Nexon has proven to be one of the fastest-growing online game companies of the past decade. The Korean company pioneered the microtransactions/free-to-play business model, where users play for free and buy virtual goods with real money. In the past five years, Nexon’s Maplestory game has signed up more than 100 million users, including 7 million in the U.S., and its games are some of the most engaging on the web.
Now the company is setting its sites on social games on Facebook and mobile games on tablets and smartphones as well. It wants to succeed through something that hasn’t really been tried in Facebook games yet: hooking users through engaging game play, rather than via casual “snack”-type games.
In the struggle between hardcore and casual, casual games have won so far on Facebook. Simpler games such as CityVille and FrontierVille have had much better luck reaching audiences. But Daniel Kim, chief executive of Nexon America in Los Angeles, believes social games will continue to evolve; he notes that in early Hollywood, most of the successful movies were Westerns. Only later did the industry evolve other types of films.
Like many other game companies, 16-year-old Nexon faces a tough transition. Maplestory and other Nexon games are hefty online titles that have to be downloaded. By contrast, Facebook games are often light and casual, built with Flash animation and played instantly via web browsers. Even though Nexon is one of the giants of online games, it’s new to social and mobile games.
Kim said in an interview at the Dice Summit video game conference in Las Vegas that Nexon’s focus is on connected games, building online community, and creating competition that drives engagement. Despite the slowdown in game industry growth, Nexon’s formula has kept its rate of growth high, Kim said. Altogether, Nexon is operating more than 30 games as online services across the world. Most of that is on the PC. But Nexon now wants to move on to a variety of platforms.
In an interview with Nexon’s Kim last year, we talked about the dinosaurs of the game industry (console game makers), the mammals (the free-to-play online game companies) the rats (the social game companies on Facebook), and the cockroaches (the mobile game makers). The question is, who among these different rivals is going to inherit the Earth?
Nexon manages to hang on to its players for a long time, with many of them playing for months. A higher percentage of Nexon’s users convert to paid users than is normal. To try to get Facebook players, who often play for just five minutes a day, to switch to longer engagement times is a challenge.
Nexon is working with two outside studios, Antic of Canada and One2Tribe in Poland. The goal is to get Nexon to move as fast as a startup. It aims to get double-digit payment rates, double-digit average revenue per user, double-digit tens of millions of users playing, and double-digit months of engagement. Nexon’s games are played by users for hours per session, compared to a matter of minutes for social games. And Nexon’s numbers of concurrent users, or the number playing at any given time, hit new peaks for Maplestory in December after the company launched a major update to the game.
“When it comes to engagement, I feel Nexon has a 10-year head start,” Kim said. “But we are trying to move into new platforms and to do that via engagement.”
It may be late compared to rivals such as Zynga, but Kim says the market is just getting started.
