Playphone Bets a Mobile-Social Gaming Network Will Help it Shift From a Legacy Feature Phone Business

San Jose’s Playphone is one of a handful of companies that sees freemium mobile gaming as a ticket to a smooth transition between the feature phone and smartphone era.

The company, which has a legacy feature phone business with 35 million registered users, is rolling out a mobile-social gaming network that will ideally pave the way to a more sustainable business in the future.

It’s facing a very fierce competition with rivals like DeNA, GREE, Heyzap, PapayaMobile and more.

Playphone’s chief executive Rob Czerny seems to be playing up the network’s features against DeNA and GREE’s formidable capital commitments to making their global mobile-social gaming networks succeed. Playphone’s network works across Android, iOS, HTML5 and Flash and it supports a synchronous multiplayer mode for live games like rounds of poker. There’s also single sign-on with Facebook.

But the one point where Playphone can differentiate itself is probably in carrier billing for long-tail markets. Because of its feature phone business and international reach, the company has relationships with about 100 carriers throughout emerging markets. If there aren’t payment options in the iTunes store or Android Market for a specific country, Playphone can kick in with its own ones through an HTML5 layer.

That’s a bit different from GREE and DeNA, which are strong in Japan (naturally) and are only now really focusing on the West and China. PapayaMobile, likewise, focuses on the West and China.

Playphone’s new network, which it just formally launched this week has about a half-million monthly actives on smartphones. Czerny expects that to double this month and he expects to add about one game a day in the first quarter.

“I’m not afraid of these other companies. Facebook is a social network, but it’s one social network. We connect to all social networks,” he said. “They won’t connect to QQ or Orkut. As long as we stay independent, we can be more powerful than a single system. And we have more experience in global distribution.”

Backed by four venture rounds with participation from Menlo Ventures, Cardinal Venture Capital, Coral Group, and Scale Venture Partners, the company has raised an undisclosed amount of funding since being founded in 2004.

Its legacy business’ revenues for selling music, graphics and video content on feature phones may sound high, but keep in mind that that era required expensive partnerships with carriers. Other standalone game developers like Glu Mobile and Electronic Arts are facing the same dynamics in trying to grow a smartphone business while winding down a feature phone one.