When Kim first broke the news that Zynga was in talks to buy Draw Something developer OMGPOP, she noted that one other suitor was the Japanese social gaming giant GREE, which had already made a name for itself in buying U.S. gaming companies, picking up OpenFeint in April 2011 for $104 million.
Now that Zynga has, in fact, bought OMGPOP, where does that leave GREE? In a partnership with a local player, the advertising giant Dentsu. Announced just today, GREE says Dentsu will help promote its games, acquire content and potentially make other investments.
It’s telling that the announcement came less than 24 hours after Zynga confirmed its purchase of OMGPOP, a deal thought to be in the region of $210 million. It shows just how heated the competition is among social gaming companies right now for content and mindshare among users and investors.
GREE — whose social gaming network currently reaches around 190 million players with some 7,500 game applications — has yet to reveal many details of what, exactly, Dentsu will be doing to promote games, but for now it looks very much like an international play: not only has GREE made moves to expand its presence in the U.S. but it notes that Dentsu is active in 28 countries and “will use its global reach and expertise to promote the GREE brand internationally.”
In terms of M&A, the two say they will be making content acqusitions (let’s think of what other social gaming targets are out there at the moment); and they will also be making venture investments.
Again, for now, we don’t have any figures on the size of a potential fund, but one area that is likely to be a focus is mobile advertising and marketing: not only does that play to Dentsu’s strengths but is also an essential cornerstone for how social games have generated revenues to date. It’s also an area ripe for more innovative development beyond simple banners and other kinds of exisitng, in-app promotions.
Dentsu is no stranger to mobile, although some of its efforts have been decidedly under the radar (if not totally dormant) since being announced.
One of them was a partnership with Apple for its iAd mobile advertising effort, in which Dentsu became Apple’s exclusive partner to sell and develop ads for iAd inventory in Japan.
Although the iAd business appears to be growing, from its launch in 2010, it had a lot teething problems related to complaints about minimum ad spends and the kind of control that Apple had originally wanted to wield over ads, to the chagrin of brands and their marketing partners. More recently Apple has reportedly softened its approach with lower and more flexible pricing, among other changes.