Nexon's Research Line: Two Segments and Three Dashes

Section ６【研究開発活動】, research and development activities, in the annual securities report of NEXON Co., Ltd. for its 24th fiscal year, January 1 to December 31, 2025, filed on EDINET on March 24, 2026, fills part of page 43 of 204. It has three numbered sub-headings, (1) 研究開発体制, (2) 研究開発方針 and (3) 研究開発費, and under the third it prints the figure a reader comes for: 当連結会計年度における研究開発費は26,429百万円となっております — research and development expense for the year was 26,429 million yen (US$161.3 million). Beneath that sentence is a table headed 報告セグメントの名称 / 研究開発費(百万円) with five segment rows: 日本 −, 韓国 24,176, 中国 −, 北米 −, その他 2,333, followed by 報告セグメント計 26,509, 調整額 △80 and 合計(連結) 26,429 (US$147.6 million, US$14.2 million, US$161.8 million, US$0.49 million, US$161.3 million). Two segments carry a figure and three print a dash. This piece reads the section and the pages of the same report that say which companies sit in each segment.

The first sub-heading says what the group counts as research. 当社グループにおいては、基礎研究及び新技術開発等のいわゆる研究開発に相当する活動を行っていないため、独立した研究開発組織を有しておりません — the group does not carry out activities corresponding to research and development in the usual sense, such as basic research and new-technology development, and so has no independent research and development organisation. The next sentence gives the substitute: しかしながら当社グループにおいては、グループ内で開発しているオンラインゲームコンテンツが企画され商用化に至るまでの過程を「研究開発」と捉えており、グループ内の開発人員による通常の開発業務の中で行われております — the group regards the process by which online game content developed within the group goes from planning to commercialisation as research and development, carried out within the ordinary development work of its development staff. The second sub-heading, (2) 研究開発方針, follows from the first: because the activity sits inside ordinary development work, 特段の研究開発活動の方針を設定しておりません, no particular research and development policy is set. These are the report's statements about itself, quoted as printed.

The third sub-heading defines the expense line. 当社グループにおける研究開発費には、グループ内で開発するオンラインゲームコンテンツの企画承認時から商用化日までの費用(労務費、外注費及びその他経費)を計上しており — the group's research and development expense records the costs of online game content developed within the group from the time the plan is approved to the date of commercialisation, namely labour, outsourcing and other expenses. The 26,429 million yen (US$161.3 million) is therefore the cost of in-house games between two dates, approval and launch, rather than the cost of a laboratory. Immediately before the table the section adds one sentence: なお、当連結会計年度において、研究開発活動の状況に重要な変更はありません — there was no material change in the state of research and development activities during the year.

The report for the 23rd fiscal year, calendar 2024, filed on March 27, 2025, prints the corresponding section on page 40 of 200 with that year's figure, 24,944百万円 (US$152.3 million), and a table reading 日本 −, 韓国 21,757, 中国 −, 北米 674, その他 2,561, 報告セグメント計 24,992, 調整額 △48, 合計(連結) 24,944 (US$132.8 million, US$4.1 million, US$15.6 million, US$152.6 million, US$0.29 million). The desk set the two sections side by side, character by character, after removing line breaks from the extracted text. Apart from the figures, the fiscal-year dates in the table heading and one verb ending, 下記のとおりであります in the 23rd report against 下記のとおりです in the 24th, the extracted text is the same. The one row that changes kind is 北米: it printed 674 (US$4.1 million) in the 23rd report and prints a dash in the 24th. In each year the desk confirmed that the segment figures printed agree with the printed 報告セグメント計 and that the subtotal and the printed 調整額 agree with the printed 合計(連結); no sum is written here beyond what the report prints.

