There’s some positive but mainly negative news from Japanese games giant GREE which is set to cut jobs in North America as it completes the removal of Openfeint from its business in the region. The company — which saw Q1 2013 profit drop 5 percent on a year previous — has announced that it will be making job cuts, as it switches its focus to titles outside of the once-popular games platform it acquired last year.
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The end of the line came for Openfeint last month when GREE announced it will close down the games platform, which it bought for $104 million last year, on December 14. That move will see an unspecified number of staff from the GREE Platform business — which Openfeint became — made redundant with others reassigned to other areas. GREE says the platform business will be transitioned to Tokyo, as the company moves to “focus its US business primarily on its own titles and developer partner titles.”
The announcement — which does not appear to have been posted on the company’s website — includes the following excerpt:
“As part of the company’s internal US reorganization, a majority of the GREE games platform team will be transitioned to new departments with redundancies in some areas. The overall GREE Platform business will begin transitioning to its operations in Tokyo as a part of this change.”
We reached out to GREE for further details but were told: “Unfortunately at this time we are unable to share any information outside of what is in the press release.”
That’s fairly ominous but we hope to get further confirmed information from the company, most likely when business hours open in Japan. See update above – we’re still chasing further details from GREE. The company has confirmed that the redundancies have already been made and all of the jobs cut were from the platform business.
GREE began migrating Openfeint developers to its global gaming platform in May, so the step away has been on the cards, but job loses were certainly not expected. That’s in spite of the slump in profits that continued into the third quarter — despite the company posting net sales of $467 million, a 25 percent increase on a year previous — due to increased regulation in Japan and the cost of international marketing.
On the positive side, as a news sweetener to the staff exits, GREE has announced a fund dedicated to investing in games developers. Run separate to its GREE Ventures VC arm, it has already made its first investment after putting $3 million to game developer MunkyFun.
GREE has been focused on cracking the US market and, in addition to Openfeint — which is being absorbed into its global service — the company has bought Funzio ($210 million), Pokelabo ($173 million) and a number of studios, including App Ant.
Along with rival DeNA, GREE continues to show its Western competitors the way, and its revenues are far beyond what Zynga or others have managed. DeNA’s most recent earnings saw it post record quarterly revenue of $627 million, up 45 percent year-on-year.
Here’s the announcement in full:
GREE Expands its U.S. Games Business With New Mobile Games Fund and Announcement of $3 million Investment in Hit Developer, MunkyFun
San Francisco, CA December 06, 2012- GREE is today announcing that it’s expanding its focus on 2nd party mobile game development with a new mobile investment fund managed by a new publishing and partnerships group. The fund’s first venture is in mobile game developer, MunkyFun, maker of games such as My Horse and Bounty Bots. MunkyFun received a minority investment of $3 million from GREE.
GREE, which recently announced the closure of mobile social gaming platform, OpenFeint, is focusing its US business primarily on its own titles and developer partner titles. As part of the company’s internal US reorganization, a majority of the GREE games platform team will be transitioned to new departments with redundancies in some areas. The overall GREE Platform business will begin transitioning to its operations in Tokyo as a part of this change
The US operation continues to build a strong portfolio of mobile games- including recently launched titles Monster Quest and MLB: Full Deck. The mobile investment fund is the latest in a series of commitments to first party and second party titles including full-out acquisitions of mobile game developers App Ant in September 2012 and Investment in IUGO Entertainment earlier this year.
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