Free to Play games in Europe - 2009

Free to Play games in Europe Thomas Bidaux ICO Partners

Presentation

Thomas BIDAUX

France Telecom

NCsoft Europe

ICO Partners

Who are you?

Introduction

Free to play games in Europe…

Europe

Free to play games defined

Freemium & Micro Transactions games

Excluding Facebook games, Casual (Try before you buy) and free games (flash light games not monetized). They are relevant, but would need more time to cover as well.

Introduction

Europe

Introduction

Free to play games

?

Introduction

Free to play business models:

Free access to the game or part of the game

Monetized extra features via different means

Long term value from the users

Online games

Introduction

Keys to Free to Play analysis:

ARPPU (Average Revenue Per Paying User)

ARPU (Average Revenue Per User)

CPA (Cost Per Acquisition)

Lifetime Value (LTV)

Active Users

Peak Concurrent Users (PCCU)

Basic F2P economic principles

Online games = Persistent Social Entertainment

Entertainment : has value from day 1

Persistent : day 1 value = 0, increases with time

Social : day 1 value = low (except Facebook games), increases with time

Network effect (works both ways!)

Recurring costs needs recurring revenue

Service not product

Marginal costs tend to zero

Free = no friction

Lowest possible barrier to entry

Others are important : accessibility, downloads, signup forms...

Keep CPA < LTV 

Introduction

Various forms of Free to Play games:

Client-based MMOs

Browser-based games

Facebook (or Bebo or MySpace) games

Casual games

Etc.

A Disclaimer

Many elements in this presentation some might have to be skipped but…

… slides are (already) online @ www.slideshare.net/ICOPartners

All numbers are estimates

The Plan

European Market

Market profile

Market size

Maps

Freemium Games

Micro Transaction Games

Game Portals

Gems

Conclusion

The European Market

The market size (P2P and F2P) – M of Players

Source: idate Sept. 2008

The European Market

The market size (P2P and F2P) – $ ARPU

Source: idate Sept. 2008

The European Market

P2P vs F2P

The European Market

Estimated market size:

30M+ F2P online games players in Europe

400+ games

Estimated revenue : 400-500M€/year

The European Market

Free to Play games profiles

Freemium games

Freemium is:

Free to Play game or part of a game

Extra game elements and features are unlocked by a subscription (fix ARPPU). One-time fees exist, but usually not sustainable.

Set fee, easy to project and control, ceiling on ARPPU

Prefered for kid games (so far)

Well known freemium services are Runescape and Club Penguin

Important Freemium games

Game: Dofus

Genre: Browser-friendly fantasy MMO (Flash/java)

Developer: Ankama (France)

Numbers: 170 000 PCCU; 400 000 Subscribers; ARPPU 5 €

Key territories: France, Spain

Premium features:

Zone privieges

Item privileges

No combat cap

PVP

Pets

No cap on crafting

Housing

Game: Runescape

Genre: Browser-based fantasy MMO (java)

Developer: Jagex (UK)

Numbers: 250 000 PCCU; 1 000 000 Subscribers; ARPPU 5 $

Key territories: US, UK, Netherlands, Scandinavia

Premium features:

Zone privileges

Item privileges

Quests privileges

Extra skills

Transport privileges

Dedicated servers

Dedicated mini games

Extra Bank space

Housing

Extra emotes

Game: Tibia

Genre: Client-based fantasy MMO

Developer: Cipsoft (Germany)

Numbers: 50 000 PCCU; 300,000 Active, 100 000 Subscribers; ARPPU 5 €

Key territories: Poland, Eastern Europe

Premium features:

Zone privileges

Extra spells

Transport privileges

Housing

Dedicated servers

Bank privileges

Leveling privileges

Game: Panfu

Genre: Browser-based kid virtual world (flash)

Developer: Young Internet (Germany)

Numbers: 800 000 active users; ARPPU 10 $

Key territories: US, UK, Germany, Poland

Premium features:

