Why did Gamevil Acquired Com2us?

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Mobile game publisher Gamevil has acquired its South Korean rival Com2us in a deal of KRW 70 billion. That is around $ 65 million. Although Gamevil is the acquiring party in this transaction, it actually did less business than Com2uS last year. Gamevil reported full-year revenues of KRW 70.2 billion ($65.5 million), compared to Com2uS full-year haul of KRW 76.9 billion ($71.8 million).

 

How could this happen? Even these two players were competing in the mobile game market; their way of approach on the business was totally different. Com2us was keeping its focus on the in-house developed games such as “GolfStar”. However Gamevil positioned its core competency as the publisher with the investment. If you look into the IR report of each company, this makes sense.

 

By the GAMEVIL’s 2ndQuarter of 2013 Financial Results, 3rd party games were 68% as of 2Q 2013. In the 2nd quarter of 2012, the rates of 3rd party games were only 42%. Comparing with Gamevil, Com2us launched 7 new games in the 2nd quarter this year. There were only 2 games by 3rd party developers. Rest of the games were developed as in-house games.

 

This could happen because of the number of developers. Com2us spent 29% of its operating cost, KRW 5,883 Mill. ($ 5,47 Mill.), for the HR resources. However Gamevil spent only 17% of its operating cost, KRW 2,885 Mil($ 2.68 Mill), for the HR resources. Of course, this number includes not only developers but the most of the employees in a game publisher shall be the developer.

 

Then why did they do so? The mobile game itself has been Red Ocean by the big publishers such as WeMade, CJ E&M, or Netmarble. Of course, these two players have similar genre in game line up.  But Gamevil has its competency as publisher for 3rd party developers. Com2us has its competency as in-house development. It would be great if you can make the synergy. That is why this acquiring happened earlier this week.

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