S.Korea's Netmarble seeks M&As, U.S. expansion - founder

NC

18/01/2017 09:31

* Seeks to expand share of N.America, Europe games market 
    * Targets to place in top 10 of mobile games in China and 
Japan 
    * Netmarble reports 1.5 trln won in 2016 provisional sales 
 
    By Joyce Lee 
    SEOUL, Jan 18 (Reuters) - South Korea's largest mobile game 
company, Netmarble Games Corp, is seeking more mergers and 
acquisitions and intellectual property rights to expand its 
share of the gaming market in North America and Europe, its 
founder said.  
    The Tencent-backed  0700.HK  firm - with plans for a public 
listing estimated at billions of dollars in the first half this 
year - aims to raise its ranking in key markets to reach its 
goal of becoming a global top 5 game company by 2020, Bang 
Jun-hyuk told Reuters.  
    Netmarble wants to place within the top 10 in mobile games 
in China and Japan, Bang said on the sidelines of a news 
conference on Wednesday.  
    "The global game market's wave of M&As that began in 2016 is 
expected to continue to the first half of 2018," the 48-year-old 
controlling shareholder said. "After the market is reorganised, 
the remaining major companies' profits are expected to rise."  
    Netmarble, which CLSA valued at 14.3 trillion won ($12.3 
billion) in a Jan. 17 report, will look to the initial public 
offering to build up funds for mergers and acquisitions and 
other investments, to help reach its target of 5 trillion won in 
sales by 2020. 
    It reported 1.5 trillion won in 2016 provisional sales, up 
from 1.07 trillion won in 2015, helped by its blockbuster 
role-playing game "Lineage 2: Revolution" which earned 206 
billion won in first-month revenue since launching in one 
country, South Korea, in December.  
    The 2016 hit Pokemon Go reported about $200 million in 
first-month revenue, according to data provider Sensor Tower.  
    South Korea is the world's fourth-largest games market 
behind China, the United States and Japan with annual revenue of 
around $4 billion, according to June 2016 data from research 
firm Newzoo.  
    Bang said the company plans to make role-playing games, in 
which participants assume the role of a character and interact 
within the game's imaginary world, more mainstream in North 
American and European markets where strategy games dominate. 
    Netmarble has invested in mobile game studios in the United 
States and Canada. However, the need for a bigger war chest was 
evident when it lost out last year to a Chinese consortium 
including Alibaba's Jack Ma that offered $4.4 billion in cash to 
buy Caesars' online game unit.  urn:newsml:reuters.com:*:nL1N1AG0HE 
    Aside from plans to take "Lineage 2: Revolution" global, 
Netmarble announced on Wednesday plans for 17 new games, with 
some based on franchises such as Transformers and G.I. Joe. 
    Bang said there would also be 4 games developed for China. 
"Going forward, we have a target of releasing major games in 
China and Japan," he said.  
    Bang, a high school dropout who founded Netmarble in 2000 
after two previous start-up failures, sold management control to 
South Korean conglomerate CJ Group in 2004 but returned to lead 
a struggling Netmarble in 2011.  
    He owns a 32.4 percent stake in the firm, while Tencent 
Holdings Ltd holds a 25.3 percent stake through an investment 
vehicle.   
    Netmarble received Korean exchange approval for an IPO in 
December 2016. JP Morgan  JPM.N  and NH Investment & Securities 
 005940.KS  are advisers. 
    ($1 = 1,163.9900 won) 
 
 (Editing by Jacqueline Wong) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: NETMARBLE STRATEGY/