Kakao Games Progressing Smoothly with IPO Preparation... Coming Soon to KOSDAQ

Scheduled for demand forecasting on the 26th-27th... Public offering price range is 20,000 to 24,000 won

[Asia Economy Reporter Kum Boryeong] Kakao Games, known as a major player in the second half IPO market, is accelerating its listing on the KOSDAQ market scheduled for next month.

According to Shin Young Securities on the 21st, Kakao Games plans to be listed on the KOSDAQ market on the 11th of next month after a demand forecast on the 26th and 27th. The desired public offering price is 20,000 to 24,000 KRW, and based on this, the expected market capitalization is estimated to be between 1.4 trillion and 1.7 trillion KRW.

Kakao Games is a company responsible for the entire gaming industry, including game development, publishing, and platforms. Its publishing capabilities are recognized as the best in Korea. It has published games such as Battlegrounds, Black Desert in North America and Europe, and ArcheAge.

Its mobile platform, Kakao Gamehagi, holds behavioral data of 10 million users. This data is collected and analyzed to expose targeted game advertisements to 13 million users who are Kakao 'Plus Friends'. In the PC game sector, user accessibility is enhanced through the Daum portal site.

Yoon Euljung, a researcher at Shin Young Securities, explained, "Based on strong messenger competitiveness, it is strengthening its position as a marketing platform," adding, "Kakao Gamehagi is evolving into a marketing platform based on the traffic and competitiveness of the KakaoTalk messenger platform."

Development capabilities are being expanded. To compensate for the development capabilities, which were considered a weakness of Kakao Games, it acquired XL Games, the developer of Dalbitjogaksa. XL Games is one of the few domestic developers with the capability to produce large-scale PC and mobile massively multiplayer online role-playing games (MMORPGs).

Lee Jinman, a researcher at SK Securities, said, "More than 50% of the total workforce is in development positions. There are many star developers such as Song Jae-kyung, CEO of XL Games, and Kim Min-soo, PD of Dalbitjogaksa," adding, "They aim to increase the proportion of in-house development to 60% to reduce fees paid to developers and improve profit margins."

The major shareholders of Kakao Games are Kakao (58.9%), Tencent-affiliated Aceville (5.6%), Netmarble (5.6%), and K Cube Holdings (1.3%). Major subsidiaries include Friends Games (82.4%), Kakao VX (74.8%), and XL Games (52.9%).