Smilegate RPG, the subsidiary of South Korean gaming company Smilegate, is mulling to go public to obtain the ammunitions for mobile and global outreach.

Smilegate RPG has tapped about 10 investment banks as candidates to underwrite its initial public offering (IPO), according to gaming and financial industry sources on Thursday. The mid-sized game company is expected to draw up a shortlist this month to arrange an IPO possibly next year, sources said.

When asked about the IPO, Smilegate said it is in the process of determining the company’s valuation and has not yet confirmed any plans to go public.

One of Smilegate RPG’s flagship PC games is Lost Ark, a massively multiplayer online role-playing game launched last year after seven years of development. Commanding a budget of 100 billion won ($88.1 million), the game was an instant hit, posing a formidable threat to blockbuster successes like PlayerUnknown`s Battlegrounds. Lost Ark raked in sales of 40 billion won in its first month of launch and at one point enjoyed a market share of 15 percent among local internet café users. It is currently the fifth to sixth most popular game in internet cafés.

Industry experts say the IPO proceeds are likely to fund the development of Lost Ark’s mobile version, which is currently under review by developers. The company also plans to take the game global in an effort to reduce the group’s reliance on CrossFire, a game created by another subsidiary Smilegate Entertainment that currently makes up 80 to 90 percent of Smilegate’s total revenue.

Launched in 2007, CrossFire is one of the world’s most popular first-person-shooter games with over 8 million concurrent players around the globe. But its popularity in China, the world’s largest game market, has started to wane as it faces stiff competition from other new gaming names. In 2017, Smilegate reported revenue of 620 billion won, its first fall in sales since its inception in 2002.

By Lee Sun-hee and Kim Hyo-jin

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