Gumi: From Social Networking to Social Gaming and Making Loads of Money

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Over at Myojo Wakaru (sort of Japan’s answer to SXSW) in Fukuoka, I met up with Gumi’s founder and president, Hironao Kunimitsu.

It was an interesting place to chat with an entrepreneur because the music was loud and cool bunny girls were walking around serving us drinks. I can certainly think of worse ways to spend a weekend!

Hironao was practically shouting at me over the music as he shared his amazing entrepreneur story. He told me that Gumi was first founded as a social network and back then, he saw the growth of Facebook and thought there could be a similar concept in Japan. He was thinking mobile rather than web as he wanted to fuse social networking with the mobile inclination of Japanese people.

He said Gumi did get some traction as a social network. But he wanted to do much more than just the social part. Hironao wanted to build content for his users, partly because he has experience working as a TV producer. So naturally, distributing video content like movies was one of his interests. But regrettably he realized that there would be too many legal issues to be dealt with. So instead of videos, Hironao now focuses on building social games, which he said have also been distributed on GREE and Mixi.

Anyway, Gumi’s social games turned out to be more popular and profitable than its social network business. Hironao said that in Japan, people are affluent and are willing to pay for virtual items in mobile games, and that allows him to generate revenue quickly.

He revealed that Gumi is making a whopping US$6 million per month and growing. It is also one of the largest game developers on GREE.

When asked about his expansion plan, he said that Gumi is now looking to expand to the US and then to Europe. But he also confessed that it is tough for Japanese companies to expand to the states. He said:

Most developers would rather work for Google, Facebook, or Zynga than for Japanese companies.

That’s about all that we discussed as the fun and wacky Hironao introduced me to some of his Japanese friends and… uh… taught me some Japanese at the same time.

It was fun. Arigato.

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