Entry of Wemade-Kakao expected to change landscape of the fledgling market


Korea’s mobile gaming industry is expected to see fiercer competition as newcomers Wemade Entertainment and Kakao Talk are set to enter the race, industry sources and an analyst said on Monday.

Wemade Entertainment, a listed online gamer, and Kakao Talk, Korea’s renowned mobile messenger, recently announced their strategic partnership in mobile games. Wemade invested 20 billion won ($17.5 million) for about a 6 percent stake in Kakao, which will operate as a platform provider for Wemade content.

A spokesperson for Wemade said the alliance will help its potential games reach some 40 million users of Kakao, adding that it plans to release about five games by the end of June this year. It will also release some of those games via other platforms of Apple’s App Store and Google’s Android.

Wemade and Kakao, whose relationship resembles Zynga-Facebook in the U.S., could be considered latecomers in the race that began more than a year ago.

However, given that the market is still developing unlike the mature online game sector, any players ― new or established ― could still turn the tide to grab the top spot, industry sources said. One industry source commented that with Wemade making an entrance, the market now has most of the major players in place for a “real game” to begin this year.

A sector analyst said this competition is expected to unfold over the next three years until the market reaches its full maturity.

To this end, Wemade, which makes “high-quality” online games, still has a shot to challenge the existing players. The analyst expects Wemade to see its 2012 sales grow 42 percent to 165 billion won, 8 percent of which to come from its newly launched mobile games this year.

Currently, the top players are Gamevil and Com2us in terms of sales, both listed smart phone-based gamers that operate their own platforms. Gamevil had sales of 43 billion won in 2011, while Com2us had 36 billion in sales, according to financial statements.

Over the last year, the market has seen big online gamers such as Nexon and Neowiz joining the mobile gaming competition through organic and inorganic expansions, further fueling the competition amid a rapidly increasing use of smart devices by consumers. Saturation in the online gaming market is another reason those players have been eyeing the mobile space, the sources said.

Nexon recently acquired JCE, the maker of “Rule the Sky,” according to media reports.

Gamevil and Com2us could not be reached for comment.

By Park Hyong-ki (hkp@heraldcorp.com)