UPDATE 2-Temporary game ban trips up debut by South Korea's Netmarble Games

* Minors ban on mega-hit game pares earlier gains

* S.Korea's 2nd-largest IPO ever

* Proven ability to release continuous hits-analysts

* War chest of $4.4 bln for acquisitions-company (Adds minors ban, analysts' response)

SEOUL, May 12 (Reuters) - Shares in Netmarble Games Corp pared gains after debuting as much as 9 percent higher on Friday, as regulations banning minors from playing its mega-hit game spooked some investors who had clamored to buy into the success of the South Korea's largest smartphone games maker.

The stock opened at 165,000 won ($146.65), above the IPO price of 157,000 won, and rose as high as 9.2 percent in early trade before falling to as low as the IPO price of 157,000 won. The KOSPI index was down 0.3 percent as of 0125 GMT.

A Netmarble spokeswoman on Friday confirmed media reports that the gaming regulator had barred for at least two weeks or anyone aged 18 and under from playing its mega-hit game "Lineage II: Revolution" until the company changes an in-game item trading system.

The spokeswoman said the company would change the feature in the age 12-plus role playing game, which gaming data provider SuperData named the world's biggest earning game in February even though it was only available at home. South Korea is the world's fourth-largest gaming market, with annual revenue of about $4 billion, data from researcher Newzoo showed.

Analysts described the ban as a temporary setback and said Netmarble's ability to churn out hits in a crowded smartphone gaming maket made it a sound bet. The follow-up to Lineage II - "PentaStorm" - is the most popular game on the Google Android store in South Korea on Friday.

"Compared to other Asian game developers such as Mixi or GungHo that have not had a notable follow-up after they released mega-hit games, Netmarble has steadily released hits," said Shinyoung Securities analyst Jang Won-yeol.

A shortage of tradeable shares will also help support the stock, brokers said.

About 17.6 million shares out of 84.7 million total are available for trade, with the rest - almost all owned by controlling and strategic shareholders such as Netmarble founder Bang Jun-hyuk and China's Tencent Holdings - in a six-month lock-up.

Netmarble said in April it expects to have a war chest of some $4.4 billion for acquisitions after the listing to realize its goal of becoming one of world's top five games companies by 2020 with 5 trillion won in annual revenue.

The company had priced its April IPO, which last month raised $2.3 billion in South Korea's second-largest initial public offering, at the top of an indicative range.

($1 = 1,126.1000 won) (Reporting by Joyce Lee; Editing by Miral Fahmy)