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Inciting The Mobile Revolution

Ngmoco CEO Neil Young discusses his grand vision for the future of mobile gaming, a move he feels Ngmoco, bolstered by its November 2010 acquisition by Japanese giant DeNA, is poised to not just capitalize on but shape.

[Ngmoco CEO Neil Young discusses his grand vision for the future of mobile gaming, a move he feels Ngmoco, bolstered by its November 2010 acquisition by Japanese giant DeNA, is poised to not just capitalize on but shape.]

Less than three years ago, Neil Young left EA to found Ngmoco. At the time, he described the company as a "publisher" -- but it is clear from the conversation he had with Gamasutra this month that his ambitions for the company, which was acquired by Japanese mobile entertainment titan DeNA late last year -- are much bigger now.

"It's kind of like a once-in-a-generation opportunity," Young tells Gamasutra.

His belief is that, using DeNA's hugely successful Mobage-Town service as the blueprint and matching it with carefully-crafted and targeted games, the possibility is there to launch a service that can dominate the entertainment landscape, just as cable networks such as MTV and ESPN defined their niches in the Wild West of cable television.

In the following interview, Young outlines his roadmap for the company, discusses its integration with Tokyo-based DeNA, and offers up his thoughts on the ascendency of Android -- a platform that plays a big part of the future of the company. He also discusses the opportunities for developers to hop onto the Mobage service.

So how long has it been since DeNA?

Neil Young: We announced the acquisition in September; we closed November the 9th. So it's been about three months.

And how are things going in terms of the integration?

NY: It's good. There's a lot to do and a lot to learn. I was telling someone the other day I kind of feel like I'm in The Matrix, you know? And you go [mimics the quick learning segments from the film], you know, and I feel like I'm going to come out of that and know some kung fu. So there's a lot to learn.

DeNA has built this incredible business machine in Japan, and we've been spending a lot of time really understanding the parts that are truly globally applicable; the things that resonate at a human level, and then the things that are just cultural.

Whenever you're dealing with media and entertainment, the content is often specifically related to the culture, but the formats are actually quite common, especially in Western markets. But in games the mechanics are fundamentally human, so humans respond to mechanics in certain ways, certainly in social games.

And so we've been going through the process of really trying to understand the DeNA businesses completely as possible and preparing to bring mobile games to a global audience. You know, not take the Mobage-Town services -- the feature phone service in Japan -- and just bring that across, but actually build our new smartphone service on a global scale. So there's a lot of work to do. We've accomplished a lot in 90 days, and I'm looking forward to the next 90 days.

Around the time of the acquisition you launched the Mobage program for Western developers. How has that been going with uptake and interest?

NY: It's good. I think we announced at the time that we had 40 developers in the West and the East -- about 50/50, so a split down the middle -- as a part of the private beta. We're still in the private beta, I think we're at 0.93S right now. 0.95 is the next big major release, and then 1.0 will come out shortly thereafter.

The priority is on launching for the Japanese market first, and then the Western markets, and then China. But we expect the Japanese launch of both Mobage and the general availability of the set developer sandbox and the APIs, those things will happen in the next couple months.

What is your goal, ultimately, for it? It's a private beta right now. How open will it get? And will developers be able to populate games onto the service as freely as, say, Facebook?

NY: Yeah, mostly. As freely as Facebook? I mean, there is a review process, but the review process is, you know, does it have pornography in it? It's not a "Do we think you are a competitor?" or anything like that.

Apple App Store-esque, I guess, in that way?

NY: Well, it's sort of different... I'll tell you what our ultimate goal is -- we think there's an opportunity to build one of the definitive destinations for games and entertainment.

And on Android, that means, today, sort of an aggregated application and individual applications available in the marketplace. And on iOS, obviously you can't do the aggregated applications, so it's really just the disaggregated approach where any game that you get, you become a part of the network.

We've become very adept as a company, as we built the Plus+ network, of being able to build and maintain a relationship with the audience over time, and introduce that audience to new applications, so that we can keep people cycling through and engaged in the business.

As the mobile operating systems move from phones to tablets and televisions, there's really an incredible opportunity to build something that feels like a future entertainment network. Something that's as impactful to the digital generation as, say, MTV was to the rock 'n' roll generation, or ESPN was to sports fans, and that's sort of what we're trying to accomplish.

Now if you could do that, it would be incredibly valuable. DeNA generates about 1.3 billion U.S. dollars, at about $630 million of profit, from a service that is much like that. In just a single territory. It has the reach of a television network, the monetization of a social games business. So that's sort of the vision; that's kind of where we're headed.

Along the way, we will modify our plans based on what happens in the ecosystem, and how things develop, and what new devices come out, and how quickly things move from phones to tablets, and then tablets to televisions. But all with this basic kind of core premise, this core idea is if you can maintain, manage, and monetize a relationship with customers over time. That is actually the valuable IP at the end of the day; that's the thing that you can build a really big company around.


