Bluehole shareholders hit by falling 'Battlegrounds' users

By Jun Ji-hye

Shares of Bluehole have been dropping sharply in the over-the-counter market amid the declining popularity of its mega-hit computer game “PlayerUnknown's Battlegrounds.”

This has dealt a blow to company founder Chang Byung-gyu, Tencent and other shareholders.

The fall in the stock price has led the Korean game company's second-largest stockholder, Tencent, and other investors to see large scale valuation losses.

In 38communications, the over-the counter stock trading website, the value of unlisted Bluehole was tallied at 435,000 won ($392) on Sept. 28, the lowest price of the year.

The firm's share price had jumped to 780,000 won in October last year on the back of the soaring popularity of “Battlegrounds,” but the figure is now declining, down by 19.44 percent in September alone.

Tencent, which became the second-largest shareholder of Bluehole in August, reportedly acquired an 8.5 percent stake of the Korean firm at 650,000 won per share. The gross investment was estimated at 570 billion won.

Considering the current share price is about 33 percent less than that, valuation losses of the Chinese firm are estimated at about 180 billion won.

It is also estimated that Chang Byung-gyu, founder and chief strategy officer of Bluehole, the largest shareholder with a 19.7 percent share as of June, has seen losses of 510 billion won, compared to when the firm's share price hit an all-time high last October.

After its release in March last year on Steam, the world's largest online game store platform, “Battlegrounds,” a survivor shooter game reminiscent of the Japanese film “Battle Royale,” became a great hit globally, enjoying simultaneous access by more than 3 million users last December.

But the number of users that accessed the game simultaneously on average was tallied at about 1.13 million over the recent month.

One of the main causes for the sluggish popularity of “Battlegrounds” is cited as the significant growth of its foreign rivals such as “Fortnite,” developed by U.S.-based Epic Games.

The firm's bungled management of illegal programs that enable gamers to cheat in the game, such as using automatically aimed guns, is also cited as a cause for losing “Battlegrounds” users.

Some analysts forecast, however, that Bluehole's shares could bounce back amid growing expectations about the firm's new massive multiplayer online role-playing game (MMORPG), “AIR.”

“We are working hard to release AIR at the earliest possible date, but at the moment, we are unable to say when exactly the new game will be released,” a Bluehole official said.

Kim Dong-hee, an analyst from Meritz Securities, said Bluehole's shares are expected to rise if the firm carries out tests of AIR at the end of this year or in the beginning of next year. Once the company receives a service permit for “Battlegrounds” from the Chinese government, the official service will also be available in the top game market in the world, the analyst noted.

“If Bluehole begins the initial public offering process, the shares could jump as well,” the analyst said.