DeNA And GREE: My Perspective On Japanese Social Games Going Global

By Serkan Toto, PhD www.serkantoto.com

About Me

•  Tokyo-based web, mobile and gaming industry consultant •  Advisor for startups in Asia and the US •  Japan contributor for TechCrunch.com •  Personal website: www.serkantoto.com

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Email: totoserkan AT gmail.com

Visit My Website For Free Information On Japan’s Social Game Industry (http://www.serkantoto.com)

Question 1: Do you really see millions of users in the US, Europe, and Asia prefer playing games on GREE and Mobage over Facebook and the others?

Question 2: Do you really see China allowing game platforms from Japan to play a crucial role in its domestic market?

Opinion: “GREE and DeNA are poised to fail outside Japan - at least as platform providers.” (Note: I hope I am wrong.)

Just a few pointers. There are many more.

Point 1: Japan-Only Success Factors

•  Key success factors that fueled DeNA and GREE‘s growth in Japan don‘t apply elsewhere.

•  Examples: •  Carrier billing •  Game-friendly society •  Mobile-centric users •  Japan‘s ARPU for social games is unique

globally •  Fast, reliable 3G networks (example: in SEA) •  Affordable mobile data plans

Point 2: Popularity of Japan-Specific Games

•  The biggest social games in Japan are card battle games: acceptance abroad is uncertain. First titles from Japanese game firms flopped.

•  Genres like dating simulations or social horse racing games difficult/impossible to transplant.

•  Game design is heavily influenced by Manga and Anime culture.

•  US and European game developers have caught up/overtaken their Japanese counterparts.

Point 3: Heavy Competition In Mobile Social

•  Incompatibility between Japanese and foreign management styles and business cultures is well documented in economic literature.

•  Example from the social game industry: the Openfeint <-> GREE case from September 2011.

•  Integration of startups (Openfeint, ngmoco) and listed large-cap companies (GREE, DeNA) makes things even worse.

Point 4: Japanese Management Is Unique

•  Fact: in the entire web and mobile business history, absolutely no Japanese company succeeded abroad.

•  Example: NTT Docomo‘s i-mode. But there are many, many more.

•  Nintendo and Sony PS comparison doesn‘t count (the social game market in the 2010s has nothing in common with the video game market in the 1980s/1990s).

Point 5: History

•  Being successful in Japan and understanding mobile does not automatically lead to success outside the country, as DeNA and GREE suggest (see point 1).

•  Zynga got burnt in Japan even though they have acquired a startup, teamed up with local companies (SoftBank Mobile, Mixi), and clearly know how to do social games. -> similarity?

Point 6: No Causality

Thank you for listening! Questions?

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Twitter: http://twitter.com/serkantoto

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Email: totoserkan AT gmail.com