FinancialGREE
GREE’s Global Strategy and OpenFeint Acquisition
22 Apr 201117 pages~7 min full read
GREE acquired OpenFeint for $104 million to transform from a Japan-centric platform into a global social gaming network targeting an eventual user base of 800 million.
See it on page 12The acquisition integrates OpenFeint’s existing infrastructure, which as of April 2011 included 75 million users, 5,000 games, and a network of 19,000 developers.
See it on page 5GREE’s strategy is driven by the rapid growth of the global smartphone market, which is projected to reach nearly 100% penetration in North America by 2014.
See it on page 3The deal leverages OpenFeint’s established U.S. market position, including strategic partnerships with major carriers such as AT&T and Verizon Wireless.
See it on page 8GREE plans to integrate its expertise in monetization and engagement into the OpenFeint platform while reducing porting costs for developers through aligned platform specifications.
See it on page 9The company is pursuing a dual-track growth strategy that combines platform expansion through alliances with partners like Tencent and mig33 alongside internal game development in Japanese and international studios.
See it on page 2GREE’s acquisition of OpenFeint represents a strategic move to establish a dominant global social gaming network by integrating Japanese social networking expertise with a massive international user base. The primary thesis centers on the rapid growth of the global smartphone market, which is projected to outpace PC shipments and reach nearly 100% penetration in North America by 2014. By acquiring OpenFeint, GREE aims to transition from a Japan-centric platform to a global leader, leveraging a combined ecosystem that targets over 100 million users and eventually seeks to reach 800 million through further alliances with partners like Tencent and mig33.
The acquisition, valued at approximately $104 million USD, was executed through a statutory reverse triangular merger involving GREE’s U.S. subsidiary. OpenFeint brings a robust infrastructure to the deal, including 75 million users, 5,000 games, and a network of 19,000 developers as of April 2011. The platform provides comprehensive solutions for marketing, user activation through social features like leaderboards and achievements, and monetization via microtransactions and performance-based advertising. OpenFeint’s market position is further strengthened by strategic partnerships with major U.S. carriers, including AT&T and Verizon Wireless.
The strategic synergy between the two entities focuses on platform alliance and knowledge sharing. By aligning platform specifications, GREE intends to reduce porting costs for developers while enhancing OpenFeint’s social features using GREE’s established expertise in engagement and monetization. This dual-track strategy involves expanding the platform business through mergers and alliances while simultaneously developing social games through both Japanese and international studios to maximize average revenue per user across a unified global network.
