Kakao Games is a game company whose earnings center on in-app spending from live-service games such as Odin: Valhalla Rising, with golf and sports (Kakao VX) and advertising/platform businesses added on, in a structure that leans heavily on a small number of hit titles. This year's biggest event is a governance change in which a domestic entity funded by LY Corporation injected roughly ₩300 billion through a rights offering and convertible bonds, shifting the largest shareholder from Kakao to the LY Corporation group; the company said it would use the funds for financial stability and investment in new titles and global expansion. What stands out lately is that the large capital injection reduced financial uncertainty and the share price is depressed at a P/B of 0.59x as points to watch; on the other hand, three straight years of declining revenue and losses continue, the first-quarter decline steepened further, and the new-title success that is the key to a rebound has not yet been confirmed.
At-a-glance assessment financial health · growth · profitability · valuation
- The most recent full-year net result was a loss.
- Revenue fell 25.9% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 32.5% lower than a year earlier.
- ROE is -8.5% (controlling-interest basis). It is below the sector average.
- Operating margin is -8.5%.
- P/E is hard to compute here, so this is read on P/B.
Ownership & governance As of 2025-12-31
Largest shareholder Kakao 37.57% (corporate)
Controlling bloc incl. related parties 45.11%
With the controlling bloc holding 45%, the ownership structure is stable.
🔎 In-depth analysis
- Kakao Games is a game company that develops mobile and PC games directly or brings in and services other developers' games.
- The core of its revenue is in-app spending from live-service games such as its flagship 'Odin: Valhalla Rising.' Added to that are other businesses such as golf booking and sports (Kakao VX) and game advertising/platform.
- The catch is that this company's earnings effectively lean heavily on one or two hit titles.
- Without a new hit, revenue from existing games naturally declines over time, in a structure where overall results sink along with it.
- The latest close is ₩8,480 and the market cap is ₩909.4 billion.
- The price sits above its 20-day line (₩8,358) and below its 60-day line (₩10,076).
- With the short- and mid-term trends diverging, the direction should be viewed separately.
- The RSI (a supplementary gauge comparing upward and downward strength over the past 14 days on a 0-100 scale) is 48.3, a neutral level.
- The one-month change is -0.4%, the three-month change is -26.3%, and the position versus the 52-week high is -55.6%.
- Relative strength against the KOSDAQ is 42 (on a 1-99 scale, converted from returns versus the index over the past year with heavier weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 58% of all stocks by strength.
- Over the past three months it lagged the index by 2.8%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- Take the valuation metrics one by one.
- The P/B (how many times book net assets the share price is) is 0.59, below 1x.
- That means the share price of ₩7,820 is below net assets per share of ₩13,188, so on the numbers alone it looks cheap.
- But right now it is hard to call it undervalued on the P/B alone, because the ROE (how much is earned in a year per unit of equity) is -8.5%, meaning it is eroding capital.
- The P/E (how many times a year's earnings the share price is) cannot be calculated because it is loss-making.
- The debt ratio (debt relative to equity) of 125% is not unmanageable but is not low either.
- Factoring in debt makes the picture heavier still.
- Net debt (total borrowings minus cash) is roughly ₩547.1 billion, and EV/Sales (enterprise value divided by revenue) is 3.0x.
- The FCF yield (actual cash generated relative to market cap) is -6.6%, meaning it is spending rather than generating cash right now.
- In sum, it is a company that 'looks cheap against assets but is not yet earning money.'
- The growth metrics point to negative growth.
- Revenue fell for three straight years, from ₩725.8 billion in 2023 to ₩627.2 billion in 2024 and ₩465.0 billion in 2025.
- Operating profit also shrank from a ₩75.4 billion surplus in 2023 to ₩19.1 billion in 2024, then turned to a ₩39.6 billion loss in 2025.
- Net losses have continued for a third year.
- In the first quarter of 2026, revenue fell 32.5% year over year to ₩82.9 billion, with the decline actually steepening, and the quarter posted an operating loss of ₩25.5 billion and a net loss of ₩39.5 billion.
- The rebound scenario the company has laid out rests entirely on this year's new titles.
- The company officially announced it would sequentially launch multiple new titles in 2026, including 'Dungeon Arise,' 'Odin Q,' 'Project OQ,' and 'ArcheAge Chronicles.' However, these are still pre-launch titles.
- Until their actual success is confirmed, it is hard to pin this year's earnings to a figure.
- This year's biggest event at the company is not results but a governance change.
- A domestic entity effectively funded by LY Corporation injected roughly ₩300 billion through a third-party allocation rights offering and convertible bonds.
- As a result, the largest shareholder shifted from Kakao to the LY Corporation group, and Kakao stepped back to become the second-largest shareholder.
- The company officially explained it would use these funds for financial stability and as a source for investment in new titles and global expansion.
- This becomes both a force to rebuild a shaky balance sheet and, from existing shareholders' standpoint, a dilution of stakes from the issuance of new shares.
- Earlier, the company had also acquired part of its previously issued exchangeable bonds before maturity.
- Separate the points to watch from the cautions.
- There are two points to watch.
- First, the ₩300 billion capital injection from the LY Corporation group greatly reduced financial uncertainty.
- Second, the share price is already heavily depressed against net assets (P/B of 0.59x) and versus the 52-week high.
- The cautions are just as clear.
- The company has seen revenue fall and posted losses for three straight years, and the decline steepened further in the first quarter of 2026.
- The new titles that are the key to a rebound are still pre-launch, so their success is unconfirmed.