The same figure appears as a management indicator. ２【サステナビリティに関する考え方及び取組】 has as its fifth item (5) 知的財産権 (IP), and its ② 指標及び目標 on page 25 opens by saying that the group manages various indicators and results but 具体的な数値目標は設定しておりません, sets no specific numerical targets, これは開発やリリースの状況によって目標値が頻繁に変動する可能性があるためです — because target values may change frequently with the state of development and releases. It then prints two small tables. イ. 研究開発費: 研究開発費の金額(百万円) 24,944 and 26,429 for 2024年度実績 and 2025年度実績 (US$152.3 million and US$161.3 million), and 研究開発費の割合(％), defined in the row label as 研究開発費÷売上収益, research and development expense divided by revenue, at 5.6 and 5.6. ロ. 特許登録件数: 新規登録件数, newly registered patents, 65 and 67; 期末登録件数, registered patents at year end, 385 and 444. The 23rd report's page 24 printed the earlier pair: 24,618 and 24,944 (US$150.3 million and US$152.3 million), 5.8 and 5.6 percent, 63 and 65 new registrations, 330 and 385 at year end. The percentages are the report's; the revenue they divide by is on page 2 of the 24th report, 423,356, 446,211 and 475,102 million yen for 2023, 2024 and 2025 (US$2,584.6 million, US$2,724.1 million, US$2,900.5 million).

In the financial statements the line sits inside selling, general and administrative expenses. Note 29 販売費及び一般管理費 on page 169 lists, for 2024 and 2025: 人件費, personnel, 35,421 and 31,965 (US$216.2 million and US$195.1 million); 支払手数料, fees paid, 11,830 and 9,912 (US$72.2 million and US$60.5 million); 広告宣伝費, advertising, 28,713 and 36,181 (US$175.3 million and US$220.9 million); 減価償却費及び償却費, depreciation and amortisation, 4,538 and 4,518 (US$27.7 million and US$27.6 million); 研究開発費 24,944 and 26,429 (US$152.3 million and US$161.3 million); プラットフォーム利用料, platform fees, 21,316 and 36,281 (US$130.1 million and US$221.5 million); その他 15,414 and 16,642 (US$94.1 million and US$101.6 million); and a printed 合計 of 142,176 and 161,928 (US$868.0 million and US$988.6 million). The desk confirmed that the seven printed lines agree with the printed total in both years. The 23rd report's note 29, on page 164, carries 2023: 研究開発費 24,618 (US$150.3 million) in a total of 147,740 (US$902.0 million). The management analysis on page 38 attributes the 13.9 percent rise in the total mainly to advertising for new titles and to platform fees that rose with the launch of ARC Raiders and MapleStory: Idle RPG.

The accounting policy uses two words where the section uses one. Item (c) 研究開発費 of (7) のれん及び無形資産, in the significant accounting policies note, on page 114 states that 新規の科学的又は技術的な知識及び理解を得る目的で実施される研究活動に関する支出は、発生時に純損益として認識しております — expenditure on research activities undertaken to gain new scientific or technical knowledge and understanding is recognised in profit or loss when incurred — and that 一定の要件を満たすことで資産化した開発費用は、取得原価から償却累計額及び減損損失累計額を控除した金額で計上しております, development costs capitalised on meeting certain requirements are carried at cost less accumulated amortisation and impairment. The 23rd report's page 108 prints the same policy. One intangible asset is described in terms of its development stage further on: a numbered note beneath the intangible-assets tables on page 135, 6. 当社グループにおける重要なゲーム著作権の帳簿価額, lists the group's important ゲーム著作権, game copyrights, as a single row, その他 Embark Studios AB, 1,874 and 2,110 million yen (US$11.4 million and US$12.9 million) at the two year ends, with a remaining amortisation period of 5 years, and the impairment-test text on the same page says that the ARC Raiders copyright was 開発段階, in the development stage, in the prior year, so amortisation had not begun, and that amortisation began in the current year with the title's launch.

