Kakao Games Bounces Back After Overcoming 'Uma Musume' Controversy

[Asia Economy Reporter Seungjin Lee] Kakao Games, which faced difficulties due to operational controversies surrounding the mobile game ‘Uma Musume Pretty Derby’ (hereafter Uma Musume), is making a comeback. With its flagship title ‘Odin: Valhalla Rising’ (hereafter Odin) reclaiming the top spot and the re-launch of a gacha event, Uma Musume’s rapidly rising revenue is expected to contribute to solid performance in the second half of the year.

According to big data analysis solution Mobile Index on the 6th, Uma Musume ranked 10th in revenue on the Google Play Store. After falling outside the top 45 last month, Uma Musume climbed more than 30 spots within a week, signaling a recovery in revenue.

Kakao Games recently faced conflicts with users over the operation of Uma Musume. Users held a ‘carriage protest’ by sending carriages in front of the Kakao Games headquarters. Although Kakao Games held a meeting with users afterward, the conflict deepened, leading users to file refund lawsuits, which caused Uma Musume’s revenue to plummet sharply. The game dropped from 15th place on the revenue ranking on the 23rd of last month to outside the top 45 by the 26th.

However, as Kakao Games began implementing the promises made during the meeting with users, including replacing the Uma Musume operation team, the revenue ranking quickly rebounded. Additionally, the gacha event, which had been prematurely ended and sparked controversy, is scheduled to be held again next week, which is expected to cause another rise in revenue ranking.

Kakao Games’ core intellectual property (IP), Odin, has contributed to the revenue rebound by ranking first on both the Google Play Store and Apple App Store. Odin’s return to the top spot is the first time in about five months since May.

Odin’s surge is attributed to the first new class ‘Shield Maiden’ updated on the 28th of last month. The publisher Kakao Games also opened a new server called ‘Mimir’ alongside Shield Maiden. Kakao Games is preparing for the Western release of the hit game Odin early next year. Starting with Odin, Kakao Games plans to break away from a revenue structure dependent on the domestic market and expand into overseas markets.

Furthermore, Kakao Games will sequentially release new titles such as ‘Distera,’ ‘Eversoul,’ and ‘Ares: Rise of Guardians’ (hereafter Ares) starting in the second half of this year. Distera is being prepared for Steam Early Access release within the year. All three new titles will be launched globally.

Although Uma Musume’s sharp revenue decline triggered a red flag for Kakao Games’ performance, the strong progress of its flagship titles is expected to result in solid earnings. According to the securities industry, Kakao Games’ third-quarter revenue is projected to be 329.7 billion KRW, down 29% year-on-year, but operating profit is expected to grow 62% year-on-year to 69.2 billion KRW.