Last year, SHIFT UP, which was considered a 'big player in initial public offerings (IPOs),' has been sailing smoothly since its listing, leading to increased interest in the next contenders. Promising candidates for IPOs in the gaming industry are weighing the right timing for listing while already increasing their corporate value with hit titles.
According to the gaming industry on the 25th, Netmarble Neo, LIONHEART STUDIO, and Wemade Connect are preparing for IPOs.
Netmarble Neo is currently the most proactive corporation in pursuing an IPO. Netmarble will vote on a proposal to transition from a dual representation system under CEO Kwon Young-sik and Kim Byung-kyu to a single representation system under Kim Byung-kyu at the annual shareholders' meeting on the 31st of 2025. CEO Kwon will only maintain his position at Netmarble Neo. The industry anticipates that Netmarble Neo will accelerate its IPO push.
Previously, Netmarble attempted an IPO in 2021 but withdrew it after five months due to poor performance. Last year, Netmarble Neo demonstrated a different appearance. By focusing on the development of new titles utilizing its intellectual property (IP), the company successfully made a stunning comeback. The hit of 'Solo Leveling: Arise,' released in May last year, resulted in sales of 100.2 billion won and an operating profit of 50.8 billion won as of the third quarter of last year. Additionally, it won the Daesang at the Korea Game Awards last year with 'Solo Leveling: Arise' (hereafter referred to as 'Solo Leveling').
Kakao Games' subsidiary LIONHEART STUDIO is also seeing strong IPO prospects. LIONHEART passed the preliminary listing examination for the KOSDAQ in September 2022 but submitted a withdrawal report two weeks later. LIONHEART is the developer of the award-winning title 'Odin: Valhalla Rising' in 2021, and 'Odin' continues to rank high on Google Play in sales, even before its fourth anniversary. Given their strong determination for an IPO, the success of their next title is expected to be a major driving force. The company is currently preparing for the release of the subculture collection RPG 'Project C' (tentative name) in the third quarter and a massively multiplayer online role-playing game (MMORPG) 'Project Q' (tentative name) in the fourth quarter.
Wemade Connect is also gearing up for an IPO. It was established with the goal of going public following its past as Plarium Games, but it hasn't achieved significant results. However, the success of 'Lost Sword,' released earlier this year, has changed the situation. 'Lost Sword' recorded accumulated sales of $10 million (about 14.6 billion won) within 50 days of its launch. The resignation of CEO Lee Ho-dae from the position he concurrently held at Wemade Play earlier this month is also seen positively. The industry views this as a strategic move for CEO Lee to focus on Wemade Connect's listing in line with the success of 'Lost Sword.'
Some argue that for gaming companies to succeed in going public, they need more than just a hit title. In fact, SHIFT UP was the only domestic gaming company to succeed in listing last year, backed by hits like 'Goddess of Victory: Nikke' and 'Stellar Blade.' However, the current stock price is below the offering price. MERITZ Securities noted that SHIFT UP is entering a stage of diminished stock momentum ahead of the second quarter, which could reduce the potential for stock price increases. They revised their target price from 90,000 won to 70,000 won.
Moreover, concerns about split listings must be addressed. Split listing refers to the process where a parent company separates a portion of its business unit into a subsidiary and lists that subsidiary as well. This can lead to a decline in the parent company's stock price and dilute the value of its shareholders’ stocks. Both Netmarble Neo and LIONHEART have faced criticism regarding split listings during their IPO processes. There is criticism that the separation of development and publishing sectors for individual listings may conflict with the interests of the parent company’s shareholders, thus each company needs to demonstrate its independent competitiveness.
A gaming industry official said, “These days, it is difficult to succeed in an IPO with just a single hit title,” adding, “Securing a stable fan base to create a sustainable growth model and building a diversified genre portfolio will be the key elements for IPO success.”