Housing privileges

Clothes

Pets

English or Spanish content

Other Freemium games in Europe Game From Genre Size Country Tribal Wars Innogames (DE) Management 4M actives DE, EEU, PT, NE, TU Travian* Travian (DE) Management 4.4M actives (250K PCCU) DE, TU, PO, EEU Hattrick Extralives (SE) Sport Management 1.6M actives IT, DE, SP, PT Managerzone Power Challenge (SE) Sport Management 500K active TU, PO Stardoll* Stardoll (SE) Life Sim 35M registered, 5M active UK, FR, PO Moshi Monsters Mind Candy (UK) Virtual World 400K active US, UK AQ Worlds Artix (US) RPG 1.5M active US, UK, Nordic Spineworld Playdo Virtual world/RPG 3M registered US, UK, Nordic

Micro Transaction games

Micro Transactions are:

Free to Play game

Extra game elements and features are unlocked by low-priced items

They are actually not « real » Micro Transactions

« Paying users » finance « Free users » (indirectly or more directly via Dual Currency models)

More difficult to project, no ceiling

Important Micro Transaction games

Game: Habbo

Genre: Browser-based kid virtual world (flash)

Developer: Sulake (Finland)

Numbers: 10 M active users; ARPU 1.3 $

Key territories: Nordic, UK, Germany, France

MT features:

Furnitures

Clothes

Pets and Pet food

Mini-games access

Screenshots

Home page perks

Game: Metin 2

Genre: Client-based Fantasy MMORPG

Publisher: Gameforge (Germany)

Numbers: 5 M active users; 35K PCCU; ARPPU 20 €

Key territories: Germany, Poland, Turkey

MT features:

Gameplay buff

Experience buff

Gold gain buff

Repair items

In Game shop

Potions

Trasnports

Looks

Gender swap

Game: Dark Orbit

Genre: Browser-based Space management game

Publisher: Bigpoint (Germany)

Numbers: 60K PCCU; ARPU 3.6 €

Key territories: Turkey

MT features:

Elite items

Faster real time game features

Discounted items

Game: Ogame

Genre: Browser-based Space management game

Publisher: Gameforge (Germany)

Numbers: 2.4M active users

Key territories: France, Germany, Italy, Turkey. Exists in many languages.

MT features:

Commander: Building queue, More UI

Admiral: More fleet slots

Engineer: Less damage taken

Geologist: Better mining

Technocrat: Better espionage

Trading ressources

Game: Flyff

Genre: Client-based MMORPG

Publisher: Gala Net Europe (Ireland)

Numbers: 250K active users; ARPPU 20 €

Key territories: Germany, France

MT features:

Loot buff

Experience buff

Look items/outfits

Respecs

Potions

Pets

Group summon

Speed buff

Game: Runes of Magic

Genre: Client-based MMORPG

Publisher: Frogsters (Germany)

Numbers: 500 K active users; 30 K PCCU; ARPPU 20 €

Key territories: Germany, UK, Nordic

MT features:

Transport

Mounts

Death management

Housing customization

Experience Buff

Loot buff

Crafting tools

Respecs

Chests keys

Pets

Other Micro Transaction games in Europe Game From Genre Size (estimates) Country Dragonica Gala Net Europe MMORPG N/A Rappelz Gala Net Europe MMORPG 150K FR, DE Last Chaos Gamigo MMORPG 60K DE Battleforge EA RTS 60K DE Seafight Bigpoint Management 500K Silkroad Online Joymax MMORPG 300K TU Florensia Burda IC MMORPG 120K DE, FR 4Story Gameforge MMORPG 70K DE Nostale Gameforge MMORPG 100K DE, FR, UK Perfect World Games Masters MMORPG 200K DE, PO Knight Online K2 MMORPG 500K TU Cabal Online Games Masters MMORPG 230K TU, EEU, DE Twelve Sky 2 MAYN Interactive MMORPG 150K US, DE, TU

