Kakao Crosses the $4B Threshold in User Spending
Kakao surpassed $4B in user spending, with the largest share of revenue coming from ODIN: Valhalla Rising and KakaoTalk.
— by Diana Levintova
Kakao Games’ Dynamics Overview
Revenue dynamics
Kakao Corp has achieved a significant milestone, surpassing $4 billion in user spending. This impressive figure is largely attributed to key revenue streams, with ODIN: Valhalla Rising contributing 25%, KakaoTalk 23%, KakaoPage 9%, and Guardian Tales 8%.
Kakao Corp is South Korean conglomerate with a diverse range of subsidiaries and affiliates, including Kakao Games, Kakao Bank, Kakao Mobility, etc.
Disclaimer: To calculate user spending we’re adding back store fees and inclusive taxes that stores pay to some countries before making their payment to a publisher to the revenue metric displayed on the app’s page.
Following the release of ODIN: Valhalla Rising, Kakao experienced a substantial boost in revenue. Initially, the game's launch led to a four-month peak in earnings. However, this surge eventually stabilized to an average monthly income of $40 million. Notably, this figure saw occasional increases following the launches of new games, such as 우마무스메 프리티 더비 in July 2022 and 아레스 : 라이즈 오브 가디언즈 in May 2023.
Downloads dynamics
Meanwhile, the download statistics present a different split. KakaoTalk accounts for the largest percentage of downloads in the portfolio considering the decrease of the messenger market, followed by Melon and KakaoPage apps. Guardian Tales stands out as the most downloaded game, with a lifetime total of 15.7 million installs.
Market split
Focusing on regional performance, South Korea emerges as the dominant market for Kakao, contributing 87% of total revenue. This is followed by Japan and Taiwan, contributing 4% and 3%, respectively.
A similar pattern is evident in download statistics, with the majority of downloads, 84%, originating from South Korea, and considerably smaller percentages from Japan and the US.
Regarding revenue generation across different platforms, Google Play leads with 65% of total revenue, while the Apple Store accounts for the remaining 35%.
Top Performers Deep Dive
KakaoTalk
Looking at the dynamics of Kakao’s top performers, we will notice that KakaoTalk's revenue and downloads experienced a significant decline from 2017 to 2023, with the lowest point in 2022. Quite surprisingly, not only KakaoTalk’s metric decreased: observing South Korea’s messenger market we will notice that it is facing a downtrend with redistribution of the main audience that is left to Telegram and WhatsApp.
KakaoTalks continuously attempts to improve the app's positioning by applying new advertising strategies like the Talk Board and enhancing commerce functions within the app. Additionally, Kakao's content unit, including webtoons and media, already experienced a 30% increase in sales this year. So, let’s see if the app's dynamics will change its shift in 2024.
KakaoPage
Another notable trend among Kakao’s portfolio is KakaoPage’s fourfold increase in monthly revenue since May 2022, continuing to the date. This surge is influenced by the mix of factors amid the growing popularity of webtoons, which rose from 20.3% in 2018 to 29.9% in 2022, including: - Releases of the new anticipated webtoons, such as "Secret Relationship", "A Business Proposal”,"Grave Robber-King”, etc. - Expansion to Indonesia - Kakao’s plan on increasing its overseas sales to 30% of its total by 2025 with a focus on webtoon and entertainment businesses - Popularity of webtoon adaptation to k-dramas that are streamed on the major platforms like Netflix and Prime and, thus, likely attracted new readers
ODIN: Valhalla Rising
Lastly, let’s have a look at the ODIN: Valhalla Rising, the largest revenue contributor for Kakao. It saw its revenue soar to $47M monthly post-launch. Designed for mobile and PC, the game is touted as the first mobile game to use 3D scanning and motion capture for realistic and immersive gameplay. Developed with a $9 million investment from Kakao and WeMade Entertainment, ODIN targets both gaming sectors. Currently, it's predominantly popular in the Asian market, especially in South Korea, accounting for 88% of its revenue. A North American and European release is planned for Q4 2023.
Conclusion
Kakao's milestone of $4 billion in user spending reflects its diverse and successful portfolio, including major contributions from games like ODIN: Valhalla Rising. Despite market challenges, the company has shown resilience and adaptability, positioning itself for continued growth and expansion into new global markets.