US users show higher frequency of play, but Zynga still trails Japanese firms in average revenues per user
According to a June 2012 article in the Wall Street Journal, Japanese mobile social gaming firms DeNA and GREE are more efficient when it comes to monetizing their users than US competitor Zynga.
The Journal reported on estimates by Macquarie Securities that Zynga’s monthly user numbers dwarfed both GREE and DeNA, even though the firms had similar market capitalizations. This is a result of the Japanese firms’ strong monetization of their user bases. GREE and DeNA had average revenues per user (ARPU) of $11.21 and $6.50 per month, respectively, as of March 2012, compared to Zynga’s paltry $0.33 per user per month. As the market heats up, both GREE and DeNA have acquired US and multinational game developers in order to expand their footprints abroad.
That could be bad news for Zynga, but it looks like a solid strategy for the overall mobile content category, as well as GREE and DeNA. According to a February 2012 survey by ad agency Dentsu, conducted in Tokyo and New York state, more than a third of tablet users in New York played games on their tablets (33.7%) every day, compared to less than a tenth in Japan (9.1%).
With New Yorkers three times more likely to play tablet games daily than users in their own capital, Japanese gaming firms must see the broader US demographic as a valuable, and perhaps more profitable, set of customers. February data from Google and Ipsos MediaCT indicated that 63% of smartphone users in the US made a purchase on their device on at least a monthly basis, compared to just 54% of users in Japan.
The data shows that expansion for both GREE and DeNA abroad may not only offer a broader user base, but also opportunities to continue growing their average revenues per user. Meanwhile, Zynga has to work on monetizing its huge user base better if it wants to compete with its nimble Japanese rivals.
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