Game x IP Business (2021)
GREE Entertainment announcement
On July 1, 2021, the subsidiary Funplex, which provides game management services, took over part of the game business and licensing business of GREE ❤632> through an absorption-type split, and was reborn as GREE Entertainment, Inc. GREE Entertainment will expand its business in earnest as the third game company of the GREE Group, following WFS and Pokelabo.
This time, we interviewed Mr. Sanhisa Kotake (pictured), who became president and representative director, to talk about the background of the birth of GREE Entertainment, its position in the GREE Group, its strengths as a company, and future developments.
— :Thank you. Could you tell us how you came to this decision?
GREE has three pillars: game business, advertising media business, and live entertainment business including virtual YouTuber. Among them, advertising media business and live entertainment business are gradually shifting to the monetization phase from the investment period. There is. Under such circumstances, we have decided to establish our company GREE Entertainment in order to further accelerate the growth of the game business.
-: This time, Funplex and some games of GREE itself and the licensing business have been combined. I understand Funplex, but could you tell us about the contents of the licensing business? From the outside, it looks like “One Punch Man” or “Mushoku Tensei” in fragments.
In fact, GREE has invested in the animation production committee for a long time, and has participated in about 30 movies so far. The purpose of the investment was to acquire the right to make games, but also to deepen the understanding of IP by being involved in a series of processes from IP launch to monetization.
Regarding game development, we are not only developing ourselves, but also cultivating partner developers and collaborating on game development. Regarding “One Punch Man”, we did not participate in the production committee, but because it became very popular in China, we got the right to make it a game and partnered with a Chinese developer. I did.
In GREE’s licensing business, we have participated in the production committee and have been involved from the early stage of IP to contribute to the development of the work and promote the promotion of games. In some cases, like “ONE PUNCH MAN Ippatsu Maji Fight”, we borrow only the right to make a game without joining the production committee and develop it together with our partners.
-: When establishing GREE Entertainment, how do you plan to demonstrate your unique strengths in the future?
GREE has game companies called WFS and Pokelabo, but I would like to take a different approach from both companies. In general, game companies mainly develop and provide games that they want to develop, including IP titles, but we focus on IP.
This time, when launching GREE Entertainment, we have changed the name of the existing “license business” to “IP produce business”, and as a background, we are not simply borrowing IP, but an IP-first attitude. The intention is to stick to and commit to growing IP.
With the mission of supporting the success and growth of IP through involvement in the production committee and the original, we not only develop games ourselves, but also bridge to other game companies and collaborate with IP and other games. I would also like to provide support.
When we develop IP games ourselves, we are keeping in mind not only IP games but also services that are integrated with non-game content. It’s difficult to tell you concretely, but I’m assuming that the game is included in various contents that will please the fans, not “there is a game”. We develop games, but the feature is that we are shining the spotlight on “IP”.
— :So that’s it. Some IP content does not match the current mainstream smartphone games, so that direction may be interesting. In a nutshell, what kind of existence do you think the company GREE Entertainment is?
We want to become an “IP producing group” that maximizes the value of IP, regardless of the frame of the game.
-: There are IP-producing companies in the world, but many companies do not have development capabilities, and I think that the development and operation capabilities of GREE Entertainment are very attractive.
Looking at anime, which is an adjacent area, Netflix and Amazon Prime Video are growing as platforms for watching anime all over the world against the backdrop of the spread of smartphones. Under such circumstances, the spotlight is on the quality of works by MAPPA and ufotable, as well as their high production ability.
Games are similar to anime, and with the spread of smartphones in the background, the ability to develop and operate high-quality games is required more than ever. As IP develops better, we need to further enhance our own development capabilities.
-: Do you mean that the game development department will be further strengthened from now on?
Okay. Group companies WFS and Pokelabo are developing and developing game engines that they are good at, while also developing games that utilize IP that matches the characteristics of the game engine. I can use the group’s game engine, so I’m thinking of actively using it.
-: It’s great that you can get the cooperation of the group.
