Kakao’s Backing Raises Korean Gaming Entrepreneur to Billionaires

kim Jae-young, the founder of South Korean online game developer Lionheart Studio, is now a billionaire after a $925 million investment from local internet giant Kakao, becoming the third gaming entrepreneur in the video game-obsessed country since last year. who has reached billionaire status.

Kakao Games Europe, the European subsidiary of Kakao’s gaming arm Kakao Games, purchased a 30.37% stake in Lionheart in late June for 1.2 trillion won ($925 million) and valued the company at approximately $3 billion. The majority of the stake was purchased from Kim, who now owns 34.67% of Lionheart. Kim, who is CEO and chairman of Lionheart, also owns a 2.87% stake in Kakao Games, whose sales hit record highs thanks to Lionheart’s popular online game Odin: Valhalla Rising† combined, Forbes estimates his net worth at $1.7 billion.

Developed by Lionheart and published by Kakao Games, Odin was released in South Korea last June and topped the country’s app store rankings. Kakao Games released Odin in Hong Kong, Macau and Taiwan in March, and the company is gearing up to release the game in Japan in the second half of this year. Odin has been downloaded more than 1 million times from Google’s Play Store, according to app research firm Sensor Tower, including 10,000 last month alone.

When Odin was launched, the game boosted Kakao Games’ mobile gaming revenue to a record high of 410.5 billion won ($315 million) in the third quarter of last year, up 359% from the same period last year. Lionheart, which makes all its money with Odinreported revenue of 232.6 billion won ($180 million) and a loss of 150.7 billion won in 2021, compared to a loss of 25.4 billion won the year before.

Lionheart, based in Seongnam, south of Seoul, is preparing for an IPO, according to a spokesman. Local newspaper Business newspaper Maeil reported that Lionheart could be valued at up to 8 trillion won ($6 billion), citing analyst estimates. Lionheart’s IPO would be the largest by a South Korean gaming company since billionaire Chang Byung-gyu’s Krafton, which raised $3.8 billion on the Korea Exchange in August last year.

Kim founded Lionheart in 2018, primarily with investments from Kakao Games and game developer Wemade, a pioneer of blockchain-based games in South Korea. Kakao Games has gradually increased its stake in Lionheart over the years and now owns 24.57% of the company. Along with its European arm, Kakao Games, which is part of billionaire Kim Beom-su’s Internet conglomerate Kakao, owns a majority of Lionheart. The other major shareholder is Wemade, which has a 4.23% stake after selling nearly half of its Lionheart stake to Kakao Games.

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“With the acquisition of a majority stake in Lionheart Studio, the developer of the hit title Odin, Kakao Games is to strengthen its development capabilities and secure significant earnings growth,” said NH Investment & Securities analyst Jaemin Ahn in a research note. “The acquisition should be an opportunity for Kakao Games to seriously focus on the global market.”

Before Lionheart, Kim previously co-founded another online game company, Action Square, in 2012, which went to the Korea Exchange in 2015 through a special acquisition company. Previously, Kim, who earned a master’s degree in mechanical engineering from Hanyang University in Seoul, worked at Japanese video game maker Koei (now part of billionaire pair Yoichi and Keiko Erikawa’s Koei Tecmo) and Neowiz, one of South Korea’s first internet companies. founded by Krafton’s Chang.

Last year, Chang and Wemade founder Park Kwan-ho also became billionaires themselves. The other South Korean gaming entrepreneurs in the three-comma club are Kim Taek-jin of NCSoft, Bang Jun-hyuk of Netmarble, Lee Joon-ho of NHN Entertainment, Kim Dae-il of Pearl Abyss and Kwon Hyuk-bin of smilegate.

Kim Jung-ju, founder of Nexon, pioneer of the free-to-play model where users play games for free but pay for virtual items and accessories, was the richest South Korean gaming entrepreneur until his sudden death in February at 54. age. His wife, Yoo Jung-hyun, who helped set up Nexon in 1994, made her debut this year on Korea’s 50 richest list with a net worth of $3 billion.


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