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Japan’s DeNA doesn’t always get a lot of attention in the social and mobile game markets. But the company’s revenues and profits are starting to look mighty interesting.
While old guard game companies such as Electronic Arts are squaring off against upstart rivals such as social game maker Zynga, they may not realize that international rivals are going to wage a fierce battle to control the world’s gaming stage.
DeNA (pronounced D-N-A) reported today that it now expects to report $1.3 billion in revenues for the fiscal year ending March 31. For its third fiscal quarter ended Dec. 31, the company reported revenue of $359 million. Earnings were 250 percent higher than a year ago. Revenues have now been growing for five quarters in a row. The core business is running the Mobage-town mobile social network, which has 309 partner game developers and 764 games.
In Silicon Valley, DeNA raised eyebrows when it agreed to buy iPhone game maker Ngmoco for as much as $403 million. That price was estimated to be about 13 times Ngmoco’s revenues. DeNA made the move so that it could expand into Western mobile markets and become a worldwide powerhouse in mobile games — before rival Zynga takes the No. 1 spot. To do so, DeNA will have to graduate from cute Japanese games to games with worldwide appeal.
Zynga has been buying its own mobile game developers as it expands beyond Facebook games. Electronic Arts, meanwhile, said that all of its digital online game revenues — mobile, social, online and downloadable content — will generate revenue of $750 million for the fiscal year ending March 31.
In other words, DeNA is pretty far ahead of Electronic Arts. Zynga doesn’t report revenues publicly, but I’d be surprised if it could outgrow DeNA. This spring, DeNA plans to launch its Mobage smartphone platform, working with Ngmoco. DeNA claimed in November that it makes 15 times more revenue per user than Zynga does.
Previously, DeNA said it would generate $1.25 billion in revenues in the current fiscal year.