GREE invests over $100m in OpenFeint to drive their global expansion

The leading social gaming platform for mobile devices in Japan – GREE, announced earlier today that it will be entering the global market by acquiring OpenFeint’s outstanding securities for approximately $104m as well as an additional capital for the rapid growth of the OpenFeint platform. The company and its team will keep being OpenFeint, and its team will remain with long-term incentives, including the founder and CEO Jason Citron, who managed to grow the company to 75m users and 19k game developers in only two years. By working together, OpenFeint and GREE will build a worldwide ecosystem of distribution channels to ease game developers.

The combined gaming ecosystem of OpenFeint and GREE will reach 100m users worldwide. Since GREE is the fastest growing tech company in Japan, the organisation will use its social gaming platform expertise to increase OpenFeint’s growth and take social gaming on mobile to the next level.

The two companies are currently expanding internationally at a rapid speed, and soon they will open offices in London, Beijing and Singapore. Both of the organisations are looking to hire a lot of personnel, and OpenFeint wants to double in size during this year.

The CEO and founder of GREE, Yoshikazu Tanaka stated that at their company they are socialising the next evolution of games and since OpenFeint is the best US-based social network in the industry, they are the perfect partner for GREE to offer the best possible mobile social games to the largest audience worldwide.

The CEO of GREE International, Naoki Aoyagi added that this acquisition will further emphasise GREE’s commitment to providing the first as well as the best possible global gaming ecosystem with both the consumer and developer in mind. He works for the subsidiary that just opened its office in in San Francisco.

OpenFeint currently manages the world’s biggest cross-platform social gaming network for smartphones and tablets. Over 19k free to play, and traditional game developers are taking advantage of the system’s features to retain, acquire, and even monetize users.

Jason Citron, the founder and CEO of OpenFeint stated that we at OpenFeint are excited that GREE is sharing our belief in our network and are even ecstatic to be able to partner with such a renowned global leader to create a multi-billion dollar business. Together, the two companies will be able to deliver the strongest ecosystem of gaming networks worldwide to our combined 100m users.

There is no need to mention that more than 5,000 games use OpenFeint, including #1 Google Play and Apple App store hits such as Tiny Wings and Fruit Ninja. OpenFeint has also established partnerships with top mobile carriers that hold more than half of the market share in the US.

Acquisition Overview

GREE acquired OpenFeint through a triangular merger. This means that a new subsidiary was recently established in the United States under GREE International for the sole reason of OpenFeint’s 100% acquisition. GREE contributed funds to GREE International for the purchase as well as they subscribed for extra shares in GREE International. Moreover, this new subsidiary merged into OpenFeint. So, GREE International will be paying cash consideration to OpenFeint’s shareholders as well as warrant holders in connection with the merger. The completion of the merger and the execution of the agreement was completed on the 21st of April, 2011.

About GREE

GREE offers the leading social networking as well as social applications in Japan. They have over 25m users and are currently at the forefront of mobile technology. GREE began their global expansion by creating GREE International in San Francisco, which is a 100% fully-owned subsidiary of GREE. GREE is a multi-billion company which is trading on the Tokyo Stock Exchange. The code is 3632.

GREE continues to maintain a strategic alliance with conspicuous international partners like Tencent, which is one of the biggest Broadband providers in China. Another company is Project Goth, which currently manages mig33 which is a mobile SNS with approximately 47m users from emerging countries like the ones in Southeast Asia in order to build a common platform specifications for all mobile devices. GREE wants to provide an entirely global social platform for users from all over the world by looking for further collaboration with the already established Japanese and international partners. The company also wants to enable a deeper person-to-person interaction in the games.