DeNA’s CEO Sees Facebook, Zynga as Potential Partners
DeNA Co., Japan’s biggest developer of social games for mobile phones, may partner with Facebook Inc. or Zynga Game Network Inc. as the company seeks to expand overseas, Chief Executive Officer Tomoko Namba said.
“There’s a real possibility of a marketing alliance with Facebook to grow our customer base, because they focus on real- world connections between people while we target virtual relationships,” Namba said in an interview in Tokyo on Nov. 9. “Zynga could be a potential partner as a game developer for our platform,” she said, without giving further details.
DeNA has more than 21 million users in Japan and aims to quadruple sales in four years by targeting U.S. consumers who use smartphones to play games. Shipments of game-capable handsets are set to rise 11 percent to 1.27 billion this year, according to market researcher iSuppli Corp.
DeNA rose 1.1 percent to close at 2,478 yen on the Tokyo Stock Exchange, extending its gain this year to 35 percent. The benchmark Nikkei 225 Stock Average has lost 6.5 percent in the period.
The company’s sales will climb to about 400 billion yen ($4.9 billion) in the year ending March 2015 from an estimated 100 billion yen this fiscal year, Namba said at a briefing on Nov. 1. Overseas operations will account for about half the revenue, compared with almost zero now, she said at the time.
DeNA earlier this month reported net income rose 17 percent to 7.64 billion yen in the three months ended Sept. 30, as sales increased 12 percent to 27.1 billion yen. The company cited demand for virtual goods, in-game advertising and avatars, which accounted for about 86 percent of its sales in the quarter.
The Tokyo-based company agreed last month to pay $400 million for Ngmoco, a builder of games for Apple Inc.’s iPhone, to create the world’s largest mobile social games company. The deal is DeNA’s third involving a U.S. company in the past year, including last month’s purchase of Gameview Studios Llc.
The acquisition is designed to help DeNA create a system that will let developers make games that run on both Apple and Google Inc.’s Android operating systems, according to the company. Ngmoco will also help DeNA make its Mobage Town gaming site into a global service, the company said.
Games played on social networks are typically free, with the makers of the titles generating revenue by selling virtual goods such as body armor and machine guns for DeNA’s most popular game, “Bandit Nation.” Mobage members play titles made by DeNA and third-party developers and get free access to social networking features such as blogs, e-mail and avatars.
In “Bandit Nation,” users battle criminal bosses and other players for treasures and virtual currency. Players can also band together and take on rival gangs. Virtual police prevents advanced users from preying on beginners.
Zynga’s “FarmVille,” where users pretend to grow vegetables by buying equipment, is Facebook’s most popular game with more than 55 million users, according to AppData.com, a website that tracks application use on the social networking portal. “Bandit Nation,” released on Facebook in May, was not in the top 1,000 ranking.
DeNA aims to increase global subscribers to about 200 million in four years, compared with 12 million in Ngmoco’s network, Namba said.
“For us to be a global player, our users need to measure in the hundreds of millions,” she said.
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