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KLab Seeks China Game Partners After Topping Japan Charts

KLab Inc. (3656), maker of the most popular music game for Apple Inc. iPhones in Japan, is seeking more partners in China to bolster growth and build on the success of its Love Live! title. 

KLab aims to increase operating profit from its overseas gaming business to half the total within the next two years from about 3 percent now, President Tetsuya Sanada said in an interview. To help do that the company has teamed with Qihoo 360 Technology Co. (QIHU) and Shanda Games Ltd. to expand in China, and KLab will begin self-publishing games outside Japan next year. 

KLab joins other Japanese gaming companies, including GungHo Online Entertainment Inc. (3765) and Square Enix Holdings Co. (9684), in targeting overseas markets for growth to build on domestic success. Love Live! School Idol Festival, which features songs sung by animated schoolgirl characters that players tap along with, started offering Chinese and Korean versions last month after reaching 3 million downloads in May. 

“The China smartphone game market has large potential,” Sanada said in the July 23 interview at KLab’s Tokyo-headquarters. “It may surpass Japan and U.S. combined. China’s smartphone market is growing very fast.” 

Japan surpassed the U.S. as the top-grossing market for applications in October as smartphone use surged and wireless carriers started billing customers directly for downloads from Google Inc.’s online store. 

Shares of KLab added 3.4 percent to close at 1,705 yen in Tokyo trade. The stock has more than doubled this year, compared with a 1.6 percent decline in the benchmark Topix index.