DeNA's Ngmoco buy signals social gaming war

Neha Dharia/Ovum
20 Oct 2010
00:00

Ngmoco (Next Generation Mobile Company) has been bought by DeNA

The highest profile social gaming acquisition involving an iPhone games developer

DeNA has a mobile social gaming platform called Mobage Town with 20.5 million users and is an industry heavyweight in Japan with estimated revenues set to hit the $1 billion mark for 2010. DeNA has already acquired four social gaming service providers, but at $400 million US-based Ngmoco is DeNA’s highest profile acquisition so far and is strategically important in strengthening DeNA’s push into western markets.

Ngmoco, an iPhone games developer, is showing solid growth, having crossed the 50 million downloads mark on the App Store as of September 2010, and has over 12 million users on its Plus+ network across 119 games. It has also grown the business through a clutch of companies in the social gaming realm – Miraphonic, Freeverse, and Stumptown Game Machine.

Although DeNA is a leader in social gaming in Japan, the local market is highly competitive, particularly as western companies such as Zynga make inroads.

DeNA needed to ramp up international expansion to help maintain longer-term growth. Prior to Ngmoco, DeNA had acquired US Gameview studios which specializes in iPhone games. It has also invested in US Aurora Feint, which provides a 20% share and use of the OpenFeint platform to create mobile social games, and has set up a $27.5 million fund to invest in social gaming start-ups.

The beginning of the battle for mobile social gaming real estate

This can be seen as a strategy to counter Zynga’s increased presence in the Japanese market. Zynga has been going from strength to strength in Japan having recently acquired a series of Japanese start-ups including Unoh (a social gaming company), and also announced partnerships with social networks such as GREE and Mixi, as well as mobile carriers. Moreover, Zynga recently raised $147 million in funding from SoftBank, one of the largest telecoms operators in Japan and the main shareholder in Yahoo Japan.

Related content

Comments
No Comments Yet! Be the first to share what you think!