Kakao’s Game Center initiative has “global aspirations:” Ovum

Having already established itself as a mainstay in the mobile messaging space, South Korean-based Kakao has set it sights on the mobile gaming market.

Despite the existence of established services of mobile carriers, iOS and Android application stores, and game portals in the Korean game market, analyst firm, Ovum, expects that Kakao’s newly launched “Game Center” service will carve its own, profitable niche within the market.

Kakao made a name for itself for its KakaoTalk messaging service, which has gained 55 million users since its launch in March 2010, though this marks the first time the company is branching out into content delivery.

Despite the company’s background grounded in mobile messaging, Ovum consumer telecoms analyst, Mark Ranson, foresees Kakao being well positioned to transition into the role of digital content provider.

“Kakao has wisely recognised the importance of collaborating with game industry specialist companies, which should help them fill any potential void in skills that might have been missing from Kakao’s core team,” he said.

Ranson adds that Kakao is partnering with large Korean game company, Wemade, in a move that should help them “transition smoothly” into the interactive entertainment sector.

“Kakao recently acquired Korean game developer ISEEYOU, which will also help improve in-house game market expertise,” he said.

With KakaoTalk already available in 12 different languages, Ranson expects that Kakao’s ambitions for its Game Center will extend beyond South Korea’s borders.

“Kakao certainly has always held global aspirations, and mobile gaming is likely to be a core part of its continued push beyond Korea,” he said.

In particular, Ranson identified China and Indonesia as potential key markets for Kakao’s Game Center’s growth.

“The Japanese mobile game market is more mature and dominated by local players GREE and Mobage, which make it market particularly challenging,” he said. Japan’s GREE has been aggressively pursuing the global market, having announced a goal of having one billion users, about five times what it already had at the end of 2011, by launching its new “GREE platform” into Japan and overseas regions.

Ranson admits that GREE and Mobage’s success in Japan most likely provided Kakao with inspiration behind its Game Center initiative, and the company will be hoping to replicate that type of success in its own domestic market of South Korea.

“Kakao will be fully aware of the strategies competitors are pursuing, and will be hoping to learn from the successes and failures other players have experienced, as they try to expand beyond Northeast Asia,” he said.

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