Game developers and investors network at the 2015 Mobile Games Forum in Hong Kong, where mobile gaming industry leaders shared their secrets to success in Asian markets. Image: Global MGF.

American Mobile Games Attract Asian Investment

Japan Korea China

South Korea’s largest online game publisher, Netmarble Games, just became the largest stakeholder in SGN, an American studio that creates mobile and social games. Last month, SGN received a $130 million investment from Netmarble. SGN was launched four years ago by MySpace co-founders Chris DeWolfe and Aber Whitcomb, and its hit game Cookie Jam was Facebook’s Game of the Year in 2014.

Why the collaboration? The benefit to SGN is clear: it’s on track to pull in about $280 million in revenue this year, nearly ten times its profits from the previous year. With this rapid expansion of its budget, SGN has numerous options for new development and marketing initiatives, but a key priority is expanding into Asian markets. Meanwhile, Netmarble intends to use SGN to grow its presence in Western markets after difficulty branching out of its foothold in East Asia, despite establishing an American subsidiary in 2013. The companies will remain independent but intend to share expertise and promote each other.

The recent SGN-Netmarble collaboration is only the latest in a string of East Asian investors looking to pour money into American mobile game companies. Some of China’s web-based giants, Alibaba and Tencent, have also invested millions into American mobile game studios in the past year. Sega, a Japanese company, not only invested in multiple studios but also acquired Demiurge Studios in Cambridge, Massachusetts.

The mobile games industry is worth almost $30 billion, and is expected to continue its rapid expansion for the next few years. Since 2013, Asia has been the world’s largest market for mobile games. China alone has more mobile gamers than the population of the United States! American companies can capitalize by thinking globally, since Asian consumers are forecasted to bring in over half of the industry’s global revenue by 2018.

Meghana Nerurkar is a Research Intern at the East-West Center in Washington and an undergraduate student at American University.