Gree overtakes DeNA in social game market

Major Internet game firm DeNA Co. fell behind its rival Gree Inc. in the Japanese market for the first time in the October-December quarter.

DeNA, which hit the headlines in November with its high-profile purchase of the Yokohama BayStars professional baseball club, saw its sales fall 1.5 percent from the previous quarter to 34.1 billion yen (about $450 million) during the October-December period, according to a financial statement released Feb. 7.

Operating profits also declined 12 percent from the previous quarter to 13.5 billion yen and were 8 percent down on the same period last year.

Gree and DeNA have been fighting fiercely for leadership in social network gaming, a growing market that encourages customers to play games and interact online.

Gree’s sales stood at 41.5 billion yen in the October-December period, up 36 percent from the previous quarter, and putting it ahead of DeNa in terms of quarterly sales for the first time. Its operating profits rose 35 percent to 22.5 billion yen.

DeNA’s social network gaming sites had 36 million members at the end of 2011, about 7 million more than Gree’s. Recently, however, DeNA has struggled to develop hit games capable of bringing in big revenues.

DeNA grew rapidly due to the huge popularity of the game “Kaito Royale” (Thief Royale), which it developed in 2009. More than two years have passed since that game hit the market and its sales have decreased drastically.

Games developed by Gree, on the other hand, are still on the crest of a wave. They include “Tanken Doliland” (Expedition Doliland) and “Seisen Cerberus” (Holy war Cerberus).

Following the expansion of social network game market, major computer game developers, such as Konami Corp. and Tecmo Koei Holdings Co., have made inroads themselves, intensifying competition.

“We were late in developing the card battle-style games that are enjoying popularity. From January this year, we are recovering our profitability,” said DeNA's president, Isao Moriyasu.

“With the synergies from the purchase of the professional baseball club, we want to increase customers aged in their 30s or older with money in their pockets,” he added.