With a valuation around $10 billion, there are few companies that epitomize the growth in social and mobile gaming like Zynga. The maker of FarmVille, Vampire Wars and Scramble Live attracts more than 275 million users to its Facebook games every month – enough to generate an estimated $500 million in revenue every year, according to Dealbook.
Zynga’s clout may overshadow Chinese competitor Rekoo, but Rekoo’s approach closely mirrors Zynga’s and the company’s growth is just as potent. Based in Beijing, the small gaming start-up has looked beyond the Great Firewall as it pushes out titles like Sunshine Ranch, Sunshine Deep Sea and Animal Paradise.
Rekoo first started developing games for Facebook in March 2009. Within six months, Sunshine Ranch and Animal Paradise were so popular that the company was among the Top 10 most successful developers on Facebook, according to Sherman So of Asia Times.
The company’s success outside of China was an eye-opener for Rekoo’s founder Liu Yong. His games were getting just 3 million visitors a day in the U.S., and they were generating revenue of $1 million a month, So writes. Rekoo was getting more than three times as much traffic as that in China, but generating 85 percent less revenue.
Liu saw the writing on the wall, and quickly put the company’s focus on foreign markets. In particular, Liu targeted Japan’s leading social networking site, Mixi.co.jp. The Japanese market was larger than the U.S. market, and customers there were just as willing as Americans to pay for virtual goods. The fact that there was less competition in Japan didn’t hurt either.
Good move. A year and a half later, Rekoo claims 2-3 million visitors to its games in Japan every day. That’s enough for “several million dollars a month” in revenue, So reports. Now, the company’s turning its attention back to the Chinese market with a partnership with China’s largest internet company Tencent.
Liu expects the deal to push Rekoo’s revenue in China from $150,000 a month to $1-$2 million a month by the end of 2011. That would give the company total revenues of more than $50 million a year. Zynga generates ten times as much cash, but a strong foothold in in China could start to close the gap between the two companies. Now, if only Rekoo would consider an IPO.
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Tags: gaming stocks, social networking stocks, Tencent Holdings, Zynga
