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2013 cartoon digital

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Trends And Opportunities In The Evolving Market For Video Games

Trends And Opportunities In The Evolving Market For Video Games


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  • 1. Cartoon Digital 2013 Trends And Opportunities In The Evolving Market For Video Games Munich, June 2013 Laurent Michaud Tel: +33 467 144 439 Head of Consumer Electronics & Digital Entertainment l.michaud@idate.org
  • 2. Sommaire 1. Game Industry Organisation p 03 2. 8 Key Trends p 08 3. What Synergy between video game and cinema/animation? p 23
  • 3. Game Industry Organisation
  • 4. Value Chain : Hardware + Software+ Service Design & Creation Tools Providers Middleware Providers Developers Publishers Distributors Retailers Home Consoles (Microsoft, Nintendo, Sony, and a lot of traditional publishers) Mobile Phones & Smartphones (Apple, Samsung, HTC, Nokia, RIM…EA Mobile, Gameloft, SuperCell, King and many indies) Computers and Online Games (Zynga, King, CD Projekt, Wargamming.net) Smart TV (Onlive, Playcast, Visiware, Tectoy, SreenAngels…) Handheld Consoles (Nintendo, Sony, and less and less traditonal publishers) Tablets (Apple, Samsung, Microsoft…EA Mobile, Gameloft, SuperCell, King)
  • 5. Value Chain : Hardware + Software+ Service Design & Creation Tools Providers Middleware Providers Developers Publishers Distributors Retailers Home Consoles (Microsoft, Nintendo, Sony) Mobile Phones & Smartphones (Apple, Samsung, HTC, Nokia, RIM…) Computers (PC, Mac) Smart TV (Onlive, Playcast, Visiware, Tectoy, SreenAngels…) Handheld Consoles (Nintendo, Sony) Tablets (Apple, Samsung, Microsoft…)
  • 6. Value Chain : Hardware + Software+ Service Design & Creation Tools Providers Middleware Providers Developers Publishers Distributors Retailers Home Consoles (Microsoft, Nintendo, Sony) Mobile Phones & Smartphones (Apple, Samsung, HTC, Nokia, RIM…) Computers (PC, Mac) Smart TV (Onlive, Playcast, Visiware, Tectoy, SreenAngels…) Handheld Consoles (Nintendo, Sony) Tablets (Apple, Samsung, Microsoft…)
  • 7. Value Chain : Hardware + Software+ Service Design & Creation Tools Providers Middleware Providers Developers Publishers Distributors Retailers Home Consoles (Microsoft, Nintendo, Sony) Mobile Phones & Smartphones (Apple, Samsung, HTC, Nokia, RIM…) Computers (PC, Mac) Smart TV (Onlive, Playcast, Visiware, Tectoy, SreenAngels…) Handheld Consoles (Nintendo, Sony) Tablets (Apple, Samsung, Microsoft…)
  • 8. 8 Key Trends
  • 9. Introduction: A Secular Growth World Video Game Market, 2012-2016 (millions EUR) 2012 2013 2014 2015 2016 Mobile Games 5 165 6 352 7 661 9 092 10 643 Offline Computer Games 2 778 2 553 2 259 1 887 1 504 Online Computer Games 13 292 15 377 17 351 19 146 20 834 Home Console Games 15 063 12 251 12 472 15 365 18 664 Handheld Console Games 5 572 7 303 8 416 9 087 8 995 Total 41 870 43 836 48 159 54 577 60 640 Growth Rate 4.7% 9.9% 13.3% 11.1% World Video Game Market, 2012-2016 (millions EUR) Source : IDATE – December 2012
  • 10. 10 1/ More than half of World Video Game Revenue comes from digital sales Source: IDATE, December 2012 Digital Revenue Breakdown (Million EUR) 8 Key Trends Source IDATE, December 2012 World video game market: physical vs. digital game sales, 2012-2016(Million EUR) 2012 2013 2014 2015 2016 Total World Video Game Market 41 429,9 44 211,7 49 436,6 54 776,0 59 113,9 Digital Video Game Market 23 917,3 27 981,5 33 420,3 40 031,1 46 556,0 Digital Market Growth Rate 17,0% 19,4% 19,8% 16,3% Digital Market / Total Market 57,7% 63,3% 67,6% 73,1% 78,8% 2012 2013 2014 2015 2016 Home Console 2 863,3 3 643,3 5 551,7 8 428,9 11 285,6 Handheld Console 336,9 662,3 1 241,7 2 059,4 2 817,0 Computer 15 078,0 16 955,3 19 013,5 21 129,1 23 373,0 Mobile 5 639,1 6 720,5 7 613,3 8 413,6 9 080,5 Total 23 917,3 27 981,5 33 420,3 40 031,1 46 556,0 Copyright © IDATE 2012
  • 11. 11 8 Key Trends Importance of digital revenue Activision In FY2012, net revenues from digital online channel account for 34% of total revenues. Electronic Arts According to company forecasts, digital net revenue will definitely overtake physical net revenue by the end of 2014. 36% of Non- GAAP net revenue. Ubisoft In FY2013, Online/digital sales leaped 86% to €148 million, which represented 11.7% of the Group’s total sales. Nintendo On the 15 Nintendo-published titles available on 3DS, in 2012, 11% have come through full digital downloads of those games Take Two Interactive Revenue from digitally delivered content grew 148% year-over- year and accounted for 22% of Non-GAAP net revenue. Digital Revenue of Traditional Game Publishers Source : IDATE – 2013
  • 12. 12 8 Key Trends 2/ The 2012-2016 period confirms the success of Free2Play business model which could cross the Rubicon and will tease consoles, handheld consoles and connected TVs.
