Silicon Valley is in the tech bubble. So the Japanese gaming industry is. There appears, one after another, small venture companies releasing tiny social games for the mobile platforms.
In Japan, there are two major social gaming platforms – GREE and DeNA, both of which are now trying to extend its market abroad. (By the way, when I say the “platform” here, this does not mean “iPhone” or “Android.” In social games, users or game providers need someone who maintains the circulation of e-currencies. That someone is the platform operator, and the world using the same currency settlement system is called a platform. Think of Zynga in the U.S., or Tencent in China.).
GREE and DeNA are competing to lock in consumers to their platform so that more of their e-currencies are used there. Henceforth, the platform operator tries to present more attractive gaming contents than its competitor.
In such a course of competition, the FTC of Japan issued a cease and desist order to DeNA on June 9, 2011, accusing that DeNA had disturbed transactions between game providers and GREE by compelling these game providers to sign an exclusivity agreements with DeNA.
It looks like there is a competition for a limited number of good games. However, in my view, despite such an order by the FTC, the real competition behind the scene is not something about software, but one for human resources.
Unlike the video games in arcades or home consoles, generally speaking, social games are not original or creative at all (although I admit there is some exceptions like “Angry Birds.”). Therefore, there is no better way to create a smash hit, than to release as many games as possible and see which one consumers will like. In addition, once an operator makes a smash hit with a game, its competitor often tries to release an identical game (in actuality, GREE sued DeNA for copyright infringement in a fishing game.). Gaming contents seem totally fungible to me.
Under such circumstances, what is important is not a single game creating genius, but the labor that can release more games than the competitor. DeNA tried to lock in such labor, by compelling third party gaming providers to become their exclusive work force.
This example reminded me of the fact that the venture business is a labor-intensive industry, and all that matter is human resources after all, even in this internet age.
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