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Inciting The Mobile Revolution

March 24, 2011 Article Start Previous Page 3 of 3

As you said early on, if we observe the market of Japan, for years now there's been a strong, really healthy, robust mobile market in Japan, but it's just had no impact outside of Japan. What makes DeNA different?

NY: Well, I think the conditions on the ground in the West weren't really conducive to making something happen. So if you look at the conditions on the ground now, they are eerily similar to the conditions on the ground in Japan in the early to mid-2000s.

Penetration of mobile subscribers into the population base is actually quite advanced here; if you took the total number of subscribers in the total population, it's 93 percent. Japan is 97 percent.

What's different is today in Japan, 3G penetration is 98 percent and here it's about 47 percent. Well, when Japan crossed the 40 percent threshold, that's when this explosion really happened. So we're crossing that threshold, and you've probably seen pictures of Japanese commuters on subways...

Oh, I've seen it in real life. [laughs]

NY: Right, sitting there like that [holds phone and looks down at it intently]. Look around you here now, it's the same thing.

You know, you picked up your phone and you looked at it in the middle of a meeting with us, and you can walk down the street -- we could look out the window now, we could see every other person looking down at their phone and interacting with it. So these devices have become kind of essential like Swiss Army knives for life; the essential accessory.

The only other accessory that's more important to you right now than your phone is your wallet. And in Japan, actually, that's not even the case, because they've got mobile wallets associated with their cell phones. So I think that the conditions here are now such that the type of behavior that we've been able to see in Japan can actually translate.

Now if you just took something from Japan and moved it over, it may or may not work. Just like if you took a Japanese video game and you just moved it straight over, it may or may not work. Now you can start by just localizing the language, and it still may or may not work. Some do, some don't.

I think what you really have to do, is you really have to be able to expertly differentiate between what is cultural in content, and then what is human and mechanical. And the human and mechanical things, you need to bring those across, because they are generally applicable. The content stuff you have to look at, I think, with a much more critical eye.

So on that basis do you think that, say, Western developers that are being invited into the program, are they anticipating targeting Asian audiences with their products? And the same for the Asian developers.

NY: Yeah, and I think one of the great benefits -- just to describe a little bit about the way that Mobage-Town works in Japan -- is we have consulting teams that literally work with the developers to try to make the games be the very best they can be in that ecosystem. So they give them advice and guidance and feedback to help them get the very best outcome.

We are going to extend those consulting teams so that they don't just focus on the very best outcome for a given territory, but helping teams get the very best outcome on a global basis. So if you're a Japanese developer and you want to bring your application to the West -- even before you start it -- that team will help you identify if it's going to be appropriate, and if it's not, what type of changes you could make, and vice-versa.

We want developers that work with us to have the very, very best chance of having really big hit titles and making the most money because, I mean, certainly, if that happens, we'll be running a really good ecosystem.

We Rule Quests

You had spoken about having good results getting users involved in the Plus+ network -- retaining people, turning them on to other games. I'm curious if that's your vision to keep people in the Mobage loop.

NY: Well, yeah. I mean, we'd love for people to be engaged in Mobage so that it becomes a part of their daily routine. I mean I think the reality is... You know, we don't own people. [chuckles] People own themselves. And we have to provide them with a service that's compelling enough that they just want to keep coming back to it.

It's kind of like when you go home -- if you have a TV at home that you use -- you're probably going to go to a TV channel that's kind of like your home TV channel, and it's the one you always tune in to as a starting point.

We want Mobage to be that. For games and entertainment, we want you to go, "Okay, Mobage. That's where I'm going first" -- "Figure out what's going on in Mobage, or with Mobage, or the game I'm playing in Mobage, let me do that, and then I'll think about launching from there."

Have you said when you plan to launch it in the West? You sort of said "after Japan."

NY: Japan will come soon, here within the next quarter, both the sandbox being made generally available to developers and the Mobage service being launched in the next couple of months. And then shortly after, the Western sandboxes and the Western service.

We also have -- it's worth mentioning as well -- the partnership with Samsung, where Samsung has a deal where they are pre-installing an application called Game Hub on all their Android devices starting with the Galaxy S II, and Mobage powers Game Hub. So in addition to getting kind of carriage on our network, you get carriage on all of these Samsung devices.

And that is actually probably going to be the very first thing that launches. You know, GameHub version 1.0 is more of a list of applications that all run on top of our NgCore framework. But as the Mobage service becomes available in the West, that list view will switch out to the network view. And it's a great way for developers, I think, to get their applications in front of customers on a pretty big scale.

You spoke about the rise of cable and CNN, ESPN, MTV, right? Is Mobage going to be all-encompassing? Is it casual? Can we have an MTV of Mobage that targets young, hipper audiences, with potentially also a more action-oriented version? What is your vision for capturing different audiences with the service?

NY: I think we want -- initially, we want a vibrant service with a lot of diversity, and I think you want to start there and offer a range of things. I don't think it will live in the world of hardcore, R-rated shooters. I think we will -- you know if I was to age range it, I would say E through T from a kind of [ESRB] ratings way of viewing it.

From a demographic standpoint, we would like it to equally appeal to men and women. We found that the best services tend to, and the best games do. And from an age of audience, I think we want to start with young adults. Adults and young adults. Because that's really where people have the best balance of understanding the medium, and being willing to spend money on the medium, and have the time to be able to spend money -- spend time with the service.

And those people tend to be the people that affect cultural change. And if you want to build a consumer brand, and a consumer mark, you kind of want to target the people who can proliferate it the most effectively.

Article Start Previous Page 3 of 3

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