The company plans to unlock a new revenue channel in instant gaming following its strategic acquisition of Nextgamer.io.

After a year which saw it achieve market traction with two successful game titles, listed ASX game developer iCandy Interactive (ASX:ICI) is eyeing new pathways for growth over the next 12 months.

The company turned heads in the market when its Masketeers: Idle has Fallen title generated $1m of revenue in just two months post-release.

It followed that up with its popular Claw Stars title, which also got off to a fast start with $300,000 of in-game revenue in its first two weeks in July.

Speaking with Stockhead this week, iCandy chairman Lau Kin Wai said the company is staying busy as it pursues new growth opportunities tied to the broader macro trends in mobile gaming.

Among them is ‘instant gaming’ – games that be played on mobile devices with easy access which doesn’t require users to download an app.

Instant gaming

“We’re excited about that genre and it’s come about because browser technology for mobile phones has made some significant improvements,” Kin said.

He flagged recent upgrades to HTML5 software as one such development.

“It’s easier to play games effectively through a browser now, and the type of games that work for that format are simpler games that are easier to learn and master,” Kin said.

“Those type of games where you can pick it up within the first five minutes are getting very popular. And it’s a different segment of the market to players who enjoy more complexity.”

That being said, the two formats don’t cannibalise each other.

“You’ve got people who play both styles, and it can kind of depend on circumstances. Say you’re on transport and you’re a few minutes from your destination – you just want to play something simple and that’s where instant gaming is aimed at,” Kin said.

From a revenue perspective, the format differs from ICI’s other leading titles such as Masketeers and Claw Stars, where players make in-game purchases

“In-game advertising is definitely the main revenue driver for that sector, and we’re quite advanced in that genre because of our acquisition of Nextgamer,” Kin said

Based in Singapore, Nextgamer’s speciality is in building games that take no longer than two or three minutes to play per session, with functionality for web-based and app-based mobile platforms.

iCandy acquired the company in March and has been building out its in-house development strategy over the last six months.

“They specialise in the technology around instant gaming and hyper-casual games. So it’s really accelerated our pathway to having products in those segments and we’re aiming to establish that new revenue stream by the end of the year,” Kin said.

 

M&A trail

Elsewhere, iCandy is focused on leveraging the IP it’s built from its two successful game launches to consolidate its user growth and revenue metrics.

Kin said it’s an ongoing process where each new game provides the company with feedback to improve its content offering.

“A good example is Masketeers. Users said they loved the gameplay, but that wanted more sociability within the game to play with their friends,” Kin said.

“So we really incorporated that social aspect in the development of Claw Stars. And the next version of Claw Stars will include even more team-based features.”

And after closing out the June 2021 half-year with a healthy cash balance of around $10m, Kin said the company is eyeing additional M&A opportunities in the south-east Asian market.

“As a company, I think it’s always been a part of our DNA to look at M&A for growth. So the balance sheet allows us to be a bit more aggressive on that side of things,” Kin said.

And in that context, iCandy’s regional positioning gives it a competitive advantage,” he added.

“As an ASX-listed game developer, I think that direct access to Asia differentiates us a bit,” Kin said.

“It’s a really strong growth market, with a unique economic situation and the growing middle classes in those regions.”

“I also think SE-Asia has become a bit of a hotbed for innovation. When you have a couple of successful tech companies, that spurs a lot of aspirations for companies in the region to work on projects — gaming included. So that (M&A growth) will definitely be part of our strategy going forward.”

This article was developed in collaboration with iCandy Interactive, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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