Nexon has invested a total of $874 million in Bandai Namco, Konami, Sega Sammy, as well as toys maker Hasbro.
The Tokyo-based maker of Maplestory and other online games explained that this series of investments are part of its ‘long-term friendly investments’ strategy. The company has no future plans to acquire them. The company also reiterated that it invested in these four companies because of their globally recognized intellectual property.
“We believe companies with strong, well-managed global IP are often overlooked and undervalued in a market that is narrowly focused on introductions of new IP,” CEO Owen Mahoney said in a statement. “These investments reflect our respect for management teams that create and grow global properties over a period of years and decades. We believe that each has the potential to capitalize on the secular shift from linear formats to interactive entertainment.”
“These investments represent a good use of our cash in a low-interest environment, and we are extremely pleased with the initial results. While leveraging partnerships was not a consideration in our investment decisions, we are pleased with the dialogue that has ensued with some companies,” Mahoney commented.
The investments follow after Nexon’s board decided to sink $1.5 billion into gaming and entertainment companies that “demonstrate the ability to develop and sustain strong, globally recognized intellectual property.” The company’s latest $874 million spending row accounts for 58 percent of that $1.5 billion.
Nexon has an estimated $4.8 billion in its coffers, and the company has on an active lookout to invest some of that cash. In addition to that $874 million investment, the company also embarked on a share buyback scheme.
Most of that cash has been and still being generated from its cash cow titles such as Maplestory and Dungeon Fighter. The duo has maintained solid growth for decades. In 2020, Nexon’s revenues totaled $2.7 billion in revenues.
Of all three companies Nexon invested in so far, Bandai Namco Entertainment happens to in a financially strong position. The Japan-based publisher’s revenues and profits have been up for the third quarter of its financial year. Bandai also predicts that its revenue and net income will sharply rise to $6.6 billion, and $328.3 million, respectively.
Earlier, in February of this year, Bandai Namco announced that it had acquired a minority stake in Germany-based game development studio Limbic Entertainment for an undisclosed sum. Limbic Entertainment is known for the ‘Might & Magic’ series in collaboration with Ubisoft, strategy title Tropico 6, and Memories of Mars.