GREE and Mobage are brand names that don’t ring a bell with too many people (yet) as far as markets like the US or Europe are concerned, but these mobile social gaming platforms are hugely successful in Japan. The Tokyo-based companies behind these homegrown gaming networks, GREE and DeNA, reported some big financial numbers today.
DeNA (current market cap: US$6.4 billion) today announced sales reached US$457 million for the second quarter of this fiscal (through the end of September 2011), while operating income hit a mind-boggling US$203 million. That translates into 28% and 13% year-on-year growth, respectively.
While these numbers are impressive (especially because about 90% of sales come from game-related transactions), DeNA isn’t as strong on a quarter-by-quarter basis: from Q1 to Q2, sales have been flat (+/-0%), while operating income dropped 3%. Their financial report can be downloaded in English from here.
Competitor GREE didn’t have quarterly results to report, but they didn’t want to let DeNA steal the show: the company (current market cap: US$7.3 billion) has radically revised their earnings estimates for the fiscal year (which ends in June 2012).
GREE is now expecting sales to hit US$1.67 billion to US$1.8 billion for the current fiscal (up 40-44.4% from the previous forecast), while operating profit is expected to land somewhere between US$770 million and US$900 million (up 40-50%). All of GREE’s new numbers in English can be found here.
What’s impressive is that DeNA and GREE still make almost all of their money in Japan, on cell phones, and with games (avatar-related sales, in-game virtual items) only. Both companies started offering mobile games embedded in a social networking platform for Japanese feature phones around 2006/2007, with DeNA now boasting 32 million registered users in Japan, while GREE has over 26 million.
The social networks are in the process of internationalizing heavily and acquired or set up subsidiaries throughout the world. In the US, for example, DeNA acquired ngmoco last year for US$400 million (and set up Mobage in English on Android as a beta in summer), while GREE acquired Openfeint in April this year for over US$100 million.