Overseas Expansion

The debut screenshot from Blunderbuss by Molten Games, a gaming company in which NCSoft recently obtained a 28% stake.
The debut screenshot from Blunderbuss by Molten Games, a gaming company in which NCSoft recently obtained a 28% stake.

 

Korea’s portal and online game industries are increasing their sizes by purchasing overseas firms or making investments to enter the global market. They are actively seeking to take the initiative in overseas expansion in order to fight back against global companies’ offensives that are designed to dominate the local market. 

According to industry sources on February 2, the country’s top portal operator Naver released “LINE whoscall” early in January, a service that enables smartphone users to block calls and text messages from unknown numbers by identifying the source. 

This service, part of on mobile messenger LINE, is a new version of Whoscall, showcased by Taipei-based startup Gogolook. The Korean web giant acquired Gogolook through its subsidiary CampMobile for 18.6 billion won (US$17.2 million) last December. 

Daum Communications has recently forged a strategic partnership with Tapas Media, after buying an ownership stake in the company at the end of 2013. Founded in the US by CEO Kim Chang-won, who also co-created Tattertools, Tapas Media is running the US-based webtoon portal site Tapastic. Tapastic currently has 1,200 writers and 24,000 webtoons, showcasing Korean webtoons in the US, which has emerged as next-gen content for Hallyu, or the Korean wave. Next, it will actively seek to target the US content market using Tapas Media as the springboard. 

The online game industry is also waging an all-out war to purchase foreign companies. 

Korean game giant Nexon, which bought Japanese mobile game developer Gloops for 520 billion won (US$480 million) in 2012, started to expand its presence overseas by buying US game developer Robotoki in February 2013. In July, Nexon also acquired a stake in US social game developer SecretNewCo and mobile and online game developer Rumble Entertainmet to enter the US market. 

NCSoft also obtained a 28% stake in San Diego-based Molten Games, with an investment of 6.7 billion won (US$6.2 million) last year. Molten Games, an online gaming company established by former Blizzard Entertainment CEO Han Jung-won, is going to release its first title, Blunderbuss, in 2015. 

Other mid-sized game companies that already finalized M&A deals are expected to create synergy on a massive scale starting this year. 

For example, CJ E&M Netmarble is aggressively seeking to penetrate the European market, following the takeover of Joygame, the top online gaming distributor in Turkey, through its affiliate CJ Games for 16 billion won (US$14.8 million) last year. Webzen is making another attempt with renewed energies by launching a series of its new games this year, after purchasing Gala-net, a subsidiary of global gaming company Gala Group in charge of the US and Europe, for 19.1 billion won (US$17.6 million). YD Online is also aiming at releasing many online and mobile games in the Japanese market through its affiliate Arario, a medium-sized game developer based in Japan. 

The reason for local portal and online gaming industries’ active involvement in the takeover of overseas companies lies in the fact that the local market is already saturated. Moreover, global market penetration is becoming crucial for Korean firms, as global mobile and online games developers are accelerating the launch of their offensive to dominate the local market.

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