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This article was published on November 20, 2012

After making money in Korea, mobile chat app Kakao Talk takes its games service global

After making money in Korea, mobile chat app Kakao Talk takes its games service global
Jon Russell
Story by

Jon Russell

Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on T Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on Twitter, Angel List, LinkedIn.

Kakao Talk, one of Asia’s most popular mobile chap apps, has introduced its games service — Kakao Games — to its international user base, three months after it debuted among users in its native Korea.

Three games will initially be made available to users of the Kakao Talk Android app, but the company says it has plans to offer more titles and expand support to iOS users in due course. Users of the BlackBerry app look like they will not get the games service, which appears to be down to the limitations of RIM’s platform.

Parent company Kakao — which has seen Kakao Talk download more than 65 million times worldwide — is optimistic about the potential of the service based on the success it has seen in Korea. During the Korea-only launch period, Kakao Games saw 82 million downloads from 23 million unique users. More importantly, it brought in revenues of $51.6 million, with October alone seeing $35.3 million.

Kakao believes that the app store can act as a more effective and efficient ecosystem for developers — particularly indie and small studios — that may be short on staff or marketing budgets, and/or looking for an alternative to Google Play or Apple’s App Store.

It proposes that, rather than publishing to app stores, developers use its Kakao Games API to make their content compatible with the service, which allows for two player gaming via the service.

Indeed, it picks out two such examples — 30-man-strong SundayToz, and Next Floor, which has 5 employees — to highlight that potential. SundayToz-made Anipeng passed 20 million downloads in Korea, topping the free app and top grossing chart for Google Play in Korea, while NextFloor’s Dragon Flight racked up 11.6 million downloads in the country within one month.

Kakao Games works much like that of Japanese mobile chat rival Line. Kakao Talk users can download titles and play with each other inside the messaging app, while they can also share scores and other features among their Kakao Talk friends. Players can buy virtual items and make in-app purchases using Kakao Talk’s virtual coins, ‘Chocos’.

Line’s ‘Channel’ service, which allows in-app games, is available worldwide has seen impressive pick-up. LINE Birzzle, its most successful title, recorded more than 10 million downloads within 97 days, that’s after racking up 2 million within 24 hours.

While that is a proof point of the wider market in Asia — neither Line nor Kakao Talk is yet to gain serious visibility in Europe or the US — Kakao Talk is, more than any other chat app, yet to replicate its domestic success overseas. Kakao Talk has a 95 percent plus attachment rate among Korea’s smartphone owners — which numbered 30 million as of August — and while the company says it is growing its marketshare in Southeast Asia and the Middle East, it is yet to show compelling statistics to suggest it has cornered an overseas market.

There is no doubt that Kakao Talk is continuing to grow, however, and given the revenue that the games service made in Korea, it is taking a big step towards making money from its international users. Indeed, Kakao’s recent tie-in with Yahoo Japan could well help Kakao Games make an impact in the lucrative Japanese content market, where it will rival Line once again.

While many of Asia’s chat app’s have gained more than 50 million users, each one is still in the early stages of monetizing its service. Opt-in marketing campaigns and brand sponsorships are popular, but new paths to revenue making are being taken as services try to avoid straight-up advertising, which is not likely to be welcomed by users.

Interestingly, Chinese rival WeChat — which is owned by Tencent, which is also a Kakao investor — is close to offering mobile payments, rather than taking the gaming route that Line, and now Kakao Talk, are moving down.

In all three cases, however, smartphones users are communicating, gaming and doing other things that they might previously have done through Facebook. While this kind of ecosystem is still yet to take root in the US, it is already providing cause for concern for Chinese microblog giant Sina Weibo, which recently admitted its 400 million users are spending less time on its service due to chat apps.

For that reason alone, Facebook, Twitter and others would do well to keep an eye on how things develop.

➤ Kakao Talk: iOS | Android | BlackBerry

Image via PARK JI-HWAN/AFP/Getty Images

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