Analysis: Kakao’s Esports Foray with DRX, And Why It Matters

kakao esports

DRX CEO predicts a new “K-wave” as a result of a new connection between Korea’s gaming community and Kakao’s brand.

 

By Alvin Mak

 

Popular Korean League of Legends esports team DragonX (DRX) has signed a new partnership deal with Kakao, the Korean Internet and tech giant, according to a statement released on Tuesday, June 9, 2020.

 

Reportedly, this deal is meant to revolutionize the world of content collaboration, in addition to introducing a new wave in professional gaming.

 

For those who are unfamiliar with either esports or Kakao, the question is: who are DRX and Kakao Friends, and why is this deal important in the Asian tech ecosystem?

 

Kakao’s Empire

 

Kakao’s role in the deal mainly involves their brand Kakao Friends: a series of eight cartoon characters, each with their own personalities and traits. The Kakao Friends characters, now widely recognizable in Korea, were originally developed as emoticons for the company’s texting app, KakaoTalk.

 

KakaoTalk’s mind-blowing popularity is demonstrated in the fact that over 99% of Korean instant messaging users use the platform. By comparison, messaging giant WhatsApp only claims 0.1% of this market.

 

The Kakao Friends brand has continued to evolve since its inception, and through a variety of merchandising and licensing partnerships – including one with debit cards through Kakao’s fintech offering Kakao Bank, and another with a brand of yogurt drinks – these characters are immediately recognizable and wildly popular.

 

The Korean tech giant is also the developer of navigation platform Kakao Navi, subway transportation planner app Kakao Metro, and many more besides. It has also acquired streaming company Melon, social media platform Path, and webtoon company Podotree, as additions to their KakaoTalk messaging app.

 

With over 44 million domestic monthly active users, it is clear that Kakao has started to construct a tech and brand empire in Korea.

 

DRX’s Dominance and Korean esports

 

Esports company DRX doesn’t fall short when compared to Kakao’s dominance. The professional League of Legends (LoL) team represents one of the top three largest League of Legends fan bases in the world.

 

It is unsurprising that the franchise has partnerships with globally renowned companies, including British supercar brand McLaren, energy drink company RedBull, and gaming hardware manufacturer Logitech.

 

In addition to the brand, DRX’s individual players are known around the world. DRX Deft is a widely recognized ADC superstar, and rookie DRX Chovy is regarded by many as Faker’s successor. Faker, or Lee Sang-hyeok, is a Korean LoL icon who made estimated earnings of $2.5 million in 2019 alone; he is arguably the most famous esports figure in the world.

 

The Korean esports community has experienced an explosion in popularity of unprecedented proportions. South Korea now has the top esports ecosystem in the world, trumping rival communities in North America, Europe and Japan.

 

The exceptional Internet quality in South Korea, as demonstrated by their introduction of 5G networks in April 2019, has opened the door for over 20,000 internet gaming cafés (PC Bangs) across the country.

 

PC Bangs are where young Koreans play multiplayer games outside of their homes. These recreational facilities have become such a fundamental part of Korean culture that they have been compared to going to the movies or a bar in the West.

 

Not only has the gaming community seen exceptional growth, but experts say that professional gaming is evolving to replace traditional sporting events.

 

The country already has two permanent television broadcasting channels that stream esports. The channels, Ongamenet and MBC Game, cater to the reported 10 million South Koreans who follow esports regularly. Professional gaming events in Korea have even had enough viewership to trump programming in professional baseball, soccer and basketball.

 

It’s clear that South Korea takes its esports very seriously. It is taken so seriously in fact, that a new gaming school has emerged in Seoul: Game Coach Academy. The school gears itself toward continuously scouting for young talent, and is dedicated to discovering the next Faker. Gaming is evidently ingrained into Korean culture.

 

“K-Wave”

 

The two franchises together are primed to kick off a global marketing campaign. Fans will begin to see Kakao Friends sporting DRX merchandise; the Kakao Friends brand will also begin to appear on various forms of DRX content, including but not limited to online gaming streams and team apparel.

 

The campaign is reported to not simply consist of new branded content. There are also expectations to push original collaborative content to create a new age of partnered branding.

 

Sang-in Choi, CEO of DRX, believes the partnership will spark a new “K-wave” – an international revolution of Korean culture and technology – as a result of this historic partnership. This deal is expected to not only revolutionize content in Korea, but also bring more Korean culture to the international community. Continued expansion of the eSsorts community is also expected as a result of this renewed cultural trend.

 

Perhaps this new excitement will push esports and gaming further into the spotlight, legitimizing professional gaming for non-believers, and paving the way for never-before-seen advancements in tech and connectivity.

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