In January, a mysterious $40M worth of investment from high-profile venture capital firm Andreessen Horowitz (A16z) paid for a 75% stake in bitcoin game platform Nexon. It was a major move for the company, which has been a major player in the South Korean video game industry for decades.
In late May, the largest Asian gaming company Nexon announced it invested $40 million in Bitmain Technologies. That’s a net worth of around $100 million. The next month, it announced the sale of its stake in the company. The price of bitcoin in May was just $6,800. So Nexon sold its entire stake for about $4,200, or a loss of 85% on its investment.
Nexon, one of the largest game development organizations in the world, has invested in several blockchain technology start-ups. Last year they reported they had invested over $100 million in cryptocurrency. The announcement made a splash, but what did you do?
Nexon’s financial quarter was very intriguing. Revenues for the second quarter were down from the previous quarter, which was expected. Why? It turns out that there are many causes for this.
Nexon first points out that its earnings failed due to the strange $100 million US investment in bitcoin it made last spring. The business claimed at the time that bitcoin would provide it with “long-term stability and liquidity,” but this quarter it says that it “identified a revaluation loss of 4.5 billion owing to fluctuations in the market price of bitcoin.” In the past four months, the company has lost approximately $40 million, or 40% of its bitcoin investment. Yikes.
Second, MapleStory — a long-time profit generator for the business – has been failing in Korea, according to GIbiz, which attributes it to continuing discontent within the core MapleStory audience about a lack of lockbox odds transparency. Seriously.
Despite the increase in FIFA Online and The Kingdom of the Winds: Yeon, as well as the huge lineup of incoming new titles we previously reported on, such as Project Magnum, Project HP, and Mabinogi Mobile, the business seems unconcerned.
The news was first reported by The Wall Street Journal on November 4th, and it comes as a surprise to many to learn that a company that has a long history of investing in Bitcoin startups and a track record of keeping its promises, just decided to pull out.. Read more about google nexon korea and let us know what you think.
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