NHN Entertainment looks to offer game cloud platform service
Kim Yu-won, left, executive director of NHN Entertainment’s data science center, and Hong Seong-bong, the company’s platform development department director, speak during a press conference to announce the launch of a business-to-business cloud game management platform service at the company’s headquarters in Pangyo, Gyeonggi Province, Wednesday. / Courtesy of NHN Entertainment
By Yoon Sung-won
NHN Entertainment has launched a business-to-business (B2B) game cloud platform service to make up for its weakening profits in its top income source ― gambling games.
Releasing the cloud service named “TOAST Cloud,” the company said it will diversify its business portfolio to game cloud platforms from existing online and mobile games, and e-commerce to survive as a general IT company.
“We plan to develop the new service as a general game cloud by tapping into the know-how in the local game industry that we have accumulated,” said Kim Yu-won, executive director of NHN Entertainment’s data science center, during a press conference titled “TOAST Analytics and Promotion” at the company’s headquarters in Pangyo, Gyeonggi Province, Wednesday.
Hit hard by strengthened government regulations on gambling games this year, NHN Entertainment recorded operating losses in both the second and third quarters at 7.3 billion won and 6.2 billion won, respectively.
TOAST Cloud is designed to provide various marketing efficiency analyses on mobile games as well as analytic indexes that game publishers can use to devise future game management plans, Hong Seong-bong, NHN Entertainment’s platform development department director, said.
“We will introduce a multi-facet prediction engine to provide optimal information for future marketing strategies,” he added.
Hong explained that the service also offers analyses on the effect of game promotions and advertisements such as how many downloads have been recorded, how many paid subscribers did these advertisements attract and how much money did a subscriber spend on a game on average. NHN claimed that these data will guarantee client companies garner maximum effects with a minimum investment.
On the same day, the company announced that it has acquired a local cloud network and data center management company PIOLINK to secure core technologies to develop an integrated B2B cloud platform.
PIOLINK was established as a cloud data center optimization service provider in July 2000 and has been led by its CEO Cho Young-chul. It provides equipment that facilitates efficient application data transfer through networks alongside security technologies.
PIOLINK was listed on the KOSDAQ in August 2013 and has dominated the Korean market in the segment with more than a 25 percent share. It posted 23.1 billion won in sales and 4.3 billion won in operating profit in 2013, the company said.
In August, NHN and PIOLINK signed an agreement to expand cooperation in B2B businesses and develop a new business model based on software-defined cloud network services. They also agreed upon supporting each other in overseas IT infrastructure establishment projects.
In a measure to upgrade existing cooperation, NHN Entertainment said it has invested 20.6 billion won for 1.73 million shares in PIOLINK and will be the largest shareholder with 29.7 percent by February.
NHN said it aims at strengthening its technological capability to compete with contenders in the mobile game data analysis segment such as 5Rocks, adbrix and Google. It said it will offer the service for free for a limited period and start to commercialize part of its services starting next year.
Meanwhile, profitability of NHN’s new B2B service is yet to be seen as it is still not certain how many game companies will turn to the new service.
“Big names in the local game industry seem to be more interested in establishing their own game cloud platforms. It will not be easy for the company to win major deals here,” an industry source said.