GREE, DeNA and the Mobile Social Gaming Wild West

By Azam Khan 

Mobile social gaming network GREE has recently announced its plan to launch a cohesive mobile gaming platform by mid 2012. In addition, the Japanese giant is also projecting net sales of around $1.7B, a 40 percent jump from the firm’s previous projections. This news comes at a time when DeNA is aggressively laying out its plans for Mobage Global after achieving a net income of around $105M for the quarter. More after the jump.

According to GREE, the network is gaining 3.8 users per second and boasts one of the highest ARPUs in the industry. GREE currently has over 150M players with roughly 7100 games and is in a good position to provide its partners a platform to work on. Their strategy is slightly different than DeNA which is actively building first party games, and more like PapayaMobile which stopped production of its first party games to focus exclusively on its platform.

GREE’s mobile gaming network announcement lacks details but the CEO of GREE Intl (who replace Jason Citron recently) stated, “this new platform allows our partners to focus on increasing engagement and revenue, while continuing to offer the most comprehensive free-to-play gaming experience,” said Naoki Aoyagi, CEO of GREE International. “The new platform will leverage OpenFeint and GREE assets and will bring together Western and Asian mobile social markets with a goal of reaching over one billion users.”

GREE has been hiring extensively for its US office, hiring people such as ex-Google Japan exec Jori Pearsall and Shanti Bergel of EA/Playfish. Ethan Fassett of Playdom has also joined as well as ex Glu Mobile and IUGO exec Sarah Thomson. GREE’s current financials reveal a $216 million in profit for over this time, representative of a 168 % growth over where they were at this time last year. Along with today’s financials, the company recently announced revised earnings estimates for the fiscal year (ending June 2012), which is up more than 40 percent from previous forecasts. GREE now expects its operating profit to reach approximately $900 million, revised from $770 million (U.S.).


Competitor DeNA purchased ngmoco for $303M upfront plus $100M in potential future earnouts, whereas GREE’s purchased OpenFeint for $104M. Compare these with EA’s acquisition of JAMDAT for $680M in late 2005 that eventually resulted in a $386M write-off for EA 4 years later.

Mobage Global has been live on Android as beta and is currently being launched in China. In addition to the social mobile gaming platform, DeNA is also continuing to strengthen its social game development capabilities and has planned a bunch of titles for release including its own titles, Dragon Craft and Skyfall RPG, as well as porting existing iOS hits like Pocket God and TinyCo’s Tiny Chef.

Having acquired ngmoco, Gameview Studios, and the recent Vietnam-based Punch Entertainment and Chile-based Atakama Labs, we can expect a massive flurry of casual titles to be released in the upcoming year. DeNA also has joint ventures setup with Namco Bandai and Grasshopper that it will leverage in the creation of new game design patterns and recruiting new staff members.

Mobage’s iOS version is due out near the end of 2011 after the Android launch scheduled for this month. Mobage currently has 32M players according to DeNA – a number it will aim to increase via aggressive marketing pushes to hit its goal of generating $100M Moba-coin transactions per quarter.  DeNA has been doing quite well, setting record financial figures back to back for 8 consecutive sets. Although net sales, operating income and net income were up year-on-year, all 3 failed to hit the Q1 quarter earnings which ended on June 30th.

Mobage has published 163 games in Q2 vs 49 in Q1 although DeNA mentioned that its games in Japan hadn’t monetized as well as they could have. Despite these set backs, DeNA is aiming to release card-battle games – a popular genre in Japan.

DeNA is still in a good position to make an impact in the market and has been actively hiring executives such as the CMO from Mattel and a COO from Current TV. DeNA also setup a new publisher office in Singapore to accompany those already setup in China and Korea. DeNA has a whopping total of about 400 developer staff worldwide with plans to hire 1000 more. In total the staff is close to 1300 people.

The challenge remains for both companies to technically create a platform that can integrate engines and frameworks to encompass a variety of game play types. DeNA is using its ngcore engine and leveraging ngmoco’s Plus+ network whereas OpenFeint has operated relatively independent up till now. In addition, both companies are challenged to head a global workforce and have differing management cultures which could explain OpenFeint’s rapid staff replacements.

It’ll be interesting to see how both companies play this out. Check out my old post on the eastern front here.