South Korean game companies with new business plans to develop games using nonfungible tokens saw their share prices surge Monday, despite concerns over the market being overheated without actual plans laid out to materialize such a big agenda, experts said Monday.
Nonfungible tokens refer to the digital counterparts of real-world assets, largely visual art or music, that guarantee ownership through the blockchain technology.
Game developers enjoying a sudden spike in stock prices have announced NFT projects, industry sources said.
According to the country’s stock market operator Korea Exchange, shares of Gamevil, a game company listed on the secondary Kosdaq, increased by 50.2 percent from Nov. 8 to 150,500 won ($127.8). Gamevil’s affiliate Com2us also saw share prices surge by 29.2 percent to 172,800 won in the cited period.
The companies shared plans Wednesday to open the NFTs Exchange and develop C2X -- NFTs that can be used as game money -- by next year.
Game companies listed on the main bourse Kospi have seen a surge in their stock prices as well.
NCSoft’s stock price soared by 4.9 percent to 660,000 won, while shares of Netmarble increased by 5.2 percent to 131,500 won in the cited period. Both announced last week plans to launch new NFT-based games next year.
Experts warn gaming stocks are rising too fast without concrete plans ahead.
“Although NFTs market is the next generation’s blue ocean, some game companies haven’t even shared a detailed business plan,” said Kim Jae-yoon, KTB Investment & Securities analyst.
Kim added that game providers are piggybacking on the hype surrounding NFTs to offset their poor business performance.
In the case of NCSoft, its business profit in the third quarter plummeted by 56 percent to 96.3 billion won. Netmarble’s profit was also down by 69.6 percent, marking 26.6 billion won.
“Retail investors should invest with caution since the gaming stock prices might take a downturn after the government introduces new measures to regulate the NFT market,” Kim said.
By Byun Hye-jin (firstname.lastname@example.org