GREE, Inc. Partners with Four Additional Studios

GREE GREE, Inc., the Japanese company behind the Gree social gaming network, has continued its partnership and buying spree of North American mobile game developers. Enders Fund, Fathom Interactive, Fifth Column, and FreezeTag have now been added to the list of studios publishing their titles on the Gree network.

While GREE, Inc. has been buying developers outright, the latest deals are partnerships rather than any type of acquisition. Fifth Column Games’ CEO Andrew Marsh explains as such:

As a small, indie developer, we face significant challenges in today’s highly competitive social mobile gaming market. Working with the GREE team allows us to focus on making a great game and getting it out to the right players, while maintaining full ownership of the title.

The company had earlier purchased the start up developer Funzio for $210 million as well as acquiring San Francisco studio App Ant and South Korean studio Paprika Labs.

The sum required to seal these latest round of deals has not yet been disclosed.

Analysis: Earlier this year, we noted that, despite Gree hitting sales growth figures in the triple digits, their stock was collapsing due to the removal of their gambling-like “Gacha” micro-transaction system. I noted back then that Gree would have to do something drastic if they wanted to stay in the game.

And boy, have they delivered! They’re using all their resources from the Gacha age to get a more sustainable system going with lots of actual decent content for users to purchase. They can afford to splash the cash as well after having secured sales of nearly $2 billion USD in the fiscal year of 2012, which ended on June 30th, 2012.

The only thing that surprises me is that Gree has been focused on acquiring North American developers rather than native Japanese ones. It’s obvious that Gree is trying to capitalize heavily on their newer American market, but part of me wonders how their market share back home will be affected, considering that the competition for mobile games is fierce with players like DeNA’s Mobage also attempting to diversify.

In any case, the Gacha age where Gree could post year-on-year growth of over 150% is over. Even the company itself has a more modest estimate of about 23%-30% growth for this fiscal year, which is still quite an impressive number given the current economic climate.

Mohamed Al Saadoon

About Mohamed Al Saadoon