LINE and Tencent the company behind WeChat have come together for the first time to invest $110 million in 4:33 Creative Lab, a games studio based out of Korea.
This means we could see some new original LINE games and WeChat games.
The news, confirmed by TechCrunch, marks the beginning of the two companies moving forward in their global investment strategy in the face of growing competition.
The strategy will give both LINE and WeChat direct access to original games
The strategy behind the investment is that it will give both LINE and WeChat direct access to original games and could even keep them away from other messaging apps, particularly KakaoTalk, which could help both companies boost their slowing games businesses.
Of course, LINE still has a $10 billion IPO coming, one that was postponed by parent company Naver in late September as it seeks to grow its business. LINE currently has 500 million registered users, 170 million of which are currently active.
As I’ve said before, consolidation in the messaging space is inevitable and while this is only a partnership between two companies and not a merger, with Facebook buying WhatsApp, Rakuten buying Viber, and Daum merging with Kakao in less than a year, it’s clear that the consolidation is indeed taking place, so it’s important for messaging apps to gain as many users as possible. This alliance between LINE and Tencent could also signify a push against Facebook on the social front, since it has 1 billion combined users between Facebook Messenger and WhatsApp.
For now it looks as though all of the apps will continue focusing on growth.
What app do you play games on most?