Gaming at the Crossroads
           Mitch Lasky
        Benchmark Capital
Irell & Manella LLP




    SERUM
Content vs. Distribution
Content innovation drives
  audience expansion.
Distribution innovation
drives value creation.
Doom
Steam
1992-2004
1992           2004
Revenue        $300 million    $3.1 billion
Market Value   ~$250 million   ~$15 billion
The “Shiny Disc” Era
c. 1992
              US
Territories   Western Europe
              Japan

              SNES, Genesis
Platforms     Gameb...
1992: One Model


Buy games at retail.
“Shiny Disc” Attributes

•Huge asset creation costs
•Manufacturing and platform licensing
•Recurring customer acquisition ...
2004-2009
What changed in 2004?
World of Warcraft Released
Half Life 2 distributed
   through Steam
Shanda IPO
TenCent/QQ IPO
JAMDAT IPO
Aggregate public valuations of
non-traditional game companies
  exceeded market cap of EA
Online Attributes

•Services requiring on-going investment
•Open platforms, more open to competition
•Distribution & custo...
c. 2009
               US, Latin America
Territories    Western Europe, Eastern Europe, Russia
               Japan, China...
2009: Many Models

Buy games at retail (new & used)
         Subscription
         “Freemium”
     Ad Support/Lead Gen
   ...
Five things to watch in ‘09
Social gaming
DeNA’s Mobagetown
Light, persistent games &
 location-based gaming
GoCrossCampus
Advanced session-based gaming
KartRider
Riot Games’ “League of Legends”
User-Generated Content
Second Life
Little Big Planet
Line Rider
Sports 2.0
Six Degrees’ Action AllStars
Thank you ...
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
Smu Guildhall Keynote
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Transcript of "Smu Guildhall Keynote"

  1. 1. Gaming at the Crossroads Mitch Lasky Benchmark Capital
  2. 2. Irell & Manella LLP SERUM
  3. 3. Content vs. Distribution
  4. 4. Content innovation drives audience expansion.
  5. 5. Distribution innovation drives value creation.
  6. 6. Doom
  7. 7. Steam
  8. 8. 1992-2004
  9. 9. 1992 2004 Revenue $300 million $3.1 billion Market Value ~$250 million ~$15 billion
  10. 10. The “Shiny Disc” Era
  11. 11. c. 1992 US Territories Western Europe Japan SNES, Genesis Platforms Gameboy PC (floppy) Nintendo, Sega Publishers EA & “7 Dwarves” Namco, Konami
  12. 12. 1992: One Model Buy games at retail.
  13. 13. “Shiny Disc” Attributes •Huge asset creation costs •Manufacturing and platform licensing •Recurring customer acquisition costs •Shipping, retail, inventory management •Piracy & IP protection
  14. 14. 2004-2009
  15. 15. What changed in 2004?
  16. 16. World of Warcraft Released
  17. 17. Half Life 2 distributed through Steam
  18. 18. Shanda IPO
  19. 19. TenCent/QQ IPO
  20. 20. JAMDAT IPO
  21. 21. Aggregate public valuations of non-traditional game companies exceeded market cap of EA
  22. 22. Online Attributes •Services requiring on-going investment •Open platforms, more open to competition •Distribution & customer acquisition merged •Fluid concept of IP & ownership (UGC, etc.) •Network effects
  23. 23. c. 2009 US, Latin America Territories Western Europe, Eastern Europe, Russia Japan, China, Korea, SE Asia Xbox 360, PS3, Wii DS, PSP, Mobile Platforms PC-CD, Steam, MMOG Flash, in-browser, mid-session downloads Facebook/Myspace 1st Parties (Microsoft, Sony, Nintendo) Activision-Blizzard, EA, Valve THQ, Take Two, Ubisoft, Atari Publishers Konami, Capcom, Square/Enix, DeNA Shanda, The9, Giant, Perfect World, TenCent NCSoft, Nexon, Neowiz Zynga, Gaia, Linden Lab, Habbo
  24. 24. 2009: Many Models Buy games at retail (new & used) Subscription “Freemium” Ad Support/Lead Gen Virtual Goods Stored Value Cards
  25. 25. Five things to watch in ‘09
  26. 26. Social gaming
  27. 27. DeNA’s Mobagetown
  28. 28. Light, persistent games & location-based gaming
  29. 29. GoCrossCampus
  30. 30. Advanced session-based gaming
  31. 31. KartRider
  32. 32. Riot Games’ “League of Legends”
  33. 33. User-Generated Content
  34. 34. Second Life
  35. 35. Little Big Planet
  36. 36. Line Rider
  37. 37. Sports 2.0
  38. 38. Six Degrees’ Action AllStars
  39. 39. Thank you ...

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