IAH Games Shelves Initial Public Offering

Games firm shelves IPO
Infocomm Asia Holdings pushes back launch due to global financial crisis
By Chua Hian Hou
INVESTORS looking to own a piece of the online video gaming industry will have to wait a little longer.

Infocomm Asia Holdings (IAH), which distributes games such as Grand Theft Auto IV and Fifa Online 2, has postponed its plans for an initial public offering (IPO) due to the global financial crisis.

IAH had originally hoped to launch the IPO next year in a bourse in Singapore, Hong Kong or the United States, said chief executive Roland Ong.

Despite the setback, IAH has engaged financial advisory firm Lazard to 'evaluate various strategic options including partnerships with and fund-raising from potential investors,' he said.

The company, which had earlier raised US$25 million (S$36.7 million) from investors, including the Infocomm Development Authority of Singapore, Japan's Softbank and Nasdaq-listed game company Gigamedia, hopes to raise another US$30 million from these sources next year.

Despite the gloomy economic outlook, Mr Ong believes the US$30 million is a 'realistic' target, as many cash-rich companies are still upbeat about the booming Asian gaming industry.

He, too, is bullish about his own company's prospects even in the face of the spreading economic turmoil. He cited studies which show that games do better during downturns because 'they are the cheapest form of entertainment'.

The funds will be used to double the 20 or so game titles it currently offers, to buy additional computer and networking hardware to run online gaming services, and to make acquisitions.

IAH, which was set up in 2006, posted $4 million in revenues last year.

Revenue rose sharply this year, thanks to hits like Grand Theft Auto. The company is 'on track' to meet its forecast revenues of 'over $20 million', said Mr Ong.

He also expects the loss-making firm to turn profitable next year, on the back of over $40 million in revenues.

If and when IAH eventually lists here, it would become the first gaming company to be listed on the Singapore Exchange.

Hellgate may end
INFOCOMM Asia Holdings (IAH), which runs a free online site allowing players of the Hellgate: London video game to play together online, is 'relooking' the service.

IAH's vice president for marketing and strategy Yeo Yeok Chuan said the company is deciding whether to continue offering the free online service, which costs bandwidth and hardware resources.

If online play is discontinued, it will mean that Hellgate would only be playable in its single-player, non-online mode.

The 3D action role-playing game, made by the game gurus which created the hit Diablo, allows players to play solo or with other gamers in the same virtual world. Hellgate was launched last October, to great fanfare.

Since the launch though, the game was plagued by problems.

In July, news broke that Flagship Studios, the company behind Hellgate, was bankrupt. The intellectual property rights to Hellgate passed onto one of Flagship's shareholders, Korean game developer HanbitSoft. IAH chief executive Roland Ong said that Hellgate is going 'back to the drawing board' for more development work, and may be 'revived in the second half of next year'. IAH is Hellgate?s local distributor and online gaming service provider.

The failure of Hellgate, which Mr Ong said was Flagship's fault, had cost IAH dearly.

If Hellgate had taken off, said Mr Ong, it would have doubled IAH's revenues this year. -- Chua Hian Hou