Ngmoco acquisition justified: DeNA made $160 million internationally in FY12
Western operations to be profitable this summer
As I've discussed many times since DeNA spent $303 million acquiring ngmoco in October 2010, such deals are more often than not disasters.
In this case, you had an established Japanese company that operated a very successful feature phone social platform combining with a small, aggressive, venture-backed San Francisco start up game developer.
Yet, two and a half years - and several reorganisations - later, it looks like DeNA's money wasn't wasted after all.
Of course, it still generates a lot of its money from Japanese feature phone users. Revenue from Japanese smartphone users only overtook this in September 2012.
Yet, what's more important is DeNA is now generating sizeable revenues internationally.
Thanks to the success of titles such as Rage of Bahamut, MARVEL: War of Heroes and Blood Brothers - a title we recently considered in our Charticle feature - it made almost $70 million between January and March 2013 (its Q4).
DeNA hasn't broken out the figures formally, but as the graph below shows revenue from its international operations was around $160 million in FY12.
That's about 8 percent of its total revenue.
And consumption of the platform's MobaCoin virtual currency is predicted to be $90 million in the next quarter.
That's why says it plans to "turn Mobage West into a profitable operation during the summer".
[source: DeNA (PDF)]
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Keith Katz | 18:54 - 9 May 2013
I think you have to ask the question: was this achievable without plunking down $300mm? There have to be better ways to net this kind of revenue over a 3 year time horizon than deploying this much capital. But what do I know =)
jon jordan | 18:17 - 9 May 2013
I agree, but if the quarterly revenue keeps growing...
That's why they say "turn Mobage West into a profitable operation during the summer" - I guess that means in q-o-q burnrate terms
love to see similar figures from GREE though!!
Keith Katz | 16:01 - 9 May 2013
Jon, I'd bet you that $90mm that DeNA still hasn't come anywhere close to seeing a positive ROI on that investment. We have no idea what the margins are on that revenue--I'd bet very, very slim. Not to mention the amount of money poured in post-acquisition, opportunity costs of deploying that capital elsewhere, the fact that these revenue figures aren't necessarily a direct result of the acquisition, etc.
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