1. China
Social
Gaming
Market
Entry
Study
Analysis
and
comparison
of
Japan’s
GREE
and
DeNA
strategies
July
2011
By
Alexei
Poliakov
(analyHca1st.com)

2. China
Market
Strategy:
GREE
vs.
DeNA
China
Office
Strategy
Overview
Product
Distribu9on
Partners
Social
networks
Developers
Mobile
Operators
Handset
Makers
Opened
office
in
Enters
China
through
-­‐ Localized
version
of
Strategic
alliance
with
Partnership
with
online
Will
leverage
The9’s
Reportedly
in
talks
with
Beijing
in
2011
in
partnerships.
Leverages
OpenFeint,
a
mobile
China’s
biggest
social
game
developer
and
exisHng
relaHonships
some
vendors
but
no
order
to
be
partners’
exisHng
social
gaming
network
Tencent
operator
The9,
who
with
leading
announcements
so
far.
strategically
distribuHon
channels.
Focus
plaUorm
(a.k.a.
(~600m
users)
to
launched
OpenFeint-­‐ operators.
The9
is
GREE
close
to
its
on
spreading
its
OpenFeint
“Gree
PlaUorm
for
enable
the
flow
of
powered
“The9
Game
reported
to
be
partner
Tencent
plaUorm
among
developers
Smartphone”)
games
between
China
Zone”
service
and
who
developing
a
mobile
rather
than
building
a
user
-­‐ Localized
games
and
Japan
and
expose
has
R&D
staff
of
300
for
gaming
plaUorm
base
directly.
Taps
into
local
from
Japan
Gree
PlaUorm
for
in-­‐house
development.
along
with
three
developer
talent
to
source
Smartphone
in
China.
operators.
hit
game
Htles
for
its
Japan
With
The9
launched
the
operaHons.
PosiHons
itself
$100m
Fund9
to
fund
as
a
mediator
between
games
that
“move
from
China
and
Japan
markets
to
iOS
to
Android.”
maximize
distribuHon
and
moneHzaHon
for
both
Will
co-­‐invest
with
Chinese
and
Japanese
Tencent
in
local
developers.
developers
to
encourage
the
adopHon
of
OpenFeint
in
China
In
Shanghai
from
Direct
entry
in
2006
and
-­‐ Ngcore
social
Operates
mobile
SNS
In
He-­‐up
with
local
Relies
on
NTT
Announced
a
He-­‐up
2006
M&A
entry
(acquisiHon
of
gaming
engine
TianXia
with
12m
partner
NetDragon,
who
DoCoMo’s
with
Samsung
to
pre-­‐
leading
at
that
Hme
SNS
-­‐ Social
network
built
registered
users.
is
listed
on
HK
Stock
introducHons
to
install
Mobage
app
on
TianXia)
in
2009
didn’t
pay
on
top
of
91.com
Exchange
and
operates
mobile
operators.
vendor’s
smartphones
off.
In
2011,
changes
(mobage.com.cn)
Builds
a
social
mobile
app
store
worldwide,
including
DeNA
strategy
by
finding
local
-­‐ Localized
games
community
on
top
of
91.com.
NetDragon
will
China.
partner
to
build
local
user
from
Japan
and
91.com
(91Game
use
DeNA’s
Ngcore
community
and
spread
games
developed
in
PlaUorm),
a
mobile
app
engine
to
develop
Ngcore
social
gaming
engine
China
store
operated
by
games.
among
developers.
Makes
NetDragon
investments
in
local
game
In
late
2010,
put
developer
companies.
approximately
$12m
in
two
funds
co-­‐operated
by
Japan’s
Cyber
Agent
Ventures
and
JAIC
to
invest
in
small
third-­‐
party
developers
from
China

