholm-based Embark Studios, whose founder led the development of the successful “Battlefield” franchise. In 2022, it invested $400 million for a minority stake in AGBO, the independent studio founded by Anthony and Joe Russo, the creative duo that directed Marvel’s “Avengers: Endgame” and “Avengers: Infinity War.”

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“The idea with that is to combine what we’re really good at — making a virtual world last and growing forever — with what they’re really good at,” Nexon’s chief executive, Owen Mahoney, told Reuters.

Nexon has partnered with AGBO to explore ways to expand its game franchises into film or television and to develop virtual worlds or video games inspired by AGBO’s films.

“Our vision, which aligns closely with Nexon’s, recognizes that the public has come to expect a real immersion into the IP they care about most,” said AGBO CEO Jason Bergsman.

The two companies are in talks about adapting Nexon franchises such as “MapleStory” and “Dungeon and Fighter”, which have rich knowledge and passionate fans. These talks are still in the preliminary stages, warns a source with direct knowledge of the situation.

They also discuss a game or virtual world inspired by ‘Battle of the Planets’, an iconic 1970s Japanese anime show that AGBO is developing as a feature film.

Mahoney hopes to use Nexon’s experience in serving “live games” — updating titles while they’re running — to launch big budget titles with a Western sensibility, such as Embark Studios’ free-to-play shooting game “ARC Raiders.” .

Embark founder Patrick Soderlund once ran Dice, the company that developed the “Battlefield” franchise and was acquired by Electronic Arts (EA.O) when Mahoney was its head of mergers and acquisitions.

VIRTUAL WORLD PIONEERING

Nexon has diligently avoided the “metaverse” frenzy that has gripped tech giants Microsoft and Facebook.

“Nobody can define it and most importantly they can’t define why it’s so damn awesome,” Mahoney said. “It’s a big nothing citizen.”

Nexon was an early adopter of features that have become commonplace in the industry, including in-game virtual currencies and the free-to-play business model.

These features were rolled out in games like Nexon’s “KartRider” racing game, which has been running for nearly two decades — one of what the company calls its “forever franchises.”

Its most popular franchise, the arcade-style fighting game “Dungeon and Fighter,” has made more than $20 billion since 2005 — more than the combined box office receipts of the “Star Wars” or “Harry Potter” movie franchises.

A big new challenge as part of Nexon’s drive to get more out of higher budget western games.

“Nexon doesn’t have much experience exploiting photo-realistic games for hardcore gamers,” Citigroup analysts wrote in March, beginning to rate the stock as “neutral.”

Nexon wants to control the costs of developing titles at a time when budgets exceed $100 million. For example, it uses machine learning technology to animate certain character actions instead of relying on employees.

“I don’t really care what happens in the first or two quarters,” Mahoney said. “What matters to me is what happens from year two to year 20.”

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Reporting by Sam Nussey in Tokyo and Dawn Chmielewski in Los Angeles; Editing by Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.