International online game operator I GOT Games (IGG) raised an unusually high amount through its IPO on the Growth Enterprise Market (GEM) board of the Hong Kong Stock Exchange due to a particularly keen Hong Kong market for online game and mobile game businesses, said a lead lawyer involved.
“As game consoles and arcade games have declined in popularity worldwide, online games have become the driver of growth in the global electronic game market,” Esther Leung, a Hong Kong partner at DLA Piper and the firm’s co-head of capital markets (Asia), told China Business Law Journal.
“Of all the segments of the online game industry, it is notable that the mobile games market segment has expanded rapidly,” she continued. “The growth can be attributed to the development of smart mobile devices and operating systems.”
Leung led the DLA Piper team advising China Everbright Capital and China Everbright Securities (HK), the sole sponsor and sole lead manager, on IGG’s Hong Kong listing.
The Singapore-based online game developer, with its management in China and operations in the US, China and the Philippines, raised more than HK$1 billion (US$129 million).
“With the popularity of smart phones and tablets in Hong Kong, companies in the mobile games industry have attracted a lot of interest from investors, who may access the games and play them on their mobile phones,” Leung said, adding that apart from IGG, the IPO of the Chinese webgame developer Forgame was also very well received in Hong Kong.
Leung said it is unusual for a GEM IPO to raise as much as IGG did, and the reason is more than just the potential of the industry. “IGG has its own strength, which differentiates itself from other online game companies,” she said. “It has a strong development team with diverse backgrounds mostly located in China, which allows them to develop the games cost effectively.
“It has developed games in multi-language versions and has broad relationships with internet platforms like Apple App Store and Google Play. Players worldwide are given easy access to their mobile games. As a result, it has built up a large player base internationally.”