[Click eStock] "Gamevil Achieves Operating Profit in Q1 by Transitioning to Business Holding Company"

[Asia Economy Reporter Eunmo Koo] Gamevil achieved an operating profit in the first quarter of this year after transitioning to a business holding company.

According to KB Securities on the 15th, Gamevil recorded sales of 34.9 billion KRW in the first quarter of this year, a 21.5% increase compared to the same period last year. Operating profit also turned positive, reaching 6.2 billion KRW during the same period. Dongryun Lee, a researcher at KB Securities, explained in a report on the day, “Gamevil successfully turned profitable by recognizing equity-method income from affiliates including Com2uS as operating revenue starting from the first quarter after transitioning to a business holding company.”

He added, “Excluding equity-method income, business revenue and operating profit were 25.6 billion KRW and -3.1 billion KRW respectively, falling short of consensus estimates, and there is no change in the estimate of controlling shareholder net income due to the holding company transition. Despite a larger-than-expected decline in game sales, profitability improved due to reduced marketing expenses.” He also evaluated, “Gamevil had continued operating losses due to fixed cost burdens amid a lack of hit new games, but the resolution of the risk of being designated as a management item through this holding company transition is positive.”

From the second half of this year, a sequential release of new game lineups is planned. In the third quarter, will be launched in Japan, and in the fourth quarter, and are planned for global release. The developer of Arcana Tactics, Tikitaka Studio, was recently acquired by Com2uS, with Com2uS developing and Gamevil publishing the game. MMORPG , currently under development by Com2uS, is also one of Gamevil’s key intellectual properties (IP) and will be published by Gamevil.

Researcher Lee explained, “From Gamevil’s perspective, it is considered the biggest anticipated title of 2021 as it can utilize Com2uS’s development capabilities under favorable conditions and also receive IP royalties.” However, he pointed out, “Although business restructuring and organizational improvement are both underway, for the stock price to rise further, the visibility of the new games’ success needs to increase.”

This content was produced with the assistance of AI translation services.