He was twenty-six years old when he built it. The year was 2004 and if you remember, the term social network still meant your actual in-the-flesh peer group; though it was not a term used by real people in the real world. Perhaps psychologists bandied it about, but at that time there was no Facebook and no Twitter, so the idea that we would communicate and interact virtually using computers and cell phones was just a gleam in the eyes of a handful of visionary entrepreneurs. One of those young visionaries was Yoshikazu Tanaka.
That ‘it’ that Mr. Tanaka built was called SNS-GREE. It was an early social network launched by the young Tanaka in Japan at a time when ubiquitous connectivity was still more fiction than science. But it was, by the standards of those early days, a success. Initially, SNS-GREE was a PC-only experience, but Mr. Tanaka, in his prescience, envisioned a hyper-connected future unencumbered by wires and desktop PCs, so he executed a masterful pivot. In 2005, the young company made the risky technological leap to mobile.
Such a move at such a time was incredibly bold. Though it does not seem so long ago, in terms of the pace of rapidly developing hardware and software, technology time is like dog-years. A decade in tech is an eternity. And hindsight tends to obscure courage and under-appreciate genius. There are very few mobile developers today who can say they were out in front of the mobile wave nine years ago.
GREE is short for degree. In 2005, they dropped the SNS prefix and, in a tip of the hat to a social psychologist named Stanley Milgram, paid homage to the concept of Six Degrees of Separation, a term widely credited to Milgram but that actually traces it’s origins back to Guglielmo Marconi, the inventor of the radio, Hungarian author Frigyes Karinthy, and the Polish math genius Benoit Mandelbrot (trust me, it’s complicated). But it was Milgram’s famous ‘Small-World’ experiments in 1967 that led to the early theories on social networks that would become the foundations for Facebook.
But back to GREE, a social-network developer newly focused on mobile. In 2007, they launched one of the first social-mobile games in Japan to great success. That game was Fishing Star. What followed was series of hits: Haconiwa™, Odoriko™, Cerberus Age™ and Monster Planet™, to name a few. GREE, and Tanaka, was vindicated. The social-to-mobile shift was proving to be the correct strategy. They had grown to dominate the then booming Japanese social-mobile market. But they were after larger fish. Japan was a big market, but the U.S. was the real catch. The leviathan lay east.
In 2011, GREE International, Inc. opened its doors in San Francisco (they have since opened offices in the UK and Canada). But simply opening an office in the city of Twitter and Zynga is no guarantee of success here. GREE invested tremendous amounts of time and resources in developing and perfecting a live-ops strategy in Japan, but transitioning that knowledge to the US was not going to be easy - and they knew it. They had the foundational knowledge that was essential to building and maintaining hit social games on mobile, but content was another thing entirely. Gree understood their Japanese audiences very well, but the US consumer was a fish of a different color. They needed some help.
Enter Funzio. In 2012, GREE acquired the maker of Crime City, Modern War and Kingdom Age for more cash than Zynga paid for OMGPOP ($210M). Why? Because they were smart, that’s why. They not only bolstered their IP portfolio, they got themselves a studio with know-how and proven insight into the minds (and wallets) of US gamers. Now, GREE can enjoy Funzio’s insight into what works in its games, and Funzio can benefit from GREE’s investment in process and technology.
“We’ve integrated GREE’s live-ops best practices into our RPGs - games like Kingdom Age, Crime City, and Modern War,” said former Funzio President, Storm-8 co-founder and now GREE COO Anil Dharni. “Because of that, we have seen those games, the oldest which has been out for over a year-and-a-half, rise up the top-grossing charts.”
GREE’s San Francisco office now employees over 400 people and since the acquisition, four of their games have charted in the top 50 in the AppStore and three in the Android top 25. So clearly something is working. What’s more telling is that, a year after the acquisition, all of the Funzio executives are still around. It’s not easy to make a Japanese-owned US studio work, but GREE’s doing it, and they’re doing it by focusing on the games and on the players.
“At the end of the day, our focus is on the players and for them, content is king,” said Dharni. “Our aim is to constantly deliver something new by focusing on live-ops and creating new features. Earlier this year, we experimented with a new feature in Modern War called ‘World Domination’ that allowed players to create teams and participate in a 72-hour live event where they battled other teams. It was a huge success, with the launch weekend resulting in the highest revenue ever in the game’s year-and-a-half-long history.”
GREE’s goal is to build strong franchises - not just one-off experiences. And that jibes with Mr. Tanaka’s early vision; which was simply to make the best, most innovative mobile-social games, games that consistently deliver new content. But that in itself isn’t unique or particularly visionary. What is unique is the social networking DNA in GREE’s genes and their longevity in the market. They have seen and done A LOT and they have found in Funzio a partner that complements their core strengths.
The mechanics of social networks revolve around the ideas of connectedness. We are all much more closely connected to one another than we might believe. There are only a handful of individuals who bridge me to you, or you to any other person in the world. Think about that. Whether that bridge be six degrees, or three, or eight really doesn’t matter. What matters is that we are not islands. We just think we are sometimes. GREE was formed, partly, to help enhance those connections through play, through games. In 2004, that was visionary. Nine years later, they’re not only still here, they’re thriving, still innovating; and they’re having fun doing it.
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