Market Insight

Viber turns to games for platform expansion

December 17, 2014


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Rakuten-owned instant messaging and VoIP service Viber has expanded its app with the addition of Viber Games.

The new games service features Viber Candy Mania and Viber Pop from mobile game network Storm8 and Wild Luck Casino from casual games developer, Playtika. Users will be able to sign in with their Viber ID to connect with friends and contacts. The games will be free to download via Google Play and the App Store. Access to additional features will be available via in-app purchases.

Viber Games is available in Belarus, Malaysia, Israel, Singapore and the Ukraine and will be rolled out worldwide in January 2015.

As of October 2014, Viber has 209 million monthly active users in 193 countries. 

Our Analysis

Viber’s foray into games is a natural move for the communications and messaging platform. With Rakuten’s wider strategy focused on building an ecosystem of mobile and online content, commerce and communication services, games is a natural extension for Viber to expand its core services.

Viber hopes to accomplish a variety of functions with games. For one, it aims to act as a discovery platform and drive app installs. Its social gaming feature will have the potential to enhance conversion and ARPU for supported games and drive further revenues for Viber and its partners. Games could also drive engagement for Viber’s platform as a whole, with users spending longer periods of time on Viber.

Viber’s new service maybe a logical evolution, but there are a number of challenges it must overcome:

Focus on the core experience

It must work hard not to interfere with its core messaging and communications user base. Similar to WhatsApp’s decision to remain ad-free, Viber cannot risk discouraging users with advertising. Instead, it has chosen to monetize via other methods, such as in-app purchases to generate revenues.

Securing a compelling content lineup

Viber needs to build a large enough quality games portfolio to make its service attractive. Partnering with game developers Storm 8 and Playtika is a start, but Viber will need to ultimately feature a variety of exclusive games titles to remain relevant. At launch its offering is not competitive enough to secure a large games following and will serve a limited role engaging existing users. Unless Viber can prove it is able to secure a highly engaged and monetised games audience it will struggle to attract new and premium content.

Differentiation

Integrating games into a social and communications platform is not a new idea. Users already have a variety of choices when it comes to games. LINE, WeChat, KakaoTalk, Kik and Tango all offer competing gaming platforms of their own. KakaoTalk made $203 million in revenues for 2013, while LINE reached $192 million in revenues for Q3 2014. Viber will need to find a way to differentiate with games that will set it apart from fellow competitors. Viber’s launch countries for its games platform point to one area where it could succeed. Much of Viber’s audience is in less mature markets such as Central and Eastern Europe, the Middle East and South East Asia which present more of an opportunity than more competitive Western European, North America mature Asian markets.

Viber’s addition of games underscores wider moves by several over-the-top service providers to further integrate services to drive ongoing engagement. Key to Rakuten’s overall strategy is to unify its Viber messaging app with Rakuten user IDs to integrate its services. 

 
 

 

 

 

Geography
Israel
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