This time, 'Social Casino' Chairman Bang Jun-hyuk's Battle to Secure Cash Cow [Buaeri's Game Dictionary]

Bang Jun-hyuk, Chairman of the Board at Netmarble

[Asia Economy Reporter Buaeri] "This is typical of Chairman Bang Jun-hyuk." When Netmarble acquired the world's third-largest mobile social casino game company for 2.5 trillion KRW, the industry responded in this way. Analysts say that Chairman Bang, following his 2019 acquisition of the rental service company 'Coway,' is securing another cash cow.

On the 3rd, according to Netmarble, it acquired 100% of the shares of the mobile social casino game company 'SpinX' for $2.19 billion (2.5 trillion KRW). This amount is about 800 billion KRW larger than the 1.74 trillion KRW spent on acquiring Coway. It is also the largest merger and acquisition (M&A) in the history of the domestic gaming industry.

Social casino refers to games such as slot machines, bingo, and poker, which are available in casinos but moved online and to mobile platforms, with the main market being North America. Overseas, these are classified purely as games and are free from government regulation, but in Korea, they are operated under restrictions. Founded in 2014, 'SpinX' has flagship titles such as Cash Frenzy, Latcher Slots, and Jackpot World, and as of Q2 2021, it ranked third in global mobile social casino genre revenue.

Social casino games are considered a high-profit area that does not require significant development effort. In fact, SpinX recorded sales of 497 billion KRW in 2019. In Q1 of this year, it achieved sales of 162.2 billion KRW, and in the first half, sales reached 328.9 billion KRW, a 46% increase compared to the same period last year.

The industry interprets Chairman Bang's bold investment this time as being in a similar context to the acquisition of Coway. Unlike the gaming business, which experiences fluctuations depending on success, rental service companies like Coway are considered businesses capable of generating regular cash flow. Social casino games also maintain steady popularity, especially in North America. Moreover, it is a market that is growing every year. According to market research firm Statista, the social casino market, which was $6.2 billion (about 7 trillion KRW) last year, is expected to grow to $7.9 billion (about 9 trillion KRW) by 2025.

The securities industry interprets this acquisition as strengthening Netmarble's North American market strategy. Netmarble has been targeting Western markets through acquisitions of North American game companies such as Kabam and Jam City. Oh Dong-hwan, a researcher at Samsung Securities, predicted, "Through the acquisition of SpinX, Netmarble is expected to generate synergy not only in terms of increased sales and net profit but also in expanding the North American and European game markets," adding, "The diversification of the game portfolio will also have a positive effect on stabilizing sales."

However, some express disappointment with this decision. Professor Wi Jeong-hyun of Chung-Ang University, president of the Korea Game Society, pointed out, "Social casino games serve more as a cash cow rather than helping the development of the core online and mobile games," adding, "While it helps with profits, in the long term, it will not create synergy with the core business."

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