Netmarble IPO may face setback due to employees’ deaths
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.