Netmarble, Neptune, Me2On lead IPO rush in 2016

[THE INVESTOR] This year will see several well-known gaming companies -- such as Netmarble, Neptune and Me2On -- floating their shares. But whether the IPO trend can continue remains to be seen, industry watchers say, citing the intensifying competition with Chinese gaming firms.

Me2On, a social casino operator, is one firm that is scheduled for an IPO on KOSDAQ market in October. It is expected to draw up to 30.8 billion won (US$ 27.55 million) funds.

Me2On was established in 2010, and it services social network service platform-based mobile casino games. One of its signature games is “Full House Casino”, which it distributes overseas. 

Neptune, which recently acquired game developer Oolblue for around 3.1 billion won, is expected to go public on Nov. 7.

With the acquisition of Oolblue, Neptune appears ready to expand its business to role-playing games.

Last but not least, Netmarble is expected to see preliminary IPO assessment within this month, with the aim to get listed on the benchmark KOSPI by early 2017 at the latest.

Intensifying competition triggers skepticism

Whether the IPO trend of gaming companies can continue, however, is doubtful, mainly due to intensifying competition from overseas, particularly China.

The local gaming market is expected to post annual sales of 13.58 trillion won this year, up 4.6 percent on-year.

The growth reflects an increase from the 2.6 percent rise the industry showed in 2014, according to Culture Ministry figures, but not as explosive as before 2013 when the sector manifested double, and even triple-digit growth.

That stopped in 2013 when the local online game industry showed negative growth of 19.6 percent on-year.

“There are less new users, not to mention that Chinese firms are entering the market to intensify the competition,” said Kim Dong-hee, a researcher at Meritz Securities.

Stringent gaming regulations are another factor hindering the industry’s growth.

However, some deregulation may be in store, as the government is considering relaxing the limit on bets gamers place in online games, for instance, and eliminating the shutdown law that keeps minors aged under 16 years from logging onto online games after midnight.

By Kim Ji-hyun (jemmie@heraldcorp.com)