DeNA West CEO: ‘Nintendo became ready to do this. And we were ready the whole time’

TOKYO — It’s the dawn of a new day in mobile gaming.

Immediately following the announcement of a business and capital alliance between Japanese gaming giants DeNA and Nintendo, DeNA West CEO Shintaro Asako spoke with GamesBeat today about what the future holds for the Tokyo-based mobile game company under this new partnership.

Asako says that the alliance will help DeNA reach beyond its competition to lead the industry and become the No. 1 mobile gaming company in the world — dethroning Supercell and Clash of Clans, King and Candy Crush Saga, and Machine Zone and Game of War in the process in a market estimated to be worth $30 billion in 2015 and $40 billion by 2017.

“Mobile gaming is our core business, and we definitely wanted to be the No. 1 mobile gaming company in the world — we’ve wanted to be a dominant player,” Asako told GamesBeat. “We were originally focused on the feature phone space and then shifted over to smart phones, and now [we have] a lot of initiative in both the domestic and international markets. But we really want to be leading player.”‘

DeNA isn’t in the top 10 mobile companies overall, according to research firm App Annie, but it is No. 8 in Japan.

Asako said that the company has put a lot of thought into how it could move into the top position, and one answer kept popping up.

“Internally, we had a lot of strategic meetings,” he said. “The one big solution was always that there’s a giant IP holder in the market that hasn’t stepped into the smartphone environment. Really, the reason they were convinced that they wanted to work with us was that we were so determined to work with them that we have really been talking to them since 2010. Yes, we were talking to them for a long, long time.

“Finally, Nintendo became ready to do this. And we were ready the whole time.”

How to court Nintendo

Asako credits DeNA’s unique approach toward a partnership as one of the key reasons that Nintendo agreed to the deal.

“I think many people went to talk to them saying something like, ‘Can I have Mario? Or can I have Zelda?’ — a lot of people wanted a shortcut to get the business,” he explained. “They need to be straight at what they really wanted to get at. We’re not doing this just for this year or next year — we really want to be a leading player.

“One thing that we’re always thinking about is how can we build a structural advantage over other people. When you look at other successful companies, like King or Supercell, a lot of them are using one successful title and then using that game engine for other titles. I think the people out there see that as not really a strong structure to be successful for a long time.”

DeNA, with a stable of games that include successful media franchises like Star Wars and Transformers, knows how to work with big intellectual properties. And it doesn’t want to be tied to just one.

“Our approach was more about looking at their strengths, and then looking at our strengths, and when we get together we can do something bigger,” he said.  “Our initial discussions were around memberships and backend systems. Through this discussion we said that if we build this backend, we should obviously work on a game. And if we’re making a game, we should use Nintendo IPs.”

The team behind the curtain

Above: Nintendo chief Satoru Iwata is pleased with DeNA’s capability to handle the mobile backend of this deal.

Image Credit: Nintendo

Nintendo president Satoru Iwata credited DeNA’s willingness to take care of the behind-the-scenes business of mobile gaming as one of the primary reasons it went forward with this partnership. Asako echoes this.

“Looking at successful players like King or Supercell, they have a massive user base, and they’re very successful at creating content,” he said. “But they haven’t really built a backend system in the way we have done, and I think that’s the key part. When you look at successful players in the mobile gaming space today, not many of them have created backend platform systems.”

Asako says that DeNA has always been in the backend business.

“Not many people talk about this but DeNA created the platform called Mobage,” he said. “Also, we started our business in VC business — that was basically a platform. DeNA has been focused on mobile platform business, with one of them happened to be games.

“Backend is not something people see every day,” Asako chuckled. “We’re willing to help them build that really sophisticated backend structure. It is not a sexy part. But we’re willing to do it.”

Getting what DeNA has always wanted

Asako says that DeNA and Nintendo still need to figure out some of the specifics in this partnership. But his company has always known what it wanted, and Asako is certain that their combined efforts will get it there.

“I’ve wanted to create something globally successful, not only for kids, but for mid-aged people and beyond,” Asako explained. “The game should attract a huge range of people. We wanted to get a huge audience like Candy Crush — like 100 million users. We wanted to create something with that kind of DAU [daily active user] base.

“For this, I think the solution is not coming out with 10 or 20 games right away. We should pick the right game. We should actually create a smartphone-specific game that requires day-to-day social interaction. It’s not just porting a Wii U game out to smartphones. But actually properly design a smartphone game. ”

King and Supercell are formidable adversaries, but Asako now has something even stronger than candies or clans in gaming: Mario.

“I think with the strong IPs they have, and their strong game operation expertise we have, I don’t think we’re dreaming [about reaching] 100 million DAU,” he said. “And by having that we can do  — we wanted to get there. I think that King has that network today. With Nintendo, there’s a huge possibility of that.”

For now, business as usual

Above: Transformers: Battle Tactics is one of DeNA’s most recent mobile releases in the U.S.

Image Credit: DeNA/Hasbro

Asako says that this new partnership won’t change what DeNA is working on. He doesn’t expect that the company’s headcount will drastically increase in the next couple or so years and that all current work and projects will continue on their paths, without issue.

“This will not impact anything that we’re doing, he said. “Of course, we’ve allocated our best people to this — it’s a huge deal and we’re superexcited. But it is important for us to be able to build our own games and continue doing all the parts of our business.”

Asako doesn’t see this as Nintendo being too late to the mobile game.

“Some people say, ‘Why did it take so long?’ When you look at the mobile gaming market, I don’t think it’s too late to do this kind of partnership,” he said. “This is still the early stage of the market. The Western market is growing. It used to be a $2 billion to $3 billion market, but today it’s a $9 billion market. I think it’s going to grow. Even the Japanese market is going to grow.”

Nintendo, Asako admits, will have at least some say in projects beyond this.

“Nintendo is now a 10 percent shareholder in DeNA. So they have a lot to say,” he said. “Ten percent is actually pretty huge: Nxt to our founder, Namba, who owns 15 percent, they’re going to be the second-largest shareholder. It’s a big deal.”

It’s almost as big a deal as bringing Mario to your smartphone in the near-future.