NEXON GAMES, NEXON's development subsidiary, turned in a poor report card in an ESG (environment, social, governance) assessment. In particular, it received a D, the lowest grade, in the governance institutional sector, drawing criticism that it falls far short of domestic and international standards in terms of governance transparency and accountability.
According to the "2025 ESG assessment and rating release for listed companies" that Korea Institute of Corporate Governance and Sustainability (KCGS) released on the 27th, NEXON GAMES received an overall ESG grade of C from KCGS. By category, it was C in environment (E), B+ in social (S), and D, the lowest grade, in governance (G).
Since 2011, KCGS has published ESG ratings annually to encourage the sustainable growth of domestic listed corporations, and this year it assessed 1,090 domestic corporations. The ratings are divided into seven levels: ◇ S (outstanding) ◇ A+ (very excellent) ◇ A (excellent) ◇ B+ (good) ◇ B (average) ◇ C (vulnerable) ◇ D (very vulnerable), and are classified by absolute evaluation according to score criteria for each grade. Among these, C and D indicate that a vulnerable sustainable management system is in place and that considerable effort is needed to improve the system.
NEXON GAMES is NEXON's development subsidiary created in Mar. 2022 through the merger of NetGames and Nexon GT. NEXON GAMES posted sales of 50.2 billion won and an operating loss of 10.5 billion won in the third quarter of this year. Sales fell 55.5% from a year earlier, turning to a loss. The company showed growth momentum last year with 256.1 billion won in sales and 38.7 billion won in operating profit, with sales up 93% three years after the merger, but sales decreased this year due to the base effect from the launch of "The First Descendant."
It is also seen as lagging in the ESG field. In particular, recording the lowest grade in the governance institutional sector suggests that key indicators such as internal controls, board independence, and the effectiveness of audit bodies fall far short of international standards. Not only NEXON GAMES, a domestic listed company, but also its Japan-listed parent NEXON received a "BB," the fifth of seven levels, in Morgan Stanley Capital International (MSCI)'s ESG assessment.
This is a different move from major domestic game companies. Among major domestic game companies represented by the 3N (NEXON, Netmarble, NCSOFT) and 2K (Kakao Games, Krafton), all but NEXON GAMES received an overall ESG grade of A this year. In particular, Kakao Games received A grades or higher in each subcategory of environment, social, and governance.
Within NEXON GAMES, a dedicated ESG task force (TF) was created last year, and the company does not publish a sustainability report, suggesting that a passive approach to ESG-related activities affected the evaluation.
The Financial Services Commission (FSC) plans to expand mandatory disclosure of sustainability reports to all KOSPI-listed companies by 2030, starting with KOSPI-listed companies with total assets of 2 trillion won or more. In response, major domestic game companies have recently voluntarily issued related reports to meet the FSC disclosure standards. In contrast, NEXON GAMES, due to its structural characteristic as NEXON's domestic subsidiary, is outside the scope of the FSC disclosure regime.
A NEXON GAMES official said, "In the basic assessment of the ESG evaluation conducted by KCGS, we improved many items and received a slightly higher assessment than the previous year, but there were some point deductions in the in-depth assessment," and added, "We are reviewing improvement measures for the cited deduction factors and plan to simultaneously work to continuously strengthen governance overall."