CrypoLogic Moves in to Korea

9 April 2008

CryptoLogic, a Dublin-based Internet gaming software developer, has made another strategic investment in the Asian region.

The company announced today an agreement to take a substantial minority interest in South Korea's Mobilebus Inc., a mobile and PC game developer and publisher. For CryptoLogic, the agreement also includes representation on Mobilebus' board of directors with the option of increasing its ownership to a majority stake.

Korea's legislative environment prohibits online gaming for real money, much like the rest of Asia. So Mobilebus' portals offer only subscription-based games. CryptoLogic's involvement will go toward assisting and building up the product offering for Mobilebus, said Stephen Taylor, CryptoLogic's Chief Financial Officer.

The new portals will offer traditional Korean card and arcade games, as well as a suite of poker games including 7 Poker, High-Low and Texas Hold'em.

The revenue for these sites comes from the selling of avatars.

"It's an online community where a lot of the money is made through the selling of that are so popular in the Asia Pacific region," said Mr. Taylor. "Poker is the primary focal point around this particular social community in Korea. So, it has been showing good growth. The marketplace has been showing good growth."

"It will also allow us to utilize some of the technology we've gotten access to through Mikoishi, a Singapore-based game development and design company in which CryptoLogic finalized a $6.1 million investment in December, to enhance the product offering and to grow things in the Korean market," he added.

Mr. Taylor said compared with some of the company's recent Asian deals (568 and Mikoishi), this one allows CryptoLogic to become an active part of the Asian gaming market.

"Some of the other deals that we've done have been more focused around us getting technologies to utilize throughout Asia Pacific," Mr. Taylor said. "This one with Mobilebus is really getting involved with an organization that is providing poker."

"And we think it's a good entrée into offering other services in the future in the Korean marketplace," he added.

For the time being, the deal covers Internet-based games only. But Mr. Taylor said CryptoLogic's tie-up with Mikoishi would help expand the offering to mobile.

The deal is expected to close in 30 days.

CryptoLogic closed down 10p to 820 today on the London Stock Exchange.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.