UMTS 2002 Barcelona, "Lets Play", Jean Barrette, Speaker

589 views
499 views

Published on

UMTS 2002 Barcelona, "Lets Play", Jean Barrette, Speaker

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
589
On SlideShare
0
From Embeds
0
Number of Embeds
20
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

UMTS 2002 Barcelona, "Lets Play", Jean Barrette, Speaker

  1. 1. Opportunities for Venture Capital in 3G: Let’s Play! Jean Barrette General Manager Bell Mobility Investments October 2001
  2. 2. Agenda A word about Bell Mobility Investments Current Venture Capital Investment climate Gaming & Entertainment opportunity -2-
  3. 3. Bell Mobility Investments Created on February 1st, 2001 Corporate Venturing vehicle for Bell Mobility Purpose is to create strategic value for Bell Mobility, Canada’s wireless Leader Focus is mainly on wireless Internet Targeting North American companies BMI brings funding but also operating knowledge from its wireless operation Vehicles are R&D accelerator for early stages Equity for later stages International Services -3-
  4. 4. Bell Mobility Part of the BCE group of companies 3C convergence: Commerce, Content, Connectivity Over 22 million customer contact points $18.1B CDN in 2000 Canada’s leading wireless provider National network Diverse wireless service portfolio Over 3.8 million subscribers Annual revenue over $1.5 Billion CDN A recognized leader in Wireless Internet 20% owned by SBC (Cingular WSP within SBC group) First in NA to: First in Canada to: •Launch CDMA Internet Browser & •Trial Location Based Services Instant Messaging •Offer wireless internet banking and online •Personalize content services shopping •Integrate wireless ecare •Launch Digital Data-to-Go •Offer wireless conference call service •Mobilize your business by bringing SAP, •Trial 1XRTT Siebel, GroupWise, Exchange and Lotus -4-
  5. 5. Venture Investment Climate Unless you have been VC Funding and Avg. Funding living on Mars... tough 120 20 climate 100 15 80 Economic slowdown 60 10 Fewer companies being 40 5 20 funded with smaller average 0 0 deal size 90 91 92 93 94 95 96 97 98 99 0 01 H1 Funding to VCs is going mostly to well established Total Inv. ($BUS) Av. Inv. ($BUS) funds and is down from 2000 but still in line to be 3rd # Companies funded by VCs largest since 1969 8000 However, estimated that $45 7000 billion still not allocated 6000 5000 Fewer, larger IPOs with very 4000 3000 little in high tech 2000 M&A activities up but at much 1000 0 lower valuations 90 91 92 93 94 95 96 97 98 99 0 01 H1 -5- Source: NVCA, Venture Economics
  6. 6. Venture Investment Climate Summary Uncertainty in the economy Stock market downturn VCs focused on “fixing” existing portfolio versus new deals IPO for High Tech not there M&A picking up to compensate Valuations slashed P2P (Path to Profitability) is key …Back to Fundamentals... Strategic investment partnerships in wireless Internet, such as with Bell Mobility Investments, are even more beneficial when investment climate is challenging. -6- Source: NVCA, Venture Economics
  7. 7. Wireless Entertainment Wireless entertainment is a broad term It can be defined as slack time management (i.e. what can I do when I am not working!) Games casino, action, classic, sports, trivia, multiplayer, etc. Gambling Images Video Music Short burst of content (comedy, astrology, etc.) Dating Currently, because of limitations on network speeds and device capability, gaming is leading the way. We will therefore focus on gaming -7-
  8. 8. Market Analysis - Revenue Most analysts agree that entertainment and gaming is compelling enough for customers to pay for the services Yankee Group forecasts that Wireless Entertainment revenue for the US to be just below $1.2Bn in 2005 Datamonitor forecasts that European and American wireless games industry to reach $6Bn in 2005 Revenue Prospects are significant Gaming seen as largest mobile entertainment revenue generator -8-
  9. 9. Market Analysis - Size Datamonitor predicts 200 million European and US users of mobile games by 2005 Arc group predicts 775M users worldwide for mobile entertainment Yankee group estimates that 55M of the 185M US wireless subscribers will be game players by 2005 Approximately 30% of Wireless Subscribers in US will play games by 2005 -9-
  10. 10. Bell Mobility’s Experience In August 2001, Wireless Entertainment accounted for 38% of all hits on the Bell Mobility Mobile Browser Bell Mobility Wireless Internet Usage m-Commerce 2% The entertainment Other section is an 5% expanding area for all Financial North American 8% mobile browsers Entertainment Gaming is the leading 38% Info Services 14% attraction by far This confirms the study done by the Yankee Group Communications 33% - 10 -
  11. 11. Enablers and Inhibitors Inhibitors of Change Key Enablers Higher bandwidth services such as Slow network speeds are not GPRS or 1XRTT sufficient for full-motion Higher performance client and better games and heavy graphics user interface Network latency Java and/or Brew enabled devices Handsets’ lack of sufficient Availability and affordability of memory and effective terminals cooling devices to support Location Based Services to leverage complex graphics mobility Lack of compelling pricing Continuity of experience, multi- model platform Multi-player interaction Billing flexibility Use of promotional offers Higher bandwidth is key specifically in areas such as video and music Java enabled terminals, slated for shipment in mid-2001, will offer flexibility and device independence There are more opportunity in Europe for mobile games because of US standards and pricing structures - 11 -
