IGE, ready to sweep the Korean RMT market?

About a month ago, IGE bought a Korean RMT mediator, Itemmania. It is not the biggest player but its share in RMT transaction is considerable, around 35%. Hard to believe fact was the price of the company, 4.7B KRW(1000KRW is around 1 USD). It was really under-valued price considering the size of the Korean RMT market. Many suspected that there might be another secretive option in the contract.

Today, some newspapers reported that the biggest player in the market, Itembay, was under negotiation for selling itself to IGE. The selling price is estimated to be between 80B and 90B KRW. If this contract be done, IGE would acutally monopolize the RMT mediation in Korea.

According to an unnamed source, Itembay has tried hard to go public in Korean stock market, but only to fail. The failure was supposed to come from the nature of its business, RMT. Virtual item trading/mediation is not totally legitimate in Korea. Many company are doing their business around RMT-related area, but nothing has been confirmed as perfectly legal in Korea.

If there be another big swing on the issue, I’ll post about it, a.s.a.p.

Also posted on Gamestudy.org

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11 thoughts on “IGE, ready to sweep the Korean RMT market?

  1. While the size of the RMT market is big, there’s no good data on how _profitable_ RMT really is.

    I discussed this in GDC this year and the general assumption was that at least 50% of the IGE trades go to arbitration and hence cause loss for the company. At least in US, the fact that the gold is transferred in the virtual world means there’s no proof the transaction really happened (no, screenshots don’t prove it) and hence if you buy gold from IGE in US, you can claim your money back from the credit card company once the gold’s been transferred. If similar trends are going on in Korea, it might be 5M was a fair price.

  2. Thanks for the first comment. I’ve got 3 points on Haro’s valuable comment.

    1. To my opinion, the rate of arbitration in Korean RMT market is not so high as that of US as you mentioned. Item trading system is so well established that most kinds of arbitration activities are actually impossible. One funny episode is that Itembay has been a long-time member of the board for anti e-commerce fraud of Korean Police Agency.

    2. Data on Revenues and profits of item mediators would be another good proof for their vibrant business. Itembay said that total revenue of FY 2005 was around 300B KRW. The rate of profit is at least around 7-10% of total revenue.

    3. The share of itemmania is around 35%, and that of itembay is around 45-50%. So, the gap between their selling prices is too large considering the difference in their market shares.

  3. Pretty simple actually… both of your numbers are incorrect.

    Haro, would you stay in business if the arbitration was at 50% and loosing money? At that kind of arbitration, IGE will not be able to stay in business. General assumption is WRONG(assumed by many must be right?…wrong!). Moreover, IGE either had the money to acquire Itemmania or was able to convince the investors to fund the money to buy… which would suggest that THEY ARE NOT loosing money.

    Now since IGE is profitable (fact) and Itemmania was acquired by IGE (fact), $5 million price seems under-valued…right?…right!. Itemmania took away at least 30% of the 80+% market share once enjoyed by Itembay. Do you think it was an accident that they became the biggest threat to Itembay over past three years?. Itemmania owners are not stupid… reason why you (Mr. Huhh) think 5 mil is under valued is because you believe the reporter who wrote the article. Doing little research, you will find that
    1. Itemmania was acquired at much higher price.
    2. Itemmania was acquired months earlier than what you read on papers.
    3. Itembay never reported 300B Won revenue… 300B is the total transaction and about 5% of that was the revenue and sub set of this 15B won was their profit… (how does 30% profit work for you?… which makes their profit 4.5B won). This would make 80-90B won price tag to be HIGH… and the reason why it looks high is because IT IS TOO HIGH. You will find that Itembay has never been offered such high price for the company neither by IGE or any other companies.

    Peace

  4. If the No. 2 RMT leader in the South Korea Market is only worth 5 Million USD, how can other companies expect a more exciting value?

    The market share of the 3 RMT companies handling C-C services:
    http://www.itembay.com    48.84%
    http://www.itemmanina.co.kr 38.96%
    http://www.item.playforum.net 4.13%

    Actually, it is said that IGE’s monthly revenue has dropped to roughly $3-4 million. Why and how it can raise new fund – $60 million from Goldmansachs to continue its expansion?

    RMT market player
    http://www.supgold.com

  5. ige is not profitable. they bought the korean rmt platforms with investment money they got from goldman sachs. but now gs wants its money back because they discovered that ige did not fully disclose financials. ige is in the process of trying to sell allakhazam and thottbot to raise the money to pay them back. they are closing the office in california and relocating everything to china so they can’t be sued. another thing i heard is that they are hiring a new ceo and cfo and plan to offshore all their money and assets to china until they can sell what is left of the business in the usa. also that the guys running the company are trying to hide money from the investment that they got in swiss bank accounts and trying to change the name of the company. a lot of people have lost their jobs there in the last few weeks and they think there is something big going to happen in january or february because they closed the california office and told everyone there is no forwarding address.

  6. Its not surprising IGE is going down. The two owners Yantis and Alan who were the brains of the business left beginning of
    last year (I wonder why) and now those people who are running it are jokers. I’m sure anyone who has dealt with them
    would agree. It will be interesting to see what trick IGE and goldman sachs will pull out this year with half
    their management team gone

  7. Ige china owed many moneys ! Ige bought golds of games from chinese farmers , but the never pay to them ! already almost 2 months!
    someone said IGE face to collapse

  8. Well, eBay’s decision to stop virtual asset auctions will probably lead more customers to IGE, right? Maybe you’ll get your payment after all..

  9. Speculations… makes me sick… Id like to see where this info you guys are getting is true. Lets see some sources

  10. IGE won’t make a positive impact on the RMT market. They haven’t made that impact yesterday, they haven’t made that impact today, so why should they (for the future)?

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