Hot on the heels of the Tencent.com news of posting record profits, Nexon America announced yesterday that they’ve also set a few records of their own. Looking at July ’08 vs. ’09 saw a 35 percent increase in revenues.
Leading the revenue surge was Nexon’s now 6 year old (Korean) and 4 year old (North America) free-to-play genre defining Maple Story. This past July saw a record number of more than 70,000 max concurrent users online. Nexon America counts over 6 million registered users, only a small fraction of Maple Story’s 92 million total worldwide players.
To put this into perspective, the NPD Group recently reported a 29 percent drop in video game industry revenues in July ’09, when compared to the year before. So where’s the disconnect? Obviously, the current global economic situation has forced consumers into tightening the belt, and holding off on new hardware and software purchases. When looking at the current situation and instigating the “Some things will have to go,” mentality, surely that gaming subscription might be one of the first things to go. Et viola, enter stage right the appeal of free-to-play gaming.
“The economy has been tough on great deal of the games industry, but we fought hard to retain our customers and to bring in as many new players as possible,” said Min Kim, Nexon America’s vice president of marketing. “We’re heavily investing on all fronts – in our games, our publishing platform, aggressive marketing efforts as well as customer service. The best news for Nexon America is that our success isn’t just reflected in registered users, but in actual, dramatic revenue growth.”
During the month of July, Nexon put the pedal to the metal with marketing efforts including a massive internet wide campaign for their fantasy MMOG, Mabinogi. The company also ran major television and feature film preview advertising campaigns for Maple Story. If that wasn’t enough, Nexon’s popular FPS Combat Arms currently has a major campaign underway.
Coinciding with these advertising blitzes, Nexon delivered major content updates to Mabinogi, MapleStory and Combat Arms, obviously not disappointing newcomers, and keeping long time players interested.
“We are serious about making Nexon the top brand in online gaming, and we are not backing on down our efforts to deliver more content to our customers or aggressively work to attract new players,” said Kim. “We pioneered the free-to-play business model when we brought MapleStory to North America in 2005. With the slew of new games we have planned and the BlockParty initiative, which will bring players together like never before, we will continue to be the leader in this market for years to come.”
So while this question hasn’t really been at the forefront of the battle for a while, I think with Nexon’s numbers, can we officially call this “but can it be profitable?” debate to rest? I think so.