DeNA director Kenji Kobayashi on what makes Japan’s social mobile giant tick

Rage Of Bahamut

What is DeNA? Like Gree, it is one of the new breed of mobile game companies which seems to defy categorisation because it does a little of everything. It is the parent company of Mobage, a developer, publisher and platform holder. It wants to become the dominant force in socially-infused mobile games, and has launched an aggressive, studio-swallowing expansion plan. It isn’t content with just being big in its homeland, either.

DeNA describes Mobage as its “current flagship business” – the use of ‘current’ is key, because during its 13-year history, DeNA has taken many forms. First it was an online auction start-up, then a shopping service, a mobile advertising firm and a social network. An explosion in virtual goods sales within the latter, then known as Mobage Town, turned DeNA on to games.

“Back in the mid-2000’s, DeNA was pioneering mobile-only web services and we were already seeing huge potential in the combination of social networking and mobile games,” DeNA director Kenji Kobayashi tells us. “We introduced our first in-house developed social game, Kaito Royale, in 2009 and the rest is history.”

DeNA now has offices and studios in 16 cities across the globe, and revenue totalled some $1.82 billion last year. “We have already acquired five studios [Gameview Studios, ngmoco, Rough Cookie, Atakama Labs and Punch Entertainment] and established two in Sweden and Canada in the last couple of years,” Kobayashi, who is confident that this kind of growth will continue, says. “We have more than a billion smartphones in the market now. No other gaming devices have ever been popularised as rapidly as smartphones. Also, mobile phones are something we carry with us all the time, and that is opening up whole new kinds of entertainment.”

Those new kinds of entertainment will succeed by “targeting our in-between times,” he explains. “A typical Mobage user in Japan logs in to Mobage five times a day and they spend seven consecutive minutes each time. That will be a total of 35 minutes, but it’s nothing you can compare with 35 consecutive minutes on a console or PC game.”

Kobayashi has a master’s degree in Aesthetics and Art from the University of Tokyo, but there’s little space for romance in mobile. DeNA’s biggest strengths are in “how to acquire, retain and monetise users,” he says, and is keen to emphasise the success of Mobage-powered Rage Of Bahamut, Blood Brothers and Ninja Royale. They are consistently among the highest in the Top Grossing charts on the US Google Play store, and their average revenue per daily active player is over a dollar.

Kenji Kobayashi

DeNA director Kenji Kobayashi

“The international success of Rage Of Bahamut on both Android and iOS actually affected the whole industry, especially in Japan,” says Kobayashi. “You can expect to see more thirdparty games coming up on our Mobage platform.” Increasingly, DeNA will partner with developers to bring more and more games to Mobage, as it did with Cygames for Rage Of Bahamut. In August the developer said that its card battler was being played by over three million people outside Japan – clearly, the genre isn’t as lost on western players as one might expect.

Extensive use of analytics explains its success, to some degree. “These titles are operated as dynamic services rather than finished products – the operators are closely monitoring player activity and continuously improving the games,” continues Kobayashi. “Daily active users, average revenue per users and return rates are important, but they are nothing more than result indicators. What we especially value at DeNA are the meta-data that show how fun and balanced the games actually are for the players.”

The rampant success of these IAP and data-driven services might make some question why DeNA would ever need to partner with ‘traditional’ games companies. “Their assets and knowledge will always be invaluable,” says Kobayashi.  “I believe the whole gaming industry has vast room for growth if we can combine them with our social and mobile expertise. In Japan, we have a joint venture with Namco Bandai Games, and the Mobage platform has titles from companies like Square Enix, Sega and Capcom.”

Monetisation, player analysis, social, mobile – DeNA has turned buzzwords into a rapidly growing games business, and one which will continue to expand its studio base and the number of partnerships it strikes with ‘traditional’ games makers. What is DeNA? As owner of Mobage, it is an ambitious mobile games developer, publisher and platform holder. In a few years’ time, perhaps that won’t need explaining quite so much.