Disney’s Takeover — Nexon’s Fantasy?
It’s a deal that looks great on paper. Walt Disney, the world’s largest media and entertainment corporation, acquires a small but lucrative South Korean venture, which thrives in a rare business area the U.S. giant had struggled to get a hold of ― online gaming.
For Nexon, the country’s second-largest online game provider behind NCsoft, a marriage with the Mighty Mouse opens a whole new world of profit, allowing it to strengthen its share of the fast-growing U.S. market and feature their popular game characters in film animations and movies to boost merchandise sales. A win-win all around, right?
Kim Jung-ju, president of Nexon Holdings, the parent company of Nexon, seemed to agree when he hinted to a local newspaper that he might opt to sell a chunk of his 68 percent plus stake in the online game publisher if the right deal emerges.
However, after Kim’s comments were reported, Nexon officials were busy on the phones denying speculation that they are about to become employees of Walt Disney.
``No, it is not true,’’ said a Nexon spokesman, who claimed that Kim’s words were taken out of context in the interview.
The Nexon official revealed that the company has been negotiating with Walt Disney over potential business projects, such as releasing animation based on the characters of its popular games such as Maple Story, which has a strong following in the U.S. However, the talks have never been about selling company shares, he said.
An official at Walt Disney Korea declined to confirm whether the company is interested in Nexon or any other domestic online game provider. However, he said Walt Disney is committed to increasing its game-related revenue here, although there are no significant business projects to comment on as of yet.
Nexon posted revenue of 305 billion won (about $267 million) last year, based on the popularity of games such as Maple Story and Kartrider. Nexon’s units in the United States, Japan and Europe are also enjoying strong business, and the presence of Walt Disney would surely help the company boost its overseas sales.
Walt Disney has been showing a strong interest in the gaming business, recently establishing Fall Line Studio through its subsidiary, Buena Vista, which will be dedicated to creating games for Nintendo consoles.
The company also operates an Internet game site, Towntown (play.toontown.com), but the results have been disappointing. Adding Nexon to its lineup would represent an immediate improvement. Acquiring Nexon would also allow Walt Disney to become the second-largest shareholder of NHN, the country’s largest Internet company that operates portal site, Naver, and online game site, Hangame.
In his interview with the Korea Economic Daily, Kim claimed that Walt Disney is one of the major animation companies that had shown consistent interest in Nexon.
``Right now, I have no plans to sell Nexon, which I worked so hard to develop over the past 15 years,’’ said Nexon’s founder.
``However, if they approach us with plans for an indirect investment or other reasonable offer, I will positively consider them,’’ he said.