Net­mar­ble IPO may face set­back due to em­ploy­ees’ deaths

The Korea Times - - BUSINESS - By Lee Min-hyung mh­

Net­mar­ble Games is fac­ing grow­ing un­cer­tainty ahead of its planned ini­tial pub­lic of­fer­ing (IPO) early next year, hit hard by two deaths of its em­ploy­ees.

The lat­est tragedy took place last month when a game de­vel­oper from its devel­op­ment sub­sidiary, Net­mar­ble Neo, sud­denly died for no ap­par­ent rea­son.

The in­ci­dent came only a month af­ter an­other Net­mar­ble de­vel­oper, sur­named Park, leaped to his death from a com­pany build­ing in Guro, south­west­ern Seoul. At the time, Net­mar­ble said in a state­ment that Park might have com­mit­ted sui­cide af­ter be­ing dis­ci­plined for his al­leged em­bez­zle­ment.

The scan­dals came at a crit­i­cal time as the coun­try’s largest mo­bile game op­er­a­tor is seek­ing to make its suc­cess­ful KOSPI de­but next year for which the firm sub­mit­ted a pre­lim­i­nary screen­ing ap­pli­ca­tion to the Korea Ex­change on Sept. 30.

Net­mar­ble gen­er­ated some 1.07 tril­lion won ($911 mil­lion) in sales last year, with an oper­at­ing profit of 225.3 bil­lion won in the same pe­riod.

Its earn­ings are ex­pected to grow big­ger this year, with its com­bined sales from the first to the third quar­ters top­ping 1 tril­lion won.

Mar­ket watch­ers es­ti­mate the game ti­tan will hit a mar­ket cap of some 10 tril­lion won fol­low­ing its planned IPO.

But with Net­mar­ble con­tin­u­ing to come un­der pub­lic back­lash for these tragedies, the out­look re­mains murky for the firm to re­store its tar­nished brand im­age be­fore the IPO, ac­cord­ing to ob­servers.

“Game com­pa­nies here are in­fa­mous for their mas­sive work­loads, due to the grow­ing com­pe­ti­tion from ex­ist­ing and new play­ers both here and abroad,” said a soft­ware in­dus­try source.

“Em­ploy­ees, par­tic­u­larly de­vel­op­ers, have a tough time en­dur­ing the de­mand­ing work en­vi­ron­ment in the game in­dus­try. For this rea­son, they fre­quently move to other com­pa­nies. Game firms, which can­not keep their man­power for the long-term, will inevitably lose their brand com­pet­i­tive­ness and in­vestor con­fi­dence,” he added.

An­other source from the IT in­dus­try said: “The IPO is a pro­ce­dure to sell shares to ran­dom in­vestors and make pub­lic a com­pany’s fi­nan­cial in­for­ma­tion.”

“When a com­pany is in­volved in un­eth­i­cal scan­dals, it runs the risk of mak­ing its IPO plan go back to square one, which is a global trend,” he added.

Like Net­mar­ble, NCSOFT is also suf­fer­ing from set­backs fol­low­ing a re­cent scan­dal over the death of one of its game de­vel­op­ers.

The em­ployee of the coun­try’s third-largest game firm com­mit­ted sui­cide at its head­quar­ters in Pangyo, Gyeonggi Province, last week.

The ex­act rea­sons be­hind her death have yet to be con­firmed. Po­lice are in­ves­ti­gat­ing the case with the pos­si­bil­ity that her de­ci­sion may have come from de­pres­sion and work-re­lated stress.

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