  • 13. 13 8 Key Trends 2/ The 2012-2016 period confirms the success of Free2Play business model which could cross the Rubicon and will tease consoles, handheld consoles and connected TVs. 3/ Intense competition in the segment of mobile games. Even if the game experience is quite different, Smartphones are getting to compete with handheld consoles… and home consoles.
  • 14. 14 8 Key Trends - 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 Unknown 2008-09 2008-12 2009-03 2009-06 2009-09 2009-12 2010-03 2010-06 2010-09 2010-12 2011-03 2011-06 2011-09 2011-12 2012-03 2012-06 2012-09 2012-12 2013-03 # Apps # Games Source: IDATE d’après 148apps.biz, mai 2013 Evolution Appstore Games , 2008-2013 Platform # Apps # Games % of Games Apple Store 880 090 148 614 17% Android Market 696 527 95 935 14% Source: IDATE d’après 148apps.biz, mai 2013 Games and Application within Stores
  • 15. 15 8 Key Trends 2/ The 2012-2016 period confirms the success of Free2Play business model which could cross the Rubicon and will tease consoles, handheld consoles and connected TVs. 3/ Intense competition in the segment of mobile games. Even if the game experience is quite different, Smartphones are getting to compete with handheld consoles… and home consoles. 4/ The tablets game features fit gamer expectations.
  • 16. 16 8 Key Trends Media Tablet Domestic Shipments (Million units) 2012 2013 2014 2015 2016 North America 37.7 45.1 48.5 50.1 50.9 USA 36.1 42.6 45.5 46.8 47.4 Rest of North America 1.6 2.5 3.0 3.3 3.5 Europe 27.3 39.1 51.0 60.7 67.7 France 3.8 5.4 6.2 6.6 6.8 Germany 6.2 8.0 9.1 9.7 10.0 Italy 3.4 4.8 5.6 6.0 6.1 Spain 2.5 3.7 4.3 4.6 4.8 United Kingdom 4.8 6.4 7.2 7.5 7.8 Rest of Europe 6.6 10.8 18.7 26.2 32.1 Asia/Pacific 40.7 57.9 74.2 86.5 93.1 Japan 8.4 12.7 15.9 17.2 17.8 Rest of Asia/Pacific 32.3 45.2 58.3 69.3 75.3 Latin America 4.4 6.8 10.1 14.1 17.7 Total 110.1 148.7 183.9 211.4 229.3 Source : IDATE, décembre 2012
  • 17. 17 8 Key Trends 2/ The 2012-2016 period confirms the success of Free2Play business model which could cross the Rubicon and will tease consoles, handheld consoles and connected TVs. 3/ Intense competition in the segment of mobile games. Even if the game experience is quite different, Smartphones are getting to compete with handheld consoles… and home consoles. 4/ The tablets game features fit gamer expectations. 5/ Social Gaming Act 2. Better graphics, more virality, multiplayer synchronized system, Facebook Home
  • 18. 18 8KeyTrends Source: AppData – June of 2013
  • 19. 19 8 Key Trends 2/ The 2012-2016 period confirms the success of Free2Play business model which could cross the Rubicon and will tease consoles, handheld consoles and connected TVs. 3/ Intense competition in the segment of mobile games. Even if the game experience is quite different, Smartphones are getting to compete with handheld consoles… and home consoles. 4/ The tablets game features fit gamer expectations. 5/ Social Gaming Act 2. Better graphics, more virality, multiplayer synchronized system, Facebook Home 6/ Gamers need ubiquitous games. The multiplicity of connectable media allows access to play through different screens, but the experience is too often interrupted from one screen to another. Ubiquity is a continuous experience whatever screen or device.
