Gree Inc. and KDDI Corp. are suing DeNA Co. for ¥1.05 billion in damages for allegedly instructing game developers not to offer their titles to Gree's social-networking platform.
In a statement Monday, Gree said it is seeking ¥900 million of the total damages.
DeNA, operator of the Mobage social networking site, allegedly stopped developers, carriers and ad agencies from offering their services to Gree, even after the Fair Trade Commission issued a cease and desist order in June, Gree said.
The litigation indicates competition is intensifying in the smartphone game sector, said Hiroshi Naya, an analyst at Ichiyoshi Securities Co.
"Both companies are feeling the pressure as growth in the gaming market is just consistent, not robust," Naya said. "Their challenge is how to increase revenue."
DeNA spokesman Tomoyuki Akiyama declined comment, saying the Tokyo-based firm hasn't seen the court filing yet.
DeNA and Gree are reshaping the domestic video game market, estimated to be worth around ¥820 billion, by offering cellphone users games for free and charging them for virtual items. The domestic market for social gaming will almost triple to ¥305 billion in 2013, according to a June estimate by Mitsubishi UFJ Morgan Stanley Securities Co.
Gree is 48.5 percent owned by billionaire Yoshikazu Tanaka, 34, and 6.9 percent by KDDI.
"We can't allow DeNA's behavior to stand," Tanaka said at a news conference in Tokyo.
"We needed to take some kind of action to recover damages."
Some game developers are worried about "retaliation" by DeNA if they ignore its instructions to bypass Gree, Tanaka said without elaborating.
