Korea’s Gaming And Internet Moguls See Fortunes Soar During Covid-19 Pandemic

This story is part of Forbes’ coverage of Korea’s Richest 2020. See the full list here.

It’s business as usual at South Korean gaming company Nexon, which—considering the pandemic’s disruption of the global entertainment industry—is something to brag about. “We’re (still) able to make content and operate our games,” says Nexon’s American CEO Owen Mahoney, in a remote interview with Forbes Asia. Movies, sports and live events have been forced into hiatus, but Nexon’s business is almost completely virtual, and its games fully digital. The pandemic, says Mahoney, who joined Nexon from U.S. game developer Electronic Arts in 2010, “has not slowed our business down.”

Nexon is just one of the Korean game developers getting a boost as global lockdowns and social distancing give people more time at home to play games. Global spending on digital games rose 11% in March from the same month in 2019, and 17% in April to a record $10.5 billion, according to Nielsen’s SuperData.

Korean gaming stocks have thus soared, lifting the fortunes of their founders. NCSoft’s Kim Taek-jin has seen his net worth surge 47% to $2.5 billion, while NHN Entertainment founder Lee Joon-ho’s rose 22% to $1.38 billion. Top Korean internet moguls have also benefited: Kakao’s Kim Beom-su, who was the list’s biggest percentage gainer, has seen his net worth jump 93% to $5.2 billion, while Lee Hae-jin, cofounder of search firm Naver, saw his fortune rose 85% to $1.7 billion.

Nexon’s own founder, 52-year-old Kim Jung-ju, has seen his net worth jump 52% to $9.6 billion, making him one of the biggest gainers on this year’s list, after reversing a slide in Nexon shares last year. Nexon, which Kim controls through his holding company NXC, slumped 13% last year after the failed sale of his controlling stake in NXC to potential bidders, which included gaming company Netmarble, Kakao and billionaire Michael Kim’s MBK Partners private equity firm.

The failure of the NXC deal in June last year caused Netmarble’s stock to fall roughly 20%, dragging the fortune of its founder and chairman Bang Jun-hyuk down 25% to $1.69 billion. Bang was an exception to the rising trend among Korean gaming fortunes. To be sure, Netmarble’s revenue in the first quarter rose about 12% year on year to $447 million; driving that surge was its 2020 release, The Seven Deadly Sins: Grand Cross, which generated around $53 million in sales.

Bang then pursued other deals to help Netmarble diversify. Last December, it paid roughly $1.5 billion for a 25% stake in Korean home-appliance rental company Coway, which was owned by MBK Partners. Bang also stands to see a windfall if talent agency Big Hit Entertainment lists on the Korea Exchange: Bang paid $170 million in 2018 for a 26% stake in Big Hit, which is headed by his distant cousin Bang Si-hyuk and which manages global K-Pop sensation BTS. Big Hit hopes to hold its IPO before the end of this year.

Nexon’s shares, meanwhile, have climbed this year by more than 50% to a record high, fueled in part by news that second-quarter earnings will rise as much as 20%. Nexon reported first-quarter revenue of $760 million, an 11% drop from last year, but smaller than expected. The company also reported a strong start for its game KartRider Rush+, which was downloaded more than 10 million times in its first two weeks after its midMay global launch. Nexon is now readying for the summer release of its action game Dungeon & Fighter 2D Mobile.

Mahoney says he expects the sales momentum to continue after the pandemic as digital home entertainment becomes more commonplace. “I think we’re going to look back in 20 years and we’ll say this was the turning point in the entertainment industry,” he says.