Market Watch

DeNa to Launch Global Mobile Social Games Platform


Display Driver IC Forecast

DeNA, owner of leading Japanese games focused mobile social network Mobage Town, will launch a global platform for mobile social games in April 2011. DeNA hopes the new platform will expand its reach in Western markets beyond its Japanese stronghold.

Based on technology developed by the recently acquired Ngmoco (for $403m in October 2010), DeNA will offer developers a single platform to create games for iOS (iPhone, iPad, iPod Touch) and Android devices. Ngmoco's Ngcore development platform is now included in the Open Mobage Smartphone SDK (software development kit), currently available in private beta to 50 mobile games developers including Square Enix, Hudson, Gamevil, SGN and Take-Two Interactive.

DeNA has signed a deal with Samsung to preinstall the service on all Samsung Android handsets to boost its adoption on smartphones in Western Markets.

Analysis
Since launching games on its Mobage Town mobile social network in 2008, DeNA has seen its quarterly games related revenues rise to over $200m in Q3 2010. DeNA is on course to generate more than $1bn revenues ($700m from games) in 2010. DeNA built up an audience of around 10m monthly active users before it launched a freemium games platform on Mobage Town.  With this global strategy it is pursuing a different approach by making games the focus from the outset.

With almost all its revenues currently coming from the Japanese market, DeNA will hope this Western expansion enables it to continue to grow. Screen Digest believes DeNA's forthcoming platform will find an audience in the West. It is, however, unlikely to generate the same level of revenues per user as seen in Japan. In the mobile industry, Japan has long been a specific market where subscribers have proved far more willing to pay for and access mobile content than elsewhere.

Freemium business models are growing in popularity on the App Store. Screen Digest's most recent analysis of iPhone/iPod Touch charts showed that more than one third of the 100 top grossing games were offered initially for free and monetised via in app purchases and microtransactions.