DeNA shutters U.S. offices as the early leader in mobile gaming retreats to Japan

Bridging success in gaming from one region to another is difficult. Just ask DeNA.

That publisher is dissolving and liquidizing its DeNA Global in San Francisco, which was the subsidiary that oversaw the company’s Western operations. DeNA was one of the early leaders in mobile gaming, but now it is not even a top-10 publisher in the $36.6 billion industry. And the company is likely shifting its focus to ensuring its partnership with Nintendo works out.

“In the Game Business, DeNA has focused on three key regions — Japan, China, and the West,” reads a DeNA notice to investors. “During the fiscal year ended March 31, 2016, DeNA optimized the organizational structure and game portfolio in the West and has been developing games for the Western market with a lean structure since; however, since the games did not meet expectations, DeNA has decided to dissolve and liquidate its West subsidiaries, including DeNA Global, Inc.”

DeNA had some of the biggest early hits on mobile with games like Rage of Bahumut. That collectible card game dominated Japan and other regions long before Blizzard ever even announced Hearthstone: Heroes of Warcraft. But the company never transitioned those early hits into sustained success — especially in important Western markets like the United States. And that has led to this retreat.

While the company is ending its physical presence in the U.S., the company is not abandoning the region or surrounding markets.

“[DeNA] will shift the strategy for this region towards collaborations with external partners rather than doing game development in a local studio,” reads the notice.

Gaming-market analyst Serkan Toto noted this closure in a post on Twitter before also claiming that DeNA is handling a lot of the development work on Nintendo’s upcoming mobile game, Super Mario Run.

1) About Super Mario Run: it's still on track for a December release. Surprisingly, the game is not developed by Nintendo but partner DeNA.

— Dr. Serkan Toto / Kantan Games Inc. (@serkantoto) October 18, 2016

Super Mario Run is due out in December, and Mario creator Shigeru Miyamoto is overseeing the game personally. That means Nintendo is handling the design and is responsible fordirecting the game. DeNA, however, is handling the “engineering.”

That is a bigger role for DeNA than Nintendo originally claimed the company would have as part of the partnership between the two Japanese publishers. DeNA was always supposed to handle Nintendo’s network across mobile and consoles going forward, and the developer was also going to provide software-as-a-service expertise. But Nintendo always claimed it was going to handle game development itself. That may have changed when Nintendo decided to make Super Mario run.

Now, DeNA has more responsibilities than ever in its dealings with Nintendo. And with analysts predicting that 1.5 billion people might download Super Mario Run, DeNA likely wants to get this right to ensure that the partnership continues.