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Japanese Social Mobile Games Company DeNA On Track To Top $1 Billion In Revenue

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The Japanese gaming company DeNA, which is traded on the Tokyo Stock Exchange, reported robust first quarter earnings today.

For its fiscal first quarter DeNA’s revenue reached $279 million, up 175% compared to the same quarter last year. Its operating profit increased by 282% to about $138 million over the first quarter of 2009 (according to the company’s own currency conversion from yen to U.S. dollars).

Of total revenue, 84% was derived from social games which the company defines as games that have social sharing, leaderboard and related features, including those that are played over mobile phones. (DeNA did not break out revenue from sales of in-game advertising, ad-supported games and paid game sales.)

By comparison, a top competitor to DeNA in the U.S., Zynga is rumored to have first half of 2010 revenue of $350 million (half of which is operating profit) and projected revenue of at least $1.0 billion for 2011.

DeNA has plans to introduce games for PC use via its partnership with Yahoo! in Japan.

Its Yahoo! Mobage (pronounced yahoo moe-buh-gay) games channel is due for release on October 1st. But the company plans to focus on sales of games for smartphones, including via its MiniNation store and the iPhone in the U.S. in the near-term. It has not struck a partnership with Yahoo! in the U.S. (yet).

DeNA’s first quarter earnings were fueled by its entry into the American market and debut on iPhones in 2010, an increase in the number of social and mobile game titles it sold, and ongoing growth in its sales of social and mobile games and avatars in Japan.

Last year (fiscal 2009) DeNA reported revenues of $517 million and operating profits of $228 million. If the company’s 2010 first quarter results are any indication, it is on target to become a billion dollar revenue (or more) mobile and social gaming business.

Preparing to sell its games in the U.S. this year, the company took a 20% stake in the gaming platform company Aurora Feint in 2009 to prepare to do so, and speed distribution.

Aurora Feint’s OpenFeint platform, a DeNA spokesperson explained, is almost like an X-box live for phones. The company created a mobile community of gamers in North America that resembled gamer communities DeNA previously created in Japan.

DeNA also acquired IceBreaker, a U.S. game developer and publisher in 2009.

Competitors to DeNA in the U.S. include Zynga, and the mobile and social gaming divisions of technology, entertainment and gaming giants.

In the past year, Google, Disney and Electronic Arts, respectively, acquired social gaming companies Slide, Playdom and Playfish.

In a company earnings statement, Tomoko Namba, the chief executive of DeNA said, “Becoming the premier [global] social gaming company appears extremely feasible,” lauding the company’s duality as a game developer and platform operator.

DeNA also plans to promote mergers and acquisitions, and make investments through its approximately $27.5 million Incubate Fund No.1 Limited Partnership, a venture capital fund focused on social gaming.

DeNA’s most popular game titles in the U.S. are all free mobile games: Bandit Nation, MiniNation BalloonHunt, Mini Solitaire and Mini NumberPlace.

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