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[2011] Monetizing Emerging Games Markets
 

[2011] Monetizing Emerging Games Markets

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    [2011] Monetizing Emerging Games Markets [2011] Monetizing Emerging Games Markets Document Transcript

    • Monetizing Emerging Games’ Markets Benoit Schotte-Daudin, GlobalCollect Peter Warman, Newzoo Powered by August 2011
    • GlobalCollect is the world’s premier Payment Service Provider of local e-payment solutions for the online Video Gaming industry. While most providers limit their services to a technical link with payment acquirers, GlobalCollect is a full service partner providing you with online game monetization market metrics and best practices based on years of experience with international online gaming leaders. Through a single-interface platform, we offer access to an unrivalled portfolio of online payment methods in almost 200 countries and 170 currencies, including all major credit and debit cards, e-wallets, direct debits, real-time banking, prepaid, cash at outlets, and bank transfers.  Newzoo is an international market research firm focused completely on the games industry. Newzoo aims to provide the best independent consumer market data across all game platforms and business models. Newzoo also operates the global B2B portal Gamesindustry.com and publishes the bi-annual Games Industry Black Book. www.newzoo.com. 2
    • Table of Contents 1 Game platform popularity 1.1 Emerging versus Western markets 4 4 2 Who plays and who pays 2.1 Spending on social and MMO games 2.2 Demographics 2.3 Emerging markets 6 6 7 8 3 Business models 3.1 Virtual item sales versus subscriptions 10 10 4   Payment preferences 4.1 Country ranking 4.2 Payment methods 4.3 Processing payments 4.4 Transaction value 12 12 13 14 15 3
    • 1 Game platform popularity Emerging versus Western markets In emerging markets like Brazil and Russia Internet penetration and use is relatively low, but growing at an enormous pace. Of the active internet population - 46 million in Brazil as well as Russia - at least 75% plays games. The uptake of online and mobile gaming has pushed the number of players and “payers” to a level comparable to major European markets. The number of people actively playing games ranges from 16 million in Mexico to 35 million in Brazil to 38 million in Russia. Equivalent to Western countries, on average 50% of these consumers actually spend money on games. Number of gamers per “platform” in Brazil Active internet population 10-65: 46 million | Gamers: 35 million | Spenders: 17 million 26M 24M 24M 24M 19M Casual websites Social networks Mobile devices MMO games 21M Console games PC/Mac boxed 23M PC/Mac download The average Brazilian gamer plays on 4.6 of the game genres/platforms above Number of gamers per “platform” in Mexico Active internet population 10-65: 22 million | Gamers: 16 million | Spenders: 9 million 11M 12M 12M Casual websites Social networks Mobile devices 9M MMO games 12M Console games 10M 11M PC/Mac boxed PC/Mac download The average Mexican gamer plays on 4.8 of the game genres/platforms above 4
    • The average game genre/platform is more or less the same for Western and Emerging markets. Mexico is leading with 4.8 game genres/platforms played per gamer. Followed by Russia with 4.7, Brazil with 4.6, and Spain with 4.2. Overall the graphs show that Mobile is a popular platform across different countries - in most countries it is among the top three in terms of number of gamers per platform. This definitely contributes to the average game genre/platform played per person, as players play more games on the move these days. Number of gamers per “platform” in Russia Active internet population 10-65: 46 million | Gamers: 38 million | Spenders: 20 million 29M 28M 29M 26M 25M 25M PC/Mac boxed PC/Mac download 14M Casual websites Social networks Mobile devices MMO games Console games The average Russian gamer plays on 4.7 of the game genres/platforms above Number of gamers per “platform” in Spain Active internet population 10-65: 24 million | Gamers: 15 million | Spenders: 6 million 8.6M 8.9M Casual websites Social networks 10.2M Mobile devices 12.2M 6.0M MMO games Console games 9.3M 8.1M PC/Mac boxed PC/Mac download The average Spanish gamer plays on 4.2 of the game genres/platforms above 5