What the five rows of the table are is set out in ３【事業の内容】 on page 8. The group consists of the company, 36 consolidated subsidiaries and 13 associates and joint ventures accounted for by the equity method at December 31, 2025, and 国内では当社、海外においては現地連結子会社が、それぞれ独立した経営単位として各地域における包括的な戦略を立案し — in Japan the company and overseas the local consolidated subsidiaries each plan a comprehensive strategy for their region as independent management units. したがって、当社グループは、PCオンラインゲーム及びモバイルゲームの制作・開発、配信を基礎とした各社の所在地別のセグメントから構成されております — the group is therefore made up of segments by the location of each company, based on the production, development and distribution of PC online and mobile games. The five reportable segments are 日本, 韓国, 中国, 北米 and その他, and その他 includes 欧州及びアジア諸国, Europe and Asian countries. The segment note on page 124 adds the reason for aggregating by location: 為替の変動が業績に与える影響が類似しており, the effect of exchange-rate movements on results is similar within each location. The research table is thus a table of where the companies that incur the cost are domiciled.

Page 8 lists the main consolidated subsidiaries by segment: 韓国: NEXON Korea Corporation; NEOPLE INC.; NEXON Games Co., Ltd.; VIP Global Super Growth Hedge Fund. 中国: Lexian Software Development (Shanghai) Co., Ltd. 北米: Nexon America Inc.; Nexon US Holding Inc.; Toben Studio Inc. その他: Embark Studios AB. The 23rd report's list on its page 8 named two companies under 北米, Nexon America Inc. and Nexon US Holding Inc.; Toben Studio Inc. is in the 24th report's list. ５【従業員の状況】 on page 17 gives the segments their headcount at December 31, 2025: 日本 233 (23), 韓国 8,342 (208), 中国 184 (2), 北米 187 (4), その他 888 (6), 合計 9,834 (243), where the figures in parentheses are the annual average of temporary staff, shown separately. The 23rd report's page 17: 238 (2), 7,962 (171), 186 (0), 186 (11), 757 (1), 9,329 (185).

韓国, the row that carries 24,176 million yen (US$147.6 million), is where the report places development. Page 12: PCオンラインゲームの制作・開発については、韓国のNEXON Korea Corporationとその傘下にある開発会社が担当するとともに、開発したゲームの著作権を中心とするIPを保有し — production and development of PC online games is handled by NEXON Korea Corporation in Korea and the development companies under it, which also hold the intellectual property, centred on copyright, of the games they develop, and license them region by region for royalties; and なお、モバイルゲームの開発・配信については、主にNEXON Korea Corporation及びNEXON Games Co., Ltd.において行っております, mobile game development and distribution is mainly at NEXON Korea Corporation and NEXON Games Co., Ltd. The table on page 13 describes NEXON Korea Corporation as developing its own PC online and mobile titles, with MapleStory as its representative development title; NEOPLE INC. as developing PC online and mobile games and as the developer and IP holder of Dungeon&Fighter; and NEXON Games Co., Ltd. as carrying on PC online and mobile game development in Korea. ４【関係会社の状況】 on page 15 gives the voting interests as 100.0 percent for the first two and 62.9 percent, held indirectly, for NEXON Games, whose 主要な事業の内容 is printed as PCオンラインゲーム及びモバイルゲーム開発事業.

The plant table for overseas subsidiaries on page 45 puts people and book values beside those names. NEXON Korea Corporation in 京畿道城南市: PCオンラインゲーム及びモバイルゲーム用設備, a book value of 38,708 million yen (US$236.3 million) and 4,154 (105) employees; NEOPLE INC. in 済州特別自治道: 29,657 million yen (US$181.1 million) and 1,501 (27); NEXON Games Co., Ltd. in Seoul: 9,278 million yen (US$56.6 million) and 1,657 (51). Note 2 to the table says that the 帳簿価額 column headed その他 is mainly software, game copyrights and game distribution rights. The segment note on page 126 gives 韓国 external revenue of 400,657 million yen (US$2,446.0 million) and a segment profit of 132,945 million yen (US$811.6 million) for 2025, and 資本的支出, capital expenditure, of 32,745 million yen (US$199.9 million), a figure the capex table on page 44 repeats.

