Japan's DeNA to offer mobile games on official sites of China's three largest carriers

The Japan mobile gaming company will also offer purchases that are charged through Chinese users' phone bills

DeNA, a major mobile platform operator in Japan, said Wednesday it has signed deals with China's three largest carriers to offer its games through their official app stores.

The Japanese company said it had also reached agreements to let users pay for games and virtual items directly through carrier billing, a major hurdle that eliminates the need to establish a separate method of payment. Direct billing is already available for China Mobile and will start for China Unicom and China Telecom this summer in the country.

DeNA is aggressively expanding abroad, especially in China, where partnering with software portals and official download sites is crucial to drawing users. In recent months it announced deals with SINA, the operator of China's largest microblogging platform, search engine Baidu, and game developer NetDragon Websoft. Last year DeNA said it would offer its core gaming platform on the Aliyun mobile OS developed by e-commerce giant Alibaba Group.

The company said it had 36 million users at the end of last year. It offers most of its games through the "freemium" model that allows basic play for free but then charges a premium for things like in-game items and power-ups. It also generates revenue from in-game advertising and tie-ups and affiliate marketing, and is highly profitable -- during the fiscal year that ends this month it expects to generate ¥32.6 billion (US$400 million) in net profit, on ¥144 billion in sales.

The latest deals will give DeNA access to the almost 1 billion subscribers of the three Chinese carriers, though only about 10 percent of them are on modern 3G networks. Japan's mobile market has about 123 million subscribers total but is considered a mature market that has mostly stopped expanding.

DeNA's aggressive tactics have also brought criticism and legal action. It was sued last year by a rival game company for obstructing developers that tried to build for other platforms, after the Japan Fair Trade Commission had earlier warned it to stop the practice. It has also been criticized for luring unwary gamers into expensive purchases.

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Jay Alabaster

IDG News Service
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