    • 2 Who plays and who pays? Spending on social and MMO games When looking at the payers vs. players ratio for MMO games, it becomes clear that the US not only has the highest number of MMO payers but also by far the highest percentage of MMO payers compared to Spain and emerging markets. 43% of all MMO players in the US pay for MMO games. In emerging markets, the average percentage of MMO payers is about 35% of all MMO players. Zooming in on social game payers vs. players ratios, it can be said that the percentage of payers amongst social players is on average (almost) equal when comparing the US with emerging markets. Social payer’s percentages vary between 25 and 27% in these countries. With only 16% of social players actually paying for social games in Spain, it becomes clear that Spanish social gamers are not keen on paying for it. However, when looking at the actual social payers, Spaniards are in fact spending the most on average per month on social games (€7,62 per month). Paying Social gamers in absolute numbers and ratio in US, ES, RU, BR, MX Paying MMO game players in absolute numbers and ratio in US, ES, RU, BR, MX 19 million Social gamers in the US spend an average of 8.5 USD per month. 26% 25% 27% 43% 27% 31% of MMO gamers in Spain make an average purchase of 5.90 Euro per month 35% 34% 37% 31% 16% 19.0M 1.4M 7.2M 6.4M 3.2M 22.3M Payers (absolute) Payers (absolute) 6 1.9M 9.2M 8.1M 3.4M
    • Demographics There are significant differences between these countries when looking at the percentage/ number of MMO and social gamers as well as the payers vs. players ratio across platforms. However, looking at the graph with the age make-up of social and MMO gamers, it can be concluded that the US and emerging markets are not so different for social and MMO players and payers. Social players are most often between 10 - 35 years old: 74% in the US and 82% in Brazil. Demographic profile of payers vs players for social gaming - US Social Players: 76M – Social Payers: 19M 16% of the social players is 10 to 15 years old, which equals 12.0M social players 23% of the social payers is 26 to 30 years old, which equals 4.4M social payers 7
    • 2 Who plays and who pays? (continues) Emerging markets For Emerging and Western markets alike, the largest group of paying players can be found in the age range between 20 and 35. In Brazil for instance, 32% of social gamers are between 26 - 35 years of age, representing 42% of paying social gamers. To underline the similarity in age make-up between social payers in the US and Brazil: in both countries, 23% of all social payers are between 26 - 30 years old. For MMO players and payers the same kind of trend can be identified. Demographic profile of payers vs players for social gaming - BR Social Players: 24M – Social Payers: 6M 16% of the social players is 10 to 15 years old, which equals 3.8M social players 23% of the social payers is 26 to 30 years old, which equals 1.5M social payers 23 20 19 18 17 16 15 14 12 9 9 7 7 5 3 8 3 3 3
    • Demographic profile of payers vs players for MMO gaming - US MMO Players: 52M – MMO Payers: 22M 17% of the MMO players is 10 to 15 years old, which equals 9.1M MMO players 21% of the MMO payers is 26 to 30 years old, which equals 4.7M MMO payers 21 21 18 17 16 18 17 16 14 10 7 8 6 5 1 1 2 2 Demographic profile of payers vs players for MMO gaming - RU MMO Players: 26M – MMO Payers: 9M 18% of the MMO players is 10 to 15 years old, which equals 4.7M MMO players 17% of the MMO payers is 26 to 30 years old, which equals 1.6M MMO payers 18 17 17 17 16 15 15 13 13 11 9 8 7 6 6 2 9 3 6
