Nexon Group’s disclosure of sustainability-related financial information are as follows.
Any forward-looking statements included herein are based on the judgment of Nexon Group as of December 31, 2024
Nexon Group is aiming to become the world’s top game company, and our basic policy for new game titles is to provide exciting, creative and unique games, and that for existing game titles is to provide users with games that continue to be fun for a long period of time, through engaging content updates and satisfying game operation. Under such basic policy, in order to achieve sustainable growth and enhance mid- and long-term corporate value, we recognize that implementing appropriate initiatives to address various issues regarding sustainability is one of the top management priorities.
(1) Governance
In order to enhance Nexon Group’s corporate value from the perspective of sustainability, we have strengthened our organization for the promotion of sustainability. As of December 10, 2024, the Company established the Sustainability Committee, chaired by Shiro Uemura, Representative Director and Chief Financial Officer, as an advisory body to the Board of Directors. The Sustainability Committee consists of six members, including Shiro Uemura, Representative Director and Chief Financial Officer, as well as Satoshi Honda and Shiro Kuniya, who are external directors (Audit and Supervisory Committee members). The Sustainability Committee monitors and manages major risks and opportunities on various sustainability-related themes at Nexon Group, formulates strategies, and determines initiatives. Strategies and initiatives decided by the Sustainability Committee are regularly reported to the Board of Directors and receive its supervision. In addition, the Sustainability Secretariat has been established as a subordinate organization under the Sustainability Committee to implement initiatives in line with Nexon Group's sustainability policy and strategies in cooperation with relevant departments including legal, accounting and finance, and HR departments.
(2) Risk Management
Risks and opportunities related to sustainability are identified, assessed and managed by the Sustainability Committee. Furthermore, the risks and opportunities that should be prioritized are narrowed down upon closer examination by the Sustainability Committee based on their financial impact on Nexon Group, the impact of Nexon Group's activities on the environment and society, and the likelihood of their occurrence, from a medium- to long-term perspective.
The Sustainability Committee identifies risks and opportunities that Nexon Group should address with reference to standards such as the SASB Standards (Sustainability Accounting Standards Board), which provide companies with guidelines for sustainability-related disclosures, recognizes the following items as key sustainability issues in light of their importance, and establishes strategies and initiatives. Strategies and initiatives decided by the Sustainability Committee are regularly reported to the Board of Directors and receive its supervision. In addition, the status of responses to risks and opportunities related to sustainability is monitored by the Sustainability Committee, and the details are reported to the Board of Directors.
| Key items | Risks | Opportunities |
|---|---|---|
| Climate change |
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| Human capital |
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| IPs (intellectual property rights) |
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(3) Climate change
Nexon Group considers it necessary to accurately identify the impact of climate change on the entire value chain and the opportunities it poses from a medium- to long-term perspective, and to respond appropriately. As part of this effort, we will contribute to the realization of a sustainable society by setting targets for the reduction of greenhouse gases, analyzing the risks and opportunities that climate change poses to management, and taking optimal measures.
(a) Strategy
Based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), Nexon Group has identified (1) risks associated with the transition to a low-carbon economy and (2) physical risks such as property loss caused by natural disasters due to climate change and has formulated and promoted strategies to address such risks. Going forward, we will continue to regularly assess the impact of climate change, appropriately reflect it in the strategies, metrics and targets of the entire Nexon Group, as necessary, and proactively disclose related information.
(i) Reduction of energy consumption at major facilities
The occurrence of natural disasters due to climate change exposes Nexon Group's major facilities, including the office buildings of Nexon Korea Corporation, to risks such as substantial losses, restoration costs, and interference with business operations due to service interruptions. To address such risks, Nexon Group is considering measures to reduce greenhouse gas emissions from its major facilities and cut down on energy consumption. Specifically, we identify activities for which calculation based on the GHG Protocol is required and are working to inventory and manage greenhouse gases emitted from major facilities.
(ii) Use of renewable energy
For the realization of a decarbonized society, we are working to reduce greenhouse gas emissions to lower our environmental impact by transitioning to renewable energy. As part of this effort, we are considering measures to increase the proportion of renewable energy used, such as installing solar panels and switching to electric vehicles.
(iii) Reduction of costs through the reuse of energy
As one of the opportunities brought about by climate change, Nexon Group is working on the reuse of water resources and waste material in order to reduce costs through energy conservation. We will also strive for further improvement by keeping track of and managing fluctuations in the amounts of water resource intake and reuse, as well as the amounts of waste disposal and reuse.
