DeNA, Gree Slump as Gamemakers Team Up on Marketing: Tokyo Mover

DeNA Co. (2432) and Gree Inc. (3632), Japan’s biggest social-game operators, slumped in Tokyo trading after gamemakers led by Sega Sammy Holdings Inc. (6460) said they would team up to promote each other’s titles for smartphones.

DeNA, operator of the Mobage network, plunged as much as 9.3 percent to 1,924 yen, headed for the biggest decline in more than three months. Gree dropped as much as 7.5 percent.

Sega, creator of Sonic the Hedgehog, developed a system to allow makers including Capcom Co. (9697) and Taito Corp. to display advertising of mobile app games by other members, Koji Ueda, a Sega spokesman, said by phone today. The Nikkei newspaper earlier today reported the alliance will allow the companies to bypass platforms such as DeNA’s Mobage and Gree. Gamemakers pay a commission to companies such as Gree and DeNA for games accessed through their platforms.

“Overall, we view this as negative” for Gree and DeNA, David Gibson, a Tokyo-based analyst at Macquarie Group Ltd., said in a note today. “Developers continue to shift their resources away and not use recently launched app marketing initiatives announced by Gree/DeNA.”

DeNA traded at 1,949 yen, down by 8.1 percent, as of 1:14 p.m. in Tokyo, extending its drop this year to 31 percent. Gree traded at 838 yen and has lost 37 percent this year, compared with a 30 percent advance for the broader Topix index.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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