Park Gwan-ho, 54, founder and chair of Wemade, made a surprise announcement that he will sell his 39.33% equity stake (13,350,738 shares) to China-based capital for 920 billion won. Park returned to the front line of management after about 12 years during a period when the company was shaken by the 2024 WEMIX episode and former CEO Jang Hyun-guk's legal risk. He was initially expected to act as a firefighter, but once the Mir intellectual property (IP) dispute wrapped up, it ended up looking as if he had been waiting to hand the company over to China-based capital. Under the new largest-shareholder regime, with uncertainty over Wemade's independence and whether its development organization will be maintained, there are also concerns that attempts by China-based capital to acquire management control could spread across Korea's gaming industry.
According to the industry on the 2nd, Wemade disclosed that on the 30th it signed a stock purchase agreement to sell the 39.33% equity stake (13,350,738 shares) in Wemade held by Chair Park to Neopulse. The per-share price is about 68,910 won, or 3.6 times Wemade's closing price of 19,330 won on the disclosure day. The total transaction amount comes to 920 billion won. Once the remaining payment is completed on Oct. 30, Neopulse will become the largest shareholder with 40.25% equity in Wemade, and management control will transfer.
Neopulse, which will become Wemade's major shareholder, is an investment platform corporations established in Oct. last year. Legally it is a Korean corporation, but a Hong Kong-based investment manager holds 100% equity. It is said that Chen Wei, who has close ties with Alibaba, serves as CEO.
◇ Wemade's core asset "Mir IP"
Wemade is a first-generation Korean game company founded in 2000 by Chair Park. In 1996, while working as development team lead at ACTOZ SOFT, Park led development of "Legend of Mir," and later founded Wemade and released "Legend of Mir 2" in 2001. Since then, the Legend of Mir series has been a hit in Korea and China, becoming Wemade's core IP. In particular, in China, games using the Mir IP serve as a key revenue source. Wemade posted 614 billion won in revenue last year, of which 107.1 billion won came from Mir IP licensing revenue.
The industry reaction to the transaction has been one of bewilderment. When Chair Park returned to the forefront in 2024, it was taken as a move to personally resolve Wemade's management uncertainty. At the time, Wemade was reeling from the delisting of the virtual asset WEMIX, which had been the core asset of its play-to-earn (P2E) business, and from investigations into alleged excess circulation and false disclosures.
In fact, after Park returned, the company appeared to be getting back on track. Wemade posted an operating loss of 11 billion won in 2023, but turned to the black with 7 billion won in operating profit in 2024, and last year operating profit rose to 10.6 billion won.
◇ After the 20-year Mir dispute ends, a sale of management control?
Particularly controversial is that the sale of management control took place right after the Mir IP dispute was settled. Since 2004, when China's Shanda Games acquired ACTOZ SOFT, the co-copyright holder, Wemade has waged lawsuits for more than 20 years against Shanda, ACTOZ, and numerous Chinese game companies over Mir IP rights and revenue sharing. But in Apr. this year, Wemade ended a royalty dispute with China's Kingnet, and in Jun. it also concluded the Mir royalty dispute with ACTOZ SOFT and China's Shengqu. With the royalty disputes resolved, the sale came at a time when expectations were rising for a renewed expansion of the Mir IP business.
Some suspect that Chair Park and Neopulse may have been moving with a management control transfer in mind since last year. Neopulse appeared in a secondary share transaction at a time when Park's side's equity was tied up in a loss-compensation and collateral structure with financial investors (FIs). Back then it was interpreted as a "white knight" to ease Park's financial burden and as a strategic investor to expand business in China, but as it led to a full sale of the equity this time, some now see it as preparatory work for acquiring management control.
A gaming industry official said, "At the time, there was no talk at all of an acquisition; the mood was that it was a strategic investment for business in China," and added, "There's even a suspicion that the return to management was ultimately with the idea of handing the company over."
◇ Mir IP over the development organization? Concerns grow over a Chinese capital acquisition
Wemade said the transaction was driven by a shared vision of "evolving into AI-based future games" and "accelerating expansion into the Chinese market." However, the industry sees Neopulse as focusing more on the Mir IP's profitability in China than on Wemade's future game development capabilities. Because "Legend of Mir 2" has been a long-running hit IP in China, the thinking is that additional monetization is possible through expanding licenses in China, co-developing new titles, and partnering on local publishing. The decision to buy equity at more than triple the stock price on the disclosure day is also interpreted as reflecting expectations for the Mir IP and the potential to expand in China.
Separately from the IP's value, Wemade's independence and whether its domestic development organization will be maintained are unclear. As of the end of last year, Wemade had 453 employees in Korea, and under the new largest-shareholder structure, the key question is how much of the existing organization will remain. In particular, with many employees said to have been unaware of the equity sale until the disclosure day, the mood is one of internal unrest.
Wi Jeong-hyeon, a professor of business administration at Chung-Ang University, said, "ACTOZ SOFT, which was acquired by a Chinese company in the past, has seen its presence as a game company greatly weakened," and added, "What the acquiring corporations likely want is the revenue-generating 'Mir IP,' and they may have little interest in the domestic developer organization, which is relatively costly."
The transaction is also expected to have a significant impact on Korea's gaming industry. While there have been cases of Chinese capital such as Tencent taking equity stakes in major Korean game companies like Netmarble and Krafton, observers say a transfer of management control through securing all of a founder's equity is a different matter. In particular, concerns are mounting that small and mid-sized game companies or those with IP that has strong potential in China could emerge as additional acquisition targets for Chinese capital.