The ngmoco:)-DeNA Deal Gets its First Real Test With Mobage Launch on Android

DeNA and its recently acquired U.S. subsidiary ngmoco:) will face their first real test this week with the launch of the Japanese company's Mobage platform for English-speaking markets. The launch, part of DeNA's big move to expand outside its home market of Japan, brings the Mobage app to the Android Market where users can play about 100 gaming titles. DeNA rounded up deals with a few dozen of the more prominent iOS developers to launch on the platform including Playforge, NimbleBit, KamaGames, Haypi and Backflip Studios. The idea is that Mobage will ultimately become a popular gaming destination in its own right, where gamers can interact with each other by sharing scores and favorite apps in a global gaming network. Games on the platform use a single ad network and a common currency -- an avenue that wouldn't be available on iOS where Apple mandates that developers have to use its in-app payment system. ngmoco:) does have a presence on iOS though, with the Plus+ network. For developers, DeNA says Mobage makes it easy to port apps from one platform to another. ngmoco:), the subsidiary DeNA acquired for up to $403 million last fall, built a technology called ngCore, which lets developers write in JavaScript but have app performance that rivals a fully native implementation. The idea is to reach that illusive dream of writing an app once with the ability to run it anywhere. By offering social features and ngCore in tandem, DeNA is hoping that it can attract enough developers and users to build a large network of Android apps. With that would come downstream revenue opportunities with advertising and payments. It's a market opportunity big enough to attract several rivals including PapayaMobile, a Beijing-based mobile social gaming network. DeNA's big rival back in Japan, GREE, also recently bought OpenFeint, which has a strong presence on iOS but has yet to match its strength there on Android. Then there's a wild card with Facebook and its forthcoming HTML5 platform, which would automatically have much farther initial reach. Facebook's weakness though, ngmoco:)'s Neil Young has argued, is that gamers may not want to play with or pester their real friends. They'll want to play with others who have similar interests. The looming question is whether both DeNA and GREE can take their relatively unique model of being dual platform providers and game developers overseas. Like the Galapagos Islands of the mobile industry, Japan has been a market set apart from the rest of the world where unique devices and behaviors have flourished. Yet Western developers are hoping that U.S. consumers will follow Japanese ones along the same trend-lines in terms of mobile spending and gaming habits. And GREE and DeNA, with their years of accumulated expertise in gaming and virtual goods monetization, have been looking for ways to grow beyond a largely saturated market at home. The issue is that the DeNA, GREE model -- which combines being a platform provider with game development in a single company -- hasn't become the predominant one in the West. Instead, the U.S. market has evolved in such a way that platform building and game development are usually handled by separate entities. A large platform provider, like Apple, Facebook or Google, supports payments and distribution, while smaller companies produce independent titles. Indeed, whenever a software platform has encroached upon territory thought to have been delegated to developers or third-party service providers, there is usually some ensuing media outcry or public relations battle (see Facebook's launch of Credits, Twitter's acquisition of Tweetie and Tweetdeck). There are clauses in the five-year Zynga and Facebook agreement where Zynga can terminate the deal if Facebook ever produces its own games. Assuming that developers feel comfortable building on a platform that also produces competing IP, the question after that is whether the social platform can provide value beyond the infrastructure, retail space and distribution that Android and iOS already offer. For now, Mobage, PapayaMobile, OpenFeint and others are offering social features along with payments and monetization support. ngCore is one unique differentiator in Mobage's favor. But what would really help developers though is cheap, cost-effective user acquisition. It's just too early to tell which one of these mobile-social gaming platforms on Android will gain the momentum and network effects to do it.

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The ngmoco:)-DeNA Deal Gets its First Real Test With Mobage Launch on Android

Kim-Mai Cutler

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