Japan’s Gree Buys Mobile Social Game Developer Funzio for $210 Million

Gree, the Tokyo-based company that bought OpenFeint for $100 million last year and is trying to build a global mobile social network, has now acquired some games for its network.

Late today, it announced the acquisition of Funzio for $210 million.

At that price, it exceeds what Zynga just paid for OMGPOP, which arguably had just one hit game. Sources said at the time that Gree was also one of the bidders in that deal.

Funzio, which is based in San Francisco, has developed a number of well-received mobile social games, including Crime City, Modern War and Kingdom Age, all of which have generated more than 20 million downloads.

“The team at Funzio is creating some of the best mobile games in the world today. This acquisition allows us to join their talent and expertise with our vision for a mobile social gaming ecosystem,” said Naoki Aoyagi, Chief Executive Officer of Gree International, in a release. “We are extremely excited to expand our mid-core portfolio and continue to show how the mobile games market is the inevitable next step for gamers worldwide.”

Funzio’s executive team, including CEO Ken Chiu and COO Anil Dharni, will join Gree International as Senior Vice Presidents while CTO Ram Gudavalli and VP of Engineering Andy Keidel will join as Vice Presidents. In February, Gree announced aggressive hiring plans in San Francisco. The company said it was moving into a new 41,000-square-foot office this spring, which will enable it to double its headcount to about 300 employees.

In May 2011, Funzio raised $20 million, and more recently, TechCrunch reported it was seeking to raise $50 million at a $350 million valuation.

Gree is aggressively trying to build a social games network for mobile phones, similar to the network Facebook has built for social games on the Internet. Rivals include DeNA’s mobage network, which came to market through the acquisition of San Francisco-based Ngmoco, and Apple users would compare the network to the iPhone and iPad’s Game Center.

But in order to attract users, it must first have good games. For foreign companies, like DeNA and Gree, it’s even more important for those games to appeal to Western markets as they try to expand here.


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