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
Direction taken by EU devs

F2P developers in Europe overview Studios Geographical breakdown

Conclusion
F2P is coming in your market
Wait. It is actually already here, growing their business
Q&A?

Thanks!
[email_address]
www.linkedin.com/in/tbidaux www.icopartners.com/blog @icotom www.slideshare.net/ICOPartners

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Free to Play games in Europe - 2009

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