Nintendo is finally getting smart. In Tokyo today, the company announced that it is entering into a partnership with DeNA, the Japanese tech giant which rose to prominence on the strength of its smartphone games. During the press conference Iwata and Moriyasu revealed that this deal had been in the works since last summer. With the partnership announced, they confirmed that consumers can expect games to appear by the end of this year.
TOKYO: Japan video game maker Nintendo Co Ltd and online gaming firm DeNA are teaming up to develop smartphone games featuring the likes of Super Mario, in a bid to retain users increasingly shunning their console and browser-based games. The two companies said on March 17 that they would buy 22 billion yen (122 million pounds) worth of shares in each other as part of a capital and product tie-up. As a result, Nintendo will acquire a 10% stake in DeNA while DeNA will acquire a 1.2% stake in Nintendo.
Everyone says Japan’s business leaders need to do more to foster innovation and entrepreneurship, especially among the youth of the country. Such exhortations typically fall on deaf ears, but Tomoko Namba, founder of DeNA, is listening. Last Thursday she attended the simply but effectively named Startup Conference 2015 as a guest speaker. The twist was that instead of giving a speech about how to be an entrepreneur, she was going to be grilled by three young Japanese entrepreneurs.
DeNA yesterday released its operating results for October to December 2014. As it has promised before, the game business is still its core business, but now it’s got three strategies it wants to employ in the Japanese, Chinese, and Western markets. These tactics are in line with what the mobile gaming giant calls its “next mountain of coin consumption.” DeNA’s revenue peaked consistently each time it released hit titles in 2011, 2012, and 2013, and it aims to do the same for 2015.
DeNA added new punch to its business today, announcing acquisitions of Iemo and Peroli . Total cost was not disclosed but a DeNA representative confirmed to Tech in Asia that the two deals are worth US$50 million. Both are news curation services. Iemo is focused on home-design whereas Peroli’s key product, Mery , targets ladies fashion. “[This is] part of DeNA’s previously-announced strategy to bring digital innovation to offline industries,” a company spokesperson told Tech in Asia.
Hot on the heels of the unexpected news that Line is establishing a US$100 million fund to solidfy its growing position in the gaming industry, DeNA (TYO:2432 ) announced its first quarter financial results for 2014. The company emphasized its many new businesses but that was not enough to ignore the gaping hole left behind by missing game revenue. The basic numbers tell the story. Revenue down 31 percent (37 percent just for social media which includes games) from the previous year and operating profit down 59 percent.
If Tomoko Namba had followed conventional wisdom, DeNA (TYO:2432) would never have existed. She had made partner – only the third Japanese woman ever- at prestigious consulting firm McKinsey and Company after only ten years. Only three short years later, she left that left behind to found her own company. Initially conceived as an online auction service, DeNA struggled to attract users and profits. But in 2009, DeNA started to explore the gaming industry. One year later, titles like Kaito Royale caught fire and its valuation skyrocketed, giving a Namba net worth of nearly a US$1 billion and propelling her to the upper echelons of Japanese society.
Japan’s DeNA built its empire from games for feature phones and desktop PCs, but its legacy in leisure isn’t stopping it from tackling more serious matters. The company announced today it has formed the aptly named DeNA Life Science Inc, a wholly-owned company subsidiary specializing in health care.
The team at DeNA must be wearing out the minus buttons on their calculators. The mobile social gaming company posted its Q3 financial report (for October to December in human time) this afternoon, and all key numbers are down. DeNA (TYO:2432) has seen a 20 percent drop in revenue in the past year, and a 42 percent plunge in profits. DeNA’s revenue is down to JPY 41.7 billion – that’s $411.7 million – in Q3, and operating profit sunk to $112.5 million.