"Went All on Tuition" Wemade and Other Game Stocks Plunge... MZ Generation's 'Frustration'

Wemade Plummets... Game Stocks Fall One After Another
"Usually Play Games a Lot and Invest Knowledgeably"
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MZ Generation Investing in 'P2E' Game Stocks Expresses Frustration Through Communities

Wemade's mobile game MIR4. Wemade has recently faced complaints from individual investors due to a decline in its stock price. Photo by MIR4 homepage capture

[Asia Economy Reporter Han Seung-gon] "I lost all my first investment money in life!", "Isn't this crash a scam?"

Recently, discussions about game-related cryptocurrencies and stocks have become virtually taboo among the MZ generation. This generation, born from the early 1980s to the early 2000s, is familiar with online games and naturally invested in game-related stocks. However, they are now venting their frustration as game-related stocks have plummeted one after another within days.

On the 11th, in the KOSDAQ market, Wemade, famous for 'Mir4', closed at 95,800 KRW, down 10.13%. Compared to last year's peak, Wemade has dropped 61.01%. 'Battleground' Krafton closed at 259,000 KRW on the KOSPI market, down 12.79% from the previous day. This is about half of Krafton's IPO price of 498,000 KRW. On the same day, Krafton hit an intraday low of 255,500 KRW, setting a new post-listing low. Kakao Games and Netmarble also fell 38.97% and 33.97%, respectively, compared to last year's peak.

The trigger for the sharp stock price decline appears to be a kind of earnings shock, as game companies fail to prove their growth potential. Following Wemade's plunge, there are complaints that investor sentiment for game stocks in KOSDAQ may have collapsed.

On a stock-related online community, strong complaints such as losing all their first investment money in life are emerging, showing a chaotic situation. Kim, a college student in his 20s, sighed, "I started investing with a regular savings plan, but in an instant, I lost almost the equivalent of one semester's tuition." He added, "Investment is a personal responsibility, but shouldn't the company also defend the stock price?"

Another investor in his late 20s working in the game sector said, "I used to play games a lot and knew the field well, so I analyzed the company's value and made some profits." He lamented, "The recent unclear performance of the 'Play to Earn' (P2E) concept, which has been gaining attention, might be causing the stock price decline."

The global financial market is fluctuating as expectations arise that the U.S. Federal Reserve will accelerate tightening to curb inflation. [Image source=Yonhap News]

P2E is the concept of 'earning money while playing games.' Users can utilize the in-game currency or items they acquire as assets within the blockchain ecosystem. For example, a game environment where a character mines resources, converts them into cryptocurrency, and then sells them for Korean won to make a profit.

However, P2E is a newly emerging revenue structure in games that has just started attracting attention, and there are investment risks such as significant value fluctuations due to the recently unfavorable stock market environment, as worried by individual investors.

For instance, as the U.S. Federal Reserve is expected to accelerate tightening to curb inflation, market interest rates have surged simultaneously, impacting growth stocks with uncertain futures.

Among the ETFs that posted the best returns last year, those related to the gaming industry have recorded the largest declines this year. According to the Korea Exchange, the ETF 'KODEX Gaming Industry' fell 29.65% from the beginning of this year through the 11th.

Following 'KODEX Gaming Industry,' ETFs such as 'HANARO Fn K-Games' (-28.24%), 'TIGER K-Games' (-27.71%), 'KBSTAR Game Theme' (-27.28%), and 'TIGER KRX Game K-New Deal' (-27.17%) also declined consecutively. Moreover, the poor performance of individual stocks has further worsened the stock price situation as they fail to gain market trust.

Meanwhile, the industry has expressed its intention to actively provide opinions necessary for policy formulation regarding new industrial trends in the gaming industry, such as the metaverse and NFTs (Non-Fungible Tokens).

At a press conference commemorating the launch of the 11th Korea Game Society held at TOZ in Gangnam, Seoul, on the 25th of last month, Wi Jeong-hyun, president of the Korea Game Society, stated, "NFTs and the metaverse can be used as new driving forces for the development of the gaming industry," adding, "The association will actively provide opinions when establishing policies on NFTs and P2E."

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