Netmarble Games Corp. estimates it will bring in $1.6 billion in revenue this year, making the South Korean company one of the most lucrative mobile app firms in the world. But to hold onto that claim, it needs to attract more smartphone gamers in the U.S.
Jun-hyuk Bang, Netmarble’s founder and chairman, is betting on role-playing games. These games, in which players direct a character through a virtual world and fight or transact with computer-controlled creatures along the way, are popular in Asia. Netmarble games such as “Seven Knights” and “Marvel Future Fight” have been downloaded tens of millions of times.
Still, the company reports that just 1.1 million of its nearly 12 million daily active users live outside Asia. That’s one of the biggest challenges facing the Seoul company, which has offices in USA and holds majority ownership of mobile game maker SGN. Netmarble plans to spend aggressively this year to fortify its portfolio of games as it tries to edge in on a market controlled by Chinese and American firms.
Last year, Activision Blizzard Inc. instantly gained a big share of the market by purchasing “Candy Crush”-maker King Digital Entertainment. And China’s Tencent is reportedly in the midst of consolidating its foothold by taking a larger stake in Supercell, which produces a quartet of exceptionally profitable games including “Clash of Clans.” Tencent also owns about one-quarter of Netmarble after making a $500-million investment in 2014.
To counter, Bang wants to take Netmarble public in the coming months, raising cash to buy game development firms and to build up the popularity of certain genres in key countries such as the USA. In Bang’s view, anything but that strategy would mean leaving money on the table as he expects worldwide mobile gaming revenue to double by 2020, with analysts estimating to upward of $60 billion.
“Only a few major companies will lead the market,” Bang said through his translator during an interview last week. “Not only does size matter, you have to understand the players and really react fast.” The company hasn’t filed paperwork for an initial public offering, but the company is still moving toward that option because it’s faster compared to financing alternatives, Bang said. Seeking money from venture capitalists and funds takes “too much energy and time,” Bang said.
“The games market is going to change in two years, and I didn’t want to lose this time to grow,” Bang said. Though he’s in talks with other gaming companies, no transactions are imminent, he said while in Los Angeles for the gaming industry’s Electronic Entertainment Expo.
Some start-ups are betting on e-sports, or turning gaming into competition with money on the line, to fuel excitement about their games. But Bang isn’t a believer just yet in that strategy. He said simple, tap-based mobile games are at least a year away from having the quick-fire, precision controls that – in computer and console games – can separate the elite from the rest.
Rather than e-sports, Bang is directing attention toward the development of artificial intelligence software that would assist players. Players who keep crashing at a certain turn in a driving game would automatically get an alert warning them about the difficult maneuver. The hope is that by helping people get better, they’ll stay interested for many more months or years.
Netmarble launched in 2000, funded with $88,000 from Bang and investors. Bang, who grew up playing arcade games, left the company because of health reasons in 2006. He returned in 2011, steering Netmarble toward mobile games and helping it hit the $1-billion revenue mark last year.
Source: LA Times
Picture Source: LA Times