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[Gamasutra speaks to Naoki Aoyagi, CEO of GREE International -- the California-based branch of Japan's largest mobile social games network -- about the company's plans for the West and its view of the market.]
In April, Japan's GREE -- the country's top mobile social game network -- acquired OpenFeint, one of the leading mobile games networks in the U.S. The company is now using this network, and its talent, as a launchpad for its Western operations.
But a simple acquisition is just the beginning. Since January, GREE's CFO Naoki Aoyagi has been living and working in the U.S. Serving as CEO of GREE International, he's had his eye on global expansion for the company, and has been aggressively recruiting development and management talent as the company expands its global operations.
In this extensive interview, Aoyagi talks to Gamasutra about why the company is looking West, its strategies and goals for expanding into other markets, and why it hopes to both recruit more talented developers, build beneficial relationships with both small and large third party development studios, and how it's different from its major competitor, DeNA (which expanded to the U.S. with its own acquisition -- Ngmoco.)
You've been in the U.S. for about six months now?
NA: Yeah, since January, I live here and just spend a lot of time -- 100 percent of [my] time -- in the U.S.
Why did you, of all the management team of GREE, decide to take on the role of the CEO of the U.S. office?
NA: Because [it's] the one thing I really wanted to do. Also we think that global expansion is the next focus of GREE overall, so we started to build the global operation from the U.S. Then we almost set up the office in China, Beijing. Then maybe next in Europe and Southeast Asia this year.
It's been announced that you're planning to expand into London as well.
NA: That's right, that's right. Now we have the office, actually, in London -- it's just still small. It's just for a few people right now. We are trying to expand that office. Also in China, we're going to set up a gaming studio as well. Then we have the office in Singapore.
Are you overseeing the international expansion in all territories?
NA: Right now, yes. But actually we're going to, I think, have someone who will focus on each region, because I think now I should focus more on the U.S. side. Yeah, still, GREE International, we kind of overview operations. But you know, China is a little bit [of a] unique market, so we I think have to have someone dedicated to the China market.
And you also have a partnership with Tencent in that market, right?
NA: That's right. A very sound relationship. We introduce our developers with each other; also we do some co-investment in social gaming areas. Because if Tencent invests, the success in China is guaranteed. The same thing, we can say in Japan; we have done a lot of social gaming areas investment in the last year and this year. So yeah, that kind of thing, we are doing together with Tencent. It's very good.
At this point, you've reached the top in market share for social networking in Japan, is my understanding.
NA: Right. Now we have more than 25 million users... We're growing. It can be, I think, 30 to 40 million users, because in the last three years, I think our user base has more than tripled.
When it comes to your Japanese operations, do you have internal development for the games that you put on the GREE network or are those developed by external developers, primarily?
NA: We have both first party, second party games, and also third party games. We have now eight games done by ourselves. That being 12 months ago, the end of the last June, we launched the open platform to third parties, and now I think it's well-balanced.
The number one game by a third party, which is done by Konami, it's huge. It has more than, I think I can say, 10 million U.S. dollars a month, they have, with one title on the GREE platform. So I think in terms of revenues, it's very sound, and the third parties enjoy their growth in the GREE platform.
Now is that on smartphones or feature phones -- or both -- in Japan?
NA: Both. Both smartphones and feature phones. Right now, the majority is feature phones, but we see very good traction in smartphone games, so it's going to be all smartphone over the next three years. And now we see the big wave of the iPhone and Android -- especially Android, in Japan.
Obviously, with the acquisition of OpenFeint, you acquired a networking service that's active in the Western markets. So your goal is to have that kind of network?
NA: Yeah, the primary goal is to build the social gaming network in the world. Say that our midterm target is 500 million to 1 billion users in the world. [It's] because we see huge potential. It can be bigger than that of, say, console gaming, like Nintendo, PlayStation. Because especially in the Asian market, now everybody has a smartphone or PC.
And then of course in Japan, Korea, U.S., Europe, we have a lot of gaming users. And the social games have a broader reach than traditional console gaming -- so yeah, we see such huge potential in smartphone games.
And it's not just iOS, you're interested in being strong on Android as well?
NA: It has to be cross-platform. Not only the iPhone and Android, maybe the Windows [Phone] as well.
Your major competitor would be DeNA, and Ngmoco.
NA: I think in Japan, that's right. In the U.S., we don't see any competition here. Because, for example, in terms of number of users we have 90 million users right now, but other platforms it's I think less than one-third. So I think we should focus more on our product and services, and also the relationship with developers. And now we are trying to expand our distribution power on OpenFeint. So now we are trying to do some upgrades in services. That's our focus.