DeNA, the Japanese mobile social giant that owns ngmoco, announced yesterday that it has filed a lawsuit demanding that Gree (the other giant of Japanese mobile social games, owners of OpenFeint) and its CEO Yoshizaku Tanaka apologize and provide compensation for losses caused by Gree's press release and Tanaka's comments, which stated that DeNA engaged in illegal business activities.
The fun all started back in November 2011 when Gree and Japanese telecom KDDI (second largest in Japan) filed suit against DeNA for allegedly telling game developers not to offer their titles on Gree's social-networking platform. The lawsuit sought damages in the sum of over 1 billion yen, or about $14 million dollars.
Gree said that DeNA kept blocking developers, carriers and agencies from offering services to Gree even after Japan's fair-trade commission issued a cease-and-desist order in June. This is highly unusual in Japan, where lawsuits are far less common than in the United States. It's a sign of how deep the rivalry is between the two companies, and the size of the money at stake. Both companies will end their current fiscal year with more than $1.5 billion in revenue. The Japanese market for social gaming is projected to almost triple to 305 billion yen (about $4 billion US at current exchange rates).
Meanwhile, both companies are working to take advantage of the growing mobile market in Asia. Gree announced their first strategic alliance with a Korean developer in January, investing in Mobicle to develop games for Gree's global platform for mobile social games that they intend to launch in the spring of this year. DeNA announced yesterday a deal with Baidu, China's leading Internet search provider, to offer DeNA's Mobage platform on Android smartphones. This follows a deal with NetDragon in China to develop and localize games for Mobage in China. Gree has a partnership with Chinese giant Tencent (owners of Riot Games) to bring Gree games into the Chinese market as well.
This all happens as Apple is preparing to move into China in a big way, with one analyst predicting that Apple could sell as many as 57 million iPhones in China by 2013. Both DeNA's Mobage platform and Gree's new platform will address both Android and iOS markets, so the expansion of iOS in China would benefit both companies. Both companies are actively pursuing growth in the US and European markets as well as Asia.
