이 기사는 2020년 02월 14일 08:00 thebell 에 표출된 기사입니다.

South Korea’s Kakao Games is speeding up preparations for the initial public offering (IPO), raising hopes for an actual listing which has been delayed for three years.

Kakao Games, the gaming arm of the nation’s largest messenger app operator Kakao Corp., has recently resumed preparations for the proposed IPO, industry sources said on Wednesday. Its decision to acquire a controlling stake in game developer XL Games, which was announced on Tuesday in a regulatory filing, is also said to be part of an effort to ensure the success of the IPO.

The acquisition is seen as laying the groundwork for gaining a foothold in the massive multiplayer online (MMO) game market, which has been growing at a rapid pace in recent years. In 2018 when Kakao Games initially announced its IPO plan, the market seemed uncertain about the longer-term growth outlook of the company due to its business model that largely focused on publishing games.

However, with the acquisition, Kakao Games is set to absorb multiple pieces of intellectual property and teams to develop games owned by XL Games, which it lacked previously. This can be a factor that acts in favor of Kakao Games’ value when the IPO takes place.

XL Games, a developer and license holder of online game Arche Age, has generated revenue in a range of 30 billion won to 50 billion won annually, and has recorded improved performance after posting the first net profit in 2017.

The overall preparations seem to have almost been completed. Kakao Games has finished the paperwork for the IPO, and Korea Investment & Securities, which is serving as underwriter, is said to be ready to file the prospectus with the regulator shortly after the company’s 2019 annual report is released.

A potential obstacle to the company’s IPO is the fact that there are other Kakao affiliates with plans to list their shares, which include mobile content platform operator Kakao Page and internet-only bank Kakao Bank. It is a common conception in the domestic IPO market that a conglomerate normally does not list shares of its affiliates at the same time as it is not best for the group.

Currently, Kakao Page is expected to be valued the most among Kakao affiliates in the IPO pipeline, which represents that the Kakao Games IPO plan could remain a lower priority from the perspective of the group. If a listing is delayed again, it would be highly unlikely that Kakao Games finishes its IPO within this year. The final decision will be made by Kakao’s senior officials including Chairman Kim Beom-su.

Market insiders are also closely watching the prospects of the game market, which started slowing down in 2018 when Kakao Games first announced the IPO plan. At the time, the company forecasted its value to be in a range of 1.24 trillion won to 1.92 trillion won.

(By reporter Seong Sang-woo)