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Japan's Gaming Giant GREE Retrenches In Europe, Shuts Down UK Office To Focus Ops In The U.S.

It's not only Zynga feeling the pinch in the gaming world these days. GREE , the $1.8 billion Japanese mobile gaming giant, is downsizing operations once again, this time with a focus on Europe. TechCrunch has learned that the company is shutting down operations in the region, which are primarily based in the UK. Lynn Daniel, business development director for GREE in the UK, confirmed the closure of the UK operations in an email -- the full statement is below -- noting that the company is consolidating its Western-focused operations in its offices in the U.S.. We're still trying to see how many people exactly this will affect in the UK and what happens in the rest of the region.
Gree International

It’s not only Zynga feeling the pinch in the gaming world these days. GREE, the $1.8 billion Japanese mobile gaming giant, is downsizing operations once again, this time with a focus on Europe. TechCrunch has learned that the company is shutting down operations in the region, which are primarily based in the UK. Lynn Daniel, business development director for GREE in the UK, confirmed the closure of the UK operations in an email — the full statement is below — noting that the company is consolidating its Western-focused operations in its offices in the U.S.. We’re still trying to see how many people exactly this will affect in the UK and what happens in the rest of the region.

“Due to the challenging economic climate and on-going changes within the interactive industry, GREE has proposed to close its UK office,” Daniel’s statement reads. “This decision is being considered in order to focus on developing content from the United States of America for the Western market.”

These are not the first layoffs for the mobile games company. It closed down operations in China in June and laid off 120 employees. Prior to that, the company laid off at least 25 people in its San Francisco operations.

At the time of the U.S. layoffs, an internal memo revealed that GREE would be forming a publishing and partnerships team in the U.S., along with a growth and revenue team, two moves aimed squarely at driving revenues. In the meantime, platform operations would be devolving back to Tokyo.

The UK operations had been around for a while, first as a business development office, and then as an expanded studio, first announced just under a year ago in August 2012, as part of a bigger push into Europe. Following in the footsteps of Zynga, this was part of GREE’s bigger remit to further localize content.

But, also like Zynga (which most recently laid off 18% more of its staff), GREE may have grown too much, too fast, as consumer tastes moved on to the next trendy (non-GREE) game. The knock-on effect on GREE’s financials has not been great, with both sales and net income down over last year. (Like other gaming companies, GREE relies both on advertising and in-game purchases for revenue.) The company’s stock has lost nearly 42% of its value in the last six months since the U.S. closures were announced.

It’s not clear how and if GREE’s minority stake in eBuddy, the Dutch-based messaging service, is affected by this news.

We’re still looking for more information and will update this post as we learn more. The full statement from GREE is below.

“Due to the challenging economic climate and on-going changes within the interactive industry, GREE has proposed to close its UK office. This decision is being considered in order to focus on developing content from the United States of America for the Western market.

“GREE has seen significant growth since it was founded in December 2004, but during 2013 the GREE board have found it necessary to re-assess and streamline the global business with a view to consolidating certain functions.

“This realignment of the business is a necessity to ensure that GREE can continue to invest and enhance its business offering moving forward. The management team are confident that the proposed restructure of the business will benefit the company due to the changing nature of the digital industry over the coming years.”


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