(iv) Implementation of environmental education and initiatives to reduce environmental impact
As part of its efforts to address climate change, Nexon Group recognizes that promoting corporate activities in harmony with the environment is an opportunity to enhance our ability to adapt to a decarbonized society in the future and to improve our corporate image. To this end, we are promoting initiatives to reduce our environmental impact, such as conducting environmental education for employees, reducing the use of disposable cups, turning off office equipment when leaving work, and deleting unnecessary e-mails.
(v) Reduction of energy consumption in data centers
Nexon Group’s main business is the production, development and service of PC online and mobile games, and energy consumption is not considered to be that large compared to the general manufacturing industry. On the other hand, due to the high proportion of energy consumption in data centers, Nexon Group is striving to reduce energy consumption in data centers by measuring greenhouse gas emissions based on the GHG Protocol.
(b) Metrics and targets
Nexon Group’s metrics for climate change and actual data are as follows. Targets are not included because the setting of specific targets to monitor the strategy regarding climate change is under consideration.
- Amount of greenhouse gas emissions
| Metrics | FY2023 actual data | FY2024 actual data |
|---|---|---|
| Scope 1 (tCO₂e) | 141 | 147 |
| Scope 2 (tCO₂e) | 5,946 | 6,018 |
(Note) 1. Scope 1 emissions are calculated by applying the emission factors presented by the guidelines of the Intergovernmental Panel on Climate Change (IPCC).
2. Scope 2 emissions are calculated in accordance with the guidelines established by the authorities in each country.
3. The amounts of greenhouse gas emissions above are calculated for major facilities (office buildings, etc.) owned by Nexon Group.
(4) Human capital
Nexon Group provides services related to online games around the world and is promoting the utilization of diverse talents in all locations regardless of age, gender, nationality, or disability. We are also promoting cross-border assignment and utilization of talented human resources with an aim to improve the development level on a global basis by sharing technology and know-how across Nexon Group. Our policy regarding human resource development including securing diversity in human resources and our policy regarding improvement of the work environment are as follows.
(a) Strategy
(i) Diversity of human resources
Nexon Group considers human resources to be an important capital for creating high-quality game content and providing enjoyable experiences. Therefore, we respect the individuality and talents of our employees and hire various personnel in a wide range of fields. In addition to external recruitment, we are also focusing on discovering and developing human resources who can thrive in the game industry. In Korea, we support university students who are interested in the game industry through online and offline job fairs, support for game development clubs, and industry-academia collaboration programs. Through these initiatives, we recruit people with diverse backgrounds and experiences, and as a result, we create and maintain an environment where people with different set of values, opinions, expertise, and experience can thrive by demonstrating their individuality and abilities, irrespective of gender, age, nationality, religion, LGBTQ status, or disability.
(ii) Human resource development
Nexon Group fully supports the growth of its employees and focuses on the development of “creative talents.” In addition to educational support aimed at improving knowledge and skills, we also offer cultural and artistic programs that stimulate creativity and development programs that promote the growth of the entire organization. Our internal e-learning system in Korea offers a variety of courses including job competence, leadership, business administration, and new employee training through an online education platform dedicated to employees. In addition, we conduct a cultural and artistic experience program at a dedicated internal forum with the purpose of fostering a creative cultural climate and enhancing creativity. Through these diverse internal human resource development programs, we are promoting the individual growth of our employees, and as a result, building a foundation to provide our users with contents of higher quality and creativity.
(iii) Comfortable working environment
Nexon Group is committed to creating a workplace environment where diverse personnel can work in a healthy manner. In particular, the system implemented for employees in Korea allows them to choose flexible working hours according to their individual work patterns. Furthermore, in order to support work-life balance, we operate our own in-house daycare center in Korea and proactively support employees in balancing family and work.
(b) Metrics and targets
Nexon Group’s metrics for its policy regarding human resource development including securing diversity in human resources and its policy regarding improvement of the work environment and actual data are as follows. Targets are not included because the setting of specific targets to monitor the strategy regarding the policy is under consideration.
(i) Gender ratio and ratio of female managers (securing diversity in human resources)
| Metrics | FY2023 actual data | FY2024 actual data |
|---|---|---|
| Gender ratio | Male: 65% - Female: 35% | Male: 66% - Female: 34% |
| Ratio of female managers (Note) | 24% | 23% |
(Note) In the case of the Company, a “manager” refers to a line manager at the level of leader or higher, and in the case of consolidated subsidiaries other than the Company (all overseas entities), the term is determined in consideration of the organization and job status at each company.
