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Video gaming in China and South East Asia
 

Video gaming in China and South East Asia

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Overview of the video gaming market in China and Southeast Asia. Includes background, forecasts, and key trends for online PC and mobile games.

Overview of the video gaming market in China and Southeast Asia. Includes background, forecasts, and key trends for online PC and mobile games.

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    Video gaming in China and South East Asia Video gaming in China and South East Asia Presentation Transcript

    • Forecast  of  the  Future  of  Games   in  China  &  Southeast  Asia   Kevin  Hause   Niko  Partners   November  5,  2013   © 2012 Nikopartners
    • About  Niko  Partners   •  We  are  a  niche  market  intelligence  firm  with  a  strong   reputaBon  for  our  experBse  on  the  games  markets  in   mainland  China  and  Southeast  Asia.     –  –  –  –  Syndicated  Research   Custom  Studies   Consumer  surveys  of  10,000+  per  year  in  China,  25,000+  in  Southeast  Asia   Tracking  data  of  15,000+  iCafe  systems   •  Founded  in  2002,     –  SEA  coverage  began  in  2010   •  Offices  in  Shanghai  and  Silicon  Valley.     © 2012 Nikopartners
    • Agenda   •  Market  overview   •  Key  trends  in  China   –  Mobile   –  Home   –  PlaSorms   •  Southeast  Asia   © 2012 Nikopartners
    • Gaming  in  China   $25,000    350.0      300.0     $20,000   Online  Revenues    250.0     Online  Gamers   $15,000    200.0      150.0     $10,000    100.0     $5,000    50.0     $0    -­‐         2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017   © 2012 Nikopartners
    • Gaming  in  China   Top  Ranked  Leisure  Time  Ac;vity   Play  Games   Online  Video   Online  shopping   Chat  with  friend  Online   Watch  TV       Play  with  children  or  parents         Reading       1st   SporBng  and  Fitness     2nd   Watch  Movie  in  Cenima       Go  shopping     Karaoke   0   N=2000,  Tiers  1-­‐4   © 2012 Nikopartners 200   400   600   800   1000   1200  
    • Chinese  Gamers   •  Gaming  is  Pervasive   –  215  m  Gamers  in  2013   –  16%  of  Total  PopulaBon   –  35%  of  All  Internet  Users   •  64%  of  Chinese  Gamers   Play  at  least  7  Hours  per   Week   China  Gamers  by  Type   Super   Hardcore   7%   Hardcore   8%   Occasional   36%   AcBve   22%   Semi-­‐ AcBve   27%   © 2012 Nikopartners
    • Gaming  in  China   •  MMORPG  Rules   –  Webgames  showing   growth   –  Casual  games  had  big   growth   •  Mobile  Growing  Fast   –  Now  up  to  9%  of  all  game   revenues   –  Not  enBrely  incremental,   with  Casual  games  impact   2013  Gaming  Revenues  by  Category   sns  +   casual  +   weibo   9%   sns  +   Mobile   casual  +   9%   weibo   10%   webgames   16%   webgames   15%   MMOGs   MMOGs   67%   74%   Source:  Niko  Partners,  2013   © 2012 Nikopartners
    • Revenues  by  Game  Type    $16,000     MMOGs    $14,000     webgames   sns  +  casual  +  weibo    $12,000     Millions  of  US$    $15,146   18%     Mobile    $10,000      $8,000      $6,000      $5,417     33%    $4,000      $4,275     42%    $2,000      $-­‐         © 2012 Nikopartners  $1,105     -­‐  3%   2011   2012   2013   2014   2015   2016   2017  
    • What  Makes  China  Different?   •  Consoles   –  Banned  Since  2000   –  Grey  Market  Exists   •  But,  only  27%   ownership  among   gamers   •  Even  more  limited   game  revenue   –  Recent  Changes  could   affect  market   © 2012 Nikopartners
