The global markets are beginning to diverge. As the economy rebounds, the winners are separating from the losers. So far, Gravity (NASDAQ:GRVY) appears to be on the winning team.

The investment world is splitting in half. Now, more than anytime in the last 18 months, the winners are diverging from the losers. No more does a single macroeconomic event steer the markets.

We are back to individual fundamentals and microeconomic themes. That means it is a stock-picker’s market.

Perfect evidence of this phenomenon comes from two companies with similar product offerings but widely divergent business models, GameStop (NYSE:GME) and Gravity (NASDAQ:GRVY).

Shares of GameStop are down by over 5% so far today as the Street digests the firm’s latest earnings figures.

With wary consumers unwilling to open their wallets, especially on non-essential items like video games, the company’s top line shrunk by 3.7% over the past three months.

The $1.74 billion in revenues translated into $38.7 million in second-quarter profits, a plunge of over 30% from the prior-year period. Making the figures appear even worse, same-store sales dropped by 14%.

The figures prove that growth was nowhere to be found, which is bad news as the company prepares to enter the critical shopping period that is the fourth quarter.

With chances of significant growth running slim, executives were forced to lower their earnings expectations for the remainder of the year. GameStop now estimates a full-year profit of $2.64 per share, down from its previous prediction of $2.93.

While GameStop may be representative of the nation’s consumer spending, it is not indicative of the kind of revenue-generating power held by some of the gaming industry’s strongest, leanest competitors.

When it comes to running a lean business, few can do it as well as the Asians, home of almost all modern efficiency practices.

While GameStop wonders where everybody went, a growing competitor, South Korea’s Global Gravity, is celebrating the fast-growth it has found in the online gaming sector.

Thanks to the drastically reduced costs and increased exposure of the Internet, Global Gravity is poised to take over as a planetary powerhouse in the gaming industry.

Size doesn’t matter

With its Ragnarok Online product soaring in popularity across the globe (it has strong exposure in 62 countries on five continents), Global Gravity shareholders are wondering what the future holds.

Today, they are getting a glimpse of the possibilities as shares of their company are surging ahead by more than 20%, thanks to a strong, intra-day volume spike.

The diverging pricing action between these competitors teaches us an important lesson. As I mentioned above, when the nation pulls out of a nasty recession, corporate fundamentals will become more and more important.

Margins, debt, free cash flow and market share will show the obvious difference between winners and losers.

We know consumers will not be dumping their savings accounts anytime soon. That means companies will be forced to stretch every dime of revenues as far as they possibly can.

Efficiency is not a wildly common concept here in the States. GameStop proves it. For companies based in Asia, however, it is not only a way of life, it is a means of survival.

Gravity may only have a market valuation of $69 million (compared to GameStop’s figure of $3.9 billion), but we all know it is not the size of your company that matters.

It is how you use it.

Source: International Small Caps: Size Doesn’t Matter