The influence of Chinese capital in South Korea's gaming industry is growing. While Chinese investments have primarily focused on acquiring stakes in major domestic gaming companies, firms like WEMADE are now actively seeking control, marking a significant shift in the market landscape.
According to industry sources, Park Kwan-ho, the largest shareholder of WEMADE, signed a share sale agreement with the investment platform Neopulse on June 30, valued at approximately 920 billion won. This deal involves transferring all of Park's shares in WEMADE, and upon completion of the transaction on October 30, Neopulse will become the largest shareholder, including its existing holdings.
The WEMADE case signals a change in how Chinese capital approaches investments in South Korean gaming companies. Previously, firms like Tencent have secured shares in major domestic companies through subsidiaries or investment firms. Tencent holds approximately 17.52% of Netmarble, 14.40% of Krafton, 34.46% of Shift Up, and 3% of Kakao Games.
Most of these investments have resulted in Tencent being a second-largest or major shareholder. Neopulse, which has secured control over WEMADE, is an investment platform fully owned by Hong Kong-based Shen Song Investment. Its representative, Chen Wei, is known to have close ties with Alibaba.
The value of WEMADE's intellectual property (IP), particularly the 'Mir' franchise, likely influenced Neopulse's acquisition. The MMORPG 'Legend of Mir 2' is popular in China under the title 'Yeolhyeol Jeongi,' and it remains a significant IP in both WEMADE and the Chinese gaming industry.
WEMADE has been involved in prolonged copyright disputes and lawsuits with Chinese gaming companies over the Mir IP. In August 2023, WEMADE signed a licensing agreement with Actoz Soft, committing to pay a total of 500 billion won over five years, at 100 billion won annually.
Industry experts are closely watching the expansion of Chinese capital's influence over South Korean gaming companies. Some express concern that WEMADE's case may set a precedent, prompting other domestic firms to consider similar moves.
Historically, China was a major consumer market for South Korean games. However, following the 2016 Hanban restrictions, the entry of South Korean games into China has been limited due to licensing issues. During the COVID-19 pandemic, Chinese gaming companies rapidly enhanced their development capabilities, backed by a large domestic market and capital.
Notably, titles like 'Genshin Impact' and 'Black Myth: Wukong' have achieved global success, leading to assessments that Chinese games have surpassed South Korean offerings.
As a result, the expansion of Chinese capital in South Korean gaming companies is viewed by some as more than just investment attraction. Concerns arise that if Chinese capital secures management rights in domestic firms, the operational and development expertise accumulated by the South Korean gaming industry could become increasingly influenced by Chinese interests.
Experts argue that this situation should be viewed not merely as corporate share transactions but as an industrial policy issue. They emphasize that gaming IP and development capabilities are strategic assets that combine technology, content, and global platform competitiveness.
Kim Jeong-tae, a professor in the Game Department at Dongyang University, stated, "Games are not just entertainment products; they have social and cultural functions, necessitating a public goods perspective." He stressed that the gaming industry should be regarded as a national strategic industry that integrates technology, IP, and global platform competitiveness, rather than merely a content industry.
Kim also noted, "In the age of AI, content that fills hardware is as important as the hardware itself. Games, being a field where technology, content, and interaction design converge, are a core industry that South Korea must protect for its competitiveness." He added that gaming IP and development capabilities should be viewed as assets linked to national competitiveness, similar to semiconductor or AI infrastructure.
* This article has been translated by AI.
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