"We Don't Hold More Than 10%": National Pension Service Reduces Exposure to Game Stocks

NPS Cuts Stakes in NC and NHN to Below 10%

"Driving Structural Change Through AI and Global Expansion"

The National Pension Service is reorganizing its gaming portfolio, rapidly reducing its stakes in NC and NHN to below 10% in a short period. This move appears to be aimed at achieving two objectives simultaneously: risk management due to stagnant growth in the domestic gaming market, and the realization of short-term gains.

According to the Financial Supervisory Service's electronic disclosure system on September 27, the National Pension Service reduced its stake in NC from 11.08% at the end of June to 9.76% as of September 14, marking a decrease of 1.32 percentage points. Although the NPS had been actively trading on the market since July 1, sometimes selling 20,000 to 40,000 shares at a time until August, the overall change in total holdings was insignificant. However, starting September 10, the NPS sold over 200,000 shares in just three trading days, rapidly decreasing its stake.

The background behind the disposal of NC shares, which the NPS had gradually increased since the end of last year, is attributed to (1) the fading of previously reflected expectations, and (2) concerns about the growth potential of the gaming industry. While NC has successfully achieved both business restructuring and the strong performance of new titles such as 'Aion 2' and 'Lineage Classic', the overall market growth is slowing, as evidenced by declining game usage rates. According to the Korea Creative Content Agency, the domestic game usage rate peaked at 74.4% in 2022, but has fallen every subsequent year, dropping to 50.2% last year. In the global market, chronic issues such as a concentration of game genres and monetization systems in Korean games are also cited as limiting growth potential. Additionally, the rise of Chinese gaming companies has also compounded the challenge.

This year in January, the National Pension Service also reduced its stake in Krafton from 7.10% to 6.10%. In the case of Netmarble, its stake was lowered from 6.15% in June 2024 to 5.15%, and it was raised again to 6.15% last year, but no further increase has occurred since. Among major listed gaming companies, there are currently none in which the National Pension Service holds a stake of 10% or more. As a result, gaming companies are being sidelined in the NPS’s portfolio composition.

This trend has also impacted NHN, which, despite being primarily involved in gaming, recently emerged as a key stock in the artificial intelligence (AI) infrastructure sector. On September 1, the National Pension Service disclosed that it reduced its NHN stake from 10.12% to 9.90%. After having increased its holding on August 12, the NPS alternated between buying and selling shares on the market within just two weeks, bringing its ownership back down below 10%.

NHN, in addition to its core businesses in games and payment software, has seen its cloud segment grow, linking it to the AI infrastructure theme. On August 18, its share price climbed as high as 78,200 won during trading, marking a new 52-week high. It is believed that the National Pension Service realized gains during this period. Recently, the share price has fallen to the 50,000 won range, but the securities industry sees more potential momentum coming from its data center business rather than its gaming operations.

The gaming industry has stated that, while they are aware of market concerns, they are actively working to expand intellectual property (IP) and target global markets. Companies such as NHN and Krafton are already widening their scope into AI to secure future growth drivers. A representative from a game company said, "The recent selling by the National Pension Service is simply part of portfolio rebalancing and profit-taking," and added, "If large-scale IPs targeting the global market start delivering tangible results, share price momentum will return."

This content was produced with the assistance of AI translation services.