Kakao Games (293490.KQ), whose largest shareholder has changed to Japan's LINE Yahoo, is accelerating its global expansion by leveraging the "LINE platform," which dominates the Southeast Asian market. Under its new leadership, the company plans to improve its financial structure while using the recently secured 300 billion won in "ammunition" to pursue aggressive mergers and acquisitions (M&A) and secure publishing rights, aiming to reclaim its status as a "prestigious gaming house."
Kakao Games held an extraordinary general shareholders meeting and board meeting on Tuesday at the Kakao AI Campus in Yongin, Gyeonggi Province, where it passed a resolution to appoint Kim Tae-hwan, vice president of LINE Games, and Lee Si-woo, chief business officer (CBO) of Kakao Games, as new co-CEOs.
Kim, the new co-CEO, is a global strategy expert who served as vice president of Nexon America before joining LINE Games in 2023 as vice president (CSO). At Kakao Games, he will oversee global business expansion and M&A. Lee, the new co-CEO and an early founding member of Kakao Games who is well-versed in business structure and management issues, will take charge of overall gaming operations and focus on internal affairs.
With Kakao Games' major shareholder shifting from Kakao (37.93% to 14.68%) to LTriple A Investment (33.43%), a subsidiary of LINE Yahoo, the industry is paying attention to the synergy that may be created between the two companies.
Kakao Games first plans to actively target Asian markets, including Japan, where LINE platform users are numerous. The strategy is to apply directly to the Southeast Asian market the success formula that led the domestic mobile gaming industry through a publishing strategy based on the national messenger "KakaoTalk." LINE messenger currently has about 200 million global monthly active users (MAU).
Shin Kwon-ho, the new chief financial officer (CFO) of Kakao Games, said, "The LINE platform is continuously expanding its influence in Southeast Asia, including Vietnam and Indonesia," adding, "We will pioneer new markets in a manner similar to Kakao Games' past success."
The 300 billion won in funds secured through the change in largest shareholder will be used for financial stabilization as well as a seed for strategic investments. The company plans to actively pursue equity investments and M&A in promising domestic and overseas developers to diversify its intellectual property (IP) portfolio. In particular, it will concentrate resources on the global marketing of six new titles slated for release within the year, including "Odin Q" and "Project C."
"Aggressive investment and innovation are essential to compete in the fierce global market," Kim said. "Based on the capital we have secured, we will do our best to ensure that Kakao Games can grow with speed on the global stage."
Cooperation with LINE Games, now an affiliate, will also be strengthened. Rather than pursuing a merger between the two companies right away, the plan is to build a joint response system in various areas such as game development and distribution.
However, the company also faces the challenge of defending against a prolonged earnings slump of six consecutive quarters of losses and the resulting share price decline. The "Kakao Games Shareholders Alliance," composed of minority shareholders, demanded substantive shareholder return policies through a statement on the same day. In response, Kakao Games said it would promptly complete the divestment of non-core businesses and improvement of its financial structure, and actively review measures to enhance shareholder value, such as treasury stock cancellation.