    • 3 Business models Virtual item sales versus subscriptions Only in Spain, subscription based payments are used more often than buying virtual items within social games. The difference between paying via subscription or virtual item is more significant when looking at Russia, Brazil, and Mexico. For MMOs this is different, where subscriptions are in higher demand than virtual items for the US and Spain. For emerging markets, the difference between the two payment methods is less for MMO games than for Social games. These numbers do not indicate the amount of money spent but the absolute number of paying gamers via subscriptions or virtual items. Popularity of subscriptions within social gaming for US, ES, RU, BR, MX Popularity of virtual items within social gaming for US, ES, RU, BR, MX 70% of Russian paying social gamers spend money on virtual items. 90% 88% 83% 85% 89% of Spanish paying social gamers spend money on subscriptions. 84% 89% 70% 68% 67% 4.4M 2.1M 52% 17.2M 1.2M 5.0M 5.3M 15.9M 2.7M Popularity (absolute) Popularity (absolute) 10 1.3M 3.7M
    • Popularity of virtual items within MMO gaming for US, ES, RU, BR, MX Popularity of subscription within MMO gaming for US, ES, RU, BR, MX 91% of Mexican paying MMO gamers spend money on virtual items. 83% 88% 79% 59% of Russian paying MMO gamers spend money on subscriptions. 91% 91% 85% 81% 76% 74% 59% 18.5M Popularity (absolute) 1.5M 7.0M 7.1M 3.1M 20.3M Popularity (absolute) 11 1.6M 5.4M 6.6M 2.5M
    • 4 Payment preferences Country ranking Emerging markets like Brazil and Russia were already in the top ranks of GlobalCollect’s online video gaming merchants in 2010 and have risen a little bit over the past 12 months. Their potential was seized by early movers and is now being aggressively tapped by all major players. To be successful in Brazil, Spain, and Mexico, online publishers need to monetize via “low-commitment” models (traditional F2P and social gaming), enabling local players to spend what they can when they can. Russia shows a different profile because of its strong hardcore player base which is more prone to targeted purchases of high-value productions (AAA MMORPG’s and downloads). Country ranking per monetization model (# of payments) (source GlobalCollect online gaming payment processing data, 2010) Overall rank AAA Downloads MMORPG F2P virtual F2P premium Social currency subscription gaming (subscriptions) 1 1 1 1 1 1 5 25 15 9 5 2 9 6 9 26 54 86 13 9 12 8 15 17 25 43 33 39 11 11 12
    • Payment methods When asked how social and MMO players pay for their games, it becomes clear that credit cards are the number one payment method in the US and Brazil. As much as 42% of the Brazilian MMO payers state that credit cards are one of their preferred payment method. Overall, credit cards and online payment services are the most popular payment methods amongst social and MMO followed by text messaging. Whereas credit cards perform best in the US and Brazil, online payment methods are more popular in Russia, Mexico, and Spain. Top three payment methods and their popularity (in %) for social gaming Amongst paying social gamers, Respondents could tick max. 3. in US, ES, RU, BR, MX Payers (absolute) 19.0M 1.4M 7.2M 6.4M 3.2M No. 1 Credit Card (39%) Text messaging service (24%) Text messaging service (39%) Credit Card (40%) Online payment service (29%) No. 2 Online payment service (29%) Online payment service (20%) Online payment service (26%) Online payment service (23%) Credit Card (29%) No. 3 Text messaging service (13%) Credit Card (20%) Credit Card (21%) Online bank account (19%) Text messaging service (22%) Ranking Top three payment methods and their popularity (in %) for MMO gaming Amongst paying social gamers, Respondents could tick max. 3. in US, ES, RU, BR, MX Payers (absolute) 22.3M 1.4M 9.2M 8.1M 3.4M No. 1 Credit Card (34 %) Online payment service (25%) Online payment service (34%) Credit Card (42%) Online payment service (26%) No. 2 Online payment service (23%) Credit Card (22%) Online payment service (32%) Online payment service (22%) Credit Card (23%) No. 3 Online bank account (21%) Text messaging service (18%) Credit Card (22%) Online bank account (15%) Text messaging service (23%) Ranking 13
