Introduction#
Goldman Sachs has pinpointed two promising companies in South Korea's online gaming industry. These firms are not just sticking to traditional gaming but are also exploring new avenues for growth.
Krafton: Expanding Beyond Gaming#
Goldman Sachs has given Krafton a Buy rating with a target price of W510,000. The company is diversifying its operations by venturing into artificial intelligence (AI) and robotics. Krafton is partnering with Hanwha Aerospace to develop AI-driven technologies, including drones. The drone market is significant, estimated at around $45 billion and growing at about 14% each year. This shift from consumer gaming to business and defense sectors is expected to stabilize Krafton’s revenue and improve its growth outlook.
NCSOFT: Leading the Mobile Gaming Revolution#
NCSOFT has also received a Buy rating, with a target price set at W340,000. The company is transforming into a leader in mobile and casual gaming. Recently, NCSOFT acquired a 70% stake in Germany's JustPlay for W301.6 billion, which will help create a comprehensive platform for game development, publishing, and monetization. NCSOFT aims to achieve W5 trillion in revenue and a 15% return on equity by 2030, with a significant portion of this revenue coming from mobile casual gaming. This strategy marks a shift away from its traditional focus on PC games, allowing NCSOFT to expand its reach into North America and Europe.
Conclusion#
Both Krafton and NCSOFT are making strategic moves to diversify their business models and tap into new markets. Goldman Sachs believes these shifts will enhance their growth potential and attract more investor interest.