Gaming enthusiasts often claim that the industry remains resilient during economic fluctuations. They argue that gamers find solace in virtual battles, even amidst the chaos of the real world.
Independent Market Report projects the global gaming industry to grow at a CAGR of 8.9% in the five years from 2022 to hit US$317.6 billion ($430.5 billion). Wielding such optimistic projections, Singapore-headquartered Winking Studios, an art outsourcing and game development company, is eyeing a Catalist listing on the Singapore Exchange S68 .
Boasting a track record of more than two decades, Winking Studios, helmed by executive chairman and CEO Johnny Jan, provides outsourcing services to major gaming companies, including EA, Sega, Ubisoft and Tencent.
Citing Independent Market Report, which was commissioned to do the industry study for the listing, Winking Studios says it is the third largest player in Asia and fourth globally. It operates in the market of gaming development and production, which is growing at a pace faster than that of the overall gaming market. Independent Market Report projects that revenue for the global game art outsourcing market will grow at a CAGR of 13.4% from 2022 to 2027 to reach US$6.3 billion in 2027.
Winking Studios is 55%-owned by Acer Gaming, the e-sports arm of leading Taiwanese hardware and electronics corporation Acer Incorporated. Both Acer Incorporated and Acer Gaming are listed on the Taiwan Stock Exchange.
Headquartered in Singapore, Winking Studios’ principal places of business are in Taiwan and China, where the company has seven studios. These operations are supported by the team in Singapore. “Although our operations are now in the Mainland China and Taiwan regions, we have plans to expand within the Southeast Asia region, and we believe that listing on SGX could support our plans to do so,” says Jan.
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“The listing on the SGX will also help boost our business reputation, as Singapore’s government policies and corporate governance are strong. With that, our clients and potential clients will be able to trust us better.”
On Nov 8, Winking Studios launched its IPO, offering 40 million new shares at 20 cents each. Besides 27.2 million placement shares, Jason Chen Chun-Shen, chairman and CEO of Acer Group, the ultimate controlling shareholder of Winking Studios, will play the cornerstone investor role by taking up the other 12.8 million shares.
Based on the placement price and post-placement and cornerstone tranche share capital of 279.7 million shares, Winking Studio’s market capitalisation will be around $55.9 million. There is no public tranche for this IPO.
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From the gross proceeds of some $8 million and net proceeds of $5.1 million, around $1 million will be allocated for business expansion, $2.4 million to fund acquisitions, $1.2 million to develop AI capabilities, and the remaining for working capital.
“Our priority is to expand within Asia because the distance (to headquarters) is shorter, and it is still within the same time zone,” says Jan, who plans to tap local talent and open new studios in Malaysia, the Philippines and Indonesia as they are all within the same time zones as the company’s existing operations. Besides ease of management, Jan believes he can gain a cost advantage over US and European competition.
Jan acknowledges that Winking Studios is launching its IPO when the appetite for new listings among investors is not particularly high, in a cautious market where concerns about inflation and slowing economies loom. “The IPO market now may be muted, but listing now might give our investors further upside as we, too, ride on the economic recovery in the following years,” he reasons.
PrimePartners Corporate Finance is the IPO’s sponsor, issue manager and placement agent. The placement will close at noon on Nov 16, and trading is expected to commence at 9am on Nov 20.
