China Mobile Online Games Market Overview


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Startonomics Beijing - June 11, 2009
Larry Zhang, CEO, Troodon Enter-tech Inc.

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China Mobile Online Games Market Overview

  1. 1. Cellphone Online Game Business Market Overview Jun 2009 Larry Zhang CEO Troodon Enter-Tech Inc.
  2. 2. PC Online Game Business in China — Of all the 14 public Chinese internet companies in US capital market, 6 are PC online game companies. NASDAQ: NTES SNDA CYOU GA PWRD NCTY — In 2009Q1, these 6 companies’ total market value is 12B USD(50%), revenue is 505M USD (60% ) , net profit is 226M USD (70%), — PC online game is by far the most successful internet business in China
  3. 3. Common conceptions of Cellphone Online Game — Players only play Cell phone Online Game (COG) for short periods of time — Because game effect is limited by the small cellphone screen, players would not pay as much as they pay for PC online games — Cellphone Online Game (COG) businesses will have a much smaller market than PC Online Game (POG) businesses
  4. 4. COG – Who are playing According to our operations data — Users play for 4.5 hours per day on average; — most have their battery charger on when they play — Users spend most of their leisure time in the game COG User Characters — Have a lot of free times — Do not have any other better entertainment options during their main free time Conclusions — COG users have limitations in entertainment activities during the majority of their free time — They regard COG as their best and primary form of entertainment
  5. 5. COG – How much they pay Business Index of Online Game Business Peak Concurrent User (PCU) Average Concurrent User (ACU) Average Revenue Per ACU (ARPU) = Product Revenue / ACU ARPU/ACU Compare (Virtual Item Selling Model) 08Q4 PC Online Game Company ICYOU: 299 PWRD:202 GA: 212 09Q1 Troodon Games 190 ~ 300 Customers pay as much as, or even more than, what they pay for PC online games
  6. 6. Troodon Brief Introduction Incorporated in September 2002 Major Business Cell phone online game development and operations Product Concepts Oriented towards 2.5G and 3G Focus on interactive entertainment Share enjoyment, provide instant pleasure
  7. 7. Troodon Products & Services Structure Cell phone MMO - Users are addicted and pay a lot - Cash cow for Troodon Casual online games Cellphone - Cultivate users’ habit of playing MMO online - Future point of profit increase Casual Online Games Light Games & Friends WAP community for gamers Making - Accumulate customer base Mobile SNS for Gamers In production - Bring in new customers for games Satisfy customers’ need for interactive entertainment anytime anywhere
  8. 8. Profile: Growth landmarks Development of cellphone online games started in July 2002 In Mar. 2004, Troodon’s first product, “Sword of Troodon”, won the Top 3 Games of The Year Award at Qualcomm’s Global BREW Forum In Apr. 2004, Troodon’s product launched on China Unicom’s BREW platform, making Troodon the first cell phone online game service provider In 2005, Troodon became profitable In May 2006, Troodon received first round investment from WIH In 2006, Troodon migrated its products from CDMA network to GSM network and changed its business model from charging based on time to charging by items. These two actions dramatically enlarged Troodon’s user base In Feb. 2008, Troodon get second round investment led by Steamboat (Disney) At present, Troodon is the No. 1 Market Share Leader in Cellphone Online MMO Game market
  9. 9. COG – How fast and how big the market will grow COG market is still facing long-term obstacles — Traffic fee is still not affordable by normal users — User need more time to have the habit of going online with cellphones — Too many kinds of phones and OS (iphone gphone symbian WM…) — Carriers have too much influence in mobile internet business COG market will become much bigger than POG market eventually – COG’s user base is much bigger than POG user base – Customers pay no less for COG than for POG
  10. 10. Troodon Entertainment Technology Larry Zhang Email: Thanks!