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Asia Nikkei: DeNA back to leaning on mobile games

ggx2ac

Member
Game developer DeNA's efforts to diversify have gone awry as new ventures such as content curation and self-driving vehicles stumble, forcing the company to fall back on a mobile game business that is still flourishing thanks to a team-up with Nintendo.

Revenue for the nine months through December came in flat on the year at 108.7 billion yen ($972 million), even as operating profit jumped 27% to 18.6 billion yen, earnings released Wednesday show.

These solid results did not bring a smile to President Isao Moriyasu's face at the earnings briefing, however. DeNA's 10 content-curation websites have been closed since December in the wake of a scandal involving false and plagiarized content. Moriyasu did not directly answer a question about whether DeNA would keep the business running, saying the company would decide after an independent committee set up to investigate the matter releases its report.

The curation business had been forecast to finally turn a profit in the October-December quarter. It instead went deeper into the red because of the scandal, reporting an operating loss of more than 800 million yen ($7.15 million). DeNA booked a 3.8 billion yen ($34 million) impairment loss on the business and will earn no revenue from it this quarter.

That DeNA is back to relying on games dismays Moriyasu. Operating profit reached 76.8 billion yen in fiscal 2012 on the back of games for conventional phones, a business launched by Moriyasu himself. Profits languished with the shift to smartphones, falling to about a quarter of the peak in fiscal 2015. The field is also getting more crowded, with PlayStation maker Sony Interactive Entertainment set to enter the fray with games based on popular titles in its library.

DeNA is starting from scratch with its autonomous-driving business after the testing it poured so much time and money into failed to get results. The company recently ended the partnership it entered with ZMP in 2015, teaming up instead with Nissan Motor.

Moriyasu reiterated to reporters his intent to cultivate new profit sources, stressing that "DeNA is an internet company." He said the company is trying to work out an operating structure and business model for the scandal-stricken content curation business that the public can accept.

The profitability of mobile games often proves a double-edged sword for developers, leaving them dependent on the business for profits. Moriyasu's DeNA is at a crucial stage for resolving this tricky situation.

More at the link:
http://asia.nikkei.com/Business/Companies/Developer-DeNA-back-to-leaning-on-mobile-games

DeNA closed a number of content curation sites in December last year after complaints of misinformation and inaccuracies.

For example, an article blamed spirits for having stiff shoulders. The CEO of DeNA issued an apology at the time, closed down those curated websites and took a 30% pay cut to his salary for six months.

These content curated sites were made for generating ad revenue. The writers for those sites were not internal employees of DeNA.
 

Quonny

Member
Fine by me. DeNA is actually one of the few gacha companies that are actually somewhat fair. Keep pumpin' 'em out.
 
In before Nintendo does with DeNA what Microsoft did with Nokia.

Yeah, IIRC MS just bought out Nokia's mobile division right? DeNA's mobile division could become Nintendo Mobile Software or something in the future. Preferably with its own unique name.

I wonder if that 10% stake in DeNA could just outright cover that division.
 

udivision

Member
Well DeNA are responsible for the Nintendo Account infastructure so they're going to be integral to Nintendo's business going forward either way.

Relying on a third party for so much support could be a dangerous precedent.
But it's too late now.
 
I had no idea they were doing autonomous driving. Kind of a weird thing to branch out from games and mobile titles to, or maybe I'm not realizing how big their company is.

Well DeNA are responsible for the Nintendo Account infastructure so they're going to be integral to Nintendo's business going forward either way.

Yeah, unfortunately. Their infrastructure hasn't been stellar, and their janky webview UI in the Nintendo mobiel titles is not up to the quality I expect from Nintendo.
 

crinale

Member
Well DeNA are responsible for the Nintendo Account infastructure so they're going to be integral to Nintendo's business going forward either way.

Kirishima stated Nintendo is not denying other partners regarding network infrastructure at previous investor's meeting. Actually DeNA stock value went downhill at that day right after the statement.
 

Shun

Member
Pls. Doesn't DeNA own mobage.

They do.

And Granblue and several other of Cygames successes were from DeNA. Cinderella Girls was also a hit on their platform.

To think Nintendo would absorb and buy out DeNA is laughable.
 

Oregano

Member
Kirishima stated Nintendo is not denying other partners regarding network infrastructure at previous investor's meeting. Actually DeNA stock value went downhill at that day right after the statement.

It's not impossible but that would be ridiculous. We've already gone from NNID to Nintendo Accounts. Changing system and providers again would be pathetic to be honest.

They do.

And Granblue and several other of Cygames successes were from DeNA. Cinderella Girls was also a hit on their platform.

To think Nintendo would absorb and buy out DeNA is laughable.

They already own 10% of the company and the partnership is only going to become more important.
 
One thing I've been curious about. Do we have any updates on Nintendo's stake in Dwango? They had a 1.5% stake in them in 2013, but they've since merged with Kadokawa. Would Nintendo's stake in them have decreased?
 

pswii60

Member
I really don't get the Nintendo/DeNA partnership and why Nintendo isn't just investing in doing the stuff in house, and why they didn't make that investment longer ago.
 

Galang

Banned
They do.

And Granblue and several other of Cygames successes were from DeNA. Cinderella Girls was also a hit on their platform.

To think Nintendo would absorb and buy out DeNA is laughable.

It's laughable at this moment, but I don't think it would be surprising at all in the future. They already have 10% to begin with
 
They do.

