Masaru Ohnogi, CEO of GCrest America, Discusses Japanese Social Gaming

We recently had the chance to play with GCrest's TinierMe, a virtual world dedicated to Japanese anime and culture, and we were pleasantly compelled by the authentic Japanese presentation and rich graphics. To follow up, I had a chance to visit with Masaru "Nogi" Ohnogi, the CEO of GCrest America and Emily Joffrion of Inner Circle Labs who's working with TinierMe to help promote the game in North America. We discussed the social elements of TinierMe, the formation of the business, a few key metrics and more. Read the interview after the jump. First off, for those of you who haven't tried the game, check it out here. TinierMe represents one of the first of a wave of Japanese games that are hitting Western shores and attempting to cut into the booming Facebook gaming market. The distinctly Japanese art style and user interface differ greatly from the current slew of Western games, and we at Social Times are taking particular interest and will be reporting on the growth of various Japanese social games in the weeks to come. Social Times: TinierMe seems to be aimed at fans of Japanese culture and anime fans specifically, so what are you doing to find and recruit those users specifically? Masaru Ohnogi: We have started by recruiting through targeted advertisements and cross-promotion from our other games. Emily: We'll also be doing promotion at Anime Expo, and we're looking into other places where we can visit and meet users when they're away from their computer. We want to remind them that we're around. Something I love about the TinierMe world is the fact that the game focuses on education about Japanese culture itself, rather than just theming the game with Japanese players. Events like the Sakura Blossoms and traditional Sword Fighting events are great for young players who want to experience cultural events like this but may not have the social skills or means to go out and see them for themselves. ST: Interesting that you're aiming at engaging with user's real emotions and interests by using this social game as a medium. Was it part of your original design goal to engage people in this way about Japanese culture, or was it a social game first and the Japan theme came along after? MO: The TinierMe game started in Japan, and is very popular as a game titled @Games. We wanted to bring this experience and animation style to the overseas market, and found that social gaming is a perfect way to start. This game was designed for the Japanese user and the fact that it is authentic was one of the first reasons we thought it would work overseas. Emily: We've been asked about how we differentiate from other similar Japanese games, and we see this as an echo of an authentic Japanese experience. This is a game being played by kids who have read manga all their life, and they are going to know the subtle nuances that make this truly Japanese. ST: So how did this game take off in Japan then? MO: In Japan, the game is called "@Games", and gained popularity by being one of the first great web game series. We saw that this was a great series to take over to the United States, but we needed to do some modifications. That's where I came in. ST: So what's your specific role and how did you personally get started on this project? MO: I was chosen by GCrest, our parent company, as the person to translate this business to North America. Some of my tasks were to examine the branding, modify the product and develop business relationships over here. Before this, I started a successful virtual currency company in Japan. ST: Interesting, so this initiative is still heavily guided from Japan. So how does your development and design work? Who's working on the project and from where? MO: I just head up the business side of things on this side. Many of our designers are all in Japan, and are very talented manga and anime artists that have to compete against other artists to get this role. We also have a small team here in US that works on the development of the product. ST: So the game includes a rich virtual store with thousands of items and a virtual currency that is awarded for almost every activity you take within the game. Can you tell us a bit about how well you're monetizing? MO: Well, we've just launched from Beta with more than 900,000 registered users in North America, and we continue to grow. TinierMe ARPU is currently three times higher than the American industry standard, and we have the ability to dial that up in a sense by controlling what items we offer and providing limited edition goods and events. We're looking to see what kind of response we get from users in English speaking countries compared to those in Japan. Our MAU numbers are very high for the American market at this point, but - to compare - our Japanese titles yield an ARPU which is seven times higher than the ARPU in TinierMe. ST: Japanese consumers have been able to make microtransaction purchases with their phone for years. It has been in the culture for longer than it has in America. Do you think this gives Japanese companies, and TinierMe, an edge in selling virtual goods? MO: The microtransaction culture in Japan is large, and has been growing. I think we understand it well. We do see mobile payments continuing to grow, but in fact the prepaid cards are the best revenue generator in Japan, especially for people that don't have credit cards. The problem with mobile payments is that you have to pay up to 50% of your money to carriers, so we'd rather use services that don't have that overhead. We'll be announcing some interesting things about monetization soon. ST: So what services are you using to monetize here in North America? MO: Here in the North American market, we find that the prepaid cards are not as popular as the offer wall and Paypal. We are interested in optimizing our business so that we don't have to pay any high commissions, so we're looking to some new companies, and thinking hard about Facebook Credits. ST: What about Offers? MO: 50% of our paying users use offers at some point, while 70% of paying users use direct payment at some point. ST: What technology for metrics? MO: NA always asks us about our technology and metrics and all that, but our tech is behind. Silicon Valley social gaming companies are constantly refining and building their technology, so in that sense we are still catching up to build great technology to help us monitor our metrics. We do have a backend system that helps us analyze the numbers. MO: We look at DAU, MAU, DAU/MAU and ARPU to understand our users best. We also look at retention, how many users come back the second week, because we find that users who come back the second week will stay for a long time. We do a lot of A/B testing with our metrics to determine what works and what doesn't. ST: How big is your company? MO: We are a small team that is owned by GCrest, who has 150 employees in Japan. That company is owned by Cyber Agent, a massive advertising company in Japan with over $1 Billion in sales each year, and have 40 sub companies in various areas of technology and advertising. ST: There was a different culture about using mobile, web and game consoles in Japan when I was there 5 years ago. People certainly weren't playing games on their PCs at home at that time. Has that changed? There has been a change, and we have seen more players playing Flash games and using the web. The mobile culture is still very prevalent and we definitely have ambitions to push our games to mobile at some point in the future.

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Masaru Ohnogi, CEO of GCrest America, Discusses Japanese Social Gaming

Neil Vidyarthi

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