    • What  Makes  China  Different?   •  Business  Models   –  Time-­‐based  Play   –  Free  to  Play     •  Virtual  Items   •  In  Game  Purchases     –  Not…   •  $60  retail   •  Paid  Downloads   Spending  per  Month  on  Virtual   Items   in  Online  Games   101-­‐200   RMB   13%   11-­‐100  RMB   36%   Source:  Niko  Partners,  2013   © 2012 Nikopartners 201+   RMB   8%   0   25%   1-­‐10  RMB   18%  
    • What  Makes  China  Different?   •  Internet  Cafés   –  Once  “THE”  gaming   locaBon   –  Declining  in  usage,  now   17%  of  total  gameplay   –  SBll  important:   •  Social  aspects  (65%)*   •  Tournaments  (14%)*   •  Faster  Internet  (15%)*   *  3Q  2013  Gamer  Survey;  n=2000   © 2012 Nikopartners
    • Genres   •  MMO   –  MMORPG  sBll  the  king   –  MMO  non-­‐RPG  growing  fast   –  Key  Btles  are  played  for  years   Hours  per  Week  Playing  Games   By  Game  Type   5   •  Webgames   Hours  per  Week   4   –  Browser-­‐based   –  Not  necessarily  easy   –  Faster  development     3   2   •  Casual/SNS/Weibo   1   –  Hot  category  in  recent  years   –  But  falling  off   0   MMO  Non-­‐RPG   Browser-­‐based   Webgames   © 2012 Nikopartners 6   Casual   MMORPG  
    • Key  Games   Top  20  MMORPG  by  Total  Number  of  Hours  Played   Rank 1 2 3 4 5 Game Name (CN) 梦幻西游2   问道 魔兽世界 天龙八部3   御龙在天 Game Name (English) Fantasy Westward journey2 Asktao World of Warcraft (CN) Dragon Oath III YuLongZaiTian Play time (Hours) Game Operator 4,467 Netease Guangyu youxi 2,550 Netease 2,426 Changyou 2,202 Tencent 1,251 Other 11,746 Total 24,642 Top  20  MMO-­‐Non  RPG  by  Total  Number  of  Hours  Played   Rank 1 2 3 4 5 Game Name (CN) 英雄联盟 穿越火线 地下城与勇士 梦三国 QQ飞车 Game Name (English) Play time (Hours) Game Operator League of Legends Tencent 41,467 Cross Fire Tencent 29,290 Dungeon-Fighter Tencent 16,878 Dream of the Three Kingdoms Electric Soul 9,241 QQ speed Tencent 6,069 Other 15,599 Total 118,543 © 2012 Nikopartners Source:  Niko  Partners  iCafe  Tracker,  Sept  2013   Sample:  400  iCafe  locaBons,  44,166  acBve  PCs,  305,033  Gamers      
    • Trends:    Mobile    800      $4,500     Mobile  Gamers  (m)    $3,500      700      600     Millions  of  US$    $3,000      500      $2,500      400      $2,000      300      $1,500      200      $1,000      100      $500      -­‐          $-­‐         2011   2012   2013   2014   2015   •  42%  CAGR  through  2017  for  revenues   •  Significant  impact  on  casual  game  market   © 2012 Nikopartners 2016   2017   Millions  of  Mobile  Gamers   Mobile  Games   Revenues  (US$  m)    $4,000     $4.3  B     680  M  
    • Mobile  Gaming  in  China   •  Fragmented  game  access   –  73%  of  games  downloaded   from  3rd  party  app  store   •  Expensive  handsets   –  Not  subsidized   –  Creates  demand  for  lower   cost  devices,  local  players   •  Mostly  casual  gmes   –  42%  casual   –  22%  acBon/arcade   © 2012 Nikopartners
    • Trends:  Home  Play   Primary  Reason  in  Picking  New  Game  to  Play   •  Ship  from  i-­‐Café  to  Home   –  From  ~80%  to  17%  of  gaming   hours   –  Due  to  berer  broadband,   greater  income/  lower  PC   costs   •  OpportuniBes:   –  Ship  in  game  choices   –  Hardware  growth   © 2012 Nikopartners It  only  will  take  a   few  minutes  per   day  to  play   8%   I  will  be  able  to   spend  lots  of   Bme  on  it   14%   Best  game  of  its   genre   52%   It  plays  well  on   the  PC  or  device   I  use   7%   Friends  are   playing  it   13%   Doesn’t  require   high  spending   6%  