I want to talk to you about Android. As you said, there's a contrast between what you can do with it as compared to iOS, and it seems like Ngmoco is pushing towards some ambitious stuff for Android. Can you give me an idea how you feel about Android and its emergence?

NY: I feel good about it. I mean, I think there are some challenges with it, but in general I feel pretty good about it. Google's made some incredible strides; I mean clearly their open strategy is getting them traction in the marketplace.

I think the operating system is improving, and improving at a fast rate. I think their delivery mechanism -- I'm not sure if you've seen the Android Market on the web, and the ability to be able to one-click download and it appears on your phone, over the air -- I mean, I think that that's superior to iTunes in many ways. So I think it's developing at a pretty fast pace.

Things that need work are fragmentation... And fragmentation is not so much device fragmentation. I mean, that is there, but it's more of an annoyance, I think, than anything else.

It's really operating system versioning. You know, Verizon hasn't rolled out 2.2 on its phones, and you need 2.2 because that's where Google's latest billing mechanism is going to come from. Then you're sort of always straddling lots of different operating system variants.

And then payment mechanisms -- you know, the payment mechanisms on Android right now just are quite a bit far behind iTunes and iOS. But they're making improvements; they'll come out with IAB. They certainly have made progress on carrier billing. So IAB plus carrier billing plus, maybe a better managed updating process for operating systems, and a continuing evolution of the marketplace... and I think you're starting to get something pretty interesting.

What appeals to you about Android? Is it just the install base creeping up? Or is it something about the platform -- the freedom that you have as a developer?

NY: I like the freedom; more freedom is better in my opinion. So I like that, and it's just the scale of Android is undeniable now. Now the naysayers will say, "Yeah, but it doesn't monetize as well" and, "You don't download as many apps." And those things are true today, but the trend is the thing to pay attention to.

If you look 12 months out, I think the monetization issues are solved. If you look 24 months out, I think monetization and fragmentation issues are probably solved, and you probably have an install base that's pretty impressive. I think also Android is sort of designed to be a ubiquitous operating system for consumer devices. So whether that's in DVD players or televisions or tablets or telephones or cars, I think that that's kind of interesting.

How much does Ngmoco -- the entity in San Francisco -- really contribute to the global DeNA strategies and projects that you are working on? And how much do DeNA contribute to you? How much back and forth is there?

NY: A lot. So -- subject to the shareholders' approval here -- I'm joining the board of DeNA. So that's obviously fairly meaningful. I spend a lot of time with Tomoko Namba, who's the CEO, really trying to plan the business. She's very committed to make DeNA a global company, and I think she really recognizes -- I know she really recognizes -- that the best way for her to do that is to build a management team that's representative of the world.

And so that means having the right balance and mix of experienced people from Japan and experienced people from the West come together and try to build a great company together.

And we didn't have to sell Ngmoco, you know. It wasn't like we were out of money and it was time to go. It wasn't like I was getting tired and didn't want to work anymore, anything like that. I mean, we sold Ngmoco because it was really the best way for us to accomplish the founding vision of our company.

If you look at the very original logos for Ngmoco, the ones that were probably at our first GDCs -- and certainly on our investor pictches, and our original business cards, and our announcements when we raised money -- it's "ng-colon-moco," and the emoticon. And then underneath that is some Japanese writing.

I remember, yeah.

NY: And so if you translate that it says, [in Japanese] "Future Entertainment Company" -- like a literal translation of what our vision was; what our founding vision for Ngmoco was. The combination with DeNA was done because we shared that same vision, and we felt like the time to do it was now.

And if you could do it, the scale of endeavor that you could create would be, one, very big and two, you just don't get those opportunities very often. Things don't converge in such a way that frequently -- I've experienced at least in my life -- where you have the opportunity to do something really, really, really big.

It's kind of like a once-in-a-generation opportunity, and I really feel like the last time it happened was with cable; you know, with CNN and ESPN and MTV. And the time before that, I think it was probably broadcast media, broadcast television. So I really think that there's an opportunity to deliver something that, for our generation -- for people who've grown up with games, that love games, that love interactivity, but also like other media too -- to kind of bring something together in one place.

Mobage-Town in Japan is just an early blueprint of that. And if you take Mobage-Town -- if you could Westernize the things that should be Westernized, retain the structural elements that work, bring it to smartphones in a way that delights people when they interact with it, I think that'd be incredibly powerful; I think that would be culture-changing. And that's very, very, very exciting.

So DeNA shared that vision, we shared that vision, and we decided to kind of go on the adventure together. And it won't be a smooth ride, I think, for us, and we have a lot to learn from one another, but it's very exciting.


As you said early on, if we observe the market of Japan, for years now there's been a strong, really healthy, robust mobile market in Japan, but it's just had no impact outside of Japan. What makes DeNA different?

NY: Well, I think the conditions on the ground in the West weren't really conducive to making something happen. So if you look at the conditions on the ground now, they are eerily similar to the conditions on the ground in Japan in the early to mid-2000s.

Penetration of mobile subscribers into the population base is actually quite advanced here; if you took the total number of subscribers in the total population, it's 93 percent. Japan is 97 percent.

