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How one game brought ‘Japan’s Facebook’ back from the brink of disaster

Dr. Serkan Toto is a gaming expert and independent consultant based in Tokyo. You can follow him on Twitter and his blog. This article is republished with his permission.

How one game saved ‘Japan’s Facebook’ from the brink

Mixi (TYO:2121), once Japan’s largest social network, is back from the dead.

In September 2006, Mixi was the first so-called web 2.0 startup ever to go IPO, and for many years it was referred to in international media as “Japan’s Facebook.” It managed to grow slowly and maintain its status as a large-cap company for years until it stopped innovating and was hit by a flood of competitors across both social and gaming, such as DeNA, GREE, Twitter, Facebook, and Line.

Too many competitors

I am simplifying, but some time in 2011 or 2012, Japanese users started considering Mixi essentially ‘over’. In May 2012, Mixi shares traded at at around 1,500 yen, less than 10 percent of their historic high in 2008.

Over the years, Mixi did try many things to turn around:

Nothing worked. The stock price kept staying flat and was falling even further until mid-November 2013, when shares were down to just over 1,000 yen.

But then a ‘miracle’ happened.

Enter the monster

As it turns out, Mixi did one thing right: deciding to develop mobile games in-house.

One of those titles, a mobile game called Monster Strike started looking like it was about to become a hit on iOS around the end of November last year, about three months after it launched. Japanese users started not only downloading but also paying for it – without any kind of mass-marketing.

As a result, Monster Strike kept climbing up in the rankings of apps pulling in money on iOS. On November 18, it was ranked 136. On November 20, it was at 43. On December 10, it moved up to 27 in the country.

December 10 was also the day that Mixi shares jumped over the 9,000 yen price point. That restored much Mixi’s market cap, becoming a billion-dollar company again in December – all thanks to a single game that was out on a single platform – and only in Japan.

And even though one day later Goldman Sachs issued a negative report on Mixi that made the stock go down substantially in the following week, it managed to bounce back. Here is how Mixi’s stock price moved over the last 12 months (up until March 2):

Monster Strike game boosts Mixi share price

Monster hype

To maintain the hype around Monster Strike, Mixi rolled out an Android version in December. Like the iOS version, it did well in terms of revenue. The success seems to have shaken things up drastically at the company, as on February 13, Mixi announced another new CEO, just months after founder Kenji Kasahara left for Yusuke Asakura (in June 2013). Mixi’s new CEO, Hiroki Morita, is the head of the studio that produced Monster Strike.

According to Mixi, the game racked up three million users by February 15 (on both iOS and Android combined), with the last 500,000 users joining in the previous 16 days.

To make sure Monster Strike isn’t losing steam, Mixi started using the one tool that works best in Japan to reach millions of users at once: TV advertising. On February 28, Mixi said it’s seeking to raise $64 million through a public stock offering, the first time in its history, in order to promote the game on TV.

On March 1, the company started airing the following three commercials on national TV:

Today, it seems like the strategy is working. Monster Strike is now the number three grossing iPhone app in Japan and number seven on Android at the time of writing.

Mixi’s core product, the social network, may still be declining – but financially speaking, Monster Strike is a godsend. Instead of a US$16 million loss, Mixi is now projecting an operating profit of US$2 million for the fiscal year through March.

This is not as huge a boost as Puzzle and Dragons gave to Gungho, but Mixi is currently boasting a US$1.1 billion market cap.

Monster Strike gameplay

So what is the fuss about?

Monster Strike can perhaps be best described as mix between action and RPG: players control a total of four monsters inside an arena in which they need to kill waves of enemies until a boss character appears at the end of the stage.

What sounds rather bland is actually a very fun game with great presentation and high production values. I especially like the creature design.

How one game saved ‘Japan’s Facebook’ from the brink

The innovation on the gameplay side is that players battle each other not through navigating menus and choosing commands but by applying a cool pinball or billiards-like mechanic to the monsters themselves. Skill is key, such as getting combos to maximize damage or choosing the right monster type against certain types of enemies. It’s hard to explain in words, so here is a gameplay and battle video:

As is the trend in Japan these days, the game also offers elements like collecting monster cards, creating decks, fusing two or more monsters to create stronger ones, playing gacha, clearing missions, and entering special events.

Another interesting element, next to the cool battle system, is the multi-player mode that allows up to four people to fight monsters together at the same time. At the moment, this mode is only available via Bluetooth.

It’s also interesting that this mode isn’t player-versus-player – rather it’s a cooperative team play where people team up to fight enemies together. In multiplayer, stamina and ‘continues’ can be shared (one user spending one continue, for example, enables all players in the round to go on with the game). It also offers special items that can’t be obtained in the single-player mode.

It remains to be seen how Mixi will keep expanding and improving Monster Strike over the next few months.

Outside Japan, Monster Strike has been announced only for China (in a tie-up with Tencent) thus far. However, I recommend just trying out the Japanese version – a Mixi account isn’t necessary. Download it here for iOS or Android.

(Editing by Steven Millward)



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