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The Japanese social gaming company is spreading its US roots to compete against Zynga
Popular social gaming platform, GREE, announced its first mobile social game, Zombie Jombie, made in the US for a US audience on Thursday. GREE is known for its strength and roots in the Japanese market but the company acquired 40,000 sq-ft of office space in San Francisco back in February, to strengthen the company's base in the US. And now, it appears it is ready to take on the biggest social company in the space: Zynga.
This new mobile social game will place GREE and Zynga in direct competition, especially now that Zynga is expanding from more than just game development, but also adding a platform and publishing other developers' content to its repertoire. As Zynga continues to expand its reach and show its strength on Facebook, many developers see the promise that outside competition offers in the gaming space.
Social gaming has proven itself to be a strong revenue driver for companies that can bring in those freemium players. One investment firm, Digi-Capital, published its in-depth review of the global gaming space, earlier this month that shows just how profitable and vast the global gaming space is.
Digi-Capital found that online and mobile games are poised to grow into an $82 billion market with a revenue share of 50% as the historically popular console gaming flattens out.
How this game works
This new iOS-exclusive title is a free-to-play card-based game that that uses zombie cards used for playing and trading in order to protect the world from the undead. For those of us preparing for the season two finale of 'The Walking Dead' on Sunday, this game could help us get our zombie fix for a little while, at least.
In this game, players become a “Jombie” – a powerful being that has a unique ability to raise and control zombies and compete against friends in battles across major U.S. cities. Players are able to build and customize their own distinctive deck of cards by combining multiple cards, trading with friends and opening treasure chests that unlock special content.
Because of the variety ways players can upgrade and power-up their cards, no two players can have the same deck. Zombie Jombie also is slated to receive on-going content updates so there is always more to add to the gaming experience.
Zombie Jombie shifts the usual perception that humans are the protagonists and zombies are danger by placing the biggest danger on the humans in the game and giving the players the power to control zombies for protection.
GREE in the social gaming world
GREE explained to me that its new North American studio, is focused on creating the best free-to-play games for mobile and plans to release more titles in the upcoming months. GREE is currently building a social mobile games platform, scheduled for release in Q2 2012.
GREE's currently has a community of 190 million players and offers over 7,500 game applications to users around the world. With offices in Tokyo (head office), San Francisco, London, Beijing, Sao Paulo, and Dubai, GREE will continue to expand aggressively worldwide.
This nearly $6 billion Japanese mobile gaming company earned nearly $153 million in revenue last quarter.
GREE has, at times revised their earnings forecast to boost revenue estimates by 40% to 50% than initial forecasts predicted. GREE's network continues to grow at a rate of 3.8 users per second, and maintains one of the highest average revenues per user in the industry. Additionally, GREE has seen significant global expansion this year, with new offices in the United States, China, Korea, Singapore, UK, Netherlands and plans for Brazil.
In contrast with those estimates, shares of Zynga were slammed 15% to $12.27 in February, after the popular social gaming company gave analysts little optimism about its outlook for this year.
Zynga earned a Q4 operating profit of 5 cents a share, with revenue up 59% from a year ago to $311.2 million.
The company reported a big $435 million loss in Q4 net income, though analysts were expecting this, as its public offering cost the company in restricted employee shares.
And 2011 saw full-year bookings of $1.16 billion for Zynga, up 38%, and revenue of $1.14 billion, up 91% year-over-year. Zynga's projections for 2012 were for bookings to be in the range of $1.35 billion to $1.45 billion. The company indicated that growth would be weighted towards the back-half of the year with slower sequential growth in the first half of the year.
While Zynga has just launched its own Zynga Platform for publishing games built by its own as well as other developers to access their 240 million monthly usership pool, they may have a growing concern that they are closer to the plateau than GREE is.
So while GREE doesn't have the close Facebook connections that Zynga has, there may be strength in being the new kid in the Bay Area, especially as Facebook looks to diversify its revenue. We might even see GREE becoming the new darling that would give Facebook investors something to look forward to -- if the Tokyo-based company wants to move in that direction.
This may be just what developers were looking for to really spur more diversity and competition in the social gaming world that has fallen victim to a flood of generic and bleekly-designed games that all look alike and seem to be drawn less for the target audience of 40+ women and more for pre-schoolers. Let's hope so.
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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.
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