The Korean billionaire Kim Jung-Ju is the head of Nexon. The MMORPG company has now released its financial report and it does not look good: The share price fell by 14.4%. The CEO has therefore lost about 2.2 billion US dollars in market value. Backgrounds include a scandal surrounding the MMORPG MapleStory, the relaxation of the Covid situation, and the sudden devaluation of Bitcoin.
Who is this? Kim Jung-Ju (53) is the founder of Nexon, a huge Korean gaming company that he founded himself in 1994. He was one of the pioneers who established the so-called “freemium” model: Free-to-play games, where you have to pay for additional services. Even today, Kim Jung-Ju holds a significant share of the company’s stock.
Nexon was one of the pioneers of MMORPGs in the 90s. Also in the 2000s, the company was extremely successful: The online role-playing game MapleStory (2003) was until recently a huge hit in South Korea.
- In 2011, Kim Jung-Ju brought Nexon to the Tokyo Stock Exchange.
- In 2016, he was involved in a scandal. He allegedly bribed a prosecutor with about $814,000, whom he had known since his student days. The scandal became known as “NexonGate”. The prosecutor received a four-year prison sentence. Kim Jung-Ju withdrew from the supervisory board of Nexon and publicly expressed how much he regrets his misconduct.
- In 2019, everything became too much for him: He wanted to sell his shares in Nexon and withdraw from business. Since he did not want to pass Nexon on to his children, he planned to sell the MMO giant, preferably to the Disney company. However, when he could not find a suitable buyer, he took the company off the market again.
Stock price of MMORPG company plummets by 14.4%
Why did he lose so much in market value? Nexon presented its financial report for the first quarter of 2021 yesterday: It was received so negatively on the Tokyo Stock Exchange that the Nexon share price fell by 14.4%. Since Kim Jung-Ju, as the founder, holds significant shares in Nexon, he consequently lost 2.2 billion US dollars and is now worth only a measly 10.9 billion US dollars, as Forbes knows (via Forbes).
Here’s why the stock price has fallen so deep:
- The actual revenues in the first quarter of 2021 were excellent: Compared to the previous year, Nexon’s revenues increased by 7%, and the company also made 4% more profit.
- But for the stock price, future prospects are more important and they have worsened: Among other things, as the Covid pandemic is receding in South Korea, it is expected that there will be fewer players in the short term and therefore the sales expectations for the next 3 months have decreased by 3%. It is even expected that they will make 19% less profit than in the previous year.
What is going on with Bitcoin? In December 2020, Nexon was a pioneer and invested about 2% of its assets in the cryptocurrency Bitcoin.
Bitcoin, however, lost about 10% of its value overnight in Asia after Tesla CEO Elon Musk announced on Twitter yesterday that his company would no longer use “Bitcoin” as a means of payment. Musk has environmental concerns because the energy consumption when mining Bitcoin is so high.
What is going on with the MMORPG? With MapleStory, one of the major MMORPGs from NCSoft, there was a scandal that we reported on at MeinMMO.
The studio had lied to players for years about the probability of stat distribution on certain items.
According to the financial report, the player numbers in MapleStory have now collapsed since the scandal became known. Therefore, high losses are expected for the next quarter compared to the previous year when MapleStory was still performing well.
Free-to-play MMORPG lied to players for years about random system, has serious trouble
