(By Brindaalakshmi K & Vikas SN)
Data messaging app Whatsapp, may be signing an MoU (Memorandum of Understanding) with a Korean gaming company WeMade to start a mobile gaming platform, reports TechRux. WeMade has however declined this development to the publication.
WeMade has a presence in markets like Korea, Taiwan, Japan, Indonesia, China, Europe and USA, and a partnership with Whatsapp could give it a global reach. Think of Facebook and Zynga.
Interestingly, its worth noting that WeMade is an investor in a similar Korea-based data messaging app Kakao Talk and in July 2012, Kakao Talk had launched Game Center for Korea, which included titles from WeMade among others. Prior to this, WeMade had also inked a deal with Japan’s Line messaging app to develop six social games for the platform. So the company has some expertise of building apps for data messaging apps.
What If WhatsApp Launches A Mobile Gaming Platform?
WhatsApp’s business model currently revolves around customer subscription and its iOS app sales. The company currently charges a one time $0.99 charge on iOS, while it offers a free one-year subscription to other platforms like Android and Symbian, following which it charges $1.99 per year (it has, however been quite liberal about that deadline till now). While WhatsApp hasn’t revealed the total number of paying customers or its total user base yet, it had claimed to have processed 18 billion messages in a single day on December 31, 2012, which is quite significant. The biggest question is how will WhatsApp or any Instant Messengers go beyond the messaging subscription model. An quick look at Whatsapp’s alternatives:
- Advertising: While players like Nimbuzz has been offering location based advertising for quite some time, WhatsApp has deliberately stayed away from this mode and has been quite vocal that advertising disrupts the user experience.
- Content & Games Subscription: This could also be the start of a whole new content subscription model: WhatsApp could also probably tie-up with content providers to push content like News, Sports Updates and Entertainment News among others, similar to what Imsy does (and Affle tried with SMS 2.0).
If the games deal eventually turns out to be true, this can potentially allow Whatsapp to diversify its revenue stream by offering various gaming titles to its customers for purchase, with telecom operator billing integrated: WhatsApp could also probably ink deals with telcos to offer this platform as a value added service to their respective subscribers. Remember that WhatsApp is already inking deals with Indian telcos and had tied up with Reliance Communications in October 2012. From the telco’s perspective, this will help them make up for the declining VAS revenues as well as increase the data usage on their networks and thereby increase the total data revenues.
- Virtual Goods: The other alternative for Whatsapp is to look at building an ecosystem around virtual goods, for which gaming is a key source of revenue. This is tricky because the propensity to pay changes from market to market, and on mobile in particular, involves integration of telco billing and collection, for which payment cycles will vary as well.
The questions that Whatsapp has to address are whether consumers will approve of it’s shift beyond just messaging, because there are several others out there already trying to unseat it.
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