Japanese mobile social gaming company DeNA, traded publicly on the Tokyo Stock Exchange, is reported massive first quarter profits yesterday (August 5th), with heavy implications that there may soon be a new social sheriff in town. Revenue for their first fiscal quarter reached $279 million, up 175% year-over-year. In comparison with leading U.S. competitor Zynga, who’s firsthalf of 2010 saw $350 million in revenue, DeNA is well on track to not only topple their empire, but to see $1 billion in sales before the year’s end.
“Becoming the premier social gaming company appears extremely feasible,” said Tomoko Namba, DeNA CEO.
These numbers come at the cusp of a social gaming revolution, which sees big names vying for the lucrative in-game economies and advertising dollars. As I had previously reported , Google recently purchased a 20% stake in Zynga, the leading U.S. social gaming company and creators of FarmVille, the soul-sucking Sim knockoff adored by over 61.6 million users. Their involvement with social gaming doesn’t end there, having recently embarked with fellow heavy hitters Playdom (recently acquired by Disney) and Playfish (recently acquired by Electronic Arts) to create a social gaming service rumored so far as “Google Me” . Their partnerships mark the beginning of what is sure to be a Rocky and Apollo battle with Facebook, as the two vie for the U.S. social market. While they wage war, DeNA is making their comeuppance like Clubber Lang, and have become a prominent threat for title contention.
In 2006, they released Mobage-town, a thriving virtual world. It is currently the leading social networking site in Japan with over 11 million members. Users create an avatar, which has its own living space. They are then able to decorate their space and purchase clothing for their virtual counterpart. They are also able to exchange messages with friends, share music, blog, and download a massive variety of free games, among a plethora of other things. While the service and games may be free to use, it acts as a vessel for avatar upgrades, in-game microtransactions, and virtual goods purchases, which have helped drive DeNA's soaring financial gains.
Similarly, they readied themselves for U.S. mobile distribution late in 2009 when they bought a 20% share in gaming company Aurora Feint’s OpenFeint platform, a gaming service with over 10 million users. OpenFeint is relatable to Xbox Live—complete with friend lists, chat services, game leaderboards—and is the American equivalent to their Japanese Mobage-town. Their introduction into the American iPhone gaming market earlier this year fueled the majority of DeNA’s first quater profits, coupled with the continued prosperity of its social and mobile offerings in Japan.
Moving forward, DeNA also intends on releasing PC games through Yahoo! Japan, under the aptly dubbed Yahoo! Mobage. This service launches October 1st. They have yet to reach an agreement with Yahoo! U.S.