Japan's Rakuten Bets on Post-App Future With New Gaming Service

(Bloomberg) -- Rakuten Inc. is betting on a future without apps.

The e-commerce company unveiled Rakuten Games on Tuesday, seeking to deliver titles that don't have to be installed on phones or personal computers. The games can be played on web browsers or within other apps, making it easier for users to play with each other without having to wait for new software to be loaded onto their devices. Titles based on Pacman and Space Invaders are among the 15 games available on the platform.

Facebook Inc. and Tencent Holdings Ltd. have also embraced similar initiatives, seeking to keep users within their apps and services instead of venturing to app stores run by Apple Inc. and Alphabet Inc.'s Google. While browser-based gaming is being touted as a step away from the app ecosystem, it's also a step back to an era when apps weren't as dominant as they are now. Rakuten is aiming for a slice of revenue in the mobile gaming-app market, which made up 81 percent of total app sales of $62 billion last year, according to App Annie.

“Rakuten's significant web presence and dedicated users make it perfectly positioned to leverage our technology to enter the mobile gaming market completely outside of the traditional app store approach,” said Michael Carter, chief executive officer of Blackstorm Labs Inc., which developed Rakuten Games with the Tokyo-based company.

The gaming platform is based on HTML5, the latest version of the language that powers websites, which allows for multimedia, graphic and gaming content to be delivered over the internet. Before HTML5 became the de facto standard, Adobe Systems Inc.'s Flash technology was a popular way for people to get multimedia content via browsers and was used to power popular games like FarmVille. The two standards clashed for a while, but Flash wasn't supported on Apple's iPhones and eventually lost out.

Now, some are seeing an opportunity to bring casual gamers on smartphones, tablets, laptops and desktops together under one roof: HTML5. Facebook joined the fray in November when it unveiled Instant Games, an HTML5-based service that lets users play games directly within Facebook Messenger. Still, HTML5 developers have a long way to go until they can produce polished games that can rival Vainglory, Super Mario Run and other smartphone titles.

Rakuten plans to tap its database of 114 million shoppers to encourage them to try the service. The company's frequent-shopper points -- Rakuten Super Points -- can be exchanged for in-game currency to buy virtual items, while deeper integration with the company's messaging app Viber is planned.

“HTML5 promotes a social gaming experience that moves at the speed that users demand: quick, seamlessly and instantly,” said Shigenori Araki, head of Rakuten Games. “What is most important is to focus on providing great new games.”

To contact the reporter on this story: Yuji Nakamura in Tokyo at ynakamura56@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Reed Stevenson, Gearoid Reidy