Thanks for sharing the article by Owen Mahoney! I found it a very interesting read, this is the first time I've heard of the term "Forever Franchise". Immediately, Pokemon comes to mind.
You laid out a lot of potential positives in the turnaround process, but what are the chief risks you see to this investment?
(1) You highlighted a very good example in Pokemon! To a smaller extent, MapleStory is also another example.
I am surprised that people still play MapleStory. Its revenue is much higher today! Quite amazing. I thought it already went the way of Angry Birds, Flappy Birds, etc.
(2) The biggest risk is the decay of the franchise. Or in Owen's words, when Nexon stops making 'fun' games.
By the time it manifests as high churn, lower customer advance payments, it'll be too late.
The leading indicator I'll look for is talent. If key employees like Patrick Söderlund departs, I'll pay very close attention.
(3) The other risk is customer concentration. In 2025, ~28% of revenue comes from one customer in the Korea segment.
Nexon does not disclose the identity, but I suspect it's Tencent.
Tencent publishes and distributes DNF in China.
As you already know, China has cracked down on mobile gaming before.
That's part of doing business in China. Government policy takes precedent over business. I would size accordingly.
Wow great timing. It seems like they beat on earnings and the stock is up 20%.
Yes I am surprised by the longevity of games like MapleStory. I remember hearing this name in the 2000s.
That makes sense. The company’s lifeblood is making fun games and preserving the key talent that have that vision to preserve the game’s core principles.
Yes every few years it seems like China introduces regulation to crack down on games, causing companies like Tencent and Netease to see their stock fall. I read about this from Jingshu’s Substack. I like these regulatory patterns, provided the regulators soften and the companies recover, it makes for good entry points.
I respect the discipline. Looking forward to reading more! Also, have you checked out out Amrize (AMRZ)? Looks like they did a spinoff last year and there have been multiple waves of cluster insider buys: http://openinsider.com/AMRZ
Also it appears Chris Hohn has bought the peers of Amrize: VMC and MLM. They are in the quarry business which is a localized oligopoly like waste management companies due to cost of moving the construction materials: https://www.dataroma.com/m/holdings.php?m=tci
Thanks for sharing the article by Owen Mahoney! I found it a very interesting read, this is the first time I've heard of the term "Forever Franchise". Immediately, Pokemon comes to mind.
You laid out a lot of potential positives in the turnaround process, but what are the chief risks you see to this investment?
(1) You highlighted a very good example in Pokemon! To a smaller extent, MapleStory is also another example.
I am surprised that people still play MapleStory. Its revenue is much higher today! Quite amazing. I thought it already went the way of Angry Birds, Flappy Birds, etc.
(2) The biggest risk is the decay of the franchise. Or in Owen's words, when Nexon stops making 'fun' games.
By the time it manifests as high churn, lower customer advance payments, it'll be too late.
The leading indicator I'll look for is talent. If key employees like Patrick Söderlund departs, I'll pay very close attention.
(3) The other risk is customer concentration. In 2025, ~28% of revenue comes from one customer in the Korea segment.
Nexon does not disclose the identity, but I suspect it's Tencent.
Tencent publishes and distributes DNF in China.
As you already know, China has cracked down on mobile gaming before.
That's part of doing business in China. Government policy takes precedent over business. I would size accordingly.
Wow great timing. It seems like they beat on earnings and the stock is up 20%.
Yes I am surprised by the longevity of games like MapleStory. I remember hearing this name in the 2000s.
That makes sense. The company’s lifeblood is making fun games and preserving the key talent that have that vision to preserve the game’s core principles.
Yes every few years it seems like China introduces regulation to crack down on games, causing companies like Tencent and Netease to see their stock fall. I read about this from Jingshu’s Substack. I like these regulatory patterns, provided the regulators soften and the companies recover, it makes for good entry points.
Thanks! I got unlucky. I wanted to buy after I finish my full thesis.
The same thing happened with PYPL, up +40%.
The good news: this strategy has potential. Not all ideas will work, but overall return seems quite attractive.
Too many ideas. Too little time and energy.
The biggest risk is I become greedy and take shortcuts. I’ve seen someone blow up like that.
More ideas to come. Stay tuned!
I respect the discipline. Looking forward to reading more! Also, have you checked out out Amrize (AMRZ)? Looks like they did a spinoff last year and there have been multiple waves of cluster insider buys: http://openinsider.com/AMRZ
Also it appears Chris Hohn has bought the peers of Amrize: VMC and MLM. They are in the quarry business which is a localized oligopoly like waste management companies due to cost of moving the construction materials: https://www.dataroma.com/m/holdings.php?m=tci
Sounds very interesting! Transport costs create strong pricing power. Thanks for sharing, I'll look into that