Japan’s GREE Picks Up Mobile-Social Gaming Network OpenFeint for $104 Million
It looks like Japan’s GREE is feeling the heat from rival DeNA to break into the U.S. market for mobile-social gaming.
The company said today that it acquired Burlingame-based OpenFeint for $104 million, which follows on DeNA’s purchase of ngmoco:) last fall for $400 million. The idea is that together, GREE and OpenFeint will build better distribution channels for mobile game developers globally, although their solution will not be a unified global network, but rather a set of locally-targeted services.
OpenFeint provides social features for games like leaderboards and ways for players to share achievements with others. It says it reaches 75 million users through 5,000 games and it produced a net loss of $6.6 million through the end of the fiscal year 2010, according to financial documents accompanying the announcement. It had net sales of $282,500. Chief executive Jason Citron and the rest of the employees will stay on board with incentive packages to keep them.
Rival DeNA will actually pick up just over $19 million through the acquisition as it had a 18.3 percent stake in the company, according to the documents. Citron owned 17.4 percent of the company, meaning he’ll bring in around $18 million. YouWeb LLC was the largest shareholder with a 24.8 percent stake, while The9 Limited owned 14.3 percent and Intel Capital owned 10.7 percent. Intel invested $3 million in OpenFeint last fall and the fund looks like it will make a nice exit by making more than triple the cash it invested back.
It’s a smart time for OpenFeint to sell. Not only does it have competition from a natural incumbent, Apple’s Game Center (flawed as it may be), Facebook has gradually built a set of tools making it easier for mobile developers to acquire users such as single sign-on. While Facebook’s mobile platform does not have a formidable footprint quite yet, deeper viral channels for mobile apps have been on roadmap for a very long time and we would not be surprised to see an announcement around this at the next f8. Facebook’s games team and the biggest mobile developers have been deepening relationships over the past few weeks and we had heard at the beginning of the year that the company was experimenting with Credits through HTML5.
It was also unclear exactly how OpenFeint would make money. It has all the power to build a social layer for the iOS platform, but none of the power to monetize it since developers have to use Apple for payment processing. OpenFeint was making some revenue through an affiliate model whereby it would receive a 5 percent cut on every iOS download it drove. But it wasn’t clear how easy it would be to grow that revenue source.
From GREE’s announcement to shareholders on the acquisition:
April 25th, 2011 at 12:53 am
Woohoo! Congrats to Jason, Peter, and Co!
April 27th, 2011 at 9:00 am
[...] Mobile-social gaming network PapayaMobile has picked up $18 million in a second round of venture funding from Keytone Ventures and DCM. The timing of the announcement is interesting as it comes just a few days after another similar company, OpenFeint, was picked up by Japan’s GREE for $104 million. [...]
April 29th, 2011 at 12:41 pm
[...] OpenFeint Debuts in China — Social mobile gaming platform, OpenFeint has launched in China this week with the help of The9. The platform is dubbed The9 Game Zone for Android devices, and according to TechCrunch, is one of the reasons why Gree agreed to purchase OpenFeint last week for $104 million. [...]
May 4th, 2011 at 1:47 pm
[...] A New Zealand-based security specialist says he was able to de-anonymize device ID numbers of OpenFeint users and connect them to their real names on Facebook. OpenFeint is a mobile-social gaming network that says it serves 75 million users and is used in 5,000 apps. It was recently acquired by Japan’s GREE for $104 million. [...]
May 19th, 2011 at 11:04 am
[...] publishing games or to stop entirely. Two of PapayaMobile’s rivals OpenFeint and ngmoco:) were picked up by Japanese mobile gaming companies that intend to keep creating their own intellectual property. That model, used by GREE and DeNA, [...]
June 7th, 2011 at 11:52 am
[...] a Plus+ gaming network, for up to $403 million in October. Then another Japanese gaming giant GREE bought OpenFeint for $104 million for $104 million in April. Game publisher Chillingo, which was acquired by Electronic Arts last October, also has a gaming [...]
June 7th, 2011 at 12:00 pm
[...] the mobile-social gaming network recently acquired by Japan’s GREE for $104 million, is adding a bottom-scrolling news feed to apps in its network. The idea is to [...]
June 24th, 2011 at 5:06 pm
[...] Japan’s GREE bought OpenFeint earlier this year as a way of bringing its business model, which combines operating a gaming platform and publishing titles, to markets outside of its home country. Both it and its rival DeNA are trying to find growth opportunities outside of Japan via acquisitions of U.S. mobile social gaming networks. [...]
July 7th, 2011 at 12:01 pm
[...] gaming network OpenFeint, which was acquired by recently acquired by Japan’s GREE in April, announced an initiative today to bring more Facebook and social game developers over to its [...]
July 28th, 2011 at 5:16 am
[...] a Beijing-based mobile social gaming network. DeNA’s big rival back in Japan, GREE, also recently bought OpenFeint, which has a strong presence on iOS but has yet to match its strength there on Android. Then [...]
August 23rd, 2011 at 1:23 pm
[...] follows well with the successes of the other YouWeb-incubated companies. Earlier this year, OpenFeint was acquired by Japanese company GREE for $104 million and CrowdStar recently released its hit title Top Girl [...]
September 15th, 2011 at 2:06 pm
[...] social network OpenFeint, which now belongs Japan’s GREE, is switching CEOs today as co-founder Jason Citron steps down to “pursue other [...]
