Sometimes we forget in the US that what is popular here doesn’t translate identically around the globe no matter how much we assume it will. Likewise, companies that are successful in other parts of the world eventually begin viewing the US market as a great opportunity to bring their “secret sauce” business to the biggest economy in the world. Such is the case with social networking which is fairly ubiquitous in the US — and many other regions — but is less pervasive in Japan, the world’s number 3 economy after the US and China. According to a recent article by eMarketer, Japan’s “niche” social network business model is a “mix of free and paid mobile social games and microtransactions.”
Mobile Social Network Users in Japan and the US, by Age, Oct 2010 (% of mobile phone owners in each group)
The article cites an October 2010 survey conducted by the UK’s Office of Communications (Ofcom) that shows that mobile social network penetration in both countries is the same — 22% of mobile phone users — while the three leading Japanese social nets have achieved increased user adoption and rising profits “by offering hundreds of free and paid games, encouraging playing with and competing against friends, enabling micro-transactions for in-game upgrades and maintaining leaderboard rankings.”
As expected this homegrown success is leading Japanese social networks to look towards duplicating their success in the US. One of the country’s largest social networks, DeNA’s Mobage-town, heavily incorporates social gaming into it mobile platform. In the past 18 months the company has made a series of acquisitions and investments in US game makers including:
* ngmoco: this San Francisco-based social gaming company was purchased in October 2010 for up to US$400 million;
* Gameview Studios: this Mountain View, CA-based social gaming company was purchased in September 2010 for an undisclosed amount;
* Icebreaker: this US-based mobile social games developer was acquired in October 2009 for an undisclosed amount; and
* Aurora Feint: this developer of a mobile SDK platform for the iPhone received an undisclosed investment in October 2009 for a 20% stake in the company.
The above series of acquisitions demonstrates a commitment on the part of DeNA to expand its footprint in the US market. After its most recent acquisition of ngmoco the two combined companies announced its plan to release a new gaming platform, ngCore, in April 2011 on the Android OS.
We believe that 2011 will be a very active year in the mobile gaming sector as more foreign companies, from Japan as well as China, will continue to make strategic acquisitions in the US. At the same time US social gaming giants such as Zynga will be on the lookout for opportunities to strengthen its foothold in the major Asian markets. Just like DeNA has been snapping up US-based companies, Zynga has had a similarly active year with numerous acquisitions of local gaming companies in Japan and China. （Source：digitaleastasia）