Mixi; Struggling once market dominate SNS company in Japan has changed its CEO

The CEO of the once most popular SNS company in Japan has changed its CEO from Kenji Kasahara (37 years old),the founder and CEO of the Company to Yusuke Asakura (30 years old).

The new CEO's carrer is very unique. He once became a jockey of the horse race, but he quit at the age of 16, and pass the examination of the top of the universities of Japan, Tokyo University and graduated.

He joined the consulting irm, Mckinsey Company Inc. Japan. Then in 2011, he joined the Mixi.

His favorite quotes is from Mark Twain's.

"Twenty years from now you will be more disappointed by the things you didn't do by the ones you did do. So throw off the bowlines. Sail away from the safe horbor. Catch the winds in you sails. Explore, Dream. Discovery."

Asakura puts this quote on his mobile phone's screen, and he makes it a rule to read this quiote time to time. Now, there has been noone who could turn around the Internet Service comapny so far.

While other SNS companies have been trying to become Social Gaming Company, Mixi refused to become heavily relying on the revenue from gaming.

That directions helped Mixi to avoid the blames for the excessive bills to teenage game lovers.
But also, made Mixi to struggle to find new revenue sources.

Asakura admitted in the press conf that it is quite difficult to fight agains FaceBook etc, because of the scale of its businesses.  He expressed that Mixi will put focus on the expansion to asian countries, while they create new applications.

It is quite interesting to see if he could turn around the company.


(Left: ex-CEO and founder; Kenji Kasahara (37)
 Right: new CEO Yusuke Asakura.)

Smart Phone Appli 'Line' is ready to go into SNS market

'Line' is the smart phone application which has been downloaded by 20million users in Japan and 45 million worldwide so far since its launch on June 2011.

This application is developed by NHN Japan, which is originally a Korean company and built its subsidiary in Japan by acquiring many famous internet startup companies in Japan, called Livedoor etc.

Now, Line is designed, developed by a team member in Japan who used to work in an acquired company,

Like Skype, the software originally was developed to provide free phone call and chat functions among the users who installed the software.

So why could they succeed despite of the late entry to the market after the domination by Skype?


According to one of the core development member, Mr. Atsushi Masuda, Chief strategy and marketing officer, reminds one episode which happened right after they started developing the software.

'When we started to develop the software, one of the software developer came and told us that such software that NHN Japan were about to develop would have no market value, because so many software like Skpe, has been out there so many years.

Then I convinced that this is the absolute chance for us, because at a time when so many software companies release various smartphone applications at any time, the software that enables users to make a free phone call is not the focused area of many software companies. And they really did not look into the reasons why general users, such as elderly people or high school students who don't have much IT knowledge, won't use Skype.'


So at a design phase, they focused on how easily the software can be set up by the users who don't know the very basic IT term like IP address etc.

(their basic ID to identify the user is ordinal telephone number, that way everyone can understand its ID without any IT knowledge, while Skype requires some basic knowledge to be set up.)

It took just only one month for the development team from planning phase until they actually released the software. This speed is also unusual for many of the Japanese software companies. Now many articles were issued by various IT media publishers, to explain how the development team worked to make such short-term release possible.

Today, NHN Japan announced the functions that will be released very soon to make line more like a communication platform and that will enable Line to go to SNS market.

Now, not many smart phone applications developed in Japan could become a well-sold global product. So, the success of this software gets the attention as a flagship software which aims at a global market from its starters.

Can SNS Gaming companies in Japan survive?

Sometimes, various things evolve uniquely in Japan. SNS gaming is one of such cases. There are three SNS gaming companies in Japan, which are

1)GREE        founded in 2004, by Yoshikazu Tanaka

w/ 25M subscribers,   JPY 64.1B in revenue for 2011

2) Mobage (DeNA) founded in 1999, by Tomoko Nanba
w/ 39M  subscribers, JPY 145.7B in revenue for 2011

 

3) Mixi          founded in 1997, by Kenji Kasahara
w/ 15M (active) subscribers,   JPY 13.3B in revenue for 2011

Those three companies have grown so rapidly, doubling its revnue every year.
In particular, GREE's 3Q 2012 revenue alone exceeded the total revenue of GREE through 2011, reaching out to JPY 118.1B.

And the ingredient which enabled those SNS companies grow so rapidly is because of  the so called 'Comp. GACHA' system.

Those game companies provide card games to let the player collect the items, for instance as an adventurer in a quest something game.  About 95% users can play with no charge.  But if the player pay to collect the items, such item will help the player outdo, or make the player look more cool than other free-of-charge players.  Among those charged items, there are some really rare items that comes out randomly, which will help the player become super-strong, or super-cool.

It's like a loto. The problem is that the purchase is so easy because network carrier will invoice later with the monthly telephone charges. Therefore, it takes certain time for some heavy users to recognize how much they had to pay for to collect such rare items.  There came out so many users, mostly teenagers but even house-wives as well, who spent thousands of US dollars (actually JPY) in a month.

Then Japanese Governemnt Agency wanrned those SNS game companies that this Comp-Gacha infridges on the prohibition of Loto regurations.

Now, those SNS companies had to abondon the most profitable Gomp-Gacha system.

Some of the game development companies say they can come up with the similar system in a way that can avoid such regularions. But many believe that the growth rate of those companies have to be slow in a foreseeable future.

On the other hand, other gaming companies like Nintendo, Microsoft, or Sony whatever, is targeting SNS gamings. So the question is if those companies who lost such profitable sytem can survive in more fierce competition.

Note)
Mixi and DeNA(Mobage) are more of a Social Network company rather than a gaming company, while Mixi started gaming service since Nov. 2011 and DeNA started in 2009.
Mixi owns more sophysticated SNS platform, but their revenue still depends on the advertizement. It is obvious that whether the company suceeded to develp chargeable service, like gaming, apart from the advertizement model in early stage really differentiated later growth ratio.

SNS Game Conpany GREE acquired OpenFeint Inc, to go into U.S market

Japan is a kind of isolated country from various perspectives. So sometimes many things show unique developments. Those phenomena is called Galapagoz-ka, where many species have been developed uniquely,

IT techologies and service companies are one of the typical industry that shows unique trend.

For instance, community site, MIXi is unique SNS service in Japan, while Facebook is trying to squeeze into Japanese Market.

GREE is a gaming platform company focusing on the mobile phone, which has 25 million users, according to its announcement.

Now the company is expanding overseas business aggressively and announced that they will acquire OpenFeint Inc,(HQed in California, U.S) with USD 104 millon dollars.

Founder and CEO of GREE is Yoshikazu Tanaka, who graduated from Nihon Univ and ex-employee of Rakuten co.

His aggressive management style is well known and enabled the comapany to grow rapidly. So, let's see if his new challenge will work as planned.