HYBE, home to the global K-pop group BTS, has dived into the gaming business, which is being interpreted as part of an effort to diversify its revenue model from the existing music label business, which relies heavily on BTS, to new businesses such as games, non-fungible tokens (NFT), and the metaverse.

According to the investment banking (IB) industry, HYBE decided to establish a corporation in the United States and transfer its game development and publishing business to this corporation. The name of the new corporation is likely to be ‘HYBE IM,’ which is named after the organization of the current game division. It is also promoting partnerships with large domestic and foreign game companies such as Krafton, Netmarble, and NCsoft. In some cases, it may be a way to establish a joint venture in the United States. HYBE also announced that it would establish an NFT joint venture with Dunamu in the United States in the first half of this year. It is evaluated that HYBE is making a big leap in the future content business in the global market, with all corporations that will be the mainstay of the company's new business decided to be located in the United States rather than in Korea.

HYBE entered the game business by acquiring Superb, a rhythm game developer, in 2019 and incorporating it as a 100% subsidiary. Last year, the company was merged with the company's game business to increase its size and recently reorganized into a new organization called HYBE IM. HYBE IM has 70-80 game development personnel. In 2019, it launched 'BTS World' in collaboration with Netmarble, HYBE's second-largest shareholder, and released games such as 'Rhythm Hive' using BTS members as characters in February of last year. However, the results of the games released so far have been below expectations. 

The industry expects HYBE to improve its game business greatly. HYBE has been introducing the company as a platform company rather than an entertainment agency since its listing in October 2020. The idea is to break away from the structure of nurturing and debuting artists and selling albums and build a platform that continuously communicates with fans to generate continuous revenue.

HYBE has been preparing for the past three years by selecting games as one of the core contents to make this concept a reality. Last year, former Nexon CEO Park Ji Won was hired as CEO of HYBE last year, boosting the company's movement to achieve its goals.

HYBE revealed that it has decided to strengthen its game business to reduce the company's dependence on BTS's revenue. Big Hit Music, to which BTS and TXT belong, recorded an operating profit of 127 billion KRW (103 million USD) last year, accounting for about 66% of HYBE's total operating profit of 190.3 billion KRW (154 million USD). Jin, the oldest member of BTS, was born in 1992 and must enlist in the military by the end of this year under the current military service law. Although the National Assembly is discussing a bill for special military service against BTS, there is a lot of opposition, so there is a lot of uncertainty.

The game industry is a representative field that can directly utilize the intellectual property rights (IP) of its artists, such as BTS, and is considered a key factor in the so-called ‘fandom to earn’ aspect, which leads to profits. In a recent conference call for investors, HYBE introduced the capabilities of its in-house game personnel and revealed its commitment to the game business.

An analyst in charge of HYBE at a domestic securities company said, “If a game is developed that allows direct contact with favorite artists within the metaverse, rather than simply borrowing BTS’ songs and characters from the game, the game business will generate unparalleled cash flow."