[Click eStock] "Joycity, Small and Mid-Cap Stocks to Watch in the Second Half"

[Asia Economy Reporter Ji Yeon-jin] Korea Investment & Securities announced on the 13th that among the small and mid-cap stocks to watch in the second half of the year, Joycity should be noted.

Joycity is a long-established domestic game company that released Freestyle, a popular basketball game in the 2000s. Since the advent of smartphones, it has mainly serviced casual games such as Rule the Sky and JuSaWiui Sin in the mobile game market, and later successfully launched strategy simulation games such as Ocean & Empire, Gunship Battle, and Pirates of the Caribbean, establishing itself as a rare game company specialized in the strategy genre in Korea.

Last year, its sales and net profit recorded 165.4 billion KRW and 11.7 billion KRW respectively, and due to increased sales from the existing lineup, its sales and net profit for the first quarter of this year were 53 billion KRW and 8.2 billion KRW. Jeong Ho-yoon, a researcher at Korea Investment & Securities, said, "Sales from the existing lineup are steadily increasing little by little, and there are no particular factors causing cost increases. If the results of new releases in the second half are reflected, there is a high possibility that performance will rapidly improve."

Currently, most of the sales are generated from long-running games such as Freestyle, Gunship Battle, and Pirates of the Caribbean. Despite being older games, due to the nature of the strategy genre, user engagement is strong, leading to steady sales growth. In particular, Gunship Battle has signed a marketing contract worth about 45 billion KRW with the American game publisher Tilting Point and is conducting marketing activities. Sales, which were around 4 billion KRW per month at the beginning of the year, are now estimated to have increased to about 7 billion KRW per month.

As the number of users increases, competition and interaction intensify, and the Average Revenue Per User (ARPU) rises, which is characteristic of the strategy genre. Therefore, sales from Joycity’s existing lineup are expected to gradually increase in the future, unlike other companies.

Additionally, the performance of new releases starting in the second half of the year is also expected. Joycity plans to release Project M, a new subculture genre title, and Disney Knights Saga, a strategy game based on the Disney IP, in the second half of this year and next year, respectively. The subculture genre, which involves collecting and nurturing beautiful girl characters, has established a solid main genre status in Japan, and various games such as Princess Connect, Arknights, and White Night Aurora have been successful in Korea as well.

Currently, Project M is in discussions for a publishing contract with a major Chinese publisher for a global release and is scheduled to be launched in major overseas regions starting with Japan, along with Korea. Given that it is a recently popular genre and that the overseas release will be conducted together with a major Chinese publisher, Project M is a new title that can sufficiently drive Joycity’s growth in the future.

Researcher Jeong said, "Disney Knights Saga, which is being developed using the Disney IP, is a game developed through an IP contract with Disney signed in July last year," adding, "It is a strategy game where users battle each other using Disney and Pixar IPs. Disney IP is highly recognized worldwide, especially in the United States. Moreover, given the characteristics of the U.S. mobile game market, where strategy games like Clash of Clans and Lords Mobile are popular, there is a high possibility that it will achieve good results in that region."

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