    • 4 Payment preferences (continues) Processing payments Even if cards are dominating most markets, each country shows quite specific local payment preferences. Brazilian players have less access to credit cards and PayPal than American ones. Consequently, they rely on cash-based payments like Boleto (21% local market share overall; up to 40% market share for fully localized online gaming merchants). Russia is all about local eWallets (WebMoney and Yandex are leading and leaving little room for PayPal) and terminal payments like Qiwi. If Mexico is under the influence of its heavy-weight eCommerce neighbor, local prepaid scheme Todito offers an attractive proposition. Premium SMS (available soon at GlobalCollect) also presents a compelling offer for players in emerging countries, while prepaid card issuers invest heavily in these markets and start getting good traction. Payment methods per country (source GlobalCollect online gaming payment processing data, 2010) 100% 11% 3% 7% 21% 10% 80% 25% 47% 60% 40% 89% 80% 79% 53% 20% 0% ■ Credit Card ■ eWallet ■ Cash ■ Direct Debit ■ Prepaid 14 75%
    • Transaction value It should come as no surprise that players from emerging countries have a lower purchasing power which is reflected in their average spent per purchase (25% less than American players on average). That explains why F2P and social gaming monetization models have enjoyed great success in these emerging markets. This structural characteristic also forces publishers of AAA products to be more creative when trying to enter these territories and gain local market share. Localized offers are usually set at a lower price point for both game clients and services - sometimes with Western pricing strategies sustained via multiple monthly installments (such as 1/6 of the price per month over six months). Average transaction value per country (source GlobalCollect online gaming payment processing data, 2010) $20.00 $18.97 $18.00 $16.00 $14.71 $14.61 $13.64 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 15
    • GlobalCollect Presents LinkedIn Groups for Gaming Industry To engage with merchants and other stakeholders in the gaming vertical, GlobalCollect has launched a couple of LinkedIn groups. Enabler for this bring added value to discussions by sharing knowledge and expertise. Case in point, as the exclusive commissioner of a survey performed by Newzoo, an industry leader in market research on gaming, GlobalCollect facilitates the collection of data not yet available to the games industry in emerging markets such as US, Brazil, Mexico, Russia, Spain, China, and Korea. Content published will focus on a different topic each month: three interesting facts per region plus vision and data. Exclusive content - so hear it here first: http://www.globalcollect.com/LinkedIn-Gaming-Groups GlobalCollect Video Gaming Team: Benoit Schotte-Daudin Andrew Monroe Global Market Leader, Online Video Gaming Account Manager – EMEA benoit.schotte-daudin@globalcollectusa.com andrew.monroe@globalcollect.com Mobile: +1 (415) 987 6937 Mobile: +31 (0)6 3016 3437 Bob Voermans Jay-o Hyon Sr. Business Development Manager - EMEA Business Development Manager - Asia Pacific bob.voermans@globalcollect.com jay-o.hyon@globalcollectapac.com Mobile: +31 (0)6 5060 2050 Mobile: +(65) 9852 3245 Stuart Mann Matías Fainbrum Business Development Manager - EMEA Business Development Manager - Latin America stuart.mann@globalcollect.com matias.fainbrum@globalcollectlatam.com Mobile: +31 (0)6 1353 9982 Mobile: +54 (9)11 4083 3730 GlobalCollect EMEA | Planetenweg 43-59 | 2132 HM Hoofddorp |The Netherlands | tel: +31 (0)23 567 1500 GlobalCollect NorthAm | Three Embarcadero Center | Suite #2900 | San Francisco CA 94111 | United States | tel: +1 (415) 975 0969 GlobalCollect LatAm | Av. Alicia Moreau de Justo 846 | 2nd Floor, Office 11 | 1107AAR Buenos Aires | Argentina | tel: +54 (11) 5272 1189 GlobalCollect APAC | 8 Temasek Boulevard | #21-04 Suntec Tower Three | 038988 Singapore | tel: + (65) 6408 8222 www.globalcollect.com