WFS and Pokelabo each have their own engine strategy. Even if the app does not become a big hit, by continuing development based on a specific engine, that engine will surely evolve and will surely accumulate as the development power of the company. We do not have our own engine, but it is a big accumulation that we are increasing the degree of involvement in animation production as we accumulate the works we produce. In fact, we are receiving more and more voices from our past achievements, and we believe that we are able to accumulate value that is different from the two game companies in the group.
-: The animation production committee doesn’t let you in because you have money. I think it was difficult to build up credit.
I agree. At first, I thought that acquiring the right to make a game and participating in the production committee were almost synonymous. The animation produced by the production committee requires a budget of hundreds of millions of yen, and is diversified and invested by affiliated companies. And when it came to making games, an additional budget of at least hundreds of millions of yen was required. Nowadays, double-digit billion yen is commonplace. The investment funds are completely different between games and animation, and the risk balance is also different.
In the meantime, I came to think that developing the game on our own might have closed the “exit” to the members of the production committee. For some works, I thought that it would be better to work with developers other than ourselves to produce better results. That’s why we started to get involved in making games in the IP production business, although we didn’t develop them.
As a result, successful cases have emerged in countries and regions other than Japan. At first, we thought we had to develop it ourselves, but by exploring a different method, I think that the result was good for IP.
Japan has the soil where new and excellent original works are born one after another. And there is a culture in which excellent writers come out and actively promote them. It is unique to Japan and is one of the strengths of Japanese IP. I think that a strategy that makes the best use of such parts will be accepted in the world.
-: You mentioned that it was developed in collaboration with other companies, and there have been some successful cases. What kind of cases did you have?
The biggest success story is “ONE PUNCH MAN Ippatsu Maji Fight”. Teamed up with a Chinese developer. As you can see from the title, “One Punch Man” is a story about a hero who defeats an enemy with a single blow, so how to incorporate this into the game was a big issue. It’s difficult to make it a game because you can beat it with a single blow. We discussed with Chinese developers and decided how to clear that point.
It’s a story that doesn’t show up very often, but there have been an increasing number of cases in which overseas game companies have invested in the Japanese animation production committee to acquire the right to make games. However, even after the anime broadcast ended, there were many cases where the game did not come out. One of the reasons was that I was not good at dealing with the supervision of the rights source.
Therefore, after identifying a company that seems to be able to properly handle supervision, we will make adjustments as a publisher between the development company and the right source in order to smoothly respond to the supervision of the right source, which is difficult for overseas companies to understand. did. There are many stances that overseas developers should deal with when problems occur, but such a stance is not very good for rights sources who want to develop soundly as an IP.
In that sense, we were able to take responsibility as a publisher, so I think we were able to go from development to publishing without major problems. I think that the copyright source may have caused some inconvenience, but I think that we were able to play our own role in the copyright source and the development company.
-: It is no longer a hit situation because you used IP. In that sense, I feel that a different approach is required. How do you see the smartphone game market, including IP games?
The recently released Netmarble’s “Nino Kuni” has a wonderful finish, isn’t it? I think that games, including consumer games, will become more and more immersive in the future. On the other hand, I think there is also a direction of a smartphone game that provides the value of plus alpha unique to that IP. We are oriented towards the latter.
It’s a little different from developing a game that uses IP, as I mentioned earlier, but it’s a game that uses IP, but it also incorporates elements such as other content being prepared and gimmicks that fans will be pleased with. However, apps and services are also in one direction.
For example, these days, there are many cases where the same scene as the animation is reproduced in the game. Different from anime, you can express the original story using anime, or combine live videos with the idol rhythm game part. The content is different from the game to the last, but is it possible to create new appeal by integrating it with the game? I would like to think of a new mechanism that fans will be pleased with, centered on IP.
-: It’s a stance that games are an element of content.
That’s it. This is easy to talk about, but it’s really hard to do. If you don’t get the understanding by coordinating with stakeholders such as the original author, the production committee, and the animation production company, you can’t do it well.
Through our IP production business, we have gradually become able to build relationships with stakeholders. If you talk about wanting to try something new, I think you’ve come to understand it because of the relationship of trust you’ve had so far. We would like to provide the value unique to the app and thereby contribute to increasing the amount of heat for the IP of the fans.
-: Have you already made such efforts?
