"Limitations of Distribution Alone... Growth Engines Needed for Long-Term Leap"
Expansive Moves Including Investment in US Game Developers Through European Subsidiary
[Asia Economy Reporter Kang Nahum] Kakao Games, which has focused on game distribution business, is making aggressive moves to invest in promising game companies to secure development capabilities. The goal is to complete a virtuous cycle structure between development and distribution to achieve the global vision of ‘Beyond Korea.’
◆Limitations of distribution, securing development capabilities= According to Kakao Games on the 19th, the recent business focus has shifted from publishing-centered to expanding its own intellectual property (IP) through ‘securing development capabilities.’ This is based on the judgment that there may be growth limits with game distribution alone and that more stable growth drivers are needed for long-term advancement.
The acquisition of Lionheart Studio, the developer of ‘Odin: Valhalla Rising,’ at the end of last year is also part of this business strategy. Kakao Games made its first investment in Lionheart Studio in August 2018 and officially signed the domestic publishing contract for ‘Odin’ in May 2020. Later, in November last year, the European subsidiary made an additional investment, acquiring management rights and securing global publishing rights, demonstrating its commitment to development capabilities.
With the environment focused solely on development after Kakao Games’ acquisition, Odin was officially launched in the Taiwan market in March, topping the Apple App Store popularity and sales rankings. On the 1st, it also reclaimed the number one spot in sales on the Google Play Store in the domestic market, proving its value as a long-term hit.
◆Aggressive investment in global developers= Kakao Games’ investment moves do not discriminate between domestic and overseas. Recently, through its European subsidiary, it invested about 24 billion KRW in the U.S. game developer ‘Frost Giant Studios’ and about 18.3 billion KRW in ‘Playable Worlds.’ Frost Giant Studios was founded by core developers of ‘StarCraft’ and ‘WarCraft.’ Playable Worlds is a game developer creating a metaverse platform and is also well known as the game company founded by Raph Koster, author of the ‘Theory of Fun.’
Through this investment strategy, Kakao Games aims to complete a virtuous cycle from development to distribution, fulfilling the company’s core slogans ‘Beyond Korea’ and ‘Beyond Game.’ Previous investments in promising domestic and international game companies such as Neptune, AdEx, and Senatechnology were also intended to complete this vision.
Joyeon Cho, CEO of Kakao Games, said, "Our recent investment direction is global first and foremost," adding, "We will become a company that can show influence on the world stage beyond Korea by securing game IPs with global competitiveness."
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