Kakao Games Stumbles in Q1, Aims for Rebound with Global Expansion (Comprehensive)

Kakao Games is accelerating its ‘Beyond Korea’ strategy. It plans to introduce various genres of games, including massively multiplayer online role-playing games (MMORPGs), to the global market.

Q1 Performance Slows

On the 3rd, Kakao Games announced its Q1 2023 results, recording sales of 249.1 billion KRW, operating profit of 11.3 billion KRW, and net profit of 4.2 billion KRW. Compared to the same period last year, sales and operating profit decreased by 6.45% and 73.05%, respectively. Net profit, which had turned to a loss in the previous quarter, returned to profitability.

By segment, mobile games recorded sales of approximately 153.9 billion KRW, down about 13% year-on-year. PC online games achieved sales of about 14.1 billion KRW, down about 4% year-on-year.

Other (non-game sectors), including golf and sports leisure telecommunications businesses, posted sales of about 81.2 billion KRW, up about 9% year-on-year.

Full-Scale Global Expansion Begins

Kakao Games will sequentially release a variety of new titles starting with the launch of Odin: Valhalla Rising in the Japanese market this June, followed by Ares: Rise of Guardians, Goddess Order, and 6 to 10 titles of Bora Battle. In Q4, it plans to introduce Odin: Valhalla Rising to the North American and European markets and Eversoul to the Japanese market, advancing its ‘Beyond Korea’ strategy.

ArcheAge War, released at the end of March, will also expand globally. During the earnings conference call, CEO Jo Gye-hyun said, “The next market for ArcheAge War after Korea is primarily Taiwan,” adding, “We are focusing on detailed strategies that consider regional preferences and demand levels for games where Kakao Games has strengths.”

He continued, “For 2D games, we hold an absolute advantage in Japan and Southeast Asia, so we are putting great effort into the Japanese launch of Eversoul,” and added, “We expect Goddess Order to be well received across all regions.”

Kakao Games is also making attempts to enter the Chinese market. Regarding China’s recent opening of its game market, CEO Jo said, “China is not a simple market, and we are trying various approaches with games that have genres or content characteristics likely to succeed there.”

He explained, “It is difficult to comment on unconfirmed matters,” adding, “Although the Chinese market does not seem likely to open easily, we continue to attempt to enter with our intellectual property (IP).”

Metabora to Onboard 4-5 Games Within the Year

Kakao Games is launching its blockchain business through Metabora.

During the conference call, CEO Jo said, “The Bora platform is a Layer 2 solution specialized for content, providing a foundation that allows each content service to easily apply blockchain and tokenomics,” adding, “We are currently building an environment where NFT and token assets can be traded on global chains with rich mobility, such as Polygon.”

He continued, “Four to five games and non-game contents are scheduled to be onboarded to the Bora platform this year. These include ‘Bora Battle,’ which is being prepared jointly with governance partners like Neptune and Mobirix, a golf-based fan community service, a puzzle game based on entertainment celebrity IP, and social casino games, all targeted for release within the year.”

He added, “We are especially looking forward to ‘Bora Battle.’ It is an arcade-style game where players worldwide compete in card, puzzle, sports, and racing games,” and said, “The official release is targeted for Q3.”

This content was produced with the assistance of AI translation services.