NEXON CEO Tells Investors to Wait Until Games Are Ready for Release, Condemns Crunch

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NEXON, the huge South Korean video game publisher known for games like Dungeon & Fighter and MapleStory, published its Q2 2021 earnings results late last week.

Following that, an investors call took place with NEXON CEO Owen Mahoney and CFO Shiro Uemura sharing their prepared remarks before the traditional Q&A section.

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Something remarkable happened at that time, though. Owen Mahoney decided to preface the question regarding the launch dates of KartRider: Drift and the new online game by Embark with a strong statement that speaks against pressuring game studios to deliver release dates. That ultimately goes against the quality of the game and its revenue potential, said the NEXON CEO, not to mention the crunch issues for developers.

It will depend on when our developers feel they have an outstanding game that they are proud to show to their closest friends. Getting there is all about iteration, play-testing and polishing. And any game company that is experienced and who is being honest with you will tell you this is not a linear process. Iteration is about making the game fun, and that is an art challenge, not an engineering challenge.

So, we could give you a date. That would satisfy your near-term need to plug something in to your model. And it would generate near-term excitement from users. But then it would put the WRONG type of pressure on the game developers. They would have to hit a date regardless of what is right for making the game fun.

In our industry that’s called Crunch mode, which is industry parlance for “put a game out by a certain deadline, no matter what the costs on the employees.“ Even after crunch mode the game is often still not ready to launch. The result of all this is frequently disappointed customers, burnt-out, demoralized developers, and damaged brands and impaired financial returns for investors.

Crunch mode is one of the most pernicious problems in our industry. The charade of launch timing serves little purpose except this dance with equity analysts. Instead, the right thing to focus and push for is a game that blows people’s minds. If we achieve that, the game will last many years and the revenues will dwarf what we would have made by launching a quarter or two earlier.

I’m sorry nobody in my industry has explained this to you before. Within the industry, we ALL know it’s true and yet few talk about it openly. Everyone should. So rather than giving you a date, this team is going to give to our customers and employees a commitment to make the best game we can, as soon as we can.

None of this is to imply we are pushing back the date for any of our games, or that we are experiencing delays at NEXON. It is only to let you know as fully as we can how we make our decisions on product launches. If your primary job is to fill in your Excel model, you’ll hate our approach.

But if you consider your job definition to be making money by identifying mis-priced assets in the entertainment industry, we think you’ll find our way a lot more lucrative.

It's the first time we've read such a clear-cut statement from an executive. We can only hope others in the industry will follow suit, as it truly makes no sense for investors to rush products to the market when it benefits no one in the long run.

For the record, the NEXON CEO did give a hint to when gamers may see those two titles:

[...] if you absolutely had to put something in your model, put it in the second half of
next year. It could certainly be sooner.

Mahoney also shared a bit more info on the title in development at Embark, describing it as a stunning game. He also said the technologies developed by the Swedish studio are so advanced as to greatly help game and content development; they're expected to be used in other NEXON games, too.

[....] this game will be a mass market Virtual World targeting a large and well-established player base. In July, Embark hosted a milestone meeting and in-depth testing that included key leaders from Nexon. All were deeply impressed. The team has been making rapid progress, and the game is stunning, reflecting Embark’s high artistic standards and, importantly, the high priority they place on fine-tuning the pacing and tension.

To make a AAA online play experience set in a Virtual World would normally require massive investment of many hundreds of people. Fortunately Embark invested heavily in creating tools for rapid content development. This set of tools and technology is valuable both before launch and after. Before launch it results in not just faster development and lower development costs, but faster and deeper iteration in the development process, since ideas can be tested and developed rapidly. Put simply, more iteration results in a better, more unique game. In AAA development, iteration is typically much harder due to the high cost of trying new ideas and throwing out what doesn’t work. After launch it means much faster introduction of new content into the live Virtual World, using a fraction of the development team. We think this tech stack will be a game changer for Embark’s first title, and for future games across the NEXON development portfolio.

By the way, NEXON recently showcased some of its upcoming projects, such as Project Magnum (a looter shooter), Project ER (an MMORPG with a focus on siege warfare), Project HP (a game similar to For Honor), and OVERKILL, the 3D version of Dungeon & Fighter. You can check out the trailers below.

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