What's different is today in Japan, 3G penetration is 98 percent and here it's about 47 percent. Well, when Japan crossed the 40 percent threshold, that's when this explosion really happened. So we're crossing that threshold, and you've probably seen pictures of Japanese commuters on subways...

Oh, I've seen it in real life. [laughs]

NY: Right, sitting there like that [holds phone and looks down at it intently]. Look around you here now, it's the same thing.

You know, you picked up your phone and you looked at it in the middle of a meeting with us, and you can walk down the street -- we could look out the window now, we could see every other person looking down at their phone and interacting with it. So these devices have become kind of essential like Swiss Army knives for life; the essential accessory.

The only other accessory that's more important to you right now than your phone is your wallet. And in Japan, actually, that's not even the case, because they've got mobile wallets associated with their cell phones. So I think that the conditions here are now such that the type of behavior that we've been able to see in Japan can actually translate.

Now if you just took something from Japan and moved it over, it may or may not work. Just like if you took a Japanese video game and you just moved it straight over, it may or may not work. Now you can start by just localizing the language, and it still may or may not work. Some do, some don't.

I think what you really have to do, is you really have to be able to expertly differentiate between what is cultural in content, and then what is human and mechanical. And the human and mechanical things, you need to bring those across, because they are generally applicable. The content stuff you have to look at, I think, with a much more critical eye.

So on that basis do you think that, say, Western developers that are being invited into the program, are they anticipating targeting Asian audiences with their products? And the same for the Asian developers.

NY: Yeah, and I think one of the great benefits -- just to describe a little bit about the way that Mobage-Town works in Japan -- is we have consulting teams that literally work with the developers to try to make the games be the very best they can be in that ecosystem. So they give them advice and guidance and feedback to help them get the very best outcome.

We are going to extend those consulting teams so that they don't just focus on the very best outcome for a given territory, but helping teams get the very best outcome on a global basis. So if you're a Japanese developer and you want to bring your application to the West -- even before you start it -- that team will help you identify if it's going to be appropriate, and if it's not, what type of changes you could make, and vice-versa.

We want developers that work with us to have the very, very best chance of having really big hit titles and making the most money because, I mean, certainly, if that happens, we'll be running a really good ecosystem.


We Rule Quests

You had spoken about having good results getting users involved in the Plus+ network -- retaining people, turning them on to other games. I'm curious if that's your vision to keep people in the Mobage loop.

NY: Well, yeah. I mean, we'd love for people to be engaged in Mobage so that it becomes a part of their daily routine. I mean I think the reality is... You know, we don't own people. [chuckles] People own themselves. And we have to provide them with a service that's compelling enough that they just want to keep coming back to it.

It's kind of like when you go home -- if you have a TV at home that you use -- you're probably going to go to a TV channel that's kind of like your home TV channel, and it's the one you always tune in to as a starting point.

We want Mobage to be that. For games and entertainment, we want you to go, "Okay, Mobage. That's where I'm going first" -- "Figure out what's going on in Mobage, or with Mobage, or the game I'm playing in Mobage, let me do that, and then I'll think about launching from there."

Have you said when you plan to launch it in the West? You sort of said "after Japan."

NY: Japan will come soon, here within the next quarter, both the sandbox being made generally available to developers and the Mobage service being launched in the next couple of months. And then shortly after, the Western sandboxes and the Western service.

We also have -- it's worth mentioning as well -- the partnership with Samsung, where Samsung has a deal where they are pre-installing an application called Game Hub on all their Android devices starting with the Galaxy S II, and Mobage powers Game Hub. So in addition to getting kind of carriage on our network, you get carriage on all of these Samsung devices.

And that is actually probably going to be the very first thing that launches. You know, GameHub version 1.0 is more of a list of applications that all run on top of our NgCore framework. But as the Mobage service becomes available in the West, that list view will switch out to the network view. And it's a great way for developers, I think, to get their applications in front of customers on a pretty big scale.

You spoke about the rise of cable and CNN, ESPN, MTV, right? Is Mobage going to be all-encompassing? Is it casual? Can we have an MTV of Mobage that targets young, hipper audiences, with potentially also a more action-oriented version? What is your vision for capturing different audiences with the service?

NY: I think we want -- initially, we want a vibrant service with a lot of diversity, and I think you want to start there and offer a range of things. I don't think it will live in the world of hardcore, R-rated shooters. I think we will -- you know if I was to age range it, I would say E through T from a kind of [ESRB] ratings way of viewing it.

From a demographic standpoint, we would like it to equally appeal to men and women. We found that the best services tend to, and the best games do. And from an age of audience, I think we want to start with young adults. Adults and young adults. Because that's really where people have the best balance of understanding the medium, and being willing to spend money on the medium, and have the time to be able to spend money -- spend time with the service.

And those people tend to be the people that affect cultural change. And if you want to build a consumer brand, and a consumer mark, you kind of want to target the people who can proliferate it the most effectively.

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