What to Be Disclosed? Attributes of Online Games for the Market Transparency Policy.

This paper identifies main features of online games to be disclosed to the market for policy makers. It tests the positive relationships between information disclosure for online games and stock returns using event analysis method. Based on data collected from online game companies between 2004 to 2009 in South Korea, the paper finds positive and significant correlation between game rating information and stock reactions. Specifically, the positive reactions are clear when a company introduces casual games, and a company has development capability. However, we do not find any significant relationships between stock reactions and voluntary information releases after the game rating information released. The findings support the feasibility of introduction of mandatory information disclosure scheme for online game industry.