We will foster creators for each trendy content category and strengthen global advertising and IP businesses to turn a profit this year.
Chief Executive Cha Byeong-gon of Sandbox Network (hereinafter Sandbox) stated accordingly in an interview with ChosunBiz on the 12th. Founded in 2015, Sandbox is a leading domestic multi-channel network (MCN) corporations. Its core businesses are producing content and running advertising for creators active on YouTube, Instagram, and other platforms. About 320 creator teams, including Gamst and Ddusi, are currently affiliated with Sandbox.
Sandbox has recently focused on improving profitability. The company posted an operating loss of 4.2 billion won last year. Compared with the 15.2 billion won operating loss in 2023, it significantly narrowed the deficit. Last year's revenue was 73.1 billion won, up 13% from a year earlier.
At the center of Sandbox's profitability improvement is Chief Executive Cha, a former certified public accountant. Cha joined Sandbox as CFO in 2023, was appointed co-CEO last year, and became sole CEO in January. Founder and former co-CEO Lee Pil-sung now serves as chair of the board and is jointly discussing business strategy and vision.
Cha said, "If we laid the groundwork for restoring profitability by streamlining noncore businesses such as esports, now is the time to return to growth by turning a profit," adding, "What matters is building a business structure that can generate profits on an ongoing basis, not just a one-off surplus."
Sandbox is currently focusing on its core business of "creator support and content production." Cha said, "The company supports the entire production process, including creator management, risk management, advertiser relations, and content planning and filming," adding, "The core role of an MCN is to help creators concentrate solely on producing content."
Cha assessed that the MCN market structure is changing rapidly. In the past, large creators dominated by racking up many views, but now the market is segmenting around content and fandoms. Cha said, "We are moving from a subscriber-count-centered era to a content-centered era," adding, "Fandoms are forming by category—such as gaming, lifestyle, and animation—and the influence of small and midsize creators with about 500,000 subscribers is growing quickly."
Sandbox is also bolstering its short-form-based "nano creator" business accordingly. The strategy is to actively cultivate creators who drive high purchase conversions with short videos. Cha said, "Even in the ad market, rather than spending a large expense on a single major creator, combining creators by category to reach fandoms is more efficient," adding, "Demand for advertising based on short-form content, such as Instagram Reels, is rising quickly."
It is also strengthening its global advertising business. Sandbox handles domestic marketing for overseas game and IT corporations such as Tencent and NetEase, Inc.. Its strength lies in offering influencer-based ad strategies when overseas corporations enter the Korean market. Recently, it has expanded collaboration beyond games to lifestyle and kids content.
It is also cultivating the IP business as a new growth pillar. It is expanding kids content IP into animation, publishing, merchandise, and performances. A representative case is "Ddusi." Ddusi has gone beyond an animation channel to extend into musicals and merchandise. Cha said, "While advertising focused on brand exposure, IP commerce is tied to actual purchase conversion and has higher margins," adding, "We are strengthening joint product development and commerce by leveraging creator IPs with strong fandoms."
It is also expanding the virtual IP business. Sandbox is cultivating virtual idols such as "Baylight" and "Uarel." Cha explained, "Virtual characters face relatively lower language and cultural barriers, making global scalability high."
Sandbox is targeting 85 billion won in revenue this year and a return to profit. In line with improving results, the company plans to pursue a KOSDAQ listing within the year. Cha said, "Sandbox is evolving into a corporations that presents the growth direction of the creator industry," adding, "Based on a sustainable revenue structure, we aim to become the first listed company among domestic comprehensive MCN corporations."