Nexon acquires U.S. game developer Big Huge Game

Korea’s largest game company Nexon has acquired Big Huge Games, which developed many hit games such as DomiNations, on March 10. This is the latest M&A move of Nexon, which has overcome crises through takeovers and stake investments.

There is much attention paid to whether Nexon will become the first Korean game company to mark annual sales of 2 trillion won (16.66 billion U.S. dollars) through the takeover of overseas game developers and mobile game development.

○ Growth through M&As

Big Huge Games was co-founded by world-renowned game designers Brian Reynolds and Tim Train. It has released massive hits such as DomiNations, Civilization 2 and Rise of Nations. Back in July 2013, Nexon established a strategic partnership with Big Huge Games to launch DomiNations in the global market in April 2015. DomiNations has had over 19 million downloads.

The acquisition will allow the two companies to make a closer cooperation across all areas, including game development, operation and marketing. The acquisition amount has not been disclosed.

M&A has been one of key growth drivers of Nexon by helping secure talents and games for global launch. The company acquired Wizet, the developer of MapleStory, in 2004 and Ntelligent Games with talented game developers in 2005. MapleStory has attracted about 170 million global users as of now.

Nexon also took over Neople, the developer of Dungeon & Fighter, for 385.2 billion won (320 million dollars) in 2008. This boosted the company’s overseas sales by 52.3 percent year-on-year to 230 billion won (191 million dollars) in the same year.

Amid slower growth in the Korean game market and the advance of global game companies into the Korean market, Nexon has strengthened its M&A strategy since 2010. It has acquired three global game developers, including Japan’s inBlue (June 2012) and the latest Big Huge Games, and made six strategic investments and partnerships.

○　Focus on overseas and mobile markets.

Global launch has been another growth driver of Nexon. The company launched The Kingdom of The Wind in the U.S. market in 1998 when the game’s concurrent users exceeded 110,000 in Korea. Since then, it has released domestic hit games in global markets, including China, Japan and Southeast Asian countries.

Nexon has focused on "culture" when going overseas by designing events and graphics that fit local culture. For example, MapleStory provides events on Lunar New year’s Day in China while using cherry blossom images in Japan.

Such efforts have helped the company to grow into a global player that provides around 150 games for 1.4 billion users in 190 countries around the world.

Nexon declared a paradigm shift from PC game-focused to mobile-focused strategy through reorganization in March 2015. Mobile game sales increased by 22.8 percent year-on-year to 41.992 billion yen (370.17 million dollars) in 2015. The company’s total sales came in at 190.263 billion yen (1.51 billion dollars). The general consensus is that Nexon’s total sales will likely exceed 2 trillion won (1.66 billion dollars) in 2016, assuming its success in the global and mobile markets.

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