Acquisition news comes at strange times. Today is no different. Late in the day just before a long holiday weekend it was announced that OpenFeint had been acquired by Japanese company GREE for $104 million.
[Updated 7:00pm, PST] Reportedly the acquisition shouldn't change either company drastically. Users shouldn't expect any immediate chances to the OpenFeint system, and both parties are positioning this acquisition as a one plus one equal three kind of thing, the sum is greater than the parts.
We are all very familiar with the little green leaf of OpenFeint with it's social gaming network already integrated with over 5,000 iOS and Android games. GREE, is a Japanese social games company much like DeNA, the company that acquired ngmoco last year. They develop massively social games for the Japanese market.
For OpenFeint, the investors get over a hundred million dollars, and validation of the network that they have built, the largest mobile social gaming network. For GREE, they get quick access to the US, and the iOS and Android platforms. GREE will also seed some more money to help OpenFeint accelerate and grow. A good sign that they are interested in building the company and not just absorbing them.
In an open letter to developers who use the OpenFeint platform, Jason Citron, CEO & Founder of OpenFeint tried to assure developers that this change will be good for the platform as it will increase the speed of updates and new features. OpenFeint have also posted a FAQ with answers to some common questions on the deal.
In my opinion, most acquisitions seem have a negative side to them. One company gets the short end of the stick. But thus far, this acquisition seems to be a win for both parties and will allow OpenFeint to continue to do the great work that they do while letting GREE better benefit from that. Time will tell.
A big congratulations to all at OpenFeint!
Read the full press release and note from Jason Citron below, after the jump.
Here's Jason Citron's open letter to the developers that use OpenFeint in their applications.
Hey OpenFeint Developer,
On behalf of the entire OpenFeint team I’m proud to announce that, as of this morning, mobile game developers all over the world have Leveled Up. Today, OpenFeint was acquired for US $104 million by GREE, Japan’s leading mobile social gaming platform. While this is certainly a proud moment for our young startup, it is really a high five to you guys, our game developer community. As of this moment, 5,393 games, that you built, form the backbone of this network - bringing millions of gamers together every day.
For those of who don’t know, GREE operates a social gaming network much like OpenFeint in Japan. GREE has over 500 games on their network and generate hundreds of millions of dollars in revenue every year. With this deal, GREE is stepping out of the Asian market and accelerating their global growth.
So what does this mean for OpenFeint? Simply put, we are stepping on the gas pedal. The entire OpenFeint team is staying on and will continue building the platform that we launched together two years ago.
With GREE’s expertise and financial backing, you’ll quickly see the benefits of this collaboration. Expect to see faster SDK updates, awesome new products, and network improvements. We’ll build more global distribution channels like we have done in China with The9 - opening new markets for your games. We’re passionately focused on creating a better social gaming experience for your players.
We share a common vision with GREE - to make the world a happier place through gaming experiences. It may sound idealistic, but it's true. Your games connect families and friends and even strangers - giving millions of people reasons to smile and laugh with each other. In two short years we’ve connected 100 million people. In the next 3 years, with your help, we intend to connect 1 billion.
I hope you’ll join us.
Founder & CEO, OpenFeint
Below is the press release from OpenFeint, released earlier today, April 21st.
SAN FRANCISCO – April 21st, 2011 – GREE, Japan’s leading mobile social gaming platform, today announced its entrance into the global market with the acquisition of OpenFeint’s outstanding securities for US $104 million, plus additional capital for accelerated growth of the OpenFeint platform. OpenFeint and its team will remain with long-term incentives, including CEO and founder Jason Citron, who grew the company to 75 million users and 19,000 game developers in two years. Working together, GREE and OpenFeint will build a global ecosystem of distribution channels for game developers.
Combined, the GREE and OpenFeint gaming ecosystem will reach 100 million users worldwide. As the fastest growing technology company in Japan, GREE will use its social gaming and platform expertise to accelerate OpenFeint’s growth, and take mobile social gaming to the next level.
GREE and OpenFeint are rapidly expanding internationally, soon opening offices in Beijing, Singapore and London. The companies are aggressively hiring, with OpenFeint planning to double in size in 2011.
“At GREE, we are socializing the next evolution of games and, as the best-in-class US-based mobile social network, OpenFeint is the ideal partner for us to offer the best mobile social games to the largest global audience,” said Yoshikazu Tanaka, founder and CEO of GREE. “This acquisition further emphasizes GREE’s commitment to providing the first and best global gaming ecosystem, with both the developer and consumer in mind,” says Naoki Aoyagi, CEO of GREE International, the subsidiary that recently opened an office in San Francisco.
OpenFeint manages the world’s largest cross platform social gaming network for smartphones. Over 19,000 traditional and free to play game developers take advantage of the network’s features to acquire, retain, and monetize users.
“We are excited that GREE shares our belief in the OpenFeint network and are ecstatic to partner with a renowned global leader to build a multi-billion dollar business,” says Jason Citron, CEO and founder of OpenFeint. “Together, we will deliver the strongest global ecosystem of gaming networks to our combined 100 million users.”
Over 5,000 games use OpenFeint, including #1 Apple App Store and Android Marketplace hits such as Fruit Ninja and Tiny Wings. OpenFeint also has established partnerships with leading mobile carriers that hold over half the US market share.
Overview of acquisition GREE will acquire OpenFeint through a triangular merger. A new subsidiary was established in the US under GREE International for the 100% acquisition of OpenFeint. GREE contributed to GREE International funds for the acquisition and subscribed for additional shares in GREE International, and the new subsidiary merged into OpenFeint. GREE International will pay cash consideration to OpenFeint shareholders and warrant/option holders in connection with the merger. The execution of the merger agreement and completion of the merger occurred on April 21st, 2011.
For the detailed scheme, please refer to the IR presentation material:www.gree.co.jp/en/ir/
About GREE GREE provides Japan’s leading social networking service and social applications at the forefront of mobile technology with over 25 million users. GREE started its global expansion by opening GREE International in San Francisco, a 100% wholly- owned subsidiary of GREE, a multi-billion dollar company trading on the Tokyo Stock Exchange (Code:3632).
GREE maintains a strategic alliance with prominent international partners such as Tencent, one of the largest Internet service providers in China, and with Project Goth, which manages “mig33,” a mobile SNS with about 47 million users in emerging countries including Southeast Asia, to create common platform specifications for the smartphones. GREE aims to provide a truly global social platform for users worldwide by pursuing further collaboration with established Japanese as well as international partners, and enabling deeper person to person interaction within games.
For further information, please visit http://gree-corp.com
About OpenFeint OpenFeint, headquartered in Burlingame, California, is the leading mobile social gaming network for all app stores and mobile devices, with over 75 million registered users and a presence in over 5,000 games. In China, OpenFeint is exclusively provided by The9. Established in August 2008, Jason Citron is the CEO. Developers interested in more information about OpenFeint and its leading mobile social gaming technology should visit http://openfeint.com/developers
Matt Marquess Sparkpr for GREE International [email protected]
GREE, Inc. and the GREE, Inc. logo are registered trademarks of GREE, Inc. in Japan. App Store is either registered trademarks or trademarks of Apple Inc. in the United States and/or other countries. Android is either registered trademarks or trademarks of Google Inc. in the United States and/or other countries. All other trademarks are the property of their respective owners.