September 30th, 2011 at 9:23 pm
[...] a little bit of turbulence following its acquisition of mobile-social gaming network OpenFeint, Japan’s GREE is quickly re-stocking its higher ranks as it looks to bring its flavor of [...]
October 4th, 2011 at 11:47 am
[...] OpenFeint claimed to reach 75 million users through 5,000 games on iOS at the time the company was acquired by DeNA in April. Roughly half a year before, DeNA bought Ngmoco, which is now pushing DeNA’s Mobage mobile-social [...]
October 4th, 2011 at 2:18 pm
[...] as engineering support for first- and third-party games out of Ngmoco, DeNA’s mobile subsidiary acquired last spring. It’s not immediately clear what will happen to Little Cave Hero on Facebook post-acquisition; [...]
November 1st, 2011 at 5:18 pm
[...] acquiring OpenFeint for $104 million and then bringing in new leadership to run the company, Japanese gaming company GREE says it will [...]
December 5th, 2011 at 2:01 pm
[...] network would use assets from both GREE’s existing platform and the OpenFeint network, which GREE acquired back in April for $104 [...]
January 30th, 2012 at 9:09 pm
[...] their games with social networking features like profiles and competitive leaderboards. Unlike rivals like GREE-owned OpenFeint and Scoreloop, which was recently acquired by RIM, PapayaMobile is purely focused on Android. [...]
January 30th, 2012 at 9:48 pm
[...] that have emerged over the past few years like apps from Appsfire, Heyzap, Explor and Apptitude and mobile-social gaming networks like OpenFeint and Scoreloop. Most have not gained widespread traction because these products suffer from the very [...]
February 2nd, 2012 at 5:34 pm
[...] or the rest of Asia for the fiscal year. The company is pouring resources into expanding overseas after spending $104 million last year to buy mobile-social gaming network OpenFeint. It’s also aggressively stepping up its headcount in the San Francisco Bay [...]
April 30th, 2012 at 10:08 am
[...] Tweet Mike Thompson• Apr 30th, 2012 facebook, Mobile, News, Social Games Developers CrowdStar and iWin are bringing some of their most popular Facebook games to GREE‘s upcoming mobile network, which launches in Q2 2012. CrowdStar is moving forward with its plan to focus more on mobile titles, bringing a new entry for its “Top Girl” series exclusively to GREE’s platform this summer. The developer is working on a an untitled, original game for the series, which already contains Top Girl, Social Girl and Modern Girl. Top Girl reached as high as No. 8 on our top free iOS apps list in January and held the No. 1 position as the top grossing app in June 2011. Social Girl was the No. 3 top free app in December 2011, as well as the No. 5 top grossing app. Modern Girl made it to No. 10 among the top free games on iOS earlier this month, as well as the No. 33 top grossing app. No plans have been announced to bring these games to GREE. iWin is working on adaptations of Deal or No Deal and 1 vs 100, for GREE’s platform. Both of these games had strong launches on Facebook, but their numbers have since decreased by more than half their peak size. Deal or No Deal peaked at 148,000 daily active users in September 2011 but is now at 70,000 DAU. 1 vs 100 reached a high of 105,000 DAU in July 2011, though it’s dropped to 20,000 DAU. Both games from iWin are launching on GREE’s platform at an unspecified point this summer. We see more and more social game developers turning to mobile platforms for growth. Zynga recently revealed that smartphone titles helped the company achieve its record-breaking bookings during Q1 2012, and it’s planning to release more mobile games this quarter. King.com recently launched Bubble Saga on the Kindle Fire and is working to bring the game to other Android devices, too. Kabam is also going mobile, having just signed up as a publishing partner for the Mobage platform. GREE represents a huge potential market for developers looking to expand outside of Facebook, as the platform has access to 190 million users across both Android and iOS, thanks in large part to the April 2011 acquisition of OpenFeint. [...]
May 1st, 2012 at 6:15 pm
[...] Fuzio acquisition is GREE’s biggest since April 2011, when the company acquired OpenFeint for $104 million in order to bring its lucrative mobile social gaming network to North [...]
May 1st, 2012 at 7:47 pm
[...] acquisition is GREE’s biggest since April 2011, when the company bought OpenFeint for $104 million in order to bring its lucrative mobile social gaming network to North [...]
May 23rd, 2012 at 7:00 am
[...] existing Japanese platform and OpenFeint, the iOS social gaming network GREE acquired for $104 million last April. According to GREE’s SVP of Product Ethan Fassett, the company’s new global [...]
July 10th, 2012 at 1:40 pm
[...] industry, co-founding game studio turned mobile-social network OpenFeint, which he sold to GREE for $104 million last spring. Although Citron originally stayed with GREE as the chief executive of OpenFeint, he [...]
November 13th, 2012 at 3:30 pm
[...] iTunes and Google Play. Based on GREE’s massive user audience (thanks in large part to its acquisition of OpenFeint in April 2011), it’s not surprising that Konami would publish a card-battling game on that [...]
November 19th, 2012 at 11:11 am
[...] April 2011, GREE acquired OpenFeint for $104 million. GREE’s competitor DeNA which operates the Mobage mobile-social [...]
November 20th, 2012 at 9:00 am
[...] is appealing to many developers right now because of the massive audience it has access to after it acquired OpenFeint for $104 million in 2011. As for OpenFeint itself, though, GREE caught many developers and users [...]