Japan's GREE Sues Rival Social Game Firm DeNA for $13 Million

TOKYO – As competition in Japan’s social gaming market intensifies, GREE is suing rival DeNA for attempting to stop developers creating games on its platform.

GREE, along with telecoms partner and shareholder KDDI, is seeking damages in excess of 1 billion yen ($13 million) from DeNA in a lawsuit issued Monday. The social gaming market in Japan is currently worth around 100 billion yen, and is growing as the traditional console gaming sector continues to shrink.

The suit claims that DeNA continued to pressure game developers not to release titles for GREE’s social gaming platform even after a Fair Trade Commission raid on DeNA Co.’s offices in December 2010 and subsequent cease-and-desist order over antitrust practices.

DeNA said that it couldn’t comment on the suit as it had yet to receive official notification.

Although Japan has been traditionally non-litigious, this has been slowly changing and GREE has sued its larger rival before, in 2009, accusing the operator of the Mobage Town platform of copying one of its games.

GREE was founded by Yoshikazu Tanaka in 2004 as a social networking site, but eventually shifted over to a game platform. Tanaka, who previously worked at Sony and Rakuten, is a member of The Hollywood Reporter’s Next Gen Asia class of 2010, and was the region’s youngest billionaire entrepreneur.

DeNA was founded as an online auction site by Tomoko Namba, who then launched Mobage Town in 2006 and stepped down as CEO earlier this year for family reasons, and is Japan’s most successful female entrepreneur.

Both sites claim more than 25 million registered users and generate most of their revenue through the sale of virtual items for use in the social games on their respective platforms. Both companies have been expanding overseas recently, with DeNA acquiring San Francisco-based mobile game developer ngomoco for $400 million last year.

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