April 26, 2024
Mobile & Internet
Behind NCsoft’s stocks plunge lies the power of tradable items
[THE INVESTOR] Item trading involving cash exchange is often seen as the culprit behind game-related crimes in South Korea, even causing cases of fraud or physical violence among game players.
But the feature is also behind the popularity of, or the gamers’ obsession with, South Korea‘s first-generation massively multiplayer online role-playing PC game “Lineage.”
More recently, item trading has apparently become the deciding factor in the game developer’s stock prices.
Ahead of the release of “Lineage M,” the PC game’s mobile adaption, its developer NCsoft suffered a rout on June 20 at around 2:30 p.m. The plunge by 11.4 percent within an hour of closing came as hearsay began to circulate centering on how “Lineage M” was launching without tradable items. The company eventually suffered in its market capitalization to the tune of 1.01 trillion won ($884.6 million).
The company later confirmed on June 20 that it would launch a version rated “12,” which does not allow players to trade items.
NCsoft’s plunge resulted in massive short selling of the stock and sparked allegations of its executive vice president engaging in insider trading.
Traders short sold nearly 314,000 NCsoft stocks worth 112.3 billion won Wednesday, breaking the previous record set the previous day. More than 196,000 NCsoft stocks worth 76.2 billion won were short sold on June 22, accounting for 17.7 percent of the stock’s daily trading.
“Lineage M” had generated some 5.5 million preorders since April 12, a record high among mobile games, but was met with disappointment by fans on online communities upon the news.
On June 21, NCsoft made another disclosure that it was planning a different version of “Lineage M” with tradable items before July 5.
“One option is ‘Lineage M’ is open only on Android smartphones, if ‘Lineage M’ with tradable items is rated X,” Kang Ji-eun of NCsoft told The Korea Herald on June 22.
The company’s stocks inched up 1.1 percent on June 21 upon the revised game release plan. But it again fell 4.66 percent on June 22.
NCsoft‘s decision on “Lineage M” came after the 6-month-old “Lineage 2: Revolution,” launched by NCsoft’s archrival Netmarble Games, was re-rated X from 12 on May 10 because of tradable items. Netmarble Games removed the in-game market for trade on June 2 at around 2 a.m. without prior notice to users.
Seeing the online market for tradable items gives rise to players speculating, the state-run game rating board has rated X games featuring item trading markets.
Rating matters to mobile game developers, according to industry sources on June 22.
“If a mobile game is rated X, not only those aged between 12 and 18, but also those using Apple’s App Store would lose access to the game,” an industry source told The Korea Herald. “Our duty is to give access back to the gamers by adjusting game features and going through reexamination by the game rating board.”
The financial regulators and market operator on June 21 launched a probe of the massive short selling on June 20 upon requests.
Meanwhile, NCsoft’s Executive Vice President Bae Jae-hyun’s decision to sell 8,000 of his 50,000 NCsoft stocks, worth some 3.3 billion won, over two days on June 13 and 15, is drawing speculation he had obtained insider information before selling the stocks.
Kang of NCsoft denied allegations on June 22, saying Bae exercised his stock options before the decision to release “Lineage M” without the item trading feature was made.
Last month, the Financial Services Commission issued fines worth a combined 2.4 billion won on 14 individuals for using insider information in selling stocks of Hanmi Pharmaceutical in September 2016, but stopped short of busting short sellers during its plunge.
By Son Ji-hyoung/The Korea Herald (consnow@heraldcorp.com)
But the feature is also behind the popularity of, or the gamers’ obsession with, South Korea‘s first-generation massively multiplayer online role-playing PC game “Lineage.”
More recently, item trading has apparently become the deciding factor in the game developer’s stock prices.
Ahead of the release of “Lineage M,” the PC game’s mobile adaption, its developer NCsoft suffered a rout on June 20 at around 2:30 p.m. The plunge by 11.4 percent within an hour of closing came as hearsay began to circulate centering on how “Lineage M” was launching without tradable items. The company eventually suffered in its market capitalization to the tune of 1.01 trillion won ($884.6 million).
The company later confirmed on June 20 that it would launch a version rated “12,” which does not allow players to trade items.
NCsoft’s plunge resulted in massive short selling of the stock and sparked allegations of its executive vice president engaging in insider trading.
Traders short sold nearly 314,000 NCsoft stocks worth 112.3 billion won Wednesday, breaking the previous record set the previous day. More than 196,000 NCsoft stocks worth 76.2 billion won were short sold on June 22, accounting for 17.7 percent of the stock’s daily trading.
“Lineage M” had generated some 5.5 million preorders since April 12, a record high among mobile games, but was met with disappointment by fans on online communities upon the news.
On June 21, NCsoft made another disclosure that it was planning a different version of “Lineage M” with tradable items before July 5.
“One option is ‘Lineage M’ is open only on Android smartphones, if ‘Lineage M’ with tradable items is rated X,” Kang Ji-eun of NCsoft told The Korea Herald on June 22.
The company’s stocks inched up 1.1 percent on June 21 upon the revised game release plan. But it again fell 4.66 percent on June 22.
NCsoft‘s decision on “Lineage M” came after the 6-month-old “Lineage 2: Revolution,” launched by NCsoft’s archrival Netmarble Games, was re-rated X from 12 on May 10 because of tradable items. Netmarble Games removed the in-game market for trade on June 2 at around 2 a.m. without prior notice to users.
Seeing the online market for tradable items gives rise to players speculating, the state-run game rating board has rated X games featuring item trading markets.
Rating matters to mobile game developers, according to industry sources on June 22.
“If a mobile game is rated X, not only those aged between 12 and 18, but also those using Apple’s App Store would lose access to the game,” an industry source told The Korea Herald. “Our duty is to give access back to the gamers by adjusting game features and going through reexamination by the game rating board.”
The financial regulators and market operator on June 21 launched a probe of the massive short selling on June 20 upon requests.
Meanwhile, NCsoft’s Executive Vice President Bae Jae-hyun’s decision to sell 8,000 of his 50,000 NCsoft stocks, worth some 3.3 billion won, over two days on June 13 and 15, is drawing speculation he had obtained insider information before selling the stocks.
Kang of NCsoft denied allegations on June 22, saying Bae exercised his stock options before the decision to release “Lineage M” without the item trading feature was made.
Last month, the Financial Services Commission issued fines worth a combined 2.4 billion won on 14 individuals for using insider information in selling stocks of Hanmi Pharmaceutical in September 2016, but stopped short of busting short sellers during its plunge.
By Son Ji-hyoung/The Korea Herald (consnow@heraldcorp.com)
