Friday, February 19, 2010

S. Korean Publisher GAMEVIL Is Hotter Than Gochujang

Seoul-based mobile games publisher GAMEVIL announced stellar earnings last week and I just gotta say that despite it being an unpopular choice *I called it* when I picked them as the Q4 revenue growth star in my recent poll (assuming no surprises from Artificial Life). Me and the other guy who voted for them are getting some crazy sick prizes, suckas! (a large boba tea and Rain's latest album).

The publicly traded company (063080.KQ) realized $7.95mil in Q4 revenue, which is a 54% gain over Q4 2008 and $4.08mil in net profit, which is 84% growth QonQ. For the full year 2009 their revenue and net were $21.33mil and $10.29mil respectively. In one year these guys have blown right past some original gaming gangstas like Capcom, I-play, THQ & Hands-On... and are gaining fast on their bigger South Korean competitor, Com2uS ($27.75mil 2009 revenue). The prominently placed line in their press release claiming they're “the first mobile game company in Korea to surpass 10 billion KRW in Net Profit” is clearly a dig at their cross-town rival (which had half GAMEVIL's profit). Actually GAMEVIL might be closer in size to Com2uS (as well as D'Choc & Artificial Life) than the numbers let on, because they only include a portion of the earnings from their profitable GAMEVIL USA, Inc. OpCo... which has 5 well received Paid titles (notably Baseball Superstars & ZENONIA) in the US App Store. For the following reasons I think these guys are really well positioned for growth...
  • a powerful base in their technologically advanced, game-crazy home market;
  • a studio that creates very high-quality, award winning games, conducive to smartphones;
  • demonstrated competence in the new OEM app stores and;
  • (this is key) lots of experience generating revenue from in-app purchases in Korea... which should give them an advantage as this develops into a significant component of app revenue streams in the West
GAMEVIL has 10 new games in their pipeline this year... which I'll begin to monitor more closely. These guys are hot and one to watch in 2010.

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