3. SWOT
Analysis:
GREE
vs.
DeNA
GREE
DeNA
Strengths
Weaknesses
Strengths
Weaknesses
• Strategic
alliance
with
• Partnership
with
• Long
presence
in
China
• Lack
of
iniHal
partners
the
Tencent
Tencent
is
not
exclusive
(learned
from
its
own
caliber
of
Tencent
• LucraHve
high-­‐ARPU
and
can
be
copied
by
mistakes
with
TianXia)
• Low
brand
awareness
of
user
base
in
Japan
rivals
• TianXia’s
exisHng
12m
mobage.com.cn
among
(alracHve
to
Chinese
• No
direct
control
over
user
base
Chinese
users
game
developers)
the
distribuHon
channels
• Considerable
degree
of
• Focus
on
smartphones
• War
chest
to
fund
• Small
knowledge
about
control
over
the
leaves
out
of
picture
the
expansion
plans
and
experHse
in
China
distribuHon
large
feature
phone
and
• Localized
version
of
• Non-­‐existent
sales
force
• High-­‐ARPU
user
base
in
PC
segments
OpenFeint
is
ready
(The9
• Focus
on
smartphones
Japan
(alracHve
to
has
a
five
year
license
leaves
out
of
picture
the
Chinese
game
deal)
large
feature
phone
and
developers)
PC
segments
• War
chest
to
fund
expansion
plans
OpportuniHes
Threats
• Tie-­‐up
with
Samsung
• AdopHon
of
OpenFeint
• Reliance
on
by
Tencent
(lock-­‐in)
intermediaries
to
deliver
OpportuniHes
Threats
• Rapidly
growing
the
product
–
risk
of
• Going
directly
to
end-­‐ • Rival
mobile
social
game
smartphone
market
exposure
to
potenHal
users
by
building
own
plaUorms
• Booming
digital
goods
shins
in
power
to
the
social
networking
service
• SubstanHal
investments
market
channel
• Booming
smartphone
to
build
business
from
• Rival
mobile
social
game
and
digital
goods
scratch
can
be
lost
due
plaUorms
markets
to
bad
execuHon
• Slow
execuHon
of
its
strategic
alliance
with
Tencent

4. RecommendaHons
/
Possible
Scenarios
GREE
DeNA
• Gepng
developers
on
board
with
OpenFeint
is
key
• DeNA
should
merge
or
direct
remaining
traffic
from
to
success
for
Gree
in
China.
In
addiHon
to
TianXia
social
network
to
its
new
venture
leveraging
Tencent
and
The9
partnerships
to
full
mobage.com.cn
potenHal,
Gree
should
spread
the
adopHon
of
• DeNA
needs
more
distribuHon/
promoHon
He-­‐ups
in
OpenFeint
across
the
rest
of
value
chain.
For
China
to
catch
up
with
Gree-­‐Tencent
alliance
example,
co-­‐market
Gree
for
Smartphone
PlaUorm
• Japan
with
its
high-­‐ARPU
users
is
very
alracHve
on
mobile
operator
and
Android
smartphone
market
for
Chinese
developers;
DeNA
as
well
as
maker’s
developer
portals
(offering
localized
SDK
Gree
should
offer
streamlined
billing,
adverHsing,
and
tutorials
for
download,
organizing
developer
analyHcs
and
localizaHon
soluHons
to
enable
events
and
workshops).
painless
distribuHon
and
moneHzaHon
of
Chinese
• Hiring
local
sales
and
markeHng
staff
is
another
games
in
Japan
without
the
need
for
developers
to
opHon
to
consider.
establish
a
presence
in
the
country
(China’s
Rekoo
is
• Gree
should
streamline
API,
billing
and
localizaHon
a
good
example
of
success
in
Japan
but
they
had
to
issues
in
order
to
start
benefipng
from
He-­‐up
with
branch
out
to
Japan
to
take
care
of
all
the
issues).
Tencent
(the
process
should
be
seamless
for
• DeNA
should
offer
Chinese
game
developers
developers
and
automated
as
much
as
possible).
distribuHon
on
PC-­‐oriented
Yahoo!
Mobage
service
For
example,
integraHng
MyGengo
API
for
rapid
in
Japan
in
addiHon
to
mobile-­‐only
Mobage
as
a
localizaHon
of
games.
differenHator
from
Gree
(many
Chinese
developers
• Gree
should
outsource
some
in-­‐house
game
target
Facebook
and,
thus
familiar
with
social
PC
development
to
China
(Capcom’s
case
should
serve
game
development)
as
an
example)
• DeNA
should
boost
its
investments
in
local
small
third-­‐party
developers
to
win
more
supporters
for
Ngcore
engine.