Asian gamemakers see opportunity in U.S.

Article Source: Tampa Bay
Original Post Date: July 24, 2015

Chris DeWolfe, chief executive of SGN, which makes smartphone games Cookie Jam, Juice Jam and Panda Pop, recently got a $130M deal with South Korean mobile game publisher Netmarble Games.

Nowhere are mobile video games more popular — or lucrative — than in Asia. And now, Asian companies are making big bets that they can spread some of their expertise in mobile gaming to the United States.

In the past year, some of China and Japan’s largest Internet companies and gamemakers have pumped tens of millions of dollars into U.S. mobile game companies. That continued Thursday when SGN, one of the largest mobile game studios in the United States, announced a $130 million investment from Netmarble Games, a mobile game publisher in South Korea. The investment, one of the largest in mobile gaming since 2013, is the latest in a string of moves by fast-growing Asian gaming and Internet companies to invest in American mobile game studios.

While this east-to-west migration of capital and mobile games has been picking up steam since 2010, it has intensified significantly in the past two years. In part, the rush is fueled by flush Asian companies and investors.

But it is also happening because Asian companies see the gaming market as less crowded in the United States, giving them an opportunity to try some of their games in America.

“They see an opportunity to bring their content over to the West,” said David Kaye, founder of Gaming Insiders, a professional network for gaming industry executives, “so it makes sense for them to invest in U.S. companies.”

As smartphones have quickly emerged as top platforms for video games, Asian countries have led the way in spending on those games. Japanese gamers spent $6.1 billion in 2014 and Chinese players spent $4.2 billion, according to SuperData, a New York City-based market research firm specializing in interactive entertainment. Mobile game revenue for all of North America last year was $4.2 billion.

Matthew Wong, research analyst for CB Insights, said Asian corporations were trying to establish a presence in the U.S. and gaming was one area where experience in Asia could be transferred to America.

“In addition to that, a lot of mobile gaming companies here want to move into the Asian market,” he said, “so finding strategic partnerships is important for both countries.”