  12. 12. Value Chain: Analyzing Investment Opportunities Technology Infrastructure Application Mobile Mobile Technology Infrastructure Application Mobile Mobile Application Content Content Mobile Service Handset Application Content Content Mobile Service Handset Customer Platform & Equipment Platform Portal Network Platform & Equipment Platform Portal Network Developers Providers Aggregators Providers Vendors Developers Providers Aggregators Providers Vendors Vendors Vendors Vendors Providers Operators Vendors Vendors Vendors Providers Operators Wireless gaming is a complex space with many players complementing or competing Investment opportunities depend on who you are and what your strategy is It is key to use a structured approach to focus in on investment opportunity Value chain analysis is useful as it Structures the different players Assists in targeting sub-segment you show focus on and those you should not Provide elegant way to view how the different players may operationalize their strategy - 12 -
  13. 13. Value Chain: Analyzing Investment Opportunities Technology Infrastructure Application Mobile Mobile Technology Infrastructure Application Mobile Mobile Application Content Content Mobile Service Handset Application Content Content Mobile Service Handset Customer Platform & Equipment Platform Portal Network Platform & Equipment Platform Portal Network Developers Providers Aggregators Providers Vendors Developers Providers Aggregators Providers Vendors Vendors Vendors Vendors Providers Operators Vendors Vendors Vendors Providers Operators Bell Mobility, as a Network Operator, is less interested in the last 2 and first 2 sub-segments. Therefore, relevant value chain segments that can be vertically integrated from a Network operator point of view: Application Platform Vendors Application Developers Content Providers Content Aggregators Mobile Portal Providers - 13 -
  14. 14. Value Chain: Analyzing Investment Opportunities Application Mobile Application Mobile Application Content Content Application Content Content Platform Portal Platform Portal Developers Providers Aggregators Developers Providers Aggregators Developers Providers Developers Providers Application Platform Developers develop a platform (hardware and software) that allows “Application Developers” to simply create applications for wireless devices Examples of Platforms Nokia MEP Digital Bridges Unity nGame GDK Application Developers use in-house or third party platforms to develop compelling applications such as games for “Content Providers” and “Content Aggregators” that can be accessed from wireless devices Many players in this sub-segment with low-barriers to entry - 14 -
  15. 15. Value Chain: Analyzing Investment Opportunities Sony, Sega Yahoo! Application Application Application Content Application Content Platform Mattel, Hasbro T-Motion Platform T-Motion Developers Aggregators Developers Aggregators Developers Developers Pure Play Bolt Content Providers create premium information or well known brands that apply to wireless gaming and entertainment and can be transformed into compelling games Content Aggregators create exclusive or preferred relationships with selected content providers and/or application developers and add value by bundling and packaging the offering. They sell either directly, through mobile portals, or mobile service providers Mobile Portal Providers create an ‘electronic’ window that fosters a sense of community for consumers as well as provides them with the opportunity to exchange and share information - 15 -
  16. 16. Value Chain: Analyzing Investment Opportunities Technology Infrastructure Application Mobile Mobile Technology Infrastructure Application Mobile Mobile Application Content Content Mobile Service Handset Application Content Content Mobile Service Handset Customer Platform & Equipment Platform Portal Network Platform & Equipment Platform Portal Network Developers Providers Aggregators Providers Vendors Developers Providers Aggregators Providers Vendors Vendors Vendors Vendors Providers Operators Vendors Vendors Vendors Providers Operators Platform Vendors want to position themselves as the “de facto” platform for developers. Highly likely that more than one platform will survive even after the industry consolidation Application Developers are focused on forming partnerships with network operators. Alternatively, seeking a high-profile portal or aggregators is an option Content Providers (brand names), such as Mattel and Hasbro, will try to monetize their brands into wireless either through Application Developers and Content Aggregators or through in-house development targeting Operators directly Content Aggregators are competing with mobile portals (operator led or not) to acquire strong brand names. Operator portals prefer to have the option of dealing with content providers directly. Pure Aggregators may try to create their own brands but this is costly Large Portals such as Yahoo carry games from Application Developers such as nGame Big Players like Sony, Sega, and Nintendo want to position themselves in the first 3 segments (move from the Content Provider space then expand down to Application Developers and Application Platform Vendors) - 16 -
  17. 17. Investment Opportunity Summary Gaming & Entertainment is a good sector for investments Revenue prospects are significant Market size potential is also significant Youth segment is important but can also have mass appeal Bell Mobility’s experience shows a strong interest in Gaming Big players such as Sony showing interest Risks are Ability to generate significant revenue based on consumer desire to pay Impact of inhibitors such as delay in 2.5G and 3G, LBS, Java, affordable more powerful clients Impact of current economic climate on consumers Investments in gaming should encapsulate the 5 major value chain segments either by one company or with complementary companies in order to de-risk the investment The Application Platform Vendors segment is considered risky since there is no standardization yet for a gaming platform and many platforms may emerge as winners - 17 -
  18. 18. Investment Opportunity Summary Consolidation will occur and may have already started Based on the material presented above as well as other analysis, Bell Mobility Investments is monitoring the activities of the following companies: - 18 -
  19. 19. Opportunities for Venture Capital in 3G: Let’s Play! Jean Barrette General Manager Bell Mobility Investments October 2001 Web Site: www.bellmobility.ca/bmi e-mail: jbarrett@mobility.com

×