18M Downloads And 3 Consecutive Quarters of $20M Revenue, Now A Global Launch on Line. Discover Korea’s Hottest Mobile Game

Cookierun 1

Having achieved 18M downloads and the number 1 spot in 20 countries back in 2009 with Oven Break, the company’s first release, Korean game developer Devsisters has just released their global follow-up, Cookie Run, on the Line games platform. Despite early success with Oven Break, they struggled to maintain momentum and effectively withdrew from the global market, choosing to focus on their home turf in Korea. This was due struggles in maintaining growth overseas, and in view of the great potential for mobile gaming in the burgeoning Android market in Korea, which was realized on the launch of the Kakao games platform in July 2012. By that point the Kakao messaging app had been installed on 95% of Korea’s 30M smartphones and the strength of this platform for the distribution of social games looked like a great opportunity.

Cookie Run Devsisters

For Devsisters the difficult choice to pull out of the global mobile gaming market has paid off. Only 10 months after the release of Cookie Run for Kakao Talk, Devsisters have now recovered to 18M users (only in Korea), and have achieved three consecutive quarters (and still going) of consistently high revenue. In a bid to re-enter the global market off the back of their new-found success, they have just launched in five languages on the Line gaming platform.

To discuss their momentous return to the global mobile gaming foray, at a time when Devsisters is enjoying their biggest success to date, I caught up with CEO Jongheun Kim and lead character designer Roberto Padilla, on the day their game was ‘soft-launched’ on Line.

What’s Made Cookie Run So Successful?

Key Success Factors – Cookie Run’s secret sauce:

  1. Game play: Jongheun Kim believes that if a game is strong enough it will become its own best marketing tool. It would seem that Cookie Run has achieved this, demonstrated by the fact that search terms around characters often feature as top search terms on Naver, Korea’s biggest search engine, even before they are released. Cookie Run is immensely engaging: As a casual game there is so much going on during game play that it is easy to become transfixed, and it is no surprise therefor that their users (up to 3M per day) come back to the game, keeping engagement exceptionally high. The game play experience is boosted by regular Power ups and special in-game actions. Additionally, users can play according to their own requirements, whether casually on a subway to work or more strategically when they have more time available.
  2. Social: Jongheun Kim also stressed that Cookie Run’s success is heavily based on their smart usage of the Kakao API. While being on Kakao doesn’t guarantee success anymore (there are now over 300 games on the platform), smart use of the platform, utilizing its social power most effectively, can have a profound impact on the success of a game. “We always ask ourselves what could we have done better; you really have to be smart,” stated Jongheun, and Roberto added that “I knew we had done a good job when people that I didn’t even know were sending me hearts [via Kakao]. At that time I realized that this had hit the market,” he added.
  3. Monetization: ”The game must be fun, and you need many users,” Jongheun explained. He went on to say that “Unless you have a critical mass of people playing, the element of competition is not strong enough, and this is one of the key benefits of using the Kakao platform. We are in a situation that in many social circles many of your close friends and family are playing.” With the highly competitive nature of Koreans adding weekly competitions that run at the busiest times of the week, Sunday evenings, is a great way to leverage earning potential. Either they play more (invest time), or you buy crystals (spend money). Jongheun stated that Devsisters is very aggressive with targeting prime revenue generating opportunites, but many other companies are more cautious: “Our weekly tournament is 9pm on Sunday. That is the peak time, and we need to be absolutely sure there aren’t issues with the server at this peak time. Downtime can really hurt the number of users and revenue.” Regular updates are also a key strategy to keep user figures increasing and to leverage the best possible financial returns for the company and its investors.

The Fans:

While both Jongheun and Roberto agreed that the strength of Cookie Run is its best marketing tool, they also believe that the exceptional loyalty and engagement of their fans has become one of their most effective marketing tools. “Every day I see new fan-generated art-work of their favorite characters. They share it with their own friends, and post it online,” said Roberto. Partly as a result of this activity, search terms related to Cookie Run frequently become trending topics in Korea, particularly around the time of game updates, which increases buzz and maximizes user acquisition. This has led, in part, to the enviable situation that in 2013 only $100k was spent by Devsisters on paid marketing activities; a testament to the quality of their product, their smart use of the Kakao API and the loyalty of their fans in ensuring that buzz around the game has kept it in the top 5 in Korea for nine months, and counting.

Mobile From the Get-Go:

Cookie Run has risen above many of the challengers at a time when gaming has been going through a major shift, with mobile steadily taking market share from PC and Console games. Jongheun Kim believes that one of the strengths of his company is that he has not had to deal with the baggage of a legacy on platforms other than mobile. From the start Devsisters has been developing only for smartphones. They have not had to shift focus and have not had to develop for more than one platform. In addition, Cookie Run is the only game that Devsisters is dedicating resource to, again demonstrating the laser focus that Jongheun Kim believes is one of the killer strengths of his team. While other more established gaming companies are still struggling to find their position in a market ever more dominated by mobile, Devsisters ‘pure mobile DNA’ has allowed them to focus 100% on Cookie Run.

