GREE, the $4.4 billion mobile gaming company from Japan that’s trying to break into Western markets, is attempting to grow its gaming platform through a new program for indie developers. Called GREE Loves Indies, it will promote different indie games every month. The Tokyo-based company is inviting indie developers to submit games for a four- to six-week launch and marketing campaign, with the first title by this holiday season.
Why? Basically, the very biggest freemium gaming companies, including Zynga and DeNA, are in an all-out competition to have the biggest network of mobile gaming titles that they either develop internally or publish on behalf of other studios. After acquiring mobile-social gaming platform OpenFeint for $104 million last year, GREE opened its own platform in May of this year to 169 countries. Shortly afterward, they acquired San Francisco-based developer Funzio for $210 million.
Building a larger gaming platform is a way of de-risking the very unpredictable, hits-driven nature of the business. By taking a revenue share of third-party titles, these companies will be able to cushion flops and help fund more experimental titles that might be too risky to build in-house. They also accumulate network effects for distributing first-party titles. (Game designer Tadhg Kelly had a great piece over the weekend explaining how mobile platforms are just as fraught with risk as the Facebook platform.) Having a large network of first and third-party titles is insurance against this.
In GREE and DeNA’s case, building a platform is a matter of replicating and modifying a strategy both companies have used successfully in their home market of Japan. In Zynga’s case, this is the first year the company has started publishing games developed externally. It’s a delicate line the San Francisco-based company has to walk, after becoming infamous for making games that are similar to popular ones created by rivals.
GREE said earlier this year that it made $29 million in first-half revenue from its U.S. studios. But the company has also spent millions on marketing and on staffing up to more than 400 people (including employees that came through the acquisition). So the profits on the U.S. efforts are slim, if they exist at all right now.