WhatsApp, one of the planet’s most popular mobile messaging apps, is said to be preparing to launch a games platform in a move that would diversify its monetization model and increase its revenues. That’s according to a report out of Korea where the US startup is said to have agreed to a partnership with Korean/US games-maker WeMade.
Update: TechRux has replaced its article with a note that says it was misinformed by sources, but we contacted its editor who explains that there were meetings and discussions — of some nature — between the two companies, although the duo did not agree to an MOU. We’re continuing to look into this and have again contacted WeMade, WhatsApp and other sources as we dig to get to the bottom of this.
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TechRux reports that the deal is initially a memorandum of understanding (MOU) which is the first-step towards a fuller deal that would see WhatsApp introduce a games platform like those that have yielded considerable success and revenues in Asia. At this point, it’s not clear whether the company has approached or signed deals with other games makers.
We spoke to Philip Lee from TechRux who told us that the report comes after tips from three separate sources in Korea, two VC investors and a former WeMade employee. We also got in touch with WhatsApp, but have yet to hear back from the company (the fact that it is a weekend does not help).
WhatsApp has seen its fair share of speculation of late — including rumor that it was an acquisition target for Facebook — but a move into gaming is one that makes plenty of sense.
The company doesn’t break out raw download or user numbers, but it has seen tremendous success with its messenger app worldwide. Priced at just $0.99 to download, WhatsApp is regularly at the top of the top grossing list in the Apple App Store and Google Play, but a foray into gaming could massively increase its revenues, as messaging services in Asia have done.
Japan-based Line (120 million registered users) and Korea’s Kakao Talk (80 million users) are two examples of messaging apps that have found success with games. WeMade has links with both. The company, which was founded in 2010 and has a US base in Seattle, produces titles for Line and is an investor in Kakao Talk.
Line recently announced that its seven-month-old games platform, which features 17 games which users can play together through the service, has seen more than 100 million cumulative app downloads.
Most of the most popular titles are casual games which — when download by two friends — can be played cooperatively or competitively through the app; it is monetized by a range of virtual goods or an initial download cost.
Distimo estimates that one game — Line Pop — clocked 1 million downloads in its first day and brought in $1 million in revenue within 12 days of its launch. Games (along with stickers — which Path has just adopted) is one of the key reasons that the free-to-download Line app is rivaling WhatsApp as the highest earning social networking app in the App Store, according to a report from App Annie.
Kakao Talk hasn’t been vocal on figures since launching its games service worldwide in November 2011, but a three-month testing period in Korea was impressive. Kakao Games saw 82 million downloads from 23 million unique users, bringing in total revenues of $51.6 million, with October alone seeing $35.3 million.
One game — SundayToz’s Anipeng — passed 20 million downloads during that 3-month period, while another — NextFloor’s Dragon Flight — racked up 11.6 million downloads in just one month.
Back to WhatsApp, with the company already declaring its distaste for advertising — which is “an insult to your intelligence and interruption of your train of thought” — content is the most logical play if it is to build new revenue streams. Gaming could work well for a few reasons.
Firstly, the app is still significantly used in Asia — even though local rivals are more sophisticated — and mobile messenger games are already a hit across the content and certain to bring in money. Looking globally, none of its US-based rivals have brought a games solution to market yet, so it could gain a march on them by moving first. As a cross platform solution, WhatsApp could offer developers an easy route to both Android and iOS users, while it could win fans if it can offer better deals than Apple or Google-Android.
Finally, WeMade looks like the right kind of partner. It has a US subsidiary and is developing games for western users, but is also big in Asia, with games dedicated to Korea, Japan and other lucrative markets.
However, the move is far from clear cut. WhatsApp has, to date, been very conservative with its service, preferring simplicity even when rivals are adopting advanced features including voice, multimedia and more. The introduction of gaming — while not affecting users directly, since they need to download a game to play — could represent a departure from that very basic, confusion-free user experience.
The introduction of gaming is one move that we recently suggested Facebook should adopt to energize its Messenger service, and it is a strategic that could benefit other messaging apps, including WhatsApp, too. With Path recently starting to sell virtual stickers, a move into gaming from WhatsApp would be another example of a US firm adopting a distinctly Asian business model.
Headline image via abulhussain/Flickr, graph via Kakao Talk