Summary:
Netmarble’s newly released game Iron Throne: Kingdom is a failure based on App Annie data.
While the stock did fall to a low of 123,000 KRW in August 2017, it has since recovered since April 2018 due to a timely 25% investment in a Korean music label that is home to the K-Pop sensation BTS.
Once the failure of this new game become evident to investors, we believe that the stock will again test its all time low of 123,000 KRW.
Analysis
Our analysis of Netmarble’s April 2017 IPO was that it was “priced for perfection”. While the Lineage 2 game releases have been near perfect in Korea and Japan, its release in the USA has been a bust and the release in China is on hold due to geopolitical tensions.
As a result, we predicted that Netmarble’s stock would fall 45% from its November 26, 2017 closing price of 188,500 KRW to around 103,378 KRW once the revenue impacts of the USA and China releases were fully understood by investors.
While the stock did fall to a low of 123,000 KRW in August 2017, it has since recovered since April 2018 due to a timely 25% investment in a Korean music label that is home to the K-Pop sensation BTS
Recently, Netmarble announced a May 2018 world-wide release of another MMO game called Iron Throne: Kingdom.
Based on App Annie data, we can already tell that the game is a bust with a global annualized revenue run rate (ARR) that will never be more that $50 Million USD. This is a drop in the bucket for Netmarble whose 2017 revenue in the range of $2,000 Million USD.
Here are the current revenue ranks on iOS Apple Store for the Iron Throne: Kingdom:
- USA — #177
- Japan – #363
- South Korea — #29
The relation between revenue and revenue rank for mobile games is a power function which we have discussed in other papers. A top 3 revenue rank game generally translates into a ARR of $1+ Billion which was the case for Lineage II. A top 10 game drops down severely to $ 160 ARR.
Here are the App Annie revenue rank charts for the game on iOS Apple for the USA, Japan, and South Korea.
iOS USA — revenue rank 177 on June 4, 2018
iOS Japan – revenue rank 262 on June 4, 2018
