Asian online games publisher Nexon set for IPO
By now, most folks have heard of Zynga Inc., a social gaming company whose pending initial public offering has riveted the technology and entertainment world for much of this year.
But few know anything about Nexon Corp., a 17-year-old Asian online games publisher that’s set to pull the trigger on its own IPO on Dec. 14. Nexon, founded in Seoul, is poised to raise $1.2 billion. That would value the company at roughly $7.2 billion, rivaling what Zynga is said to be worth.
Those previously unaware of Nexon can be forgiven. The company’s games are predominantly played in South Korea, Japan and China, although it has a small but growing U.S. audience that’s served by Nexon’s division in El Segundo.
Moreover, Nexon’s IPO will be on the Tokyo Stock Exchange, whereas Zynga’s will be on the Nasdaq Stock Market. More than 100 million people play Nexon’s games, 8 million of whom are in the U.S., according to Nexon.
Like Zynga, Nexon offers its games for free. Both companies make money by selling virtual items that players can use in their games.
Among Nexon’s bestsellers: A $25 wedding package in which two players’ game avatars can marry in a game called Maple Story. Last year, Nexon sold 26,982 weddings in North America, generating a tidy $674,550.
Nexon’s ingenuity is also illustrated in its related offering — virtual divorces, which can be purchased only by redeeming points accumulated from playing the game (not cash). This is also a hit with players. About 75% of those who hitch up in Maple Story end up divorcing.
The company, whose U.S. division is headed by Daniel Kim, operates very much like a traditional retailer, but for virtual items. The trick has been offering goods that go together.
Last year, Nexon sold 96,300 virtual pets, such as the corgi puppy, which goes for $4.90. But it sold five times the volume, or about half a million items, in pet accessories.
