F2P In Europe - April 2010

Free to Play Games in Europe April 2010

Context
This presentation was built to support a lecture given by Thomas at different conferences:
Game Forum Germany in Hannover (Jan 2010)
Quo Vadis in Berlin (Apr 2010)
Numbers and estimates were last revised in Apr 2010
Other presentations on the topic:
Online Games market in Europe – KGC, Séoul (Nov 2009)
Free to play games in Europe – Develop, Brighton (Jul 2009)

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 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
Social Games (Facebook, Bebo, MySpace)
Casual games
Etc.

Disclaimer
All numbers are estimates

The Plan
European Market
Market profile
Market size
Maps
Freemium Games
Micro Transaction Games
Game Portals
Conclusion

The European Market
The market size (P2P and F2P) – M of Players
Source: idate Sept. 2008

The European Market

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: Client Fantasy MMO (Flash/java)
Developer: Ankama (France)
Numbers: 250 000 PCCU; 500 000 +Active Subscribers, 3M monthly active users; 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; 900 000 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; 850 000 Active, 100 000 Subscribers; ARPPU 5 €
Key territories: Poland, Sweden, 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: 10M registered ; 800 000 active users; ARPPU 10 €
Key territories: 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 3.4M active DE, EEU, PO, NE, TU Travian* Travian (DE) Management 900k active FR, IT, TU, PO, SP Hattrick Extralives (SE) Sport Management 900k active IT, DE, SP, PT Managerzone Power Challenge (SE) Sport Management 750K active PO, ES Stardoll* Stardoll (SE) Life Sim 57M registered, 5M active UK, PO, DE, FR Moshi Monsters Mind Candy (UK) Virtual World 15M registered, 1M active UK AQ Worlds Artix (US) RPG 14M registered, 200k active US, UK Spineworld Playdo Virtual world/RPG 3M registered US, UK, Nordic Wizard 101 Kingsisle MMO 5M registered US, UK Free Realms SOE MMO 9M registered US, UK

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: 15 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: 7 M active users; 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: 35M registered,
80K PCCU; ARPU 3.6 €
Key territories: Turkey, Germany
MT features:
Elite items
Faster real time game features
Discounted items

Game: Ogame
Genre: Browser-based Space management game
Publisher: Gameforge (Germany)
Numbers: 1M active users
Key territories: France, Germany, 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: 300K 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: 3M registered ; 600 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) Main Countries Dragonica Gala Net Europe MMORPG 50k FR Rappelz Gala Net Europe MMORPG 300K FR, DE, PL Last Chaos Gamigo MMORPG 200K DE, PL Silkroad Online Joymax MMORPG 500K TU, PL Florensia Burda IC MMORPG 120K DE, FR, IT 4Story Gameforge MMORPG 300K EEU, PO, IT Perfect World Games Masters MMORPG 250K DE, PL Knight Online K2 MMORPG 400K TU Cabal Online Games Masters MMORPG 100K TU, EEU, DE Allods Online Gala Net Europe MMORPG 250K FR, Nordic, EEU Atlantica Online Ndoors Europe MMO/Turned-based strategy 50K DE, FR Shaiya Aeria Games MMORPG 250K DE, EEU Air Rivals Gameforge Air Combat/MMO 50K TI, IT, EEU

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, Canaan, Castle of Heroes
Numbers: 4M registered users
Key territories: France, Germany
Notable facts: Started in the UK, Polish, Italian 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, Cabal Online DE, Ogame, Ikariam, Bitefight, +more.
Numbers: 100M registered users ; 20M monthly active; 540 000 PCCU
Key territories: Germany, Poland, France, EEU, Turkey
Notable facts: Started with Browser based games and started Client-based business in 2006.

Portal: Bigpoint (Bigpoint)
Games: Seafight, Darkorbit, Space Invasion, Mafia 1930, The Pimps, +20 more.
Numbers: 110 M registered users ; 200 000 PCCU
Key territories: Germany, France, EEU, Turkey
Notable facts: Has strong media partnerships with Viacom and NBC (broadcasting TV ads on channels)

Portal: Aeria Games
Games: Shaiya, Grand Fantasia, LA Tale
Numbers: 400K active EU players (est); 10M 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 4 M Frogster 3 MMOs, 1 Casual Germany 4M (US + EU) Game Masters 3 MMOs UK 2.5M GEE 1 Casual, 1 MMOs Netherlands 1M Gamigo 10 Casuals, 4 MMOs Germany 3M Nexon Europe 1 FPS, 2 MMO UK 3M

F2P developers in Europe overview
Direction taken by EU devs

F2P developers in Europe overview Studios Geographical breakdown

Conclusion
F2P are already in Europe, doing well and growing
More coming this year, including:
More Social Networks integrated
More coming on other platforms (F2P on iPhone and Android, F2P on Game Consoles)
Q&A?

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

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F2P In Europe - April 2010

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