1. What’s Happening with Mgame (058630)?

Mgame reported disappointing results for H1 2025, with revenue down 43.6% year-on-year to KRW 47.03 billion and operating profit down 28.5% to KRW 9.18 billion. Declining sales in the PC online gaming segment are a major contributor, alongside underperforming new mobile game releases.

2. Why These Disappointing Results?

A combination of factors led to these results: a shrinking PC online gaming market, increased competition, declining performance of existing IPs, and the slow market penetration of new mobile game titles. The poor performance of the ‘Ghost Online’ idle game and ‘Droiyan Online’ mobile game in China is particularly concerning.

3. What’s the Outlook for Mgame?

Mgame is investing in new technologies like AI and blockchain and exploring overseas markets to find new growth drivers. Their expansion into Central Asia and the silver industry also offers potential. However, it remains to be seen whether these initiatives will translate into tangible results.

4. What Should Investors Do?

We recommend a ‘Hold’ or ‘Neutral’ rating for Mgame in the short term, with a cautious outlook. Investors should closely monitor the performance of new mobile game releases, the progress of new business ventures, and macroeconomic factors before making any investment decisions. The performance of ‘Ghost Online’ and ‘Droiyan Online’ in China, as well as the sustained competitiveness of existing IPs, will be crucial for the company’s future stock performance.