DeNA Picks Up 20 Percent Stake in Cygames for $92 Million

We’ve written much about the success of Cygames’s card battle game Rage of Bahamut both in its home market of Japan, as well as abroad. The title has been perhaps the biggest global hit to date on DeNA’s (TYO:2432) Mobage platform, having ranked number one on the top grossing charts for Android and iOS in the United States.

As of this past July, Rage had racked up over two million users outside of Japan, and since then it has also launched in China as well as Korea. It’s overseas users in total now exceed 5 million [1].

Today DeNA is announcing a capital and business alliance with Cygames, whose majority owner is CyberAgent (TYO:4751). The agreement will see DeNA acquire 500 shares (or 20.03 percent of outstanding shares) of Cygames for 7.4 billion yen, or about $92 million. The transaction is expected to be completed in December.

Cygames is also the publisher of the recently released Mobage title Marvel War of Heroes (pictured right), which is another card battle game that was released just a couple of weeks ago. Most likely, today’s agreement will mean even more collaboration and exchange of know-how between DeNA and Cygames moving forward.

This is just the latest example of big money being spent in the Japanese mobile social gaming space. DeNA’s rival GREE recently spent $173.8 million to acquire game publisher Pokelabo. And in early October Nexon picked up game developer Gloops for the astounding sum of $469 million.

For those of you out there crying about the lack of innovation in the Japanese tech industry, you might want to consider looking past electronics manufacturing — it’s a pretty hot space right now.

DeNA also announced its second quarter earnings yesterday, with a whopping $627 million in revenue, which was 45 percent higher than the same period the year before.