Kakao Games has chosen global casual game company MeTooOn as its first acquisition target since the launch of its new co-CEO system. This move is seen as a strategy to broaden its portfolio into the stable revenue-generating social casino genre amid ongoing losses due to a lack of new releases and declining sales from existing games.
On September 15, Kakao Games held a board meeting and decided to acquire a 39.56% stake in MeTooOn for approximately 98 billion won. This transaction will secure management control and make Kakao Games the largest shareholder.
Founded in 2010 and listed on the KOSDAQ in 2016, MeTooOn reported revenues of about 120.9 billion won and an operating profit of approximately 12.6 billion won last year. The company focuses on social casino and casual games, including titles like 'Full Pot Hold'em' and 'Full House Casino,' and operates in global markets such as Asia, North America, and Europe, with over 80% of its revenue coming from overseas.
With this acquisition, Kakao Games is expanding its portfolio to include social casino and casual games. The social casino genre is known for generating relatively stable revenue through repeat payments from users, particularly in global markets like North America and Europe. This acquisition is interpreted as a move to solidify Kakao Games' revenue base.
According to MeTooOn, its second-quarter revenue from the gaming sector was composed of 52.2% from social casino games and 47.8% from casual games, with North America accounting for 65.0% of its revenue and Asia 14.3%. The company is maintaining a revenue structure centered on North America while also expanding its presence in Asia.
Recently, Kakao Games has faced ongoing performance challenges, making profitability improvement a key priority. In the second quarter, consolidated revenue fell to 75 billion won, a 35% decrease from the same period last year, while operating losses widened to 23 billion won from 8.6 billion won a year earlier. The lack of new releases and expanded global investments have weighed on performance.
Kakao Games has been restructuring its business to focus on core gaming operations while divesting non-core businesses. The company has also improved its financial structure by selling stakes in non-core affiliates like Neptune and Kakao VX.
In June, LAAA Investment became the largest shareholder of Kakao Games. The company secured approximately 300 billion won in new funding through a capital increase and convertible bond issuance. That same month, the co-CEO system led by Kim Tae-hwan and Lee Si-woo was established, with Kim overseeing M&A and global strategy, while Lee focuses on gaming operations to drive investment and portfolio restructuring.
The acquisition of MeTooOn marks the first tangible outcome of the new co-CEO strategy. In the second-quarter earnings announcement, Kim Tae-hwan stated plans to maintain MMORPGs as a core competitive strength while expanding the portfolio with popular genres like sports and casual games, as well as securing proven titles.
Kakao Games is also working to rebound its performance through new releases. The company plans to launch 'The World of Goblins' on October 8, followed by 'ArcheAge Chronicle' and 'Dungeon Arise' later this year. Next year, it aims to continue its new lineup with titles like 'Odin Q: Valkyrie's Call' and 'Chrono Odyssey,' with a goal of achieving profitability in the first quarter of next year.
Lee Si-woo, co-CEO of Kakao Games, stated, "This acquisition is the first step in executing a proven M&A strategy under the new management system, and we will continue to pursue M&A opportunities. We aim to create synergies by expanding into various intellectual property (IP) content areas held by MeTooOn and collaborating with development studios in China for joint development."
* This article has been translated by AI.
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