DeNA’s Ngmoco, maker of the Android gaming network Mobage, sees layoffs amid restructuring

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By Kim-Mai Cutler Comment

Ngmoco, the startup DeNA bought two years to build out its mobile gaming platform in the West, has had layoffs amid corporate restructuring. While Ngmoco didn’t share the number of layoffs, we heard it was around 30.

DeNA bought the company in late 2009 for up to $403 million as part of a big push to break into Western markets. While DeNA and its rival GREE have remarkably profitable businesses in their home market of Japan, they need a way to grow. Ngmoco’s mandate was to build out the English-targeted arm of DeNA’s mobile-social gaming network Mobage.

But Ngmoco was a bit slow to roll out Mobage partly because of the technical complexity of the task, and we’ve heard the company was not able to make its first earnout date. DeNA’s additional headcount in the U.S. and China also ate into the company’s profits over the last year. The Tokyo-based company said this week that its net income declined by 25 percent to over 6.08 billion yen ($79.2 million). It reported those numbers at the same time its archrival GREE tripled net income year-over-year to $167 million.

Ngmoco says that in the process of building out Mobage and learning from DeNA’s prowess in its home market of Japan, the company has ended up with some redundancies.

“Armed with the insights we’ve gained from both the Western & Japanese markets and after completing the integration of a series of key acquisitions, we’ve organized our global operations to best support & deliver on our mission to build the leading global social-mobile game platform company,” said Neil Young, who is Ngmoco’s chief executive and a director at DeNA. “We’re incredibly proud of our company & our products. We thank everyone that has helped us get to where we are today.”

The whole Ngmoco restructuring is like a bit of deja vu. When competitor GREE bought competing mobile-social gaming network OpenFeint for $104 million last year, it was not too long before the company’s founder Jason Citron was replaced as chief executive officer. Not long after that, GREE said it would be launching a totally new mobile-social gaming network, using parts of OpenFeint’s underlying technology and platform.

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