Seeking to Transform into a Platform Player
The author is an analyst of NH Investment & Securities. He can be reached at jaemin.ahn@nhqv.com. -- Ed.
Gamevil is striving to transform into a platform player specializing in blockchain and metaverse, fields which are undergoing rapid developments as of late. We positively view the company’s recently announced plans to center its growth strategy upon building a blockchain-related ecosystem by issuing its own non-fungible tokens (NFTs) and combining with its global game platform, Hive.
- Gamevil is aiming to issue its own NFT (C2X) and release games based on a play-to-earn (P2E) model. The firm is preparing to actively respond to the recent market trend by utilizing Hive, its game platform used to service games worldwide, and the blockchain technology of its subsidiary Coinone.
- In 2022, Gamevil is to launch at least three new titles with NFT elements. It is preparing to release Chromatic Soul: AFK Raid (collectible RPG) in 1Q22, Project MR (casual) in 2Q22, and Gamevil Professional Baseball (sports) in 3Q22.
- The company also plans to enable trading of various digital assets through its NFT exchange business, and allow monetization of digital assets through its subsidiary Coinone’s platform. The subsidiary should also enable in-game item transactions via NFT.
- The marketability of a P2E model is being evidenced through recent success of WeMade’s Mir 4 in the global market—we believe that P2E is poised to become a major business model for game companies going forward. Among them, Gamevil’s future growth potential stands out given its assertive response to these emerging trends.
- Gamevil announced consolidated 3Q21 sales of W45.9bn (+34.4% y-y, +55.0% q-q) and OP of W21.6bn (+289.7% y-y, +643.4% q-q), with OP exceeding our estimate of W9.1bn by a wide gap. Business revenue fell 18.9% y-y to W22.8bn, but investment income from associates upped 281.2% y-y to W23.1bn. We attribute the jump in profitability to the facts that: 1) Com2uS’s NP has risen significantly on equity-method recognition of WYSIWYG Studio’s NP; and 2) Coinone’s earnings are also now (since 3Q21) being reflected on a consolidated basis.