Netmarble Games geared for blockbuster IPO on mobile game success

By Sohn Ji-young

Published : Feb 12, 2017 - 16:37
Updated : Feb 12, 2017 - 17:13

South Korea’s Netmarble Games has geared up to make a blockbuster stock market debut this year, boosted by the success of mobile game “Lineage II: Revolution,” which spearheaded the firm’s high earnings in 2016.

Last September when Netmarble submitted its IPO plans to the Korea Exchange, analysts had predicted the Korean mobile game giant’s market capitalization would reach around 10 trillion won ($8.7 billion).

However, following the explosive popularity of its newest mobile game, local analysts have scaled up their forecasts for Netmarble’s market cap, with some predictions peaking at 14 trillion won.


The Korean game maker announced last week that it raked in 1.51 trillion won in revenue in 2016, up 40.4 percent from the previous year. Its operating profit reached 295.4 billion won, up 31.3 percent on-year.

A major contributor to the company’s sharp revenue hike was “Lineage II: Revolution,” a mobile role playing game based on the storyline and characters from NCSoft’s famed online PC game “Lineage.”

“Lineage II: Revolution” raised more than 206 billion won in sales in the first month of its Korean release on Dec. 14, according to Netmarble. So far, the game has secured some 5 million users, around half of whom are daily active users, the company said.

“Netmarble Games’ appropriate market cap stands at 14 trillion won, as it deserves a valuation premium now applied to the world’s top six game companies,” said KTB Investment & Securities analyst Lee Mi-na in a research note to clients.

“With the launch of ‘Lineage II: Revolution,’ Netmarble has obtained a new cash cow game. The company also possesses a diverse game portfolio which can back the continued creation of new hit games,” Lee said.

Moreover, around 30 percent of “Lineage II: Revolution” users make cash purchases within the game -- significantly higher than the average 5 percent overall among mobile game users, Lee said, in projecting that the game will retain its high profitability into 2017.

Looking ahead, Netmarble aims to focus on continuing to ramp up its competitiveness in overseas markets, which accounted for around 51 percent of the company’s revenue in 2016.

Netmarble foremost plans to release “Lineage II: Revolution” in China, the world’s biggest market for role-playing games, via China’s top game publisher Tencent within this year.

“We plan to introduce ‘Lineage II: Revolution’ in other big gaming markets such as the US, China and Japan to pave a new MMORPG market in the global game community,” Netmarble CEO Kwon Young-sik said in a recent press event.

With aims to become one of the world’s top five game companies by 2020, Netmarble has also pledged to seek out more mergers and acquisitions. It plans to release 17 new mobile games targeting global users this year as well.

Netmarble is scheduled to complete its IPO on Korea's main bourse Kospi before May. The company has yet to announce a specific timetable.

By Sohn Ji-young (jys@heraldcorp.com)

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The Korea Herald by Herald Corporation