S.Korean gaming giant Netmarble eyes headquarters building sale

Netmarble Corp., a leading South Korean gaming company, is seeking to sell its headquarters building in Seoul, which could fetch up to 800 billion won ($563 million), as it plans to release nine new titles this year.

According to sources in the investment banking industry on Friday, the Korean video game publisher has invited investment banks to bid to lead the sale of its flagship head office building, dubbed G Tower.  

It reportedly plans to hold an explanatory session on the sale next week, during which it will pick the deal advisor.

The company is expected to use the proceeds from the sale to develop and market nine new games planned this year and repay debts, sources said.

The company declined to confirm details about the sale but said it is “reviewing various options to realign the company’s asset portfolio.”

Built in the Guro Digital Complex in 2021, the tower is a 39-story landmark building in the district with seven underground floors, spanning a total floor area of 170,000 square meters.

It houses not only Netmarble’s head office but also its affiliates – Coway Co., Netmarble F&C Inc. and Netmarble Neo – as well as a museum, a convention center and a park.

Netmarble hopes to sell the building for more than 15 million won per 3.3 square meters, allowing it to collect up to 800 billion won, sources said.

TIME TO SHORE UP PROFITABILITY AFTER A TURNAROUND

In 2024, Netmarble swung to a consolidated operating profit of 215.6 billion won, snapping its two-year losing streak partly thanks to the successful launch of a new game, “Solo Leveling: Arise," an action role-playing game (RPG).

Its revenue expanded 6.5% to 2.66 trillion won over the same period.

Its annual report, released in late March, showed that the company turned around last year largely due to its stringent cost controls, especially cuts in labor and marketing expenses.

Its bottom line also returned to a 3.2 billion won profit, helping improve its cash and cash equivalents last year by 34.3% from the previous year to 578.8 billion won.

With fresh capital raised from the sale of the headquarters building, Netmarble is expected to focus on further shoring up profitability this year with new game development.

The company has recently changed its leadership by shifting to a single-CEO structure following the resignation of former co-CEO Kwon Young-sik in late March.

Under the solo leadership of CEO Kim Byung-kyu, Netmarble plans to roll out nine new titles this year, including mobile game “Game of Thrones: KingsRoad” and console game “The Seven Deadly Sins: Origin” to revive growth momentum. 

REPAYING DEBTS

The Korean game publishing major dipped into the red in the previous two years following aggressive mergers and acquisitions over the past five years, coupled with delayed new title releases and sapping revenue from its legacy games.

Netmarble acquired Korean home appliance rental service provider Coway for 1.74 trillion won in 2019 and the world’s No. 3 social casino game publisher SpinX Games for $2.2 billion in 2021.

For the two mega deals, the game publishing company took out loans and still has some bank debts to repay for the SpinX acquisition.

A SALE AND LEASEBACK AGREEMENT 

Netmarble originally planned to move its head office and other affiliates’ offices to its second campus in Gwacheon, Gyeonggi Province, which is slated to open in 2027.

To attract more bidders, the company is, however, said to be mulling a long-term master lease deal, in which it can lease back the building, to ensure stable rent income for the new building owner.

G Tower is a testament to Netmarble’s ascent in the gaming industry.

In 2012, the company moved its headquarters office from Sangam, Mapo district, to the Guro Digital Complex in Guro district.

Since the relocation, Netmarble has scored back-to-back successes with new mobile games and went public on Korea’s main Kospi market in 2017.

In 2021, it completed the construction of G Tower.

Write to Gyeong-Jin Min at min@hankyung.com

Sookyung Seo edited this article.