Uni-Star Files For Hong Kong IPO Despite Declining Fortunes

The gaming company has applied to list in Hong Kong despite reporting plunging revenue in the first nine months of last year

Key Takeaways:

Uni-Star has applied to list in Hong Kong, reporting it fell into the red last year as its revenue plummeted

Paid subscribers for the role playing game specialist's two hit games plunged last year as they entered the twilight of their lifecycles

Growing opportunities for highly personalized entertainment over increasingly sophisticated smartphones is creating new opportunities for mobile games to claim a piece of a pie long dominated by traditional PC games. Now, investors could have a chance to buy into the role playing game (RPG) segment of that mobile market with a planned IPO by specialist developer Uni-Star Interactive Holding Ltd.

Despite its niche in the RPG realm, however, Uni-Star could be a hard sell due to its declining fortunes lately as its two most popular titles head into the twilight of their lifecycles.

According to its listing document filed late last month, Uni-Star recorded 5.5 billion yuan ($750 million) in gross billings from its RPGs in 2023, making it China's third-largest RPG mobile game provider with 6% of the market. Its "Nine Realms: Sword & Immortals" and "Sword Fantasy" are its two biggest breadwinners with the highest gross billings.

Founded by Guo Zhongjian in 2014, Uni-Star is now run by his daughter, Guo Xiaolan, the company's chairman and CEO. It's China's sixth large mobile game company in terms of gross billings, which refers to the total amount of money gamers pay for in-game purchases in a given period of time.

The broader gaming industry consists of upstream players like intellectual property (IP) holders and actual game developers; midstream operators such as game publishers and distributors; and finally actually gamers at the bottom of the chain.

IP holders typically license their property to game developers, who design and develop games. Publishers launch, promote and market games, and distribution channels provide platforms for game downloads and upgrades, such as app stores operated by Apple and Google. Uni-Star covers both the upstream and midstream parts of the chain, engaged in game ...