Buying ngmoco: a bid at a global game platform (2010)

Can a winning template be moved to another country?

The core of this decision lay in a question: whether the template for success it had built at home could be transferred, as it was, to an overseas market of a different character. In Japan’s feature-phone market, the method of operating a game while watching the numbers and optimising billing produced high revenue. But what that method presupposed was Japan’s peculiar devices, users and commercial customs, and there was no guarantee the same template would work as-is abroad, where smartphones were the lead. That DeNA took in a leading local company whole can be read as a choice to leap over the difficulty of transplantation — buying finished development capability and a market rather than learning it the hard way itself.

Yet what the acquisition secured was development capability; it could not buy the time to close the cultural gap between Japan and abroad. The difficulty of integration lay on a different axis from the sum paid. ngmoco’s dissolution and the later impairment show that this bet did not bear fruit as hoped. Still, which was right — growing an internationally viable form from scratch on one’s own, or taking in a local company and stepping in all at once — cannot easily be pronounced now. In which market, and in what configuration, to make the strengths built at home tell — the theme DeNA put to the world early would go on being re-asked, in changed form, each time it ventured into a new field.