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Nexon, the Tokyo-based maker of Maplestory and other online games, has invested $874 million in Hasbro, Bandai Namco, Konami, and Sega Sammy.
Nexon said it has made an unrealized gain of $279 million on the long-term investments, but it has no intention of acquiring the companies or making activist shareholder proposals with the investments.
Nexon made other investments as well, but the amounts did not meet the company’s threshold for disclosure.
In 2020, Nexon’s board authorized up to $1.5 billion for investment in entertainment companies that demonstrate the capability to develop and sustain strong globally recognized intellectual property.
Three top investment pros open up about what it takes to get your video game funded.
These are long-term friendly investments with no intention of acquisition or activism. As of the end of 2020, Nexon completed investments totaling ¥92.4 billion ($874 million) which represents 58% of the authorized amount.
“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,” said CEO Owen Mahoney 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 potential to capitalize on the secular shift from linear formats to interactive entertainment.”
Mahoney added, “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.”
Nexon has $4.8 billion in cash, and shareholders have wondered how the company would invest that money. Nexon has started a share buyback program, but it keeps generating more cash through games such as Maplestory and Dungeon Fighter, which have maintained solid growth through decades. Nexon had $2.7 billion in revenues in 2020.
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