이 기사는 2022년 05월 10일 08시14분 thebell에 표출된 기사입니다

Kakao Games, the gaming unit of South Korea’s Kakao Corp, is set to push ahead with plans to take Lion Heart, one of its game studio subsidiaries, public despite concerns from shareholders.

Lion Heart, the developer of hit mobile game Odin, is one of Kakao Games’ key revenue sources. Odin, which was released last summer, generated revenue of 400 billion won ($313.4 million) for only 110 days until early November, compared to Kakao Games’ consolidated revenue of 466 billion won in the July-September quarter.

Kakao Games’ plans to list shares of Lion Heart sparked a strong backlash from shareholders who are concerned about the potential negative impact of the listing on the parent company’s market value. The stock price of the gaming firm, which went public on Kosdaq in September 2020, has slumped by more than 20% since the game studio’s initial public offering plans were reported in early April.


Kakao Games has the right to publish games developed by Lion Heart in the domestic and overseas markets except China. This is a reason for some to react less negatively to the IPO plans because the game developer’s earnings growth would lead to increased cash flow to Kakao Games.

Lion Heart plans to use the IPO proceeds to develop new games, which if successful could help drive up its parent company’s game publishing revenue.

“I believe if Lion Heart’s value is unlocked, this will help increase Kakao Games’ value,” Cho Hyuk-min, finance head of Kakao Games, said in the company’s first-quarter earnings call on May 3.

Executives and employees of Lion Heart collectively hold a relatively large amount of shares in Kakao Games. Kim Jae-young, chief executive officer of Lion Heart, 2.78% of the gaming firm, only behind Kakao Corp CEO Namgoong Hoon’s 3.06% among individual shareholders, according to a regulatory filing on May 3. Kim’s stake is even larger than Kakao Games CEO Cho Kye-hyun’s 0.19%. Kim Beom, art director of Lion Heart, also holds 0.15% of Kakao Games.

This means they are strongly motivated to add the value to the parent company. The two executives of Lion Heart bought their stakes in Kakao Games at 77,100 won each in its capital increase in November last year. The purchase price was lower than the then market price of between 90,000 won and 110,000, but the company’s share price recently fell to around 58,500. (Reporting by Won-ji Hwang)