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CORRECTED-Japan's Nexon elevating CFO to top spot
February 13, 2014 / 6:00 AM / 4 years ago

CORRECTED-Japan's Nexon elevating CFO to top spot

(Fixes headline and paragraph 1 to say the company is “Japanese” not “South Korean”, changes 2010 to 2011 in paragraph 6)

By Malathi Nayak

SAN FRANCISCO, Feb 12 (Reuters) - Nexon Co Ltd will elevate CFO Owen Mahoney to the post of CEO in March as the Japanese online gaming giant begins to aggressively explore U.S. acquisitions to further a long-standing plan to expand in Western markets.

Mahoney will succeed chief executive Seungwoo Choi, who has led the company known for free-to-play PC games like combat title “Dungeons&Fighters” since 2008.

“We continue to believe that North America is a big, big opportunity for us,” Mahoney told Reuters in an interview on Wednesday.

Mahoney, who before joining Nexon led mergers and acquisitions and business development at Electronic Arts Inc for about a decade, said his company would be open to using its cash balance to acquire games that would help it build a strong footprint in the West.

“We want more access to IP and want to be more successful in the West with the kinds of games that will resonate with Western tastes,” Mahoney said. “But we’re also prudent about what we do, so if we see a good opportunity we’ll definitely go after it.”

Nexon, which was founded in South Korea in 1994 and has headquarters in Tokyo, went public on the Tokyo stock exchange in December 2011, around the same time as “Farmville” creator Zynga Inc listed on Nasdaq.

The company is considered to be a pioneer of the model of fast-paced games that are free to play but offer optional virtual goods or in-game purchases like weapons and energy boosts.

While Nexon has delivered numerous PC and mobile game hits in China and South Korea, it’s been unsuccessful so far in replicating that success in the fast-growing market in Europe and the United States.

On Wednesday, the company reported higher fourth-quarter revenue of 34.5 billion yen ($336.47 million), up 12 percent from a year ago. It incurred a net loss of 4.44 billion yen, partly due to an impairment loss from lower-than-expected revenue from a game by its subsidiary NDOORS Corp. About 7 percent of its total fourth-quarter income came from Europe and North America.

Nexon also reported a fourth-quarter cash balance of 138.8 billion yen.

The company, which said it generated $1.5 billion in revenue in 2013, has invested in minority stakes in game studios in North America like San Mateo, California-based Rumble Entertainment and Miami, Florida-based Shiver Entertainment, to develop content for the West. Nexon has also been importing Western content to Asia through partnerships with developers like Electronic Arts to publish its “FIFA Online 3” game in Korea.

Mahoney, who joined Nexon in 2010, will take on his new role starting March 25.

($1 = 102.5350 Japanese yen)

Editing by Matt Driskill

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