[Click eStock] "Neowiz, Expectations for Webboard Regulation Easing and P2E Game Launch"

[Asia Economy Reporter Lee Jung-yoon] Daishin Securities maintained a buy rating and a target price of 35,000 KRW on Neowiz on the 3rd, citing expectations for diversification of game platforms and visible achievements in blockchain business due to the easing of web board game regulations and the release of new P2E (Play-to-Earn) games.

Since the announcement in February of the revision to the Game Industry Promotion Act enforcement ordinance, which raised the monthly game payment limit for web board games from 500,000 KRW to 700,000 KRW, the implementation has been delayed due to the review of the content and the change of administration. However, the easing of web board game regulations is expected to take effect within this month, and revenue growth effects are anticipated from the third quarter of this year.

Researcher Lee Ji-eun of Daishin Securities explained, "During the two previous easings of web board game regulations in 2016 and 2020, sales are estimated to have grown by more than 20%," adding, "However, in 2016, the market size for web board games was small, and in 2020, the increase in game playtime due to COVID-19 also contributed, so this year, sales growth is expected to be about 10%, somewhat lower than before."

Additionally, the release of P-ui Geojit (P’s Lie, a Soul-like game) is scheduled for 2023. P-ui Geojit is expected to reveal in-game footage and release schedules twice, at Gamescom in August and Tokyo Game Show in September this year. Considering that FromSoftware, a representative developer of the Soul-like genre, released a game in the first half of this year and has historically released new titles every 2-3 years, it is analyzed that there will be no significant Soul-like genre competitors to P-ui Geojit in the first quarter of 2023.

Neowiz is releasing blockchain games in various genres such as sports, FPS (First-Person Shooter), and RPG (Role-Playing Game). Among these, there is high anticipation for games that incorporate P2E into social casino genres.

Researcher Lee said, "Although blockchain game developers have released blockchain games in various genres, they still face difficulties balancing token economies," adding, "However, social casino games, due to their genre characteristics, have similar gameplay objectives to P2E games, and unlike other genres, they have many in-game currencies and tokens, so the inflation problem caused by an increase in these is relatively less severe. Therefore, social casino games can be expected as a new P2E game genre."