South Korean gaming giant Nexon recently released IR information (investor relations documents) announcing that it has initiated bankruptcy liquidation procedures for its development subsidiary Nitro Studio. Nitro Studio was responsible for developing the new work of the "KartRider" IP "KartRider: Drift" (KartRider: Drift).
Nexon said it had officially filed for bankruptcy against Nitro Studio on October 21. The company was established as a joint venture between Nexon Korea and Wonder Holdings in August 2020 to develop games utilizing the Kart Racing IP. Although Nexon Korea fully acquired the company in February 2024, it eventually went bankrupt as its main products failed to meet expectations.
Nitro Studio launched a new game "Kart Racing: Drift" in January 2023. However, due to poor market performance, the game was terminated on October 16 this year. Nexon explained: "We have determined that Nitro Studio's role as a company has ended and liquidation through bankruptcy proceedings is the most appropriate decision."
According to the announcement, Nitro Studio has recorded a cumulative operating loss of nearly 2 billion yen (approximately 19 billion won) in the past three years. As of the time of bankruptcy filing, the company's total liabilities were as high as approximately 105.859 billion won (approximately 9.967 billion yen). Of this huge liability, approximately 83 billion won (approximately 7.802 billion yen) is Nexon Korea’s loan.
However, Nexon stated that since Nexon Korea has fully accrued bad debt provisions for this large loan claim, this bankruptcy filing is not expected to have an additional impact on Nexon’s consolidated financial results.
In terms of personnel, some of Nitro Studio’s approximately 110 employees left through voluntary severance packages in September. The remaining employees will be placed in Nexon's internal standby organization "R Team" and will be gradually reassigned based on the needs of new projects in the future.
Despite the failure of the new game, Nexon promises to continue to inherit the classic IP of "Kart Racing". Currently, the follow-up work "Kart Racing Classic" is in preparation, and the project will be developed by Nexon Korea's internal team.
