00:00Today on Forbes, Founder of Korean Gaming Company Becomes Billionaire as Shares Surge on Listing
00:08In one of the most highly anticipated IPOs in South Korea this year, shares of online game developer ShiftUp
00:15soared in their trading debut Thursday, making its founder and CEO, Kim Hyung-tae, a billionaire.
00:22The company's shares closed at
00:24171,000 South Korean won on their first day of trading on the Korea exchange, up 18% from the offering price.
00:32That gives ShiftUp a valuation of around 4.1 trillion won, about 3 billion US dollars,
00:38making it the fourth biggest online gaming company listed in South Korea by market capitalization
00:44after Krafton, Netmarble, and NCSoft.
00:48Kim, who is 45 years old, is the largest shareholder of ShiftUp, with a 39% stake in his own name.
00:55His wife, Choi Ji-yoon, holds a nearly 0.5% stake in the company.
01:00Forbes estimates Kim and his wife's net worth at 1 billion dollars.
01:05ShiftUp raised 435 billion won, about 320 million dollars, in an initial public offering of
01:137.25 million shares at 60,000 won apiece.
01:17The top of its indicative range.
01:19ShiftUp will use the proceeds of the IPO to develop new games and expand popular titles such as Goddess of Victory Nikkei and
01:27Stellar Blade.
01:28The ShiftUp IPO is the second biggest in South Korea this year, following KKR-backed HD Hyundai Marine Solutions'
01:36742 billion won offering in May, and the country's largest gaming IPO since Krafton's 4.3 trillion won float in
01:452021.
01:46Investors that backed ShiftUp before its IPO include Tencent,
01:51online game mogul Park Hwan-ho's WeMade,
01:54Kakao Ventures, the venture capital arm of Korean billionaire Kim Byung-soon's internet giant Kakao,
02:00Korean energy conglomerate Daesung Group's private equity arm, whose portfolio includes Korean online game developers Krafton and Pearl Abyss,
02:09Smilegate Investment, the venture capital arm of game giant Smilegate, and
02:14IMM Investment, which also backed Krafton.
02:17Tencent, the world's largest game publisher by revenue, is the second biggest shareholder in ShiftUp after Kim.
02:24The Chinese company owns a 35% stake through Aceville, a Singapore-based subsidiary of Tencent's cloud arm.
02:32Tencent is the distributor of ShiftUp's Goddess of Victory Nikkei.
02:36ShiftUp, based in Seoul's upscale Gangnam neighborhood, was founded by Kim in 2013.
02:42Kim was previously a video game artist at NCSoft, where he oversaw the design of the company's flagship online game, Blade and Soul.
02:50ShiftUp reported that revenue rose
02:52155% year-over-year to
02:55169 billion won, or
02:57122 million dollars, in calendar year 2023, while net income was
03:03107 billion won, up from a loss of 7 billion won in the previous year period.
03:09Almost all, 97%, of its revenue came from its flagship game, Goddess of Victory Nikkei.
03:15The game has more than 5 million downloads in the Google Play Store and has a current rating of 4.8 out of 5 stars,
03:22based on 489,000 reviews.
03:25It is currently the number five top-grossing mobile role-playing game in the U.S., according to research firm Sensor Tower.
03:32Goddess of Victory Nikkei is a third-person shooter and role-playing game with anime-style graphics.
03:38Like many other free-to-play games, Goddess of Victory Nikkei makes money through in-game purchases.
03:44Specifically, the game charges players for the chance to win rare characters, a technique called gacha, the Japanese word for vending machines that dispense toy
03:52capsules without showing the contents prior to purchase.
03:55It's a proven recipe for success.
03:57Chinese developer MiHoYo's Genshin Impact, one of the world's hottest mobile games and the first global hit made in China,
04:05uses anime-style graphics and employs the gacha technique to make money and keep players hooked.
04:11ShiftUp's Kim is the latest Korean billionaire to make a fortune from the online gaming sector.
04:16South Korea, home to the world's fastest internet speeds, was one of the earliest developers of popular multiplayer online games.
04:24NCSoft, for example, released in 1998 a multiplayer online game called Lineage.
04:30A mobile version of the game, Lineage M, is one of the top-grossing games in the world.
04:35And in 2003, Nexon launched MapleStory, a multiplayer online game with over 250 million registered users worldwide,
04:44which helped pioneer the free-to-play model where users play games for free but pay for virtual items and accessories.
04:51For full coverage, check out John Kang's piece on Forbes.com.
04:56This is Ciarán Meadows from Forbes. Thanks for tuning in.
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