[Edaily Reporter An Yu-ri ] Kakao Games Corp.(293490), which has finalized the change of its largest shareholder to “LINE Yahoo,” completed its new management structure on the 22nd by appointing Kim Tae-hwan and Lee Si-woo as co-CEOs. The company stated that it will prioritize enhancing shareholder value and work toward a turnaround in its financial performance. Regarding rumors of a merger with LINE Games circulating in some market circles, the company drew a clear line, stating, “No decision has been made.”

Kakao Games Corp. appointed the two new co-CEOs following procedures at an extraordinary general meeting of shareholders and a board of directors meeting held that day. Proposals to appoint Professor Im Tae-seop of Sungkyunkwan University’s GSB as an outside director and Seo Seok-ho, Managing Director at Petrico Partners, as a non-executive director were also approved at the shareholders’ meeting.

Newly appointed CEO Kim Tae-hwan, who previously worked at Nexon Games and Line Games, will oversee the formulation of Kakao Games Corp.’s mid- to long-term business strategies, global business expansion, and all aspects of M&A (mergers and acquisitions) and strategic investments. Lee Si-woo, the newly appointed CEO, joined Kakao Games Corp. in 2015 during its early days as Head of the Mobile Business Division. He has since served in various roles, including Chief Business Officer (CBO) and Executive Vice President, overseeing the mobile and PC game businesses. He is expected to oversee all aspects of the gaming business, including the operation of live game services, the publishing of new titles, and the management of the IP portfolio.

Kakao Games Corp.’s new management faces the challenge of turning around the company’s financial performance, which has recorded losses for six consecutive quarters due to a lack of new game releases. With the stock price having fallen by more than 50% over the past year, a recovery in the share price is also urgently needed.

Kakao Games Corp.’s strategy is to improve its financials by leveraging 3000억 won in new funding secured during the change in majority ownership and the launch of four new titles in the second half of this year. The company plans to actively pursue equity investments and M&A with promising domestic and international development studios to simultaneously expand its IP portfolio and in-house development capabilities.

The two newly appointed CEOs did not make an appearance that day, citing their attendance at a board meeting. Shareholders present at the AGM expressed disappointment, asking, “Isn’t it standard practice for new CEOs to attend the AGM and address shareholders?” Instead, Shin Kwon-ho, the new CFO (Chief Financial Officer), attended and engaged with shareholders. He recently joined Kakao Games Corp. after serving as CFO at Line Games.

CFO Shin stated, “Our financial structure has significantly improved with the injection of approximately 3000억 won in new funds,” adding, “We expect earnings to gradually improve alongside the launch of new titles in the future.” Kakao Games Corp. is set to release four new titles in the second half of this year, including “The World of Dokkaebi,” “Odin Q: Call of the Valkyries,” “ArcheAge Chronicles,” and “God Save Birmingham.”

Six Consecutive Quarters of Losses… Challenges in Turnaround and Stock Price Recovery

Regarding the possibility of a merger with LINE Games, the new CFO dismissed the idea, stating, “Nothing has been decided at this time.” He added, “While collaboration between companies within the group, such as Kakao Games Corp. and LINE Games, is possible, it will proceed only to the extent that it does not undermine shareholder value.”

Regarding plans to utilize the LINE Yahoo platform, he explained, “We view the growth potential of Southeast Asian markets, such as Vietnam and Indonesia, positively,” adding, “We may explore additional business opportunities in regions where the LINE platform has a strong influence.”

Regarding specific measures to enhance shareholder value, such as the cancellation of treasury stock, he explained, “We could use it to recruit talent, or we could enhance shareholder value through cancellation,” adding, “Since we must make a judgment after comprehensively considering various factors, it is difficult to make a definitive statement at this point.”

Regarding the management meeting with small shareholders—a demand consistently raised by the Small Shareholders’ Alliance—he promised prompt communication. CFO Shin said, “Since the new co-CEO system began today, we must first get our internal management activities in order,” but added, “We will arrange a forum to communicate with the market as soon as possible.”

Park Jong-guk, chairman of the Minority Shareholders’ Alliance, met with the press after the shareholders’ meeting and stated, “Nearly 99.9% of investors have suffered losses.” He added, “There are 70 members in our alliance, and their combined losses amount to nearly 10 billion won,” calling for proactive shareholder return measures.

He continued, “Kakao Games Corp.’s ambition at the time of its IPO was to become the ‘Tencent of Korea,’ and we invested based on that belief. However, problems arose in game operations afterward, and it was frustrating to see the company seemingly pay no attention to its stock price,” though he expressed optimism, saying, “I believe there is still potential for growth if the company expands into the global market by leveraging the LINE Yahoo platform.”

Meanwhile, Kakao Games Corp., whose stock price had fallen by more than 50% over the past year, hit the daily price limit at one point during trading that day, driven by expectations surrounding the completion of the change in its largest shareholder and the launch of new management.