Online gaming firm Nexon Co, a fast-growing Asian rival to U.S.-based Zynga, opened up slightly at 1,307 yen on its Tokyo trading debut on Wednesday, following its $1.2 billion IPO, Japan's biggest this year.

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. Its IPO was priced at 1,300 yen.

The broader market was down 0.5 percent, while domestic rivals Gree and DeNA both dropped more than one percent.

Zynga, known for its success in developing games for Facebook, was forced earlier this month to trim its planned near-$1 billion IPO -- still the largest from a U.S. Internet company since Google Inc raised $1.7 billion in 2004 -- due to weak financial markets. Zynga's first day of trading will be Friday.

Nexon, whose most successful offerings include MapleStory and KartRider, has more than 77 million active monthly users, compared with Zynga's 260 million.

Between 2008 and 2010, Nexon's operating profit tripled to 30 billion yen and sales increased more than 70 percent to 70 billion yen. The company employs 3,240 people, mostly in South Korea, and derives most of its business from Asia. China and South Korea accounted for two-thirds of revenue last year.

A cyber attack in which hackers gained access to personal data, but no financial information, on more than 13 million subscribers to its MapleStory role playing game in South Korea probably took some of the shine off the IPO, analysts have said.

Nexon has said it will use the IPO proceeds to pay off debt, build a new home for its Nexon Korea Corp unit, upgrade games systems and invest in third-party games developers.

(Reporting by Isabel Reynolds; Editing by Joseph Radford)

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