Japan’s mobile games firm GREE announced a wide-ranging deal with Yahoo Japan back in November 2012, and today the two companies have confirmed that they will open a joint-venture focused on developing social games for smartphones next month.

Tentatively called ‘GxYz’, the new entity is set to open its doors on March 15 and is backed by 200 million JPY (around $2.2 million) in investment from the duo. The JV, which GREE is taking a 51 percent share in, is designed to build on the successes of both companies — GREE as a top mobile games platform in Japan, and Yahoo Japan as the country’s leading Web content firm — as the announcement explains:

Through the establishment of GxYz, the two companies aim to strengthen their smartphone social gaming business partnership, combining the user acquisition capabilities of Yahoo! JAPAN with the social gaming development and operational expertise of GREE, while developing exceptional social games that will open up new possibilities in the game development business.

A GREE representative confirmed that, as is expected, the joint-venture “will be focused on the Japanese market”. While no upcoming titles have been confirmed at this point, we’re told that “several” games are expected to be released within the year.

The deal is significant for GREE because Japan continues to be its most lucrative market, despite the fact that it has a sizable presence in the US through the $210 million acquisition of Funzio, among other deals. The company recorded a 9 percent year-on-year drop in profits during its latest fiscal quarter, citing the cost of global expansion as a key factor.

The JV is still to be finalized, but other aspects of last November’s deal have already come into effect. Yahoo Japan has already added links to GREE’s social games to its mobile website for smartphones in a move aimed at raising traffic to the mobile games service.

DeNA, GREE’s arch rival, has enjoyed a close relationship with Yahoo Japan for some time. That partnership has seen a number of titles from its Mobage mobile games service adapted for PC players through the joint Yahoo Mobage service, which recently passed 10 million registered users. Indeed, DeNA and Yahoo Japan inked a fresh deal to expand their collaboration to mobile just 24 hours after GREE linked up with the Internet firm, which is a separate entity to Yahoo Inc.

GxYz — which is a fairly awkward effort to incorporate both companies names into the JV — will be headed up by Tomoyuki Isaka, who was formerly president of GREE Korea and becomes its first CEO.

The JV will initially be staffed by employees from GREE and Yahoo Japan “with a view to taking on new hires as the business grows”, GREE confirmed.

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