Nexon beefs up mobile biz with Japan firm buyout
By Cho Mu-hyun
Nexon, Korea’s largest game company, has expanded its business outside of its traditional desktop arena to mobile devices by acquiring mobile game-maker Gloops, based in Japan.
Nexon’s Japanese office said Tuesday that it bought its counterpart for 520 billion won ($466 million), the largest amount a Korean firm has paid for a foreign game-making company.
Gloops is known for real time mobile and social games such as Warriors of Odin distributed via its Mobage mobile platform launched in 2010. It marked 430 billion won ($386 million) in revenue for the last fiscal year that ended in June.
It will launch five new games in collaboration with platform business DeNA in North American and Europe next year and five more the following year.
“Nexon will participate full-scale in the quickly growing mobile game market through the acquisition of Gloops and become a leader that pulls the Japanese mobile game market along,” said Nexon Japan CEO Choi Seung-woo.
“Up until now Gloops has aimed to revolutionize the market and has built stable results based on its solid game portfolio and successful titles. Nexon, together with Gloops, will continue to release exciting games to mobile game users across the world.”
The company, famed for Maple Story among other titles, and its innovative free-to-play system has been facing difficulties in finding a new growth impetus amid a decline in the desktop games market.
Korea Creative Contents Agency (KOCCA) expects that out of 517 million total computer sales by 2015 over 400 million mobile computers (such as notebooks and tablets) will be bought. Nexon and other Korean companies have been edging to ride the tide of change and transform their business models.
The firm has also been facing difficulties abroad despite increasing revenue reports. Its growth in Europe has been minimal, while results in the United States and China have been lackluster in recent years, according to industry officials. Maple Story’s popularity is also on a general decline.
But the recent Japanese move is a positive sign in offsetting recent setbacks, according to analysts.
“Through this acquisition, if Nexon steadfastly builds a mobile platform in Japan, it will be of great assistance to domestic mobile businesses venturing overseas,” said Choi Hoon, an analyst at KB Investment & Securities.
SK Securities analyst Choi Kwan-soon said: “A large game business like Nexon buying mobile game businesses is an example that shows mobile games are a certain trend. The recent acquisition will have positive effects on stocks of domestic mobile game businesses.”
The company also bought smaller Japanse mobile gaming firm inBlue, known for releasing popular online card games, in June. Starting last year, it has been buying stocks of domestic mobile game developers to increase its portfolio.