Yahoo Japan and games company GREE, two giants of Japan’s Internet, have joined forces on a series of initiatives that will help raise the profile of GREE’s mobile gaming service and see Yahoo Japan — a separate entity to Yahoo Inc. — further its push into mobile and social.
Chiefly, the companies are in talks to agree to co-develop social games together and, with that in mind, they also disclosed that there are discussions to set up a joint company to promote and fully dedicate time and resources to creating joint titles.
The duo are also pooling their collective might to build up their respective content bases and are in talks to establish a joint entity to invest in digital video and other entertainment content. Beyond that, they are discussing — yes, some parts are still to be finalized — plans to open a new joint entertainment business which would lean on both side’s visibility in the gaming and mainstream Internet spaces.
While much of the agreement will bring about new businesses and divisions, GREE’s games platform is getting a nice boost with a prominent link set to be added to Yahoo Japan’s popular mobile Web portal. The company says the portal is visited by 78 percent of smartphones, which is obviously ideal for GREE – which target those very smartphone-toting folks.
The partnership — which is a major coming together in Japan — will also see ‘softer’ cooperation with the two companies set up an ongoing exchange program between their respective engineering teams, to help foster cross-company learning. Both will get a further marketing boost with planned joint CSR activities, details of which are, as yet, undisclosed.
The news, which is available in Japanese only for now, comes the same week that GREE-rival DeNA announced record quarterly revenues of $526 million and spent $92 million for a 20 percent stake in key game developer partner Cygames.
GREE recorded quarterly revenues of $501 million in August but its next financials, due November 14, are speculated to be comparatively weaker, making this partnership look like it has been arranged at an ideal time to boost the firm.
Interestingly, Yahoo Japan has an agreement with DeNA — similar to that which was agreed with Taiwan’s YahooKimo last month — so it remains to be seen what, if anything, happens to the Yahoo Mobage service in Japan.
Yahoo Japan is making a major push into mobile content and, to that point, it bought into Korean mobile messaging service Kakao Talk’s Japanese business in October. Just last month, the company — which is owned by Yahoo Inc. and operator Softbank — forked out $12.8 million to buy mobile content startup Community Factory — maker of popular photo app Decopic — as part of new CEO Manabu Miyasaka’s goal to strengthen the company’s mobile and social footprints.
GREE is busy building its overseas business, which is showing signs of taking off in the US — thanks to a number of acquisitions like Funzio for $210 million in May and Pokelabo for $173 million last month — but it also has a need to grow itself in its native Japan. Like DeNA, the firm is facing up to the aftereffects of the government’s decision to ban kompu gacha (a gambling-like mechanism) from its games. Given that the ‘lucky dip’ genre contributed to an estimated 50 percent of revenues in Japan — it’s biggest money making market — that’s quite a void to fill.
Indeed, proof of the significance of the kompu gacha ruling came when rumors of a ban wiped $406 million from GREE founder and CEO Yoshikazu Tanaka’s $1.3 billion personal fortune in one day in May.
Yahoo Japan is certainly the top Internet partner to pick in Japan, where its portal is the top visited website and massive on mobile, so it looks like GREE is certainly going for the jugular, although the exact details of its collaboration are still to come.