Foreign game companies are eyeing South Korea's 1.3 trillion won (S$1.57 billion) mobile game market, which is the second largest globally, behind only Japan.
The London-based King Digital Entertainment and Helsinki-based Supercell in may began promoting their marquee mobile games "Candy Crush Saga" and "Clash of Clans" in the domestic market.
Supercell spent around 10 billion won advertising "Clash of Clans" on television, subway platforms and billboards over the last couple of months. The commercial for "Candy Crush Saga" has aired on national television since May, stressing it as "a game with 500 million downloads."
Their marketing is beginning to pay off.
"Clash of Clans," which was hovering outside the top 10 until April, reached fourth place in the Google Play Store and came in first in Apple's App Store this month. "Candy Crush Saga" came 11th in the Play Store and 14th in the App Store.
Chinese gaming companies are also boosting their efforts in jumping into the domestic market with solid capital. China's Internet giant Tencent, which invested 530 billion won in the local game company CJ Games in March, recently held investment meetings with around 30 local mobile game companies.
Chinese e-commerce giant Alibaba, which set up its Korean branch in April, is reportedly considering buying local game companies. Further, several more Chinese companies including KongZhong and Linekong and Hong Kong-based Efun Co. have also shown interest in making inroads into South Korea's mobile game market.
Industry watchers said the South Korean game market can be an ideal test bed for global game companies.
"If a game company can succeed in the most wired and highly competitive domestic market, it is highly likely to have good performance in other countries," said Kim Sung-gon, an official from the Korea Internet & Digital Entertainment Association.
However, this may be a warning sign for the local game industry, which has already lost ground to foreign companies in the online game market. Currently, foreign games including Riot Game's "League of Legends" and Blizzard's "Diablo 3" account for around 50 per cent market share in the domestic online game market. "League of Legends" of Riot Games, which is majority-owned by Tencent, has retained the top spot for 100 consecutive weeks.
"In the domestic online game market, local companies are fiercely vying for the remaining half of the market share. If the same thing happens to the mobile game industry, it could be a source of major concern to the local game industry," said an official of a local game company who declined to be named.