Nexon, Asia's 'Freemium' PC Game Pioneer, Gets More Mobile

Although its name may not be familiar to many U.S. gamers, Nexon was once one of the most successful video game companies in Japan. Founded in South Korea in 1994, the company of 4,500 employees had the biggest initial public offering on the Tokyo Stock Exchange in 2011, thanks in large part to a stable of online games with tens of millions of players. Those titles include hack-and-slash hits such as MapleStory and Dungeon & Fighter as well as adaptations of franchises such as FIFA Soccer and the shooter game Counter-Strike. The excitement has since died down. Nexon was worth 472 billion yen (then about $6.1 billion) at the end of 2011, just after its $1.2 billion IPO; now its valuation is about 400 billion yen ($3.9 billion).

Nexon’s business is in the same doldrums as the rest of the traditional video game industry, with players migrating by the millions from consoles and PCs to mobile devices. However, the company has a major advantage: Long before there were smartphones and tablets, it was practicing a strategy that has become the business model of games for smartphones and tablets. Over the past decade, its games not only have been free to play but also have consistently lured users into paying occasional small amounts for virtual weapons, clothing, and other goods.