Nexon Cancelling Sale of Shares

Nexon, one of South Korea's largest video game developers and publishers, might be hitting a rough patch. Founder Kim Jung-ju is dismissing plans to sell his stake in the parent company NXC, after the company failed to draw a bid from Tencent Holdings. What could have been a mega merger for 2 powerhouse Asian video game businesses will continue to remain separate, for now.

Announced earlier this year, Kim was planning to sell up to 98% of the company's shares, valued at over $10 Billion USD. The reason why is still unknown. Nexon and NXC have been quiet about the deal. Some have speculated that Kim wanted to get out of the industry entirely after a lengthy legal fight for corruption charges. But the company has denied that this was the reason.

Additional bids from Kakao and MBK Partners were short of Nexon's plan. The issue at hand is NXC and Nexon couldn't get a big enough bid to sell the shares. One of the issues that may have deterred investors is that Nexon doesn't have many "hit" games. The games that work, work. They stick around for years (decades in some cases) and have a very loyal customer-base because of it. But the scarcity of new products from Nexon is unusual in the gaming industry for a company of that size. Nexon works as a games-for-service model and doesn't instantly jump from project to project. Which has worked on their long-term financials, but is not appealing to short-term gains.

What's next for Nexon? We're not sure! The company is still keeping quiet while they determine their next move. But if you're concerned about your favorite games going away, don't worry. Nexon is still coasting along.

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