Mobile and Online Games Q2 FY2026: Nexon surges as DeNA struggles

Performance reflected the momentum of hit titles and differences in business mix. Nexon and GungHo reported interim results, while DeNA reported its first quarter, making direct comparisons imperfect.

• Growth diverged sharply. Revenue rose 17.4% year on year at Nexon and 2.3% at GungHo, while DeNA's fell 10.9%. The simple average growth rate was 2.9%, although the periods do not align.
• Overseas expansion helped drive growth. Nexon's new title *ARC Raiders* lifted sales in Europe and North America. GungHo also benefited from strong performance by *Ragnarok Origin Classic* in Asia.
• The hangover from a hit weighed on results. DeNA's game business posted lower revenue and profit as sales fell from the prior-year success of *Pokémon TCG Pocket*.
• Net income alone does not show the strength of core operations. DeNA's net profit surged 198.5% year on year, boosted by a gain from the GO listing.

Nexon stood out for both momentum and profitability. Revenue rose 17.4% to 273.3 billion yen, while operating profit increased 12.8% to 89.4 billion yen, the largest among the three. Its 32.7% operating margin also ranked first.

Sales of new releases drove growth in Europe and North America, but Nexon's South Korean business saw revenue and profit decline. Interim net profit rose 101.9% year on year, with foreign-exchange gains also contributing. Regional performance was mixed beneath the headline growth.

DeNA had the toughest period. Revenue fell 10.9% to 37.2 billion yen, and operating profit dropped 46.3% to 7.4 billion yen, reflecting the pullback from the previous year's game hit.

Net profit rose 198.5% year on year, but the main driver was a gain from selling GO shares. That one-off boost should be separated from any recovery in core operations.

Nexon is looking to make new releases a pillar of overseas growth. *ARC Raiders* drove performance in Europe and North America, and the European business returned to profitability. Its South Korean flagship business lost momentum, putting the revival of existing intellectual property in focus.

GungHo is combining established titles with new releases. *Puzzle & Dragons* remained solid, while *Ragnarok Origin Classic* also performed well. Operating profit rose 27.1% to 6.4 billion yen. The company is continuing upfront investment in nine new titles and is also canceling treasury shares to improve capital efficiency.

DeNA is looking to offset slower game performance through other businesses and asset sales. Proceeds from the sale of GO shares generated a gain of about 39.5 billion yen, lifting net profit. Its full-year forecast calls for revenue of 154 billion yen and operating profit of 15 billion yen. A recovery in core earnings, including in sports, remains the test.

Hit titles can power growth, but the downturn that follows can be just as pronounced. Companies need to build their next growth drivers and recoup investment.

• Reliance on hit titles. Fading popularity or weak new releases can weigh on revenue and profit at the same time.
• Upfront development costs. GungHo is preparing nine new titles. Delays or poor performance could push back returns on that investment.
• Volatility in overseas business. Currency movements and differences in regional demand can shift results and margins.
• Changes in platform conditions. Fees, advertising costs and regulatory changes in individual markets can affect profitability.
• Misreading one-off gains. Share-sale proceeds such as DeNA's GO-related gain do not represent recurring earning power.

Nexon ranked first in both revenue and operating profit, and also led in operating margin. Margins ranked Nexon at 32.7%, DeNA at 19.9% and GungHo at 12.3%.

DeNA, however, posted the fastest net profit growth, lifted by the gain from selling GO shares. Rankings alone therefore do not capture the strength of core operations. The earning power of new releases and the staying power of established titles are likely to shape the gap between companies.

In the games industry, operational and analytical skills matter alongside planning and development. Companies need people who can support the growth of a hit and carry lessons from it into the next title.

Nexon's challenge is expanding overseas and reigniting growth in established intellectual property. For GungHo, the focus is delivering multiple new titles and earning back its investment. DeNA is working to broaden its earnings base, including beyond games. Candidates should look beyond a company's titles to its business mix and development spending.