Kakao Games, which has been shedding non-core affiliates and stakes, has brought mergers and acquisitions back as a growth strategy after the launch of new management. It chose Metoon as its first target and also formalised its willingness to make additional investments. The company appears to be placing renewed emphasis on securing external growth engines.

The industry said on Tuesday that Kakao Games decided on Sept. 15 to invest about 98 billion won to secure a 39.56% stake in Metoon. Once the transaction is completed, it will become Metoon’s largest shareholder and secure management control. The acquisition combines purchases of existing shares with a third-party allocated paid-in capital increase.

After shedding non-core assets, back to M&A

The deal is meaningful in that it signals Kakao Games’ business reshuffle of recent years is moving into a new stage.

Kakao Games has been selling off non-core businesses and assets, starting with the sale of its stake in Sena Technology in 2024. In 2025, it sold its entire stake in Neptune and also transferred its stake in KakaoVX to a subsidiary of Kakao Investment.

After focusing on improving its financial structure and business portfolio by disposing of non-core businesses and assets, it has shifted this year toward using M&A and strategic investments again as growth tools.

The change took shape after the co-CEO structure of Kim Tae-hwan (김태환) and Lee Si-woo (이시우) was launched in June. Kakao Games, when appointing Kim, foreshadowed expansion through M&A and strategic investments.

Kim said in an August second-quarter earnings conference call that the company is reviewing more than 10 investment and M&A opportunities at home and abroad. He said it would start with deals worth hundreds of millions of won rather than large transactions worth several billion won, and then gradually increase their scale.

The Metoon acquisition is the first management-control acquisition to come a little more than a month after that strategy was laid out. Compared with the past, when Kakao Games poured large funds into Neptune and Lionheart Studio and brought developers into its group, the investment approach also differs.

It now appears to be prioritising proven profitability and business synergy, starting with deals worth hundreds of millions of won rather than securing a large developer in one go.

First choice is a profitable company, also eyeing profitability improvement

The decision to pick Metoon as the first M&A target also points to changed investment criteria.

Metoon posted 120.9 billion won in revenue and 12.6 billion won in operating profit last year. Overseas revenue accounts for more than 80%. With Kakao Games posting an operating loss in the second quarter of this year, it chose a company that is already generating revenue and profit as its first acquisition target.

There is also potential to improve profitability. Kiwoom Securities forecast Metoon’s revenue this year at 110.4 billion won, down 8.7% from a year earlier, while operating profit is expected to rise 26.9% to 16.0 billion won. It also expected the operating margin to recover to 14.5% this year from 10.4% last year.

Kim Hak-jun (김학준), an analyst at Kiwoom Securities, analysed that its previously sluggish social casino and casual game-based businesses such as solitaire recently turned to profit in the first half on the back of an increase in daily active users. He said the games division is seeing its profit structure improve through measures such as marketing cost efficiency, and that this is a point when revenue growth is reflected in profit.

Metoon’s business structure also differs from Kakao Games’ MMORPG-centred portfolio, where it has shown strength. It is centred on social casino and casual games, and also has webtoon, web novel and entertainment businesses, which could broaden its business scope in terms of genre and IP.

Kakao Games has recently been expanding links with external companies through publishing contracts, IP collaborations and investments in technology companies, following the same flow. It is increasing the share of using external IP, developers and technology companies, away from the approach of securing growth engines through in-house development and group affiliates.

Lee, co-CEO of Kakao Games, said at the time of the Metoon acquisition, "This acquisition is the first step in executing an M&A strategy under the new management system, with business performance and profitability verified."

An industry official said, "Rather than securing a large developer at once like in the past, Kakao Games appears to be moving in a direction that lowers investment risk by focusing on companies with confirmed profitability." The official added, "Which company it chooses after Metoon will show the new management’s M&A criteria."

With Kim already saying he is reviewing more than 10 investment and M&A opportunities, Metoon is close to a starting point for the new investment strategy. Future acquisition targets and investment 규모 are expected to be the next yardstick showing how Kakao Games will pursue growth again after 'selection and concentration.'