Japanese Game Developer To Buy US iPhone Game Maker

DeNA, Japan's largest developer of mobile phone games, said Tuesday that it is seeking to acquire US iPhone game developer ngmoco for $400 million, as part of its long term plan to expand overseas.

The gaming giant is purchasing the San Francisco based company that develops gaming applications for smartphones such as the iPhone. The deal highlights the growing popularity of mobile phones for the gaming industry. Ngmoco was established  by a former executive of Electronic Arts Inc. two years ago.

According to a statement by DeNA, the merger with ngmoco will help the company to achieve its goal of becoming "the world's number one social gaming platform amid rapid expansion of smartphones in the global mobile phone market". The deal, which is due to be finalized in November, will cost DeNA up to $400 million in cash and stock.

The Japanese firm said that it also plans to start developing gaming applications for handsets featuring Google's Android OS from this year onwards.

DeNA operates a mobile game platform that has proven to be a big hit in Japan, Mobage Town. The platform features social games, virtual characters and chatrooms. Players can play the games for free but have to pay in order to upgrade the characters.

DeNA claims over 20 million gamers have signed up at Mobage Town platform, which is a "driving force" behind the company's growth.

DeNA's net income in the first quarter of the current fiscal year tripled to 6.53 billion yen compared to the same period last year.