その他, the row that carries 2,333 million yen (US$14.2 million), has one company in page 8's list of principal consolidated subsidiaries, Embark Studios AB; other group companies in the region are named elsewhere in the report, NEXON TAIWAN LIMITED on page 8 and Nexon Thailand Co., Ltd. on page 12, both as distributors. Embark Studios AB of Stockholm is described on page 13 as 主に欧州において、ゲームの開発・配信事業を行っております, carrying on game development and distribution mainly in Europe, and on page 15 as a 100 percent indirect subsidiary whose business is ゲーム開発・配信事業. The auditor's key audit matter on page 198 says more about what it has made: 2023年12月より同社として初タイトルとなるTHE FINALSの配信を開始し、2025年10月よりARC Raidersの配信を開始した — it began distributing THE FINALS, its first title as a company, in December 2023 and ARC Raiders in October 2025 — and that these are its only released titles. The management analysis on page 38 dates the ARC Raiders launch to October 30, 2025 and says the title passed 累計販売本数1,000万本, ten million cumulative units sold, in under two months. Page 45 lists Embark's Stockholm site as PCオンラインゲーム用設備 with a book value of 4,807 million yen (US$29.3 million) and 325 (1) employees; page 136 lists goodwill for Embark Studios AB of 28,567 and 33,868 million yen (US$174.4 million and US$206.8 million) at the two year ends; and page 126 gives the segment external revenue of 39,037 million yen (US$238.3 million), which page 35 puts at 477.1 percent above the prior year, with a segment loss of 9,463 million yen (US$57.8 million).

The three rows that print a dash have companies of their own. 日本 is the filer: page 12 calls it 事業持株会社, an operating holding company, that distributes PC online and mobile games in Japan and manages the group's companies, and page 13 adds a role in promoting tie-ups with Japanese developers whose games the group takes to other markets; its headcount is the 233 (23) above. 中国 is Lexian Software Development (Shanghai) Co., Ltd., which page 12 describes as providing infrastructure and consulting on business strategy, game operation and marketing to Chinese distributors, 中国では同国の法規制により、海外資本の会社が直接PCオンラインゲームの配信事業を行うことができないため, because foreign-capital companies cannot distribute PC online games directly in China under its regulations; the Dungeon&Fighter licence to Tencent is held by NEOPLE INC., in the 韓国 segment. 北米 holds Nexon America Inc., PCオンラインゲーム配信事業, Toben Studio Inc., ゲーム配信事業, and Nexon US Holding Inc., 持株会社, by their page 15 descriptions. The dash is the symbol the table prints in those rows; the desk reads it as printed and does not convert it to a quantity or a reason.

Two other segment tables sit next to the research table. Revenue by segment on page 126, the 外部収益 計 row for 2025, in millions of yen: 日本 5,509, 韓国 400,657, 中国 1,774, 北米 28,125, その他 39,037 (US$33.6 million, US$2,446.0 million, US$10.8 million, US$171.7 million, US$238.3 million), with 475,102 (US$2,900.5 million) in both the 報告セグメント 計 and 連結 columns. Capital expenditure by segment on page 44, the 設備投資額(百万円) column: 日本 186, 韓国 32,745, 中国 99, 北米 1,263, その他 1,156, 合計(連結) 35,449 (US$1.1 million, US$199.9 million, US$0.60 million, US$7.7 million, US$7.1 million, US$216.4 million), with a note that the figure includes investment in intangible assets and right-of-use assets as well as property, plant and equipment, excluding investment in crypto assets made through exchanges. The desk confirmed that the five printed segment figures agree with the printed total in each table. The research table differs from these two in printing a dash where they print a figure for 日本, 中国 and 北米.

