Video Game Software IPO nail biters

More IPO's are expected this week than in any other week in the last three quarters.  

Two of the hottest are in video game software - Nexon in Japan, and Zynga (ZNGA) in the US.
Nexon's $1.2B IPO was Japan's biggest this year - a leader in online game software - market cap of $7B.
Zynga's $1B IPO is one of the highest profiled IPO's of the year - the leader in social Facebook game software - target market cap of $8.9B  

The global game software industry is expected to top $80B by 2016 - no sign of slowdown, and already dwarfing the film and music industries.  

Here's where it gets interesting. 
Nexon did not see any real jump in its shares this week - very lukewarm reception - in fact, they saw a slight decline at times.
Watching this, American analysts are wondering what will happen to Zynga today. Many are saying the stock is priced too high.
There are questions surrounding the sustainability of their growth with more unique game software offerings.    

From recent reports:  
Zynga has more than 3 times the number of monthly active users as Nexon at 260 million.
Nexon is more than 8 times more profitable than Zynga.
Nexon makes most of its money in South Korea and China.
Zynga makes its money worldwide.
Nexon has made only 2 acquisitions in the last 4 years.
Zynga has made more than 18 software acquisitions in the last 2 years.  

The next four weeks will give us a good indication of who the winners will be in this hot space! Is software M&A the bigger winner?

Posted by , Executive Vice President on 15 December 2011
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