Kakao Games' Subsidiary Lionheart, Developer of 'Odin', Goes Public

[Asia Economy Reporter Seungjin Lee] Kakao Games has achieved a significant improvement in performance this first quarter, driven by the success of its core intellectual property (IP), "Odin: Valhalla Rising." However, concerns have emerged as Odin's developer, Lionheart Studio, prepares for an initial public offering (IPO).

According to Kakao Games and others on the 4th, Lionheart has completed the selection of the lead underwriter for the IPO and is preparing to go public within the year. In the securities industry, there are projections that Lionheart could be valued at over 6 trillion won based on the competitiveness of its flagship IP, Odin. Kakao Games currently holds a 51.95% stake in Lionheart.

The issue lies in Odin's influence within Kakao Games. Odin played a key role in Kakao Games entering the "1 trillion won club" in sales last year. It was also the absolute driving force behind the more than 100% year-over-year increase in sales and operating profit in the first quarter of this year. Ultimately, if Lionheart goes public, a "double counting" problem could arise, diluting Kakao Games' corporate value.

Odin also serves as the spearhead for Kakao Games' core goal this year of global expansion, which could further amplify this issue. Kakao Games plans to release Odin additionally in Japan within the year.

Regarding this, on the 3rd, Cho Gye-hyun, CEO of Kakao Games, stated, "Sufficient funding is necessary to expand in the global market," and added, "(Even if Lionheart goes public,) the structure reflects on Kakao Games' performance, which also helps enhance corporate value."

Kakao Games plans to overcome the "double counting" controversy by launching multiple new titles this year. In the first half, it will release "Uma Musume," developed by Cygames in Japan, and in the second half, it will introduce more than five new titles domestically and internationally, including games developed by XL Games.