Gaming Startup Stakes Out Emerging Markets

Peak Games provides culturally relevant content to emerging markets.

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With more than 20 million active players drawn primarily from emerging markets, Istanbul-based Peak Games has become one of the leading global gaming presences on the planet. And with today’s announcement that it has acquired Saudi Arabia's social games company Kammelna Games, the 14-month-old company extends its reach even further.

"Since we were founded, we had the goal of dominating the emerging markets," cofounder Rina Onur, 26, told Portfolio.com. "One of our core principles is providing culturally relevant games that have existed offline for years, and acquiring Kammelna will let us do so."

The emerging-market expansion isn’t just about transplanting popular Western games such as FarmVille— though the company's version of the game, Happy Farm, does boast 2.2 million daily users—but about focusing on culturally relevant Turkish and Arabic card and board games such as Kammelna's Baloot.

While competitors Zynga, Electronic Arts, and Wooga continue to rule much of the global gaming market, most of their collective efforts remain focused on Europe and North Africa, leaving much room for growth in emerging markets such as the Middle East, North Africa, and Turkey. According to TechCrunch, Peak Games hasn’t missed out on the opportunity, acquiring studios or creating their own games including Okey, Umaykut Online, Akvaryum, and Erlikhan Günlük Falınız, which Onur says now has over 7 million daily active users.

According to the statement released by Peak, the acquisition of Kammelna will allow the gaming company to offer existing games on new platforms, including Facebook and mobile, and to launch new titles across multiple platforms. The company also has plans to launch other Arabic card, board, and tabletop games through the new studio.

Peak already has offices in Amman, Jordan, as well as Barcelona, Kuwait, Bahrain, Qatar, and the United Arab Emirates. Kammelna founder Essam Alzamel will run now run Peak Games’ new studio in Damman, Saudi Arabia.

Onur told Portfolio.com that the startup mentality is new to most emerging economies, but that things are changing.

"Here it's considered better to play it safe and follow a defined path," she said. "But as we see more development in the West, more young, bright people want a role where they can make an impact."

Peak projects the number of users in the Middle East and North Africa will reach 400 million by 2015, and with Kammelna users averaging more than an hour of playtime and two-thirds of Internet users in Saudi Arabia currently playing online games, the acquisition seems to promise a large chunk of that market share. But if that wasn’t motive enough for the acquisition, according to the statement, the Saudi Arabian region has one of the highest average revenue-per-user rates in social gaming in the world.

Peak Games is backed by $15.5 million in investments from Earlybird Venture Capital and $1.5 million from Hummingbird Ventures.