Kim Jae-young, founder of South Korean online game developer Lionheart Studio.
Courtesy of Lionheart Studio
Kim Jae-young, the founder of South Korean online game developer Lionheart Studio, is now a billionaire after a $925 million investment from local internet giant Kakao, becoming the third gaming entrepreneur in the video game-obsessed country since last year to hit billionaire status.
Kakao Games Europe, the European subsidiary of Kakao’s gaming arm Kakao Games, bought a 30.37% stake in Lionheart for 1.2 trillion won ($925 million) at the end of June, valuing the company at about $3 billion. Most of the stake was bought from Kim, who now owns 34.67% of Lionheart. Kim, who is CEO and chairman of Lionheart, also owns a 2.87% stake in Kakao Games, whose revenue reached record levels thanks to Lionheart’s hit online game Odin: Valhalla Rising. Combined, Forbes estimates his net worth at $1.7 billion.
Developed by Lionheart and published by Kakao Games, Odin was released in South Korea in June last year and topped the country’s app store rankings. Kakao Games released Odin in Hong Kong, Macau and Taiwan in March, and the company is preparing to release the game in Japan in the second half of this year. Odin has been downloaded over 1 million times on Google’s Play Store, including 10,000 last month alone, according to app research firm Sensor Tower.
When Odin was launched, the game boosted Kakao Games’ mobile gaming revenue to a record high of 410.5 billion won ($315 million) in the third quarter last year, up 359% from the same period last year. Lionheart, which makes all of its money from Odin, reported 2021 revenues of 232.6 billion won ($180 million) and a loss of 150.7 billion won, up from a loss of 25.4 billion won the previous year.
Courtesy of Lionheart Studio
Based in Seongnam, south of Seoul, Lionheart is preparing for an initial public offering, says a company spokesperson. Local newspaper Maeil Business Newspaper reported that Lionheart could be valued as high as 8 trillion won ($6 billion), citing analyst estimates. Lionheart’s IPO would be the largest by a South Korean game company since that of billionaire Chang Byung-gyu’s Krafton, which raised $3.8 billion in August last year on the Korea Exchange.
Kim founded Lionheart in 2018 primarily with investments from Kakao Games and game developer Wemade, a pioneer of blockchain-based games in South Korea. Kakao Games has gradually increased its stake in Lionheart over the years, and now owns 24.57% of the company. Together with its European arm, Kakao Games, which is part of billionaire Kim Beom-su’s internet conglomerate Kakao, owns a majority of Lionheart. The other major shareholder is Wemade, which holds a 4.23% stake after selling almost half of its Lionheart stake to Kakao Games.
“With the acquisition of a majority stake in Lionheart Studio, the developer of hit title Odin, Kakao Games is to bolster its development capabilities and secure significant earnings growth,” NH Investment & Securities analyst Jaemin Ahn said in a research note. “The acquisition should serve as an opportunity for Kakao Games to target the global market in earnest.”
Before Lionheart, Kim previously cofounded another online game company, Action Square, in 2012, which went public on the Korea Exchange via a special purpose acquisition company in 2015. Previously, Kim, who holds a master’s degree in mechanical engineering from Seoul’s Hanyang University, worked at Japanese video game maker Koei (now part of billionaire couple Yoichi and Keiko Erikawa’s Koei Tecmo) and Neowiz, one of the earliest online game companies in South Korea, cofounded by Krafton’s Chang.
Last year, Chang and Wemade founder Park Kwan-ho also became billionaires in their own right. The other South Korean gaming entrepreneurs in the three-comma club are NCSoft’s Kim Taek-jin, Netmarble’s Bang Jun-hyuk, NHN Entertainment’s Lee Joon-ho, Pearl Abyss’ Kim Dae-il and Smilegate’s Kwon Hyuk-bin.
Kim Jung-ju, founder of Nexon, which pioneered the free-to-play model where users play games for free but pay for virtual items and accessories, was the wealthiest South Korean gaming entrepreneur until his sudden death in February at the age of 54. His wife, Yoo Jung-hyun, who helped start Nexon in 1994, made her debut on the Korea’s 50 Richest list this year with a net worth of $3 billion.