Emerge Gaming acquires Mobimedia, a mobile app company focusing on Pacific Island markets

Emerge Gaming (ASX:EM1) has seen healthy gains to its share price today as the company announces its acquisition of Mobimedia, an app-based gaming company targeting Pacific Island markets, for $0.65m. 

The acquisition of the Value Added Service (VAS) business - a telco company that doesn’t offer products related to calling or texting or phone plans - sees Emerge expand its presence to the Solomon Islands, Tonga, PNG, and American Samoa. 

Mobimedia produces mobile games, SMS games, and a music service called mJams. The mJams office is located in Solomon Islands, West Honiara.

Mobimedia a Victorian enterprise

Emerge will pay $0.65m to Australia’s Content Management Pty Ltd, which is registered in Victoria. CM used to be Mobimedia itself, before changing its name (and briefly existing as 321Bet in 2021). 

Worth noting is that Emerge does not enter the Pacific Islands as a new player. 

Through Mobimedia’s existing relationships, Emerge now takes on existing partnerships with the following regional teclos:  

• Telikom Limited (PNG) 

• Bluesky comms (American Samoa) 

• Tonga Comms Corporation  

• Solomon Islands Telekom 

Under the deal, Emerge will create a new subsidiary, StreamPlayStudio Pacific Pty Ltd, which current CEO Todd Emanuelli will be put in charge of. 

Emerge notes Emanuelli is an experienced telco executive with background in emerging markets, including the “Far East,” Middle East, and, existing experience in the Pacific Islands. 

A development office in Fiji will assist Emanuelli, who will be based in Victoria, where Mobimedia was formed. 

Smartphone growth continues in Pacific Islands

Leading mobile communications association GSMA released research into the growth of smartphones in the Pacific Islands back in 2019. 

It predicts 4.4m mobile internet users across the region by 2025; doubling user counts in 2018. 

By 2023, 50% of total connections in the region are predicted to be using 4G. 

Of foremost interest to investors in GSMA's 2019 research may be its final point: in 2025, the association sees Pacific Island mobile operator revenues raking in US$1.2bn.

However, projections on future growth for the region distract from an already well-established mobile operator sector across the region, and an already well-connected Pacific Islands region, as far as digital access goes. 

Consider that in 2021, anti-vaccine propaganda was identified as a key reason driving low rates in Papua New Guinea (which, at the time, hit the oil and gas sector’s ability to hire workers.) While desktop computers are rare in PNG, smartphone news consumption isn’t. 

Maybe not the happiest indicator, but, evidence of a market well familiar with mobile technology. 

Potential for inroads to Africa 

Emerge today notes its existing operations in Africa may provide a foothold through which the company could introduce its newly acquired Mobimedia portfolio to the African market. 

Back in 2020, Emerge launched its MTN Arena product in South Africa, which has since garnered 1.3m subscribers. 

MTN is ultimately another mobile games provider, using Emerge's e-sports 'tournament' capabilities to introduce something of an in-house competitive gaming league. 

Digital gaming research player Newzoo predicts 2022 will see the global e-sports audience grow to 500m people, though, the reliability of these numbers are not thoroughly covered with a methodology section. 

MTN Arena predominantly advertises through Facebook in the region; investors would be wise to keep in mind the future of Meta is perhaps no longer perceived as robust as it was only three years ago. 

Australia, Africa, Pacific Islands, and beyond 

Regardless of the future of Arena’s main advertising and outreach platform, e-sports participation is expected to keep rising, and Emerge is hopeful it can use MTN to bring its (formerly) Mobimedia suite to South Africa. 

“This deal diversifies our offering outside of our primary MTN relationship and outside Africa and brings in an entirely new management and operations team with capability and expertise, that are Australian based,” Emerge chairman Bert Mondello said. 

“Crucially, this new team, led by Todd, is incentivised to deliver new partnerships and grow the Company’s offering sustainably and profitability. We also expect to see significant improvements in revenue and profitability from synergies once the Emerge tech stack is introduced and incorporated into existing partner relationships.”

Emerge's three month price chart.