  • 20. 20 8 Key Trends 7/ Games and Smart TV: an irreversible convergence, in the context of cloud gaming spread. Beyond streamed game, this convergence will operate through a new form of interactivity which has to be designed by audiovisual players, TV channels and producers.
  • 21. 21 8 Key Trends 0 100 200 300 400 500 600 700 800 2013 2014 2015 2016 2017 North America Europe Asia Pacifique Latin Amrerica Total 2013 2014 2015 2016 2017 USA 46,5 60,8 75,2 89,6 108,6 France 7,8 11,6 15,6 19,7 25,0 Germany 12,4 16,8 20,9 24,8 30,0 Italy 7,1 10,3 13,3 16,3 20,0 Spain 4,7 6,6 8,7 11,1 14,4 United Kingdom 11,3 15,0 19,0 22,8 27,2 Japan 21,8 26,0 33,0 41,1 50,6 China 21,4 36,6 57,2 82,7 119,4 Connectable TV Set Installed Base (Million Units) Source: IDATE - janvier 2013
  • 22. 22 8 Key Trends 7/ Games and Smart TV: an irreversible convergence, in the context of cloud gaming spread. Beyond streamed game, this convergence will operate through a new form of interactivity which has to be designed by audiovisual players, TV channels and producers. 8/ Crowdfunding: a new way to finance games and especially independent studios games and industry veterans games. Few games have been developed by this way and wouldn't have not been otherwise. • The New York-based Kickstarter hosted amazing industry veteran fund projects: - 3.9 millions USD on Project Eternity d’Obsidian Entertainment, (Feargus Urquhart, Chris Parker, Darren Monahan, Chris Avellone Et Chris Jones) from Black Isle Studios, Blizzard Entertainment, Electronic Arts and Neversoft. - 3.3 millions USD on Double Fine Adventure from Tim Schafer (Day of Tentacle, la série Monkey Island) studio. - 2.9 millions USD on Wasteland 2 from Brian Fargo inXile entertainment, founder of Interplay. - 2.2 millions USD on Planetary Annihilation from Uber Entertainment created by Steve Thompson, Bob Berry, Jon Mavor. - 1.8 million USD on Shadowrun Returns from Harebrained Schemes studio , founded by Jordan Weisman (Mech Warrior, Battletech, Mech Commander, Shadowrun)….
  • 23. What Synergy between video game and cinema/animation?
  • 24. What Synergy between video game and cinema/animation? • Cinema/Animation studio are more and more committed in video game industry, but synergies are heterogeneous - They can sell to publisher the rights to operate their licenses - They can link a partnership with a publisher so as to make possible porting of their best licenses - They can engage themselves in a publishing activity • When Cinema/Animation studios are video game publisher as well, they operate like video game publishers - To spread out first party, second party or third party agreements. - To invest to cross platform titles - To deal with retail issues through their distribution subsidiary… • Cross development and marketing raised through 4 stages - First stage: collaborations addressed the possibility for a developer to create a game based on the cinema/animation studio license o The cinema/animation studio sell its licenses rights to a game publisher or a developer o The Game company developed the game being conscience that the game should be marketed in the same time of the film. o It often happened deadline was not respected and cross marketing was a failure.
  • 25. What Synergy between video game and cinema/animation? - Second stage: collaborations became effective o Conditions of license sale are more robust and lead game studio to give more attention to the game development. o Cinema/animation studio to be deeper involved in the publishing stage. o The film and the game are commercialized simultaneously. - Third stage: the era of co-creation o Film director are attracted by game creation capability, o Thanks to the interaction used in video games, film director have certainly find a new way to express their art - Fourth stage: time for upstream cooperation and cross iterated production o Both production are prepared in the same time o Assets are shared between game studios • Prospective on their strategy - Media groups will integrate video game activities to develop cross media cross platform strategies
  • 26. Thank you for your attention