The word 研究開発 is used in a second place for a second thing. Under ① 戦略 of the IP section, ハ. 研究開発部門への投資 on pages 24 and 25 says the group has established a new organisation in charge of research and development to lead next-generation technology, and that 2017年に…「インテリジェンスラボ」というデータサイエンス研究組織を創設いたしました — in 2017 it created a data-science research organisation called the Intelligence Lab, which 現在、インテリジェンスラボは業界最大規模である700人以上のメンバーを擁し, now has at least 700 members, a scale the report calls the industry's largest, working on the sophistication of in-game functions and on advanced systems using machine learning and deep learning, これにより…積極的に研究開発活動を進めております, thereby actively pursuing research and development activities. The 23rd report's pages 23 and 24 print the same passage. Page 43 uses the word for the cost of games between plan approval and launch; page 24 uses it for a data-science organisation. Both are quoted here as printed, and the report does not place the Intelligence Lab in a segment on either page.

The titles the development staff are working on are named in the same IP section, not in the research section. イ. 既存IPの強化と拡大 on page 24: a new title based on the Dungeon&Fighter IP, The First Berserker: Khazan, has been announced, and Project OVERKILL and ダンジョン＆ファイター：アラド are in development; the 23rd report's list was Khazan, Project OVERKILL and Project DW. ロ. 新規IPの創造: among large projects, The First Descendant, described as a ルートシューター, and ARC Raiders, a PvPvEエクストラクション・アドベンチャー, have been released, while NAKWON: LAST PARADISE, Project DX and Vindictus: Defying Fate are in development; among small ones, Mintrocket's DAVE THE DIVER has passed 累計販売本数700万本, seven million cumulative units, against 500万本 in the 23rd report, which also named the large-and-small pairing as the 「Big & Little」戦略. The research table assigns cost by the location of the company, so nothing in the section says which title's cost sits in which row.

Three sentences elsewhere touch the same work. Risk item (9) M&Aや業務・資本提携に関わるリスク on page 33 states the aim of acquisitions as 競争力のある事業ポートフォリオ、IP及び開発人員の確保、拡充, securing and expanding a competitive portfolio, IP and development staff. (3) 労働組合の状況 on page 17 records a long strike at the second-tier subsidiary NEOPLE INC. during the year, settled on the company's proposal, and says that in a strike 影響は一部新規開発タイトルのスケジュールに限定され、サービス提供が中断されることはありません, the effect is limited to the schedules of some new titles in development and service is not interrupted. And the funding paragraph on page 39 lists 外注費、人件費等の原価、販売費及び一般管理費、研究開発費等の営業費用 — cost of sales such as outsourcing and personnel, selling, general and administrative expenses, and operating expenses such as research and development — as the main demands for funds, met from 自己資金, own funds.

Method. The desk located the two annual securities reports in the EDINET document-list API for March 24, 2026 and March 27, 2025, retrieved the PDFs through the same API, and read them with pdfplumber: page 43 of the 24th report (S100XSM4, 204 pages) and page 40 of the 23rd (S100VHMV, 200 pages) for the section, with the segment tables read by table extraction, keeping whitespace; pages 2, 8, 12, 13, 15, 17, 24, 25, 33, 35, 38, 39, 44, 45, 114, 124, 126, 135, 136, 169 and 198 of the 24th and pages 8, 17, 23, 24, 108 and 164 of the 23rd for the indicators, the segments, the companies, the notes and the key audit matter. The two sections were compared after removing line breaks. Every figure is as printed, in the unit printed; the 5.6, 5.8, 13.9 and 477.1 percent are the reports' own ratios; where printed components were checked against a printed total the result is stated and the sum is not written. The only arithmetic is the conversion of yen to US dollars at ¥163.8 = US$1, for reference. The chart plots the three consolidated values and the segment rows for the two years.