- How the direction of the game business is set under the new largest-shareholder structure is also a variable to watch.
- In sum, it is a strong company when new titles actually succeed and the new largest shareholder throws its weight behind the game business, and a weak one when new-title performance disappoints or the restructuring is delayed.
🔎 Valuation vs peers Inconclusive
Domestic listed game development and publishing companies with a similar business character are taken as the peer set.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Netmarble | 13.93x | 0.58x | 4.14% |
| Nexon Games | 0.00x | 2.27x | -24.26% |
| Krafton | 14.98x | 1.56x | 10.43% |
| NCSOFT | 15.51x | 1.60x | 10.30% |
On the P/B alone, at 0.59x it is low, similar to Netmarble, and looks cheap against assets. But right now it is hard to call it undervalued on this number alone. Because it is loss-making, the P/E cannot be calculated, and with an ROE of -8.5% it is eroding capital. Unlike profitable companies such as Krafton and NCSoft, which command P/Bs of 1.6-1.7x, loss-making companies like Kakao Games and Nexon Games are in a phase where value is hard to gauge by earnings. 2025 results turned to a loss, and first-quarter 2026 revenue continued to decline, making it hard to judge the future on last year's metrics. The company has officially announced it will attempt a rebound with multiple new-title launches this year, but these are pre-launch titles whose success is unconfirmed. Accordingly, until new-title performance and the direction of the new largest-shareholder structure are confirmed, rather than declaring it undervalued or overvalued, an inconclusive stance is appropriate.
Price history Close · MA20 · MA60
The latest close is ₩8,480 and the market capitalization is ₩909.4 billion. The price sits above its 20-day moving average (₩8,358) and below its 60-day moving average (₩10,076). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 48.3, a neutral level. The one-month change is -0.4%, the three-month change is -26.3%, and the position relative to the 52-week high is -55.6%. Relative strength versus the KOSDAQ is 42 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 42% of all stocks. Over the past three months it lagged the index by 2.8%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -2.84% / 6M -32.87% / 12M -54.08%
Key metrics vs sector median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 0.64x is below the sector median (1.58x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -8.5%, below the sector average (10.0%). The operating margin is -8.5%. The debt ratio is 124.9%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $481.1M | $415.7M | $308.2M | -25.86% ↓ slower |
| Operating profit | $50.0M | $12.7M | -$26.2M | -306.75% ↓ slower |
| Net profit | -$151.6M | -$72.2M | -$66.3M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $671.0M | $760.7M | $481.1M | $415.7M | $308.2M |
| Operating profit | $74.2M | $116.5M | $50.0M | $12.7M | -$26.2M |
| Net profit | $350.4M | -$154.9M | -$151.6M | -$72.2M | -$66.3M |
| Revenue CAGR | 4-yr avg -17.68% | ||||
Revenue fell 25.9% year over year (2023 ₩725.8 billion → 2024 ₩627.2 billion → 2025 ₩465.0 billion), and the three-year trend is 'falling'. The rate of decline widened from the prior year. Operating profit fell 306.8% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is -17.7%. The two-year revenue CAGR is -20.0%. In the most recent quarter (Q1 2026), revenue was 32.5% lower than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
Points to watch
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 25.9% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-06-19FilingWith the completion of payment for the third-party allocation rights offering, the largest shareholder changed from Kakao to a domestic entity of the LY Corporation group. Kakao moved to the second-largest shareholder.A full overhaul of governance. A medium-term positive of securing financial stability coexists with dilution of existing shareholders' stakes from the new-share issuance. Source
- 2026-05-29FilingCorrection to the material-fact report on the decision to issue a rights offering (about ₩240 billion) and convertible bonds (₩60 billion). The roughly ₩300 billion funding structure is confirmed.Financial restructuring and securing a source for new-title and global investment. The convertible bonds carry potential for further dilution on future conversion into shares. Source
- 2026-04-30EarningsDisclosure of preliminary 2025 consolidated results. Revenue of ₩465.0 billion and an operating loss of ₩39.6 billion, turning from a surplus to a loss.A gap in new titles and the natural decline in live-game revenue are reflected in results. Improving profitability comes to the fore as the key task. Source
- 2026-05-15EarningsFiled the Q1 2026 report. Revenue of ₩82.9 billion, down 32.5% year over year, with an operating loss of ₩25.5 billion and a net loss of ₩39.5 billion.The decline actually steepened. Losses could persist until new-title launches in the second half. Source
- 2026-05-20FilingAcquired part of previously issued exchangeable bonds (including overseas exchangeable bonds) before maturity.Part of a debt-structure adjustment. A step aligned with the financial-restructuring process. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| 2025 consolidated revenue and operating profit/loss | revenue 4,650 , 396 | revenue 4,650 , 396 | Confirmed | link |
| Change of largest shareholder and scale of funding | approx. 3,000 | approx. 2,400 + 600 = approx. 3,000 | Confirmed | link |
| P/B (share price versus net assets) | 0.59x | — | Unverified | link |
Recent filings
- 2026-06-05Shareholders' meeting notice
- 2026-06-04Shareholders' meeting notice
- 2026-06-01Large-business-group status disclosure
- 2026-05-29Material-fact report (amended)
- 2026-05-29Material-fact report (amended)
- 2026-05-20Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-11Disclosure
- 2026-04-30EarningsFair-disclosure notice
- 2026-04-22EarningsEarnings disclosure
- 2026-04-02Material-fact report (amended)
- 2026-04-02Material-fact report (amended)
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.