Softbank, Zynga of U.S. planning mobile ‘social game’ service

by Kazuaki Nagata

Softbank Corp. announced Thursday it will jointly create a new company with U.S.-based Zynga Game Network Inc. and provide “social game” services on the firm’s mobile devices later this year.

Softbank, the exclusive provider in Japan of Apple’s iPhone and iPad, also said it posted a record ¥700.8 billion in sales and a record ¥156.6 billion operating profit, up 45 percent from the same period the previous year in the April-June quarter, thanks to sales of the two products.

But its net profit decreased by 29 percent due to subsidiary Yahoo Japan Corp.’s ¥26.5 billion extra tax payment ordered by the Tokyo Regional Taxation Bureau, which said one of Softbank’s acquisition cases was for tax-saving purposes.

As for the deal with Zynga, Softbank will invest about ¥13.7 billion in the California-based leading social game maker, and each company will invest 50 percent to establish Zynga Japan.

“I have a feeling that Zynga Japan will provide the best application for iPhone, iPad and our regular cell phones,” Softbank President Masayoshi Son told reporters in Tokyo. “I believe this will help expand our market share, average revenue per user for data and Softbank group business activities.”

Zynga provides social games for social network service operators like Facebook and Myspace, as well as for devices like the iPhone.