Korean gaming giants, Gamevil and Com2us, which were in fierce competition for the last 15 years, are now actively seeking to create synergy in line with their M&A deal that we reported last year.
Following Gameville's acquisition of Com2us, the two firms have working towards release of their new combined platform HIVE, which is now live. After struggling against the huge success of KakaoTalk's gaming platform (released in July 2012), the two companies were recently able to recover their market share through their stronger position in the market, as partners, though it remains to be seen whether or not the partnership will result in long-term sustainable growth, based on symergy.
The appellation “HIVE” originates from a hive that symbolizes a large number of customers and networks. As a combined platform of Gamevil's Hub and Gamevil's Circle, it is aimed at creating a place in which people around the world who enjoy games made by the two companies can interact with each other. Through HIVE, both firms are cooperating with each other in membership functions such as log-in, SNS, and communities.
The platform also has system management tool for security, in-game statistics, and updates. The platform also takes care of banners, announcements, push, and inquires dealt with by either developer. As part of the M&A deal the two companies are are also conducting marketing campaigns together. The new platform was first used for Gamevil's title, “Kritika: Chaos Unleased,” which entered closed beta testing on June 25. The platform is going to be used for all the games released by both companies going forward.
Compared to online games, mobile games take less time and money to make, but the popularity life cycle is shorter. Therefore, it is essential to mobile game developers to make a new game while their successful games are popular. In addition, it is necessary to launch a marketing campaign directed towards users of the popular game aimed at linking it with a new game.
The combination of both firms' platforms can strengthen this kind of marketing strategy and the management of users. Moreover, it is possible to lessen their heavy dependence on mobile messaging platforms like KakaoTalk, Line, and WeChat, which collect their own fees for the distribution and marketing of mobile games.
The two mobile game developers pioneered the mobile gaming industry by supplying their games through feature phones around 2000. Com2us achieved the industry's first record of 10 billion won (US$9.88 million) in sales, succeeding in its listing on the KOSDAQ market afterwards. Gamevil followed suit.
On the news of the merger last year industry commentators believed that the merger of smaller developers was the only way to compete in the fiercely competitive mobile gaming market. But this now seems to be untrue, with a number of much smaller gaming houses seeing considerable and sustained success.
Sundaytoz, PATI Games, and Devsisters all exceeded the market share of two former dominant playersby rapidly expanding their market share through KakaoTalk's gaming platform. Gamevil and Com2us' superior development capabilities and distribution expertise were no match for the tremendous popularity of mobile games created by those smaller competitors.
Additionally, despite recent success from the two merged companies (e.g. Dragon Blaze, Ace Fishing, and Summoners War), these successes have been associated to the merits of the games and their developers, rather than to any synergies created by the merger of the two companies.
The two gaming companies have achieved remarkable growth in the last six months. Particularly, Com2us is reportedly earning $500,000 per day with Ace Fishing and Summoners War, increasing the company's market cap to $593M, ahead of Gamevil at $503M.
Original article appeared on BusinessKorea