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[KOSDAQ REPORT (15)] JOYMAX taps global online game markets

This is the 15th in a series of articles analyzing companies listed on the Kosdaq, Korea's secondary stock market loaded with tech firms. - Ed.

By Kim Yoon-mi

JOYMAX Co., a Seoul-based online game developer and publisher, hopes to tap markets in countries where the online game industry is underdeveloped, the CEO of the company said yesterday.

The company is best known for Silkroad Online, or MMORPG, a multiplayer online role-playing game. International game players from 180 countries spend real money to purchase items to customize game characters or accelerate the process of the game.

More than 95 percent of the company's 32.9 billion won ($26.5 million) revenue in 2008 came from overseas sales, but the CEO said he is aiming higher.

"We should go further to expand business in the global market. We will boost overseas business in the Middle East, South America and East Europe where game content is relatively less developed," CEO Jeon Chan-woong said in an interview with The Korea Herald and The Herald Business.

"In China, too many developers are jumping into MMORPGs," he said, adding that he does not want to tap the Chinese market.

Making inroads into an underdeveloped market is particularly important for online game developers because popular content can come and go in a single day in the saturated, highly competitive market, Jeon said.

The Middle East, South America and Eastern Europe lack both game content and payment systems for consumers because the regions are at an emerging stage in terms of online game industries.

"Securing those markets first would help us save marketing costs, as well as create a strong brand image relatively easily," the CEO said.

Because JOYMAX provides Silkroad Online directly from the main server in Korea for users in different countries based on the "global direct service" platform, it reaps four or five times more profits compared to other game developers, who have to pay marketing and settlement commissions to publishers, he said.

The game developer's net profit came in at 17.1 billion won on annual sales of 32.9 billion won in 2008.

Silkroad Online generated 8.2 billion won in revenue out of the total revenue of 9.2 billion won in the second quarter, which was up 31.4 percent from a year earlier, according to the company.

In July and August, JOYMAX signed contracts to export Silkroad Online to Russia and another online game, Bumpy Crash, to Thailand.

From October, the company plans to offer Silkroad Online gamers multi-language services including Spanish, Turkish, German and Arabic to help them more conveniently interact with each other in the virtual game world.

For the local market, the company will launch Bumpy Crash soon, Jeon said.

Analysts said JOYMAX's stock price has a lot of upside potential because its shares are undervalued compared to other local game developers.

"The company's net profit is expected to hit 22 billion won this year and its price-to-earnings ratio is very low, at 9.1, compared to the local online game developers' average PE of 15," said Kim Seok-min, an analyst with Dongbu Securities.

"Such factors are expected to give extra momentum to the company's stock prices," he said.

Stock price of JOYMAX rose 4.17 percent to close at 59,900 won on Tuesday.

( source: The Korea Herald

As if anyone needed more reasons to leave SRO. JM is riding on the international market's ass, raping it over and over for massive profits and yet they still provide grossly substandard service and can't even rid their servers of a single bot for more than a few hours. I'm sure Mr. Chan-woong doesnt lose a single wink of sleep in that enormous pile of won he is sleeping in at night either.