Shift Up, lo Korean development studio to which we owe Stellar Blade and the mobile game Goddess of Victory: Nikke, had to postpone its listing on the South Korean stock exchange due to doubts raised about its excessive financial dependence on a single game, the aforementioned Nikke.
At the beginning of the week, the South Korean media reported the news that Shift Up presented a corrected version of the financial report preceding the IPO (initial public offering), moving the forecast of demand from institutional investors from June 3rd to June 27th, with the IPO subscription postponed to early July.
The doubts
The reason for the postponement appears to be due to a request from the FSS, the Korean body that supervises financial activities, regarding corrections to be made to meet the required standards. However, Shift Up said it had amended the report voluntarily and wanted to provide investors with clearer information and more time to make decisions in preparation for the IPO. The stock price predictions they speak of an initial figure oscillating between 47,000 and 60,000 won (between 33 and 43 euros). After the IPO, Shift Up could reach a valuation of 3.48 trillion won (approximately 2.50 billion euros).
The concerns expressed by the competent authorities concern the long-term sustainability of the company itself, because currently its value is given by a single game, the aforementioned Nikke. In short, if Nikke stops collecting as it does now, Shift Up could find itself exposed.
Consider that 2023 Shift Up saw a growth in turnover of 154.5%, for 168.6 billion won (approximately 124 million euros). The problem, in this case, is that 97.58% of the total figure was formed by Nikke. We will see what effect the sales of Stellar Blade will have on the 2024 turnover, in the meantime, however, it has been noted that Shift Up has stopped the development of Destiny Child, another of its mobile games, due to the decrease in users and, consequently, sales. The same could also happen to Nikke, which does not exclude Shift Up itself.
It represents another problem Shift Up’s reliance on third-party publishers for the management of its games: Stellar Blade is in fact distributed by Sony, while Nikke by Level Infinite, a subsidiary of Tencent. In short, it has a wide, but still limited, margin of maneuver on its own products.