Top Free to play games in Europe Red: Client-based Blue: Browser-based

F2P European Portals

Portal: Gpotato.eu (Gala Net Europe)

Games: Flyff, Rappelz, StreetGear, Draconica, Allods Online

Numbers: 1.2M active users

Key territories: France, Germany

Notable facts: Starting the UK and Turkish markets this summer

Portal: Gamersfirst (K2)

Games: Knight Online, Sword of the New World, War Rock

Numbers: N/A

Key territories: Turkey

Notable facts: Not related to 2K/Take2. No physical presence in Europe. Publishing European-developed Parabellum (Acony, DE) and Victory (Vae Victis, IT). Also publishing Runes of Magic in Turkey.

Portal: Game forge (Game forge)

Games: Metin 2, Nostale, Air Rivals, 4Story, Ogame, Ikariam, Bitefight, +more.

Numbers: 65 M registered users ; 540 000 PCCU

Key territories: Germany, Poland, France, EEU, Turkey

Notable facts: Started with Browser based games and started Client-based business in 2006. 78M€ in revenues in 07-08

Portal: Bigpoint (Bigpoint)

Games: Seafight, Darkorbit, Space Invasion, Mafia 1930, The Pimps, +20 more.

Numbers: 50 M registered users ; 150 000 PCCU

Key territories: Germany, France, EEU, Turkey

Notable facts: Has strong media partnerships with Viacom and NBC (broadcasting TV ads on channels)

Portal: GOA.com (France Telecom)

Games: Pangya (Golf), Crazy Kart (Racing), Warrior Epic (Diablo-like)

Numbers: N/A

Key territories: France, Germany, Spain

Notable facts: Also running Pay-To-Play games (Warhammer Online, Dark Age of Camelot). More Western developed F2P games coming: Mytheon (RTS), League of Legends (DOTA)

Portal: Aeria Games

Games: Shaiya, Megaten

Numbers: 100K active EU players (est); 7M total registered users (US + EU)

Key territories: Germany, France

Notable facts: Very active on community/social networking front

Other F2P Portals Portal Games Based in Registered users (estimate) Alaplaya 4 Casuals, 2 MMOs Germany 2 M Gametribe 4 MMOs Italy 500 K Codemasters Online 1 MMOs UK 700K (F2P only) Frogster 2 MMOs Germany 2M (US + EU) Game Masters 3 MMOs UK 1.5M GEE 1 Casual, 1 MMOs Netherlands 100K Gamigo 10 Casuals, 4 MMOs Germany 700K Key to Play 2 MMOs Spain 400K Nexon Europe 1 FPS, 1 MMO UK 1M

Hidden Pearls

Games we should hear about more often…

Hidden Pearls Game: Urban Rivals Genre: Browser Based Collectible Card Game Publisher: Boostr (France) Key territories: France, Spain, Italy Why a pearl: Reach, monetisation of users, retention. Been profitable for a long time.

Hidden Pearls Game: GoSuperModel Genre: Browser Based Fashion game Publisher: Watagame (Denmark) Key territories: Nordic, Netherlands, Germany Why a pearl: Huge audience in Nordic and Northern Europe countries (11M registered players)

Hidden Pearls

Game: Spineworld

Genre: virtual world for tweens

Publisher: Playdo AB (Sweden)

Key territories: US, UK, Nordic

Why a pearl: 3M registered players in a short time, funded and distributed in part by Miniclip. Virtual world structure with a lot of game elements

Hidden Pearls Game: Hordes Genre: Browser Based group survival horror Publisher: Motion Twin (France) Key territories: France Why a pearl: Great design, a unique social experience.

Hidden Pearls Game: Nord Genre: Browser Based Virtual World Publisher: SLX (Sweden) Key territories: Nordic countries Why a pearl: Indie game developed by 4 students. Original social oriented gameplay, UGC-driven, pets, cars

F2P developers in Europe overview