Nexon is speeding up the expansion of the intellectual property (IP) of 'Dungeon & Fighter', also known as 'DnF'. Second-quarter revenue for the DnF franchise fell 44 percent from a year earlier, but its investment direction has tilted toward expansion rather than contraction.

Nexon Chairman Patrick Soderlund (패트릭 쇠더룬드) said on the second-quarter earnings conference call, "Dungeon & Fighter is going through a period of reorganisation this year," adding, "We are pursuing a plan that prioritises the right direction over speed." He stressed that the company has not changed its view that it can put DnF back on a growth track.

Nexon is working to lift the competitiveness of its existing PC and mobile DnF titles, while preparing new games of different types such as 'DnF Kiwoogi', 'Dungeon & Fighter Classic', 'Project Overkill' and 'Dungeon & Fighter: Arad'. The structure aims to pursue a rebound in existing services and the capture of new user groups at the same time.

◆ Existing DnF undergoes reorganisation; new titles expand user base

All major season updates for PC and mobile DnF in the first half of this year fell short of expectations. Because DnF is structured so that the performance of large-scale season updates has a big impact on user metrics and revenue, weak major updates led to a decline in franchise results.

Nexon presented expanded content supply and the addition of new play styles as solutions. Jeong-heon Lee (이정헌), head of Nexon's Japan unit, said it would increase the types of large-scale, season-based updates and the volume of content produced. He also said it would add new experiences that leverage DnF's distinctive action, beyond raids or level expansions.

In China mobile, it also strengthened cooperation with Tencent. From the third quarter, content supply transferred to Tencent for development has ramped up in earnest, and Nexon plans to make the update cycle in the second half of the year tighter through this. The push to increase investment is also reflected in staffing. DnF developer Neople has recently launched large-scale hiring across 12 positions, and its workforce has nearly doubled from about 800 employees in 2020 to around 1,500 now.

While overhauling content production and operations systems for existing services, Nexon is focusing in new titles on expanding the user base and the market reached by the DnF IP itself. The users and markets targeted differ by title.

'DnF Kiwoogi', scheduled for release in the fourth quarter this year, targets light users through the idle genre. Lee said DnF Kiwoogi is similar in direction to the franchise expansion strategy pursued with MapleStory. He added that a difference is that DnF's key expansion titles are centred on internal development, making a relatively high profitability structure possible.

MapleStory is already producing results from franchise expansion. Second-quarter revenue for the MapleStory franchise rose 63 percent from a year earlier, setting an all-time quarterly high. 'MapleStory World' and 'Maple Kiwoogi' contributed to the growth.

'Dungeon & Fighter Classic' has a different direction. It is being developed with a target launch in 2027, aimed at users nostalgic for the old PC DnF. Unlike Kiwoogi, which seeks new users, it is closer to playing a role of bringing existing users back.

'Project Overkill' reconstructs the original work's 2D side-scrolling action into a 3D action role-playing game. 'Dungeon & Fighter: Arad' is a work aimed at expanding the DnF universe into the global market.

◆ 'Fewer, but bigger'... DnF is a focus title

This expansion is meaningful in that Nexon is reducing its overall development pipeline.

Soderlund said at a capital markets briefing in March that he would make "fewer, but bigger and more complete games" and would re-examine the product portfolio and pipeline. It is a strategy to selectively allocate development resources by weighing profitability by game.

Even in that process, DnF Kiwoogi, Classic, Overkill and Arad remain in the development lineup. Lee also cited DnF as an important priority for the company and said it plans to release Kiwoogi within this year and roll out expansion titles such as Classic and Overkill sequentially from next year.

Nexon's decision to keep DnF expansion titles even as it reduces the number of overall projects can be read as meaning it sees DnF not simply as a long-running IP, but as a future growth pillar.

Still, IP expansion does not guarantee results. The DnF IP-based action RPG 'The First Berserker: Khazan', released last year, drew early attention, but later received assessments that sales fell short of market expectations. Neople subsequently reassigned part of its development organisation to other projects.

Ultimately, the key issue is whether a rebound in existing DnF and an expansion of users and revenue sources through new titles will translate into results at the same time.

An industry official said, "DnF is an IP with sufficiently high awareness and a sufficiently large user base already, so what matters going forward is not increasing the number of new titles but whether it can bring in users who did not play the existing DnF," adding, "The key is whether different types of expansion, such as Classic, idle and 3D action, actually lead to a broader user base and diversified revenue."