4:33 Creative Lab, a South Korean game developer, has raised $110 million from an investment consortium that Tencent and Line Group created.
The developer will make mobile games for messaging services such as Line and Tencent’s WeChat service. Those mobile messaging services are on fire, growing to hundreds of millions of users in regions such as Japan and China. And games that run on top of those services do well because people share them heavily. Messaging services are just any tactic developers use to get their games in front of players in a mobile market that could hit $20 billion or more by the end of the year.
Techcrunch said that Line chief operating officer Takeshi Idezawa confirmed the investment is part of a “hand in hand” global strategy between Line, which is based in Japan, and Tencent, which is based in China.
Tencent has more than 600 million users for WeChat, and Line has more than 500 million. The deal leaves out Kakao, which has the bulk of the market in South Korea and hundreds of millions of users altogether. 4:33 Creative Lab created Blade and SandStorm, two of the most popular games on the Kakaotalk messaging service.
Line previously started a $100 million fund for Japanese indie developers, acquiring 10 percent of Gumi. Tango has also invested heavily in games. The advantage of putting games on mobile messaging networks was spelled out by Kent Wakeford, chief operating officer of Kabam. He said that game companies could theoretically reduce their marketing spending by putting games on the mobile messaging services, which are naturally more viral. Those messaging services take a cut, but it can be worth it.