Kakao, operator of Korea’s most-used mobile messenger KakaoTalk, said Thursday two of its game subsidiaries ― Daum Games and Nzin ― will be merged next year, in a bid to beef up its sluggish game businesses.

The board members of Nzin and Daum Games agreed Wednesday to merge the two companies. The process will be completed after an extraordinary shareholders meeting in February next year, according to Kakao. 

“Kakao expects that the merger will create synergy for growth in both the PC and mobile game segments,” the mobile messenger firm said in a statement.

The company also said it would spare no efforts to make the merged entity a global game publishing powerhouse.

Game publishing start-up Nzin is Kakao’s second-tier subsidiary. After Kakao’s investment subsidiary K Venture Group acquired a controlling 66 percent stake in Nzine in August, and Kakao named Nzin CEO Namkoong whon as the chief game officer in charge of overseeing the company’s entire game businesses earlier this month.

The announcement of the merger plan came amid Kakao’s struggle to reverse its declining sales in the game segment. 

Kakao’s game developing subsidiary Daum Games, meanwhile, has faced an uphill battle with other competitors including Nexon and NCSoft, especially in the mobile game sector with its mobile games failing to make the top three list on Google Play in the recent months.

The company has not released hit games since multiplayer online role-playing game Black Desert in December last year.

The quarterly revenue of the firm’s game businesses decreased to 51.4 billion won in the July-September period from 69.9 billion won ($59.7 million) in the January-March period.

Daum Games earned 23.4 billion won as of September this year.

Some market watchers anticipated CEO Namkoong, a cofounder of game developing firm Hangame (now NHN Entertainment), will be able to inject some vigor into the sluggish game businesses of Kakao together with Kakao’s board chairman Kim Beom-woo, who is also a cofounder of Hangame.

By Kim Young-won (wone0102@heraldcorp.com)