E-Games sees sustained growth

MANILA, Philippines - IP E-Game Ventures Inc., the listed online gaming subsidiary of IP Ventures Inc., is banking on its retail business through Internet cafés and online games for continuous growth this year.

Additional revenues will come from new hotel and resort business while more acquisition is in the works, a top company official said.

“I think in revenue growth we will be able to see double-digit growth for 2012 given the businesses we have now compared with last year,” said Ricardo F. Lagdameo, chief investment officer of E-Games.

Lagdameo said major additions to the company are Internet café chains Netopia and CyBr.

E-Games is now the biggest player in the local Internet café business with the purchase of Webworx, owner and operator of the CyBr brand, and Digital Paradise Inc., the operator of the Netopia Internet cafés, last year.

“What we are looking to do is expand the retail side of business like Internet café. We are also providing new services like food and beverage for example,” Lagdameo said.

E-Games holds top MMORPG (massively multiplayer online role-playing game) titles such as Ran Online, Cabal Online and award-winning Korean game Granado Espada. Other games include high-fantasy Runes of Magic and Korean adventure games Dragonica and Nostale Online.

In January to September last year, the company posted P49.19 million in net income, from just P950,601 in the same period in 2010.

Meanwhile, the hotel and resort business is still not expected to be the top earner for the company.

“I do not see it being the main revenue generator in the near future...these new ventures we are getting into are additional revenue streams,” Lagdameo said.

Last month, E-Games announced its acquisition of a 25-percent stake in Cosamera Resorts Corp. located in the Cagayan Special Economic Zone Freeport in Sta. Ana, Cagayan.

The company said this initial investment is in line with the firm’s plan of adding hotel, resorts and gaming businesses to its primary purpose.

Lagdameo said the competence of E-Games is still the network of Internet café and online games publishing.

Furthermore, he said they are not entering into the casino business amid several rumors.

“That is not the direction we are going into,” Lagdameo said.

E-Games is also looking at more acquisitions this year.

“For this year, we are in different stages of talks with different parties,” Lagdameo said, without elaborating.

E-Games plans to raise up to P373.52 million through a follow-on offering of shares this year.

The listed firm said it intends to use proceeds from the sale share to finance the expansion of its Internet café retail outlets (P100 million), the acquisition of new content for its online games publishing business (P50 million), strategic acquisitions (P50 million) and working capital (P20 million).

Lagdameo said E-Games might tap the debt market given favorable interest rates if there is a need for more funds.

Asked about plans to expand outside the Philippines, Lagdameo said: “Going regional has always been in the radar of the company.”

Early this month, E-Games and Level Up! Inc. completed the merger of their online game publishing businesses, a move that will allow them to exploit the growing online gaming market.

E-Games is the listed online gaming unit of IPVG Corp. while Level-Up! is owned by China’s leading Internet services provider, Tencent and Naspers, the company behind Multiply.com and several other online companies around the world.

Last year, parent firm IPVG completed the transfer of its operating assets, including IP E-Game and IP Converge Data Center, to newly-formed private firm IP Ventures Inc. in line with a restructuring plan approved by its shareholders last July.