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Did OpenFeint really just sell for 368x revenues?

By on April 27, 2011
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Earlier this week, Japan’s Gree bought OpenFeint for $104 million.

OpenFeint provides a social layer of connectivity for mobile games. With services like leaderboards, cross-promotion, game marketing, friends lists and so on, it provides a social layer for 5,000 developers, 17,000 games and 75 million gamers. The acquisition follows hot on the heels of DeNA’s acquisition of ngMoco for $400 million.


GREE is Japan’s largest mobile social gaming company. Their investor deck to announce the OpenFeint acquisition makes it clear why they did the deal: they want to reach the widest possible audience through M&A and partnerships, and OpenFeint triples their reach.

I imagine that catching up with DeNA may be part of it too.

OpenFeint’s valuation and multiples

The nice thing about Japanese transactions is that listed companies have to give details of the transaction. Here are the details they gave about the underlying revenues and profits of OpenFeint:


Can that be right? That in 2010, OpenFeint made only $282,500 in revenue and a loss of $6.6 million?

If those numbers are correct, then GREE acquired OpenFeint for a multiple of 368x revenues.

If I were Scoreloop, I’d be scouring the East looking for a sugar daddy to acquire me right now.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve:
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  • Anonymous

    That’s crazy. I’m old fashioned, I invest in companies that actually making a large, steadily growing profit. So far I’m looking at 20% return per year on my stock picks. Avoid the crazy speculatvie bubbles.

  • I find it hard to assess who got the better deal as there is so much going on behind the scene that we don’t know about : investment made and planned, how scalable are their technology & business model, etc. Some of the 6.6M$ spent last year must have gone somewhere.

    Here is but one example of how the deal may be sweeter than it seems :
    The9 is *huge* in China and it’s a brand that resonates with a lot of people thanks to all the WOW marketing blitz prior to Netease’s takeover. The weird thing of course is that Gree also just announced an agreement with Tencent to build a social gaming platform for mobiles

    ps : hi there, Diane & Thomas 😉

  • It’s an interesting point. ngMoco had users (fewer), revenues (a lot more), IP and game content. It was working, but is a hit driven business.

    OpenFeint is a network without a clear revenue model (based on these numbers) and lots of users. GREE is betting they can turn that ito revenue.

    I hope they can. But it seems like a big bet to me.

  • Anonymous

    Wow, that’s a huge bet. OTOH they have the dominant position in terms of mobile gaming network, even if monetization is hard. It’s still a better deal than DeNa’s $400M for the 14M registered on Plus+ if you just look at network size.

  • Well, the Japanese sugar daddies have both chosen their darlings, so they would have look in Korea or China.

    I think the valuation of OpenFeint is a lot less scary than the one of ngMoco. OpenFeint is a technology and platform company as opposed to ngMoco content core identity.
    Any exit would be based on an actor knowing how to monetise the platform and the users – which GREE has certainly proven they can do (in Japan at least).

    You can look at a price per user instead. That’s $1.40 per user. A steal compared to other valuations around.

    I think they just got a much better deal than DeNA had.