Keeping things fresh:

There will always be the act of gravity pulling users away from mobile games and reducing engagement. This is a natural process, but it can be slowed, and even reversed. “Our policy, our principal, our discipline, is to do a major update every 2-3 months,” said Jongheun Kim. These normally coincide with national holidays, when users spend more time on their phones for leisure. With their updates Devsisters also roll out great events and promotions, such as giveaways of the in-game currency, crystals. These can amount to as much as 100 crystals at one time, worth about $10. But there’s a catch. To receive the full quota of free crystals, players need a 16 digit code, which is broken down into 4 parts. Four digits are earned from in-game play, four by finding a code on Twitter, four from the Facebook fan page, and four from the Devsister’s blog. “This strategy helps dramatically with buzz,” smiled Jongheun Kim. “By this method we are able to achieve excellent rankings on Naver and on social media around the time of our updates. The effect of this free marketing is the equivalent of $1M marketing spend.” Between updates the game usually bleeds about 1M users, but at the time of each update these are regained, and increased, meaning that overall there has been a steady uptrend in users, after the initial ‘J-curve’ growth after first release. Additionally Devsiters releases a minor update every month, which helps to slow user bleed between major updates. In short, Cookie Run has effectively been able to beat the worrisome effects of gravity that plague the vast majority of other games.

More about Devsisters

Devsisters was founded in 2009 by Jihoon Lee, a Korean serial entrepreneur who began his career at NHN, Korea’s largest internet company. Jongheun Kim (now Co-CEO), who holds an MBA from Stanford, lived in California for eight years, working as a VC at Storm Ventures. While most of his investments for Storm were in US-based companies he led a 2005 investment in Com2US, a Korean game developer that was publicly listed on the Korean stock exchange in 2007. Jongheun joined the Devsisters team as Co-CEO in 2011, at a time when the company’s early successes had waned.

Devsisters had observed the rise of the iPhone around 2009 and believed that it would become a global hit, but at that time iPhone was not popular in Korea, so Devsisters had focused their efforts on global. They built several games, but only one, Oven Break (released June 2009) enjoyed success and garnered 20M users, as well as achieving the No. 1 position in 20 countries.

As more gaming companies focused their efforts on mobile, 2010 – 2012 saw the competition heating up, and at this time Devsisters was unable to maintain traction. Despite this decline they were able to raise $4M in funding, that helped keep the company moving forward at a difficult time.

The situation in Korea changed dramatically in July 2012, when Kakao Talk released Anipang, the first game on its brand new gaming platform. While IOS still represented a huge, yet tough, global opportunity, the success of Kakao as a distribution platform improved the situation for Korean gaming companies domestically. As 95% of the 30M Korean smartphones were using Kakao Talk by this time, the market was ripe for exploration and the opportunities looked good.

To the Future: 

Devsisters has come a long way since founding in 2009. As well as rockstar success in Korea, the company has also enjoyed success globally. There move now back into the global market therefore is not as much of a risk as if they were doing it for the first time. Jongheun Kim’s dream for this year is simple: “Achieve 100M happy global users by the end of the year.” Using their previous global experience, their success in Korea with Cookie Run, and their existing Kakao Talk SDK which will plug in to Line, they seem to have a formula for success and the future looks bright. Along with an increased user base, the company also hopes to push their profit margin from around 40% to over 60%.

Cookie Run Devsisters

Time Line:

  • Oven Break released 2009, for IOS globally and experienced reasonable success
  • 2010 – 2012 were tough years
  • 2011: $4m investment secured from three well known Korean VCs
  • 2012: Kakao Talk releases game platform, an instant success
  • 2013: Cookie Run for Kakao released. Merchandise line released, including children’s comic book and toys. Merchandising likely to play a greater role in the company’s growth going forward as Devsisters build a entertainment platform around the game and characters
  • 2014: Cookie Run begins the year with a forecast four consecutive quarters of top 5 success ($20M revenue per quarter at 40% profit). Daily user peak at 3M and daily revenue peak at $1M
  • January 28 2014: Cookie Run released globally, except China and Korea, on Line in 5 languages (English, Traditional Chinese, Spanish, Thai)
  • Goal for 2014: Secure 100M downloads (currently at 18M in Korea alone)

Cookie Run Revenue Breakdown:

  • 30% goes to Apple or Google (app store)
  • 21% goes to Kakao (distribution)
  • Just under 10% absorbed in overheads, including payroll, etc
  • 40%+ profit (no publisher, so higher profit)
  • Profit Margin expected to increase to 50% – 60% as revenue dramatically increases on global launch
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