[Featured Stock] Action Square Hits Upper Limit During Trading on Tencent Equity Investment News

[Asia Economy Reporter Ji Yeon-jin] Action Square's stock price surged to the upper limit during trading hours following news that it would receive equity investment from Tencent, the No. 1 game company in China.

On the day, Action Square recorded 7,730 KRW, up 29.92% from the previous day in early trading on the KOSPI market. Afterwards, the stock price turned downward and as of 10:22 AM, it was trading at 6,710 KRW, up 12.77% (760 KRW) from the previous day.

According to investment banks (IB) and the gaming industry on the day, Tencent plans to inject 20 billion KRW into Action Square to acquire shares of Action Square Dev, Action Square’s development subsidiary (a wholly owned subsidiary of Action Square). This is to become a strategic partner securing publishing rights and to expand Action Square’s global market entry and business growth.

Tencent is not only the largest game company in China but also the global No. 1, actively investing in domestic game companies. It is a major shareholder of Netmarble, Kakao Games, and Krafton. Additionally, Tencent maintains close relationships by distributing flagship games of Nexon and NCSoft in the Chinese market. This year, Tencent became the largest shareholder of Royal Crow, a subsidiary of Some Age, and Act Five, the developer of ‘Yeolhyeol Gangho M,’ through equity investments, thereby acquiring their new titles. Tencent’s expansion of investment in the domestic gaming industry aims to secure new game intellectual properties (IP) and development talent to strengthen its dominance in the global market.

For Action Square, pursuing strategic collaboration with Tencent is advantageous. With Tencent’s backing, it can easily enter China, the world’s largest online game market. Moreover, Action Square plans to accelerate business expansion following the release of Anvil.

Action Square is currently developing ‘Project Kingdom,’ a PC and mobile multiplatform action game utilizing the Netflix Originals ‘Kingdom’ IP. It is preparing to launch ‘Three Kingdoms Blade’ in Taiwan, Hong Kong, Macau, and Southeast Asia, as well as in North America and Europe within the year. Additionally, a new project using the ‘Blade’ IP is also being planned. Amid this business expansion, partnering with Tencent is expected to enable various strategic collaborations. An industry insider stated, "Tencent is reportedly considering a long-term contract covering not only the Chinese publishing rights for Anvil but also Action Square’s follow-up title ‘Project Kingdom.’"