Nexon makes weak Tokyo debut that casts doubt on Zynga’s float pricing

 
City A.M. Reporter
ONLINE gaming firm Nexon slipped on its trading debut yesterday following a $1.2bn (£776m) initial public offering, Japan’s biggest this year, and may signal a bumpy ride for US-based rival Zynga, which it due to debut on Nasdaq tomorrow.

Nexon, founded in South Korea almost two decades ago, offers PC-based games for free, while charging users small fees for in-game virtual items such as clothing for avatars -- a so-called freemium model that analysts see as relatively recession-proof.

Yesterday, Nexon, which sold more than 70m shares, closed at ¥1,270, below its IPO price of ¥1,300. The broader market lost 0.4 per cent, and local rivals Gree and DeNA fell 2.7 per cent and 4.3 per cent, respectively.

Zynga, which developed the popular FarmVille and Mafia Wars games for Facebook, has had to trim its near-$1bn IPO – the largest from a US internet company since Google in 2004 – because of weak financial markets.

Nexon, whose most successful offerings include role-playing adventure game MapleStory and KartRider, has more than 77m active monthly users, compared with Zynga’s 260m.

Analysts said enthusiasm for the IPO may have been dampened by a cyber attack last month in which hackers gained access to personal data, but no financial information, on more than 13m Nexon subscribers in South Korea.