Ngmoco’s Young Gives a Saucy Rejoinder to Mobage Critics as Android Gaming Network Comes Out of Beta

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By Kim-Mai Cutler Comment

Days after DeNA’s new Android mobile-social gaming platform Mobage came out of beta, the company’s U.S. subsidiary ngmoco:) is coming out swinging against critics who are skeptical that the Japanese gaming giant can make its business model work globally.

Early on, while the Mobage platform was still in beta in the U.S., several bonafide hits from the iOS world like Zombie Farm were seeing between just 5,000 and 10,000 installs on Android — a point competitors like China’s PapayaMobile were more than happy to jump on.

But ngmoco:) chief executive Neil Young pointed out that the company has tweaked its platform enough that its games are now rising up the Android charts. Zombie Farm is now the #3 free game in the Android Market in the U.S. and has between 500,000 and 1 million installs while Pocket Frogs cracked the 100,000 to 500,000 install range over the weekend.

“That criticism is coming from a competing platform with a whole bunch of shitty games,” Young said. “What PapayaMobile said was a little bit mean-spirited, whereas my statement about them having shitty games is just fact.”

Young said the company had made more than 100 changes to the Mobage product since it entered beta in July. He said user flow was initially a challenge as users had to download a Mobage app before they could play the game. Now, he says there’s a Mobage service application embedded inside of all of the games on the network. When users download a game on the platform now, there’s a shortcut inside to the Mobage network.

He added that just because Japanese consumer spending habits on mobile games are still fairly different from behavior in Western markets, it doesn’t mean that users here won’t follow the same arc.

“It’s easy to say that Japan is like the Galapagos Islands and that it has no bearing on what will happen in the U.S.,” he said. “But if you look at U.S. behavior, it looks eerily similar to what happened to Japan in the mid-2000s.”

ngmoco:) is under pressure to deliver this quarter. One hundred million dollars of the $403 million maximum acquisition price DeNA agreed to pay for the company last year is contingent on its performance by December.

On top of that, DeNA said in its most recently quarterly earnings report that its goal for the Mobage global platform was to reach $50 million in Moba-coin consumption during the quarter ending in March of next year. Ultimately, it wants to see $100 million in Moba-coin spending per quarter and an iOS version of the network should be out by November of December. Moba-coins are Mobage’s cross-game currency. (When Mobage comes to iOS, Mobacoins will only work with the game that the user purchased them with, since Apple doesn’t allow cross-game currencies.)

It’s understandable why some competitors would be fearful of a DeNA-backed mobile gaming network. Because of its parent company, ngmoco:) has deep pockets to attract developers on terms that are more favorable to them and it’s signed up dozens over the last few months (see below).

DeNA is likely to be more willing to stomach losses over time to acquire market share and had 66.5 billion yen ($851.3 million) in cash and cash equivalents at the end of the most recent quarter. Other competing networks like PapayaMobile and Heyzap are capitalized with first or second rounds of venture funding.

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