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DeNA Director: 'I Think That Zynga Has Not Really Researched Monetization'

Kenji Kobayashi, director of top Japanese social game company DeNA, tells Gamasutra its ARPU of $12 -- much higher than its Western competition -- is not a fluke, and that others must play catch-up to compete.
Kenji Kobayashi, DeNA's director, and the global executive producer for its social games business, is convinced that the high average revenue per user which the company sees isn't a fluke. "I think that people who don't know much about the Japanese market just dismiss those users as crazy, but that's not the case. You really need to research thoroughly at what time monetization becomes the most fun for your users," he told Gamasutra in a recent interview conducted at the company's Tokyo headquarters. DeNA is the owner of U.S.-based Ngmoco, which recently launched the company's successful Mobage social games platform in the West. A $12 ARPU is a lot higher than other social games companies manage, and, according to Kobayashi, "It's a very different scene, and I think that Zynga has not really researched monetization." "With Zynga, monetization often comes in the form of energy refills, or area expansions, or item unlocks, or decorative stuff. If you ask whether there's any reason to buy all of that, there really isn't. So I think the biggest difference between us and Zynga is in the number of payments made by users." The two markets aren't as different as developers might think, Kobayashi told Gamasutra. "I read in article that the ARPU across all Facebook apps is something like $20 a month, which is up there with the best of Japan's game scene. However, the ratio of paying users is only three percent-ish, I think. That's one of the big differences, and I think that's most people don't see enough reason to start purchasing things; that or the purchases just aren't that exciting. They don't expand on the fun." His company sells chances -- not items -- for fun. "We're certainly different from Zynga in that respect. Both Kaito Royale and Ninja Royale are games where you're gathering treasure, but if users could get this treasure via paid items, then the game balance would fall apart. There wouldn't be any meaning to it; you'd be ruining the core of the game," Kobayashi said. "What we sell instead is the opportunity to make treasure gathering easier. For example, have you played mahjong? This may work with poker, too. If you're one card away from a royal flush, you only get one chance to draw that card. Well, what if you paid 100 yen [$1.31] and get three chances instead? (laughs) Which do you think is more interesting to the user: very difficult odds, or a chance at easier odds?" The full interview, in which Kobayashi shares his insights into the social games space as the director of the leading company in that market, is live now on Gamasutra.

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