    • Trends:  Wechat   •  Tencent  CommunicaBons   PlaSorm   –  Messaging,  Plus   –  Username  based   •  Games  Introduced   –  Controlled  by  Tencent   –  Example:  Rhythm  Master   –  4th  WeChat  game   •  OpportuniBes   –  Seeing  separaBon  from  QQ   Chat   © 2012 Nikopartners
    • Trends:  Consoles  and  OTT   •  Ban  Liped  in  September  2013   –  14  year  old  ban  liped   –  Shanghai  FTZ   •  Immediate  AcBon   –  BesTV  and  MSFT  JV   •  Internet-­‐ready  TVs   –  BesTV,  LeTV,  Xiaomi,  iQiyi,  Hisense,   Lenovo   •  OpportuniBes   –  Limited  for  now   –  Business  model  challenges   © 2012 Nikopartners
    • Trends:  Tablets   1200   –  54%  of  Gamers  own  a  Tablet   –  33%  Own  2  or  More   –  Dominant  Brands:     1000   800   •  Apple  and  Samsung  =  90%   •  Tablet  Usage   600   –  Mostly  Not  Shared  –  80%   claim  personal  use  only   –  Same  Game  Choices  as   Mobile,  for  now   400   200   0   Other   Tablet   GBA   © 2012 Nikopartners DS   PSP   None   Number  of  Respondents   •  Growing  PenetraBon   Handheld  Gaming  Device  Ownership  
    • Southeast  Asia   •  Niko  acBvely   tracks:   –  Thailand   –  Philippines   –  Vietnam   –  Singapore   –  Malaysia   –  Indonesia   © 2012 Nikopartners
    • SEA  compared  to  China   •  China:   –  Total  PopulaBon:    1.3  billion   –  2001  Total  Games  Market:  $10   million   –  2013  Total  Games  Market:  $11.9   billion  (plus  $1.2  billion  mobile)   © 2012 Nikopartners •  Southeast  Asia:   –  Total  PopulaBon  (6  countries):  545   million   –  2013  Total  Games  Market:  $662   million   –  Projected  5  year  CAGR:  17.4%  
    • SEA  Gamers   •  Mobile  games  are  hot   •  PC  online  games  are  sBll   important   •  Only  Singapore  has  a  true   console  market   •  Vietnam,  Indonesia  and   Thailand  have  very   intriguing  games  markets   •  Vietnam  games  market   most  similar     –  Regulatory   –  Game  Type   –  Café  usage   © 2012 Nikopartners  $1,200.0      $1,000.0      $800.0      $600.0     Vietnam   Thailand   Singapore   Philippines   Malaysia   Indonesia    $400.0      $200.0      $-­‐         2011   2012   2013   2014   2015   2016  
    • PC  Online  Games  Revenue  by  Country   Country   2012   2013e   2014e   Indonesia   $88.1  million   $110.1  million   $136.5  million   Malaysia   $44.1  million   $54.1  million     $66.5  million   The  Philippines   $43.9  million   $53.3  million   $64.0  million   Singapore   $31.0  million   $34.0  million   $37.0  million   Thailand   $133.0  million   $158.1  million   $183.0  million   Vietnam   $219.6  million   $253.0  million   $291.0  million   TOTAL   $559.6  million   $662.5  million   $778.0  million   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • PC  online  gamers  per  country     Country   2012   2013e   2014e   Indonesia   19.63  million   22.75  million   26.00  million   Malaysia   7.62  million   8.70  million   9.90  million   The  Philippines   21.00  million   24.96  million   28.72  million   Singapore   1.53  million   1.66  million   1.80  million   Thailand     8.12  million   9.04  million   9.97  million   Vietnam   15.65  million   17.25  million   19.00  million   TOTAL   73.7  million   84.4  million   95.4  million   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Country  informaBon:  special  notes   •  Ranking  of  leading  online  game  operators  changes  annually  because  more   and  more  hit  licensed  games  enter  the  market,  and  some  mergers  have   occurred  too.   –  NOTE:  Niko’s  2012  data  is  disclosed  here  but  the  market  share  and  rankings   will  likely  change  in  our  2013  report   •  Niko’s  2013  report  includes  more  info  on  mobile  games,  but  our  2012   report  focused  on  PC  online  games  so  our  data  in  this  presentaBon   reflects  that.     © 2012 Nikopartners
