[News Inside Companies] Kwon Hyuk-bin's Smilegate with Assets of 8 Trillion Won

Starting with 50 million KRW capital, growing into a company with annual sales of 1 trillion KRW
Achieved 1 billion users thanks to the success of China's national game 'Crossfire'
MMORPG 'Lost Ark' continuous hits
Marking 20th anniversary, actively pioneering new businesses including entry into financial industry

[Asia Economy Reporter Kang Nahum] Following the divorce lawsuit of Smilegate founder and Chief Vision Officer (CVO) Kwon Hyuk-bin, the massive fortune worth 8 trillion won has become a hot topic, bringing renewed attention to the achievements of him and the company. The transformation of a small company with a capital of 50 million won into a major game company with sales exceeding 1 trillion won is mainly attributed to relentless attempts to conquer the global market and Kwon CVO's solid control system.

Crossfire and Lost Ark 'Blockbusters'...Grew into a 1 Trillion Won Annual Sales Company in 18 Years Since Founding

Smilegate Group recorded sales of 1.0073 trillion won in 2020, achieving the highest sales record since its establishment. The company joined the 1 trillion won club in less than 20 years since its founding in 2002. Last year, it also posted sales exceeding 1.4345 trillion won, marking two consecutive years in the 1 trillion won club.

In its early days, the company was a small-scale firm making feature phone games with a capital of 50 million won. In 2005, the company released its first FPS game, 'Headshot Online,' but the official launch was ultimately canceled as Yahoo Korea, which was in charge of publishing at the time, exited the gaming business.

Afterward, Kwon CVO embarked on producing the FPS game 'Crossfire,' which made Smilegate what it is today, successfully launching it officially. Although the response in Korea was lukewarm, it became a huge hit overseas, especially in China. Crossfire was even called the 'national game' in China and thrived, surpassing 1 million concurrent users just 10 months after its service launch in China in July 2008, in April 2009. In 2012, it exceeded 4 million concurrent users, earning a place in the China Guinness Book.

Currently, it is serviced in over 80 countries worldwide, with 1 billion users secured. As of 2020, it has recorded cumulative sales of $11.8 billion (approximately 14.8 trillion won).

Smilegate's heyday continued. The MMORPG 'Lost Ark,' which took 7 years to develop and cost about 100 billion won, achieved global success. Released on February 11 through the game distribution platform Steam in North America, Europe, South America, and Oceania, Lost Ark reached a peak concurrent user count of 1.32 million on the second day, February 12, ranking second all-time among games serviced on Steam. It holds the all-time number one spot for the MMORPG genre.

20 Years of Kwon Hyuk-bin's Sole Control System

Smilegate Group is structured with Smilegate Holdings leading its affiliates. Kwon CVO owns 100% of Smilegate Holdings' shares, and Smilegate Holdings has 100% subsidiaries including Smilegate Entertainment, Smilegate Megaport, Smilegate RPG, and Smilegate Stove.

In 2011, Kwon CVO reorganized Smilegate Group into its current holding company structure. Over the following years, through M&A (mergers and acquisitions), the group took its present form.

In August 2017, Kwon CVO stepped down as CEO of Smilegate Holdings and formed a board of directors, becoming its chairman. In 2020, Smilegate transitioned from a board of directors system to a 'Group IP Management Council system.'

The board system involves directors gathering to make internal decisions, while the Group IP Management Council system reflects management decisions incorporating opinions from internal experts and field personnel regardless of rank. At this time, Kwon CVO resigned as chairman and adopted the new title of CVO.

Notably, there is not a single publicly listed company within Smilegate Group. Since the company retains all profits, it is also known in the industry as a 'cash cow' enterprise.

The reason Kwon CVO is reluctant to list the company is reportedly due to past experiences of short-term performance pressure from investors, making him wary of external investments.

In 2019, Smilegate RPG once attempted an IPO with Mirae Asset Daewoo as the lead underwriter, but with Lost Ark's success this year and sufficient financial resources, the plan has been shelved.

20th Anniversary...Entry into the Global Financial Market

Marking its 20th anniversary this year, Smilegate has reached a new turning point. It announced ambitions to separate its financial affiliates and enter the global financial market. The plan is to segment startup investments and make preemptive investments in future new industries such as artificial intelligence (AI) and blockchain, establishing itself as a 'global innovator in Korea's financial industry.'

In April, Smilegate proposed a governance restructuring plan dividing about ten affiliates and related companies into a game and entertainment group and a financial specialized group including VC (Smilegate Investment) and asset management (Smilegate Asset Management).

Kwon CVO also announced plans for personal equity investments alongside the launch of the independent financial group. He promised active support for young entrepreneurs to challenge the global market.

Smilegate Financial Group aims to build a global financial platform providing financial services integrated with new technologies such as AI and blockchain in the global financial market. Investments will continue not only in the U.S. but also in Asian markets such as India and China.

Investment programs for early-stage businesses, such as angel funds, will also be actively developed. Smilegate Investment plans to spin off its accelerator (AC) into a separate corporation within the year. AC, Investment, and Asset Management will each specialize in early-stage investments like angel funds, traditional venture investments from Series A to Pre-IPO stages, and listed companies as well as real estate and overseas investments, respectively, aiming to nurture companies more professionally across all fields. The intention is to actively discover promising companies from the early stages and build a startup ecosystem through systematic investments.