The game has already been released, but an example is “Is it wrong to ask for a dungeon? -Memoria Frese-” (hereinafter referred to as “Dan Memo”). The original “Is It Wrong to Try to Pick Up Girls in a Dungeon?” .. Now, we are also participating in the animation production committee. We also hold regular meetings with the original author, Fujino Omori, to discuss in-game scenarios and event content together. Professor Omori says, “I like Dan Memo.”
The IP called “Danmachi” is a work that has been a big hit in anime and light novels, but in the process of gaining popularity, I think it is important to acquire fans through various developments. The game app “Dan Memo” will also help fans to increase their enthusiasm.
What we should do is not only faithfully express the world view that the original author thinks, but also by expanding the world of animation and the original through the game, we will create a mechanism to increase the number of fans. That is.
For us, using IP is not the first priority because we want to sell our games, but we have prepared a mechanism and new value / experience that is different from the development of the work so far, and from the fans IP is important to think about developments that can be said to be interesting and amazing. By doing so, I think our value will increase.
-: Up until now, it seemed that you often partnered with other companies, but how much will you focus on in-house development?
There are several things we are doing with other companies, but we are also developing multiple ones in-house. Now that we are launching a development business, we are working on game development using IP, which we have determined can add new value, by utilizing the engine of our group. Depending on the content of the IP, we judge that it is better to develop it by ourselves, or it is better to partner with another company.
-: Game development is now double-digit billion yen, and it is natural that the development period will take three to four years. I think there is. I’m also investing in IP, but how much do you want to do in the next year?
If the number of currently participating works is four per year, I would like to triple that.
-: What are your thoughts on future growth?
Currently, we are preparing several large IP titles developed in-house, and I think we can unveil one by the end of the year.
In addition, since we are in the phase of acquiring development capabilities, we would like to start new contract development in addition to the IP production business and game development / operation business.
At Funplex, we have experience in game operation, overseas expansion, and development using game engines, but we do not have the experience of developing from scratch by ourselves, so we want to acquire and improve development capabilities through contract development. thinking about. Perhaps contract development will be tackled for a fixed period of time.
-: Are you recruiting human resources?
We are recruiting for all occupations. Above all, I’m focusing on 3D art. In the future, as we strengthen 3D development, we are strengthening recruitment activities.
-: What kind of human resources do you want?
The company’s mission was to “make the world enthusiastic with IP and games originating in Japan.” We are particular about the fact that it is an IP “to” game, not an IP “no” game. We develop games, but the main axis is IP. I would like to see people who strongly feel the potential for the worldwide spread of IP originating in Japan.
I joined GREE in 2008. It was a time when avatars and “fishing stars” started to hit, and we could see the situation where they could be collected even if we did a large-scale promotion such as TV commercials. Business performance was really growing.
At that time, Japanese social games had an ARPPU (customer unit price) that was unprecedented compared to freemium games in other countries. I thought that it might be unique to Japan to be able to play such games, and I seriously thought that Japanese social games could be challenged in the world even with Internet services that had been losing.
At that time, very talented people came in to hire. In my parents’ generation, there are many companies that can compete in the world such as automobiles and electric appliances, but in my generation there were not many businesses that could compete in the world, so people who were hungry for such things. Came. I changed my hands and tried different products, but I didn’t get the results I expected. I still feel responsible for not being able to do that.
Looking at Internet services worldwide, the United States and China are very strong, and I think Japan’s presence is by no means large. I’ve always had a feeling of being uncomfortable with this reality.
Under such circumstances, there are some Japanese IPs that can compete in the world. For example, in the entertainment industry, the American movie business has a system in place to collect a large amount of production funds, and there are many that invest in a large amount of funds.
On the other hand, Japan has produced many excellent original works and produced many works that are gaining worldwide popularity without taking such a mechanism. I think Japan is extremely competitive. If you believe in the possibility that IP originating in Japan will spread to the world, and want to create an enthusiasm for IP all over the world, I would like you to come.
— :Thank you very much.
GREE, Inc. (グリー株式会社, Gurī Kabushiki-gaisha) is a Japanese Internet media company with headquarters in the Roppongi Hills Mori Tower in Roppongi, Tokyo.[1] It has been operating the social network service GREE since its establishment in December 2004.
