Interview: Nexon Announces New Western Initiatives, 2010 Profit Leap

Gamasutra talks to Nexon as Maple Story expansion drives the company's success in North America, and it signs two new games from Western-headquarted studios, including a social network game.
Maple Story expansion is driving Nexon's success in North America as it signs two new games from Western-headquarted studios, one of which will mark its first move into the social networking space. According to the company, revenues for the fourth quarter of 2010 leapt 42 percent year-on-year -- including a 60 percent increase for December alone -- thanks in large part to an expansion for its popular Maple Story MMO, which drove concurrent players to an all-time high in North America of 136,000. The South Korean-headquartered company operates Combat Arms, MapleStory, Vindictus, Dungeon Fighter Online, Mabinogi and PopTag! in the North American market out of its Los Angeles office. Its products are all free-to-play with microtransaction support. "It was a tremendous fourth quarter and year for Nexon and MapleStory's Big Bang [expansion] had a lot to do with it," said Daniel Kim, Nexon America's CEO, in a statement. "Nexon has perfected a formula for gameplay with a business model that attracts players and keeps them loyal." While the company plans to launch the Korean-developed and already announced MMO Dragon Nest, which has been released in South Korea this year, it has also signed two new as-yet unannounced games spawned from its Nexon iNitiative. This is a scheme in which the publisher solicited game designs from independent studios and funded the winners -- with $1 million at stake. In a new interview, Won Il Sue, Nexon America's vice president of business development told Gamasutra that the company has signed two games and already exceeded the initial $1 million investment in the two titles it has signed. The two studios which landed deals with the publisher are Canadian studio Antic Entertainment and Poland's One2Tribe. According to Sue, studios in "about 25" countries entered the competition. "We got over 100 submissions from pretty much all over the world. We picked these two companies because they had something we really liked." The two titles, which are "primarily" targeted to the North American market, will fit in with the company's existing free-to-play business model -- though one title will be for social networking services like Facebook rather than existing as a stand-alone game. Nexon has yet to enter the social gaming market in North America. "I think a lot of international companies really haven't dealt with the social networking game crowd, and we really want to be in that market," Sue said. "That was a strong purpose of the Nexon iNitiative." Mike Crouch, Nexon America's director of public relations, copying currently successful social games is not Nexon's plan. "We're looking at the social game market but we're not going to go into it hoping to do what's been done before." However, the developer is planning to bring its success from client-based games over to social networks, hoping to maintain average revenues and play times that exceed the social gaming standard. "When we decide to move into it we expect and our hope is that we will be able to bring that level of success in the social gaming space as well." Crouch said. "We are trying to expand into different types of games," he added. "We're going to go into social game and try to bring a lot of the knowhow we have in terms of being able to monetize our users better and make the content a lot more compelling." And, of course, another purpose is for the Asian company to dive into content both by and for Western audiences. "One of the reasons that we started [the iNitiative], is that even with all of the success that we have, there's a lot of content that's more suitable for the Western market... instead of bringing over Korean products, actually designing Western games so that the North American market is the primary market." While the company initially pledeged $1 million for the two games, "when we started working with these guys we realized their projects would require more than this so we are going to spend much more than we originally planned to," said Sue. One2Tribe has most notably created a browser-based game based on Polish hit novel and PC IP The Witcher, while Antic was founded by veterans of EA's DICE studio, which used to operate a studio in Canada. According to Sue, while it may be "unusual" to tap a Polish studio for the North American market, everything One2Tribe submitted was exceptional, and "since they've done online games before, and RPGs, we knew these guys really knew their games. It wasn't a very difficult decision to work with these guys." Meanwhile, Nexon engaged in "a lot of co-development" with Antic after reviewing its proposal, Sue said. "From the first submission, the end results will be very different." However, the studio's stable of veteran developers made them attractive to Nexon. In fact, Sue said that since "other companies had not been focused on reaching out to smaller developers," the initiative has been unexpectedly fruitful, and "because of the success that we've had, it's definitely not out of the question" that Nexon will launch another similar initiative. "There's not a traditional publisher developer model... This initaitive is one where we're reaching for their ideas, so that got a lot of interest from the development community," said Sue. Development on the projects, which are already in production, will take from six months to a year "depending on how much feature creep there is." Further details of the games will be announced at a later date, with Crouch hinting that the games might seem somewhat unusual for a publisher known mostly for MMOs.

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