LINE is investing $100 million into mobile games

Japan’s LINE Corp, the parent company behind the popular LINE instant messaging service, has taken off as one of the most popular social networks in Asia over the past few years, largely in part to its fabulous collection of stickers and booming business as a mobile gaming platforming. Home to hundreds of games these days, the company has announced a further $100 million that will be dedicated game development and other investments of that nature. One such investment is a 10 percent stake in Gumi, the developer behind one of Japan’s most popular free-to-play RPGs, Brave Frontier. The studio will now develop exclusively for LINE’s mobile service.

The smartphone gaming market is a fickle beast. Hit games once elevated the revenues of DeNA and Gree to the stratosphere but neither gaming giant has truly conquered the international market. A major obstacle is their inability to create a development platform that can rival the App Store or Google Play in terms of users or developers. Line, the Japanese corporation taking over the world with free messaging and fun stickers, thinks it can be the company to finally crack the code. According to CNet Japan, today in Tokyo, Line announced it will create a US$100 million fund the tentatively titled “Line Game Global Gateway” in September. The fund will be managed under the to-be-established Line Ventures. In addition, Line announced its acquisition of a 10 percent stake in leading game company Gumi. After a fallow period, Gumi has been the darling of the game industry recently in part due to the runaway success of the game Brave Frontier. The terms of the deal were not disclosed but Gumi is expected to IPO later this year and reach a valuation of up to US$1 billion. CNet Japan reports that Gumi will start producing games for the Line platform by the end of 2014. Line is a gaming company just as much as it is a messaging company. At today’s press conference, the company announced its 490 million users have downloaded its games 410 million times, and in December 2013, App Annie placed it at the top spot for app publisher revenues, largely due to its prowess in gaming.