KGC09 Online Games market in Europe

Online Games Market Europe

The Plan
Introduction
High-level market overview
Building a European strategy
Q&A
Disclaimer: All numbers are estimates

Introduction

The Speaker
Thomas Bidaux
GOA.com (France Telecom)
NCsoft Europe (Lineage 2, Guild Wars)
ICO Partners
Released 7 MMOs in Europe

Europe? Herman Moll - 1708

Europe?

European Union

Europe in Numbers (1)
Superficy
4 300 000 km²
China – 9 640 000 km 2
Population
500M in Europe
USA - 300M
Density
114/km²
Korea - 493/km²

Europe in Numbers (2)
Internet Users
Consoles
11.2M PS3 (46% ww)
12.4M Xbox 360 (39% ww)
20M Wii (38% ww)

Market overview

European Market
Size of the Internet market
Broadband lines per 100 inhabitants. 2008

European Market
Popular Online Games

European Market
Size of the Market
WOW Servers

European Market
F2P vs P2P

European Market
F2P vs P2P
(from 400+ games currently operated in Europe or under development)

European Market
Free to Play Market
Driven by browser-based
Some succesful client-based Free to Play
EU Estimates

Estimated market size: 30M+ F2P online games players in Europe 400+ games Estimated revenue : 400-500M€/year European F2P Market

European Devs
Online Games Studios
173 studios
300+ projects
Compared to US :
Less VC-backed
Less video games background
Successful bootstrapped web studios/hobby projects

European Devs
Prominent Studios

European Operators
Local subsiduaries
Blizzard – WOW
NCWest– GW, Lineage 2, City of Heroes
Club Penguin – Club Penguin
Gala Net – Flyff, Rappelz
Aeria Games – Last Chaos, Shaiya, Megaten
Nexon – MapleStory, Combat Arms
SquareEnix – FFXI
Ndoors – Atlantica Online
NHN – Karos Online

European Operators
Local actors
Codemasters – Lotro, DDO, Jumpgate
GOA.com – DAoC, WAR, Goa.com
Frogster – Runes of Magic, Bounty Bay Online
Gameforge – Metin 2, Ogame
Bigpoint – Seafight, Dark Orbit
Gamigo – Level R, Last Chaos, Shot Online
Burda IC – Florensia, Ragnarok, Alaplaya
Games Masters – Cabal Online, Perfect World
MAYN – 12Sky2
Rourke – Priston Tale 2, YS Online
Gametribe – DOMO, Dekaron, Infinity, Kicks Online
Playmedia – ASDA Story

Prominent Games Game: World of Warcraft Genre: Client MMORPG Developer: Blizzard (USA) Numbers: 2 000 000 Subscribers; ARPPU 13 € Key territories: UK, Scandinavia, Germany, France, Spain

Prominent Games
Game: Dofus
Genre: Fantasy MMO (Flash/java)
Developer: Ankama (France)
Numbers: 170 000 PCCU; 500 000 Subscribers; 3M active - ARPPU 5 €
Key territories: France, Spain
Premium features:
Zone privieges
Item privileges
No combat cap
PVP
Pets
No cap on crafting
Housing

Prominent Games
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

Prominent Games
Game: Habbo
Genre: Browser-based teen 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

Prominent Games
Game: Metin 2
Genre: Client-based Fantasy MMORPG
Developer: Ymir Entertainment (South Korea)
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

Building a European Strategy

European Strategy
Europe and US
What is the current US presence?
What is the current service structure?
Can the US service (if any) be leveraged?
Key decision
Separate US from European service?

European Strategy
The Licensing Route
Finding a partner:
Reactively (European publishers contacting you)
Proactively (contacting European publishers)
Always create options

European Strategy
The Licensing Route
Evaluating the partner:
Reputation
Brand management processes
Game management processes
Track record
Financial stability

European Strategy
The Licensing Route
Building the partnership :
Understand the partner's service
Create a clear general communication process
Create a clear escalation process
Define respective responsabilities
Allocate ressources

European Strategy
The Licensing Route
Key points to consider:
Service splitting - required
Business model
Royalty mechanism
IP management
Localisation strategy
Bug reporting
Customer Support policies
User feedback processes
Global communication/marketing

European Strategy
The Licensing Route
The values:
Financial
Maximise opportunities
Build a global brand

European Strategy
The Publishing Route
Various ways to achieve it:
Common US and EU services
Staged self-publishing effort
Subsidiary set-up

European Strategy
The additional tasks:
Legal
Community management
Localisation
Customer Support
Billing solutions
Server operations
Marketing
Distribution (for boxes)
Recruitment

European Strategy
The added value:
Development of local expertise
Better ROI
Brand control and brand development
Better long-time value and potential in the market

European Strategy
Opening a local office:
Which country?
Consider VAT, government support, local expertise, cultural background, long-term plans
Which tasks?
Clear roles and responsabilities between HQ and local office

European Strategy
Pros and Cons
Licensing
Simpler and quicker
Less cashflow sensitive
Not « plug and play » - still does require a lot work
Publishing
Better revenues
Localisation easier to integrate (at all levels)
Riskier investment

Questions and Answers

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

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KGC09 Online Games market in Europe

by ICO Partners

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