### b. GungHo Online Entertainment

GungHo Online Entertainment, which has used its mobile game business to expand in Japan and abroad, maintains subsidiaries in the United States and South Korea and opened a subsidiary in Singapore in September 2014 to strengthen its business in the Asia-Pacific region. The company's leading game, Puzzle & Dragons, has been released in 33 countries and regions. GungHo announced in October 2014 that it had purchased a controlling interest in the U.S. company PlayPhone, a leading global billing service that is focused on emerging markets where online games have long been popular and where there are signs of growth in the smartphone game market driven by smartphone proliferation. PlayPhone provides global billing services for smartphone games to major telecom carriers around the world. It has expanded its services to 11 carriers in 10 countries, including emerging markets in Southeast Asia, the Middle East, and Latin America. It also provides free software development kits to game developers. By acquiring PlayPhone, GungHo is attempting to capture the growth performance of emerging markets and expand into the billing platform business.

### 3. ICT service layer: Trends in Japan's ICT industry

Firm domestic demand is projected for Japan’s domestic ICT service market for the present time, driven by My Number-related investment and system investments by large financial institutions. Over the longer term, however, growth in the domestic market is expected to slow down appreciably, so enterprises are currently expanding into overseas high-growth markets through M&As and establishing local subsidiaries (Figure 5-2-3-1). Below, we list some recent efforts in the ICT service market by leading players.

### a. NTT Group

NTT Group is engaged in strengthening cloud services and accelerating global expansion as the Group aims to move to a new stage. In its Mid-term Management Strategy, announced in the fall of 2012, the Group placed global cloud services at the heart of its overseas business and set out mid-term financial targets of 2 trillion yen for overseas sales in FY 2016 and raising the overseas ratio of corporate sales to over 50 percent. As for specific initiatives, NTT Group is continuing to acquire overseas enterprises in the ICT services field and the acquired enterprises are used as the main entities in accelerating the Group's global expansion. Two reasons for the Group's decision to expand acquisitions are immediately strengthening its business, in terms of capturing customers, for example, in each region, and boosting its competitiveness by incorporating expertise from the acquired enterprises. The acquisitions are also positioned to shore up weaknesses in Group companies, and there are hopes to benefit from synergies by governing affiliated companies and collaborating between companies.

Figure 5-2-3-1 Examples of Recent M&As by Japanese enterprises in the ICT service market

Company	Announcement Period	Company Acquired (country)	Acquired Company's Business Field
NTT Corporation	June 2013	Solutionary, Inc. (U.S.)	Security services
NTT Data	December 2012	IFI Solution (Vietnam)	Offshore development for Europe
December 2012	Innocence (Australia)	SAP-related services
October 2013	everis Group (Spain)	IT services
November 2013	Aster Group (U.S.)	SAP BI-related products and services
November 2013	EBS Romania (Romania)	Near-shoring development inside Europe
November 2013	Optimal Solution Integration (U.S.)	Provision of expert SAP services
January 2014	4C Management Consulting (Denmark)	Corporate performance management
NTT Communications	June 2013	Digital Port Asia (Thailand)	Data center operations
August 2013	Arkadin International (France)	Cloud-based conferencing systems
October 2013	Virtela Technology Service (U.S.)	International data communications services
October 2013	Raging Wire Data Centers (U.S.)	Data center operations
Fujitsu	February 2012	Technology Management Corporation (Canada)	IT consulting
April 2013	Run My Process (France)	Cloud services
Hitachi Group	February 2014	Micro Clinic India (India)	IT services
April 2014	Customer Effective (U.S.)	CRM solutions
November 2014	I-Net Solutions (Singapore)	IT services
February 2015	Cosmic Blue Team (Italy)	IT services

(Source) "Study Report on Structural Changes and Future Prospects for the Global ICT Industry," MIC (2015)