IPVG eyes 80% of local online gaming market

MANILA, Philippines - With worldwide internet gaming services growing at a rapid pace, listed information technology and gaming firm IPVG Corp. is looking to aggressively invest in the online gaming business as it aims to become a dominant player in the multi-billion dollar industry by March next year.

In a press briefing yesterday, IPVG chief executive officer Enrique Gonzalez said that while the group, through unit IP E-Games, already controls 50 percent of the Philippine online gaming market, it is still aspiring to take a much bigger slice of the market like 80 percent.“We don’t want to be just the leaders in the markets we’re in. We want to secure a more dominant position. Thus, we will be investing aggressively in the online gaming business. By March next year, we hope to become the dominant player in the industry,” he said.

Gonzalez said online gaming has the potential of becoming the group’s biggest contributor in terms of profits. Currently, communications account for the biggest chunk of the group’s total revenues, chipping in P557.79 million in the first half this year followed by content with a contribution of P121.77 million. The BPO business, in which the company owns a minority stake following the sale of unit IP BPO Holdings Pte. Ltd. to PCCW Limited in early August for $22 million, contributed P85.17 million to total revenues.

Worldwide internet services are anticipated to witness prolific growth, driven by rising expenditure on IT services, improved consumer spending and intensifying e-commerce activities.

Gonzalez said the company is planning to launch new gaming titles aimed at revolutionizing local gaming. However, he declined to name the new titles that the company plans to introduce in the market.

In the first half this year, the company posted a net profit of P19.29 million, down 38.6 percent from the P31.4 million reported the same period a year ago. In the second quarter alone, IPVG earned P11.87 million or an improvement of 49.6 percent from the P9.74 million net income recorded in the first quarter this year as revenues expanded by 11 percent to P414.3 million.

Given an improving business environment and resurgent consumer spending, Gonzalez expressed confidence that the company will perform far better in the second half of the year. “ Our first half results show the inherent strength of our businesses despite a challenging business environment. We have weathered the storm and emerged stronger than ever. The second half would definitely be better than the first half due to a better business climate,” Gonzalez said.

“While 2008 proved to be the height of the global financial crises, IPVG’s lines of businesses remained resilient to an extremely challenging global macro-environment.  Our continued improvements in financial performance is an indicator of our ability in servicing the needs of our client base and the successful launch of new products and services across our business lines,” Gonzalez added.

Gonzalez said the company implemented a strategic program that redefined its core businesses that are high growth and high margin and that entailed the sale of non-core businesses to streamline corporate focus and pare down debt.

He said the company aims to reduce its existing debt of around P470 million to P480 million by half by the end of the year.

“We want to be number one in the businesses we’re in. If we cant do that, we’ll sell the business,” Gonzalez said.

Gonzalez said the company expects to sustain its positive operating results for the rest of the year by having a more focused business model and a strengthened balance sheet.

In spite of a tough macro-environment, IPVG closed major investment deals in the first half which included a P300-million investment agreement with private investment groups GEM Global Yield Fund Ltd. and Elite Holdings Inc. and the sale of the group’s call center business for $22 million. 

Aside from the Philippines, IPVG has established presence in Singapore, Hong Kong, Vietnam, India, Panama, United Kingdom and USA.