And Granblue and several other of Cygames successes were from DeNA. Cinderella Girls was also a hit on their platform.

To think Nintendo would absorb and buy out DeNA is laughable.
With their other ventures failing and Nintendo sustaining them some income, coupled with the 10% ownership, its a matter of time. AC is coming and that will blow up the charts.
 
A merger would make more sense than a buyout. That is if DeNA's situation somehow gets bad enough to have them try to do that in the next few years, but I'd doubt it for the immediate future.
 

jwhit28

Member
Are these content curation sites like the "5 secrets bankers don't want you to know" ads at the bottom of pages?
 

ggx2ac

Member
Are these content curation sites like the "5 secrets bankers don't want you to know" ads at the bottom of pages?

https://www.techinasia.com/dena-palette-content-curation-platform

It seeks to add ten category-specific content curation platforms to its stable of apps and services through M&A, new hiring, and collaboration. Three of those platforms were made public today, with another three already existing under the DeNA umbrella.

“We call them ‘platforms’ because they’re more than just ad-supported media, for two reasons. First, because any user can post an article, and second, because eventually we plan to monetize them with ecommerce, matching, and other offline services that are suited to each category,” explains DeNA spokesperson Tomoyuki Akiyama.

First up, DeNA revealed the acquisition of Find Travel for an undisclosed sum. The site lists community-curated itineraries and travel blogs based on destination (both domestic and foreign) and category (i.e. beaches and theme parks).

In addition to Find Travel, DeNA announced the launch of JOOY, a curation platform for men that focuses on fashion, love, and dating. The firm also plans to release Cuta, a curation platform for maternity- and parenting-related topics, in June.

The three platforms revealed today will complement three existing DeNA offerings: Iemo, Mery, and CAFY. DeNA acquired Iemo, a site that curates content related to home design and DIY remodeling, and ladies-fashion focused Mery last October for US$50 million. Cafy is the firm’s own cooking and recipe curation service.

While DeNA has yet to disclose themes for its final four curation platforms, Akiyama adds that they will also be lifestyle-related, “but we don’t know exactly what yet. That’s why we’re soliciting startups and potential recruits
 
So they tried to expand into multiple markets and app services unsuccessfully. Not surprised, just because they had the money to do it, does not mean they had the vision or direction to make it successful I guess.

Wonder how their console larger scale games ventures are going?
 

ccbfan

Member
Articles kinda weird.

How is dena flourishing with Nintendo when they didn't make a Nintendo game during the accounting period.

Dena had a higher operating profit that Nintendo for the time period even with the failures.

So I'm not sure where this Nintendo is saving dena is coming from?

Fire emblem is gonna make a shit ton of money though but that's not part of this accounting period.
 

ggx2ac

Member
Out of curiousity, what are these 10 content-curation websites, and what scandals?

Go to post #26 for the websites mentioned.

Here's a statement from DeNA:

http://dena.com/intl/press/2016/12/...iness-by-isao-moriyasu-president-and-ceo.html

December 1, 2016

Recently our curation platform service has attracted a variety of criticism, and as the president and CEO I would like to provide more information about how we reached this point.
As CEO, I am responsible for the service reaching this state. My lack of oversight has caused issues for our users, advertisers, partners, and many others, and I would like to sincerely apologize for damaging the trust you've all placed in us.

We have been severely criticized for allowing some articles with medical information with insufficient medical grounds to be posted on our healthcare curation website WELQ, without review from medical professionals. Providing such information in a way that was inappropriate to the sensitivity of the subject matter was a major mistake, and on realization, we decided, on November 29, to withdraw all articles posted on WELQ.

Additionally, it has been pointed out that the process for creating our articles for all our curation media, including WELQ, was problematic. Questions have also arisen concerning responsibility for posted articles.
We have very carefully considered these points, and reviewed the state of our operations. In nine of our media that share the same operating structure and policies (WELQ, iemo, Find Travel, cuta, UpIn, CAFY, JOOY, GOIN, and PUUL), some parts of our manual and directions to writers could be interpreted as suggesting plagiarizing other websites. I cannot view this as being morally correct.

We decided that we should not continue to provide or allow further articles to be created under our current process, so we decided to withdraw all articles from these nine media today at 6 p.m. (Japan Standard Time). Going forward, I personally will serve as the head of the Curation Management Committee and oversee the review of our article creation process and its contents to date for all of our media, including MERY. Further, I promise to fundamentally change our operations of these media and create a process which I can completely place my faith in.
It was my naiveté that did not allow us to respond in a timely manner to this situation, which allowed the problem to grow to such a significant scale. I would like to deeply apologize that it took me so long to address this issue.


My responsibility for these events is heavy, so in order to make the management responsibility clearer, I have decided to reduce my salary by 30% for 6 months; however, that will not be all. It is my top priority to fulfill my promise of improving the operations of our media.

We deeply regret having caused this situation and having broken the trust of so many people. We are reflecting on our actions and will do our very best to reverse the damage that has been caused.

Isao Moriyasu
 
Well DeNA are responsible for the Nintendo Account infastructure so they're going to be integral to Nintendo's business going forward either way.

Where did this even come from? Nintendo said they were partnering with DeNA now everyone thinks everything remotely mobile or online related is handled by them, despite no evidence of that being the case, unless this was stated somewhere
 

BD1

Banned
I wouldn't be surprised if they are a Nintendo division in a few years' time.

I believe Nintendo has a minority ownership stake in the company (completed after the original partnership was signed) already so the path is there.
 
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