K2 Network Series B Financing
Online game developer K2 Network has announced the closing of a $16m Series B round of venture financing. The round was led by Intel Capital and also included monies from Greycroft Partners, Khosla Ventures, Novel TMT Ventures, BV Capital and MVP Capital.
The online gaming industry is estimated to reach $10 to 13b in revenue by 2011. K2 Network, which was founded in 2001, and has a presence in the United States, Korea and India, is focused on so called Massively Multiplayer Online Games (MMOG’s). The company has between 8m to 10m registered users 1 (their website and press releases have slightly different numbers) and a range of titles in its catalog. The company provides both free to play games and premium subscription services.
MMOG’s are internet games, typically set in a fantasy realm, that support hundreds or thousands of simultaneous players. The game play is often set in virtual worlds in which players can both cooperate and compete. Massively Multiplayer Online Roll Playing Games (MMORPG’s) are a sub category of the genre. Both forms can be played on internet enabled consoles like the Xbox or as PC based games. Eve Online, World of Warcraft and EA’s FIFA Online are all examples. Both genre’s are rapidly growing in popularity, with their strongest base right now, arguably, being in Asia.
For a gaming company’s second round, the deal is notably large.
K2’s customer distribution is varied with Europe being it’s best arena, so far. The company has approximately 4m users in Europe, 3m in North America and 2m in South America. It is under-represented in Asia and Australia with about half a million users right now.
K2 will compete with the newly created Casual Gaming division at Electronic Arts, as well as global game company’s from The9 Limited (China), Neowiz (South Korea) to games available through online entertainment websites like Nick (Nicktropolis). There are also many little known startup’s trying to carve out a niche in the space like celebrity backed, 38 Studios.
