Chinese game company Kingnet, which has been in a legal dispute with Wemade over intellectual property (IP) rights to "The Legend of Mir," will invest about 400 billion won to take part in acquiring Wemade. It will secure a 49% equity stake in Neosphere, the parent company above Neopulse, which decided in June to acquire Wemade. The two companies are expected to use this investment to begin expanding business cooperation in earnest, including game development and publishing in China using the Mir IP.
According to the game industry and a disclosure on the Shenzhen Stock Exchange in China on the 13th, Kingnet plans to acquire a 49% equity stake in Neosphere through its Hong Kong subsidiary, Cypress Technology HK. Kingnet's planned investment is $298 million (about 399.7 billion won).
Neosphere holds 100% equity in Shengsong Investment, and Shengsong Investment holds 100% equity in Neopulse. It is a structure in which Neosphere indirectly controls Neopulse.
In June, Neopulse signed a contract to acquire the entire 39.33% equity stake in Wemade held by Chair Park Gwan-ho of Wemade for about 920 billion won. Including its existing equity holdings, after the transaction is completed, Neopulse's Wemade equity ratio will rise to 40.25%, making it the largest shareholder.
In the end, once the transaction is fully closed, an equity chain will be formed of "Kingnet→Cypress→Neosphere→Shengsong Investment→Neopulse→Wemade." By securing a 49% equity stake in Neosphere, Kingnet will in effect participate indirectly in the Wemade acquisition led by Neopulse.
Wemade and Kingnet had long been in a legal dispute over Mir IP use and royalty payments, but this year they concluded related lawsuits and arbitration. Kingnet develops Mir-series games as a main business in China, and Wemade is the original rights holder of the Mir IP.
Kingnet cited strengthening the Mir IP business as the key rationale for this investment. The Mir IP, which has continued in China for more than 20 years, has secured a stable user base and strong brand recognition, and an ecosystem for related games and licensing businesses is already in place.
Regarding this, Wemade said, "An investor consortium consisting of Neopulse and Kingnet, among others, signed a share purchase agreement (SPA) with Wemade Chair Park Gwan-ho on June 30, and is proceeding with all procedures required to close the transaction, including payment of the remaining amount and regulatory approvals, by Oct. 30," and added, "Once this process is completed, the investor consortium, as the largest shareholder of Wemade, plans to focus on expanding various opportunities, including publishing and core IP licensing businesses, in global and Chinese markets."