The Rise of Mobile Messaging Service as Game Distributor

The Rise of Mobile Messaging Service as Game Distributor

By Ben Chiang on November 13, 2013 

Kakao Talk and Line’s latest financial results epitomized the success of building profitable business upon mobile messaging platform. In-game purchases contributed more than half (about 53%, or US$ 53.7 million) to Line’s revenue in Q2 of this year while KakaoTalk announced earlier this year that its game platform generated US$ 311 million for the first half of this year. It seems Asian messaging services now find a new and rosier revenue source in addition to the ‘traditional’ sticker business.China’s WeChat followed suit and launched its own game platform couple months ago with later introduction of five titles that basically all made it to the Top 1 place under China Apple App Store’s game category.

To date WeChat has launched four titles ranging from match-3 (Tiantianaixiaochu), musical (Jiezou Dashi) to endless running game (Tiantian Kupao), which was said to cash in US$ 16.38 million in the first month after its debut, according to sources from its developer. Tencent expects WeChat to pump up US$ between 818 and 981 million (between RMB 5 and 6 billion) by next year.

Those track records surely intrigued Chinese stranger social networking service – or to put it more straightforwardly, an app to help people hook up – Momo. The service launched a title named Momo Paopaotu (Momo Bubble Rabbit) earlier this month and then the title made it all the way to the top place of App Store with daily average downloads of over 1.8 million.

Tang Yan, founder of Momo recently announced more than 80 million accounts and claimed breaking even. Similar to Kakao Talk and Line, Momo counted on mobile games and sticker shop to make money.

Mobile Messaging System as Game Distributor

Not only these aforementioned successes testified that mobile messaging services could make big money with games and stickers, but also they demonstrated mobile messaging system’s potential in working as a mobile game distributor to either rival against or complement traditional app markets such as Baidu’s 91, 360, Wandoujia and so on, we call them the first generation of game distribution channel. While mobile messaging platforms like WeChat, Momo and some aspirants including Yi Xin (by NetEase and China Telecom), Lai Wang (by Alibaba) are deemed as the next generation of game distribution channel.

According to Tencent’s latest financial results out this afternoon, its mobile QQ/WeChat game business recorded RMB 842 million in revenue or 11% qoq growth, which translates to a uprising market. And as channels like 91 and 360 keep using their dominant positioning in the market to squeeze more revenue out of developers, we expect some app makers turning to new channels, and this speaks to more opportunities in mobile gaming market for services like Momo, Yi Xin or Lai Wang.