Yoshikazu Tanaka managed to become the youngest billionaire in Japan since joining Gree Inc. At that time, the majority shareholder in the phone-based gaming company, has a market capitalization of $ 4 billion. However, 18 months later, capitalization dropped to USD1, 38 billion.
The 36-year-old man, too late to respond to the growth of smartphones in the global market. Half a decade after the iPhone went on sale in Japan, Gree sales depend on the generation of the handset, while 60 percent of revenues earned precede smartphone.
As a result, the company had its first annual profit decline, as consumers move in the game is available through the Apple App Store and Google Play. Communities left platform social gaming network Gree and rival DeNA Co. who once dominated the local market. Since November 2011, shares of the Tokyo-based company have slumped more than 50 percent and a worst of 108 shares belonging to other stocks in the sector Topix.
“They have to fight Apple, they have to fight against Google. We will move to whichever industry structure potentially earning player in the mobile game now,” said an analyst at Macquarie Group Ltd., David Gibson, as quoted by Bloomberg, on Tuesday (23/4 / 2013).
Euphoria of investors to the new Japanese government and policy to trigger growth, there appears to be gone for Gree. Gree stock decline from its peak, the opposite of the 225 Nikkei rise by 55 percent.
Gree net profit recorded at 31 billion yen, or USD311 million on June 30, far from last year’s profit by 48 billion yen. This decline, the first drop since the company went public in 2008. Gree closed yesterday at 1,227 yen, down from a peak of 2,840 yen in November 2011.
Currently, the number of smartphone subscribers in Japan rose to 37 percent, according to data from March 31. Based MM Research Institute Ltd. in Tokyo proportions, estimates the market to grow 58 percent in March 2015 and 65 percent in March 2016. Global smartphone sales will probably rise 28 percent this year, to 836 million units, according to IHS Inc. ‘s iSuppli.
Mobile phone-based game market in Japan may have grown 37 percent to 387 billion yen in March, and expect to grow 10 percent this year. Although the market is growing, stagnant incomes Gree probably because they have lost their momentum in the mobile phone-based game in Japan.
Tanaka, who pioneered social networking game for mobile phones in 2007, the first time looking around the Internet in 1996 while visiting the United States (U.S.). Three years later, he graduated from Nihon University in Japan with a degree in law. Before founding Gree, he worked at Sony Corp. ‘s Internet unit and online store Rakuten Inc
Tanaka is the youngest billionaire in Japan, according to Forbes magazine. The next youngest is Rakuten President Hiroshi Mikitani 48 years, with a wealth of USD5, 6 billion.
On the other hand, efforts by Gree game development was delayed, due to the features of their game under the spotlight of regulators Japanese Consumer Affairs. The regulator said the game features known as “comp gacha” (pronounced gotcha) may be illegal, because it has similarities to gambling.
Gree also seeks to increase the supply of game by buying smaller developers. Since 2009, the company has acquired stakes in 17 companies, including Pokelabo Inc. and Funzio Inc.. In February, Gree mobile games formed a partnership with Yahoo Japan Corp, Japan’s largest Web portal, game developers are bound by the creator of Pac-Man Namco Bandai, Toei Animation Co. and broadcaster TV Tokyo Holdings Corp. last month to launch an animation program and sell merchandise related.