(ii) Percentage of employees taking childcare leave (improvement of the work environment)
| Metrics | FY2023 actual data | FY2024 actual data |
|---|---|---|
| Percentage of male employees taking childcare leave | 4% | 5% |
(Note) The percentage of male employees taking childcare leave applies to the Company and its subsidiaries in Korea, which serve as a key base for Nexon Group. The actual data are close to those on a consolidated basis since the percentages of employees of the Company and such subsidiaries against the total number of Nexon Group employees in FY2023 and FY2024 are 84% and 88%, respectively.
(5) Intellectual property rights (IPs)
As a company engaged in production, development and service of online games, Nexon Group is deeply aware of the intensifying competition in the current game industry. With the evolution of technology, new competitors are constantly appearing in the market, and the expectations of users are increasing day by day. We continue to strive to create new business opportunities by leveraging our diverse lineup of IPs accumulated over the years and improve our brand value through the development of new IPs. In this environment, we recognize that appropriate IP investment and protection are indispensable for sustainable business growth and medium- to long-term enhancement of corporate value, and we have positioned this as an important issue in our management strategy.
(a) Strategy
(i) Enhancement and expansion of existing IPs
Nexon Group has fostered its own IPs with a focus on two key titles, Dungeon&Fighter and MapleStory. As we continue to operate these existing games, we are also working to provide users with a fresh gaming experience by developing new games based on those IPs. As part of this effort, we are developing new titles based on the Dungeon&Fighter IP: The First Berserker: Khazan, Project OVERKILL, and Project DW. In addition, we are actively utilizing our IPs in fields other than games to expand business opportunities. In particular, we are expanding the scope of IP utilization by producing web comics, web novels, and animations based on the stories of games such as Blue Archive, Dungeon&Fighter, and MapleStory, which attract users with their engaging storylines and characters.
(ii) Creation of new IPs
Nexon Group is simultaneously advancing large-scale projects and experimental small-scale projects under its “Big & Little” strategy and has announced new games in a variety of genres. For “Big” projects, multiple titles are under development, including The First Descendant (loot shooter), NAKWON: LAST PARADISE (extraction RPG), Project DX (MMORPG), and ARC Raiders (survival shooter). As for “Little” projects, challenging and creative games are being created in a freer development environment. Notably, MINTROCKET (originally an in-house division of NEXON Korea Corporation, incorporated as a wholly owned subsidiary in the fiscal year ended December 31, 2024) released the hybrid marine adventure game DAVE THE DIVER, which has sold more than five million units in total since its global launch on Steam. New contents are planned for release going forward.
(iii) Investments in R&D
To lead the way in the next generation of technologies, Nexon Group has established a new organization dedicated to research and development and is strengthening investment in technological innovation. As part of this initiative, we established a data science research organization in 2017 called the “Intelligence Lab” to accommodate the technological diversity and changes in game development and to meet our unique R&D needs. Currently, the Intelligence Lab has more than 700 members, the largest in the industry, and has begun to develop advanced systems using machine learning and deep learning, in addition to sophisticating in-game functions. As a result, we have created an environment to provide users with a more enjoyable gaming experience, and we are aggressively promoting research and development activities.
(iv) Protection of IPs
Nexon Group is actively pursuing patent and trademark applications to protect its IPs. In addition, we have strengthened measures against infringement and, in the event that we find that any of our various IPs, including game content, has been infringed by a third party, steps are in place to promptly respond to and eliminate the cause of such infringement.
(b) Metrics and targets
Nexon Group has the developmental and technological capabilities to consistently create and maintain world-class IPs. Based on this foundation, we have expanded business opportunities and steadily enhanced our brand value. We recognize the importance of ongoing investment in IP creation as we aim for sustainable growth going forward. Therefore, while we manage various metrics and results, we do not establish specific numerical targets. This is because such targets are subject to change frequently depending on the status of development or release.
(i) R&D expenses
| Metrics | FY2023 actual data | FY2024 actual data |
|---|---|---|
| Amount of R&D expenses (JPY in millions) | 24,618 | 24,944 |
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R&D expense ratio (%) (R&D expenses ÷ revenue) |
5.8 | 5.6 |
(ii) Number of patent registrations
| Metrics | FY2023 actual data | FY2024 actual data |
|---|---|---|
| Number of new registrations | 63 | 65 |
| Number of registrations at year-end | 330 | 385 |