    • Indonesia   •  Largest  economy  in  SEA  and   largest  archipelago  with  6,000+   islands   •  70%  of  gamers  live  on  Java   island   •  Mobile  very  important   •  10,000+  I-­‐cafés  for  gaming   •  6%  paying  gamers,  ARPPU   $6-­‐8/month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   Lyto  (Cross  Fire)   25-­‐30%   Megaxus  (CS  Online)   20-­‐25%   Kreon  (Point  Blank)   20-­‐25%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Indonesia   •  19.6  million  gamers  in  2012     •  $88.1  million  in  2012  online  games  revenues   –  25.8%  growth  over  2011     Hours  per  Week  Playing  Games,  excluding  Mobile     35% Survey  Sample  Size  for   Indonesia:     447  Gamers   Percent  of  Gamers 30% 25% 20% 15% 10% 5% 0% © 2012 Nikopartners 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • Malaysia   •  Strong  Chinese  populaBon,   especially  among  gaming   populaBon   •  Malaysia  &  Singapore  open   lumped  together,  share  servers   •  MOL  is  regional  online  payments   plaSorm  leader  and  HQ  in   Malaysia   •  800  I-­‐cafés  for  gaming   •  10%  paying  gamers,  ARPPU  $4-­‐5/ month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   AsiaSop  (Sudden   Arack)   30-­‐35%   Garena  (LOL,  HON)   25-­‐30%   Cubinet  (Perf.  World)   25-­‐30%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Malaysia   •  7.6  million  gamers  in  2012   •  $44.1  million  in  2012  online  games  revenues   –  22.5%  growth  over  2011   Hours  per  Week  Playing  Games,  excluding  Mobile     30% Survey  Sample  Size  for   Malaysia:     2,708  Gamers   Percent  of  Gamers 25% 20% 15% 10% 5% 0% © 2012 Nikopartners 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • The  Philippines   •  Mostly  English  speaking   •  Gaming  is  very  popular,  but  very   low  spending   •  20,000+  I-­‐cafés  for  gaming  and   home  PC  and  BB  penetraBon  is   very  weak   •  Facebook  gaming  very  popular   •  4%  paying  gamers  (lowest  in  the   region),  ARPPU  $4-­‐5/month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   Level  Up!  (RO,  Crazy   Kart   40-­‐50%   Garena  (LOL,  HON)   20-­‐25%   Cubinet  (Special   Force,  CF,  DOTA)   20-­‐25%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Philippines   •  21.0  million  gamers  in  2012   •  $43.9  million  in  2012  online  games  revenues   –  21.8%  growth  over  2011   Hours  per  Week  Playing  Games,  excluding  Mobile     30% Survey  Sample  Size  for   Philippines:     878  Gamers   © 2012 Nikopartners Percent  of  Gamers 25% 20% 15% 10% 5% 0% 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • Singapore   •  CommunicaBons  hub  of  SEA   •  Vibrant  and  legiBmate  market  for   consoles  and  PC  offline  games,  plus   online  games  and  mobile   •  Regional  HQ  for  many  game   companies   •  Internet  penetraBon  high  at  75%+   •  Smallest  market  in  absolute  value  and   growth  potenBal   •  17%  paying  gamers  (highest  in  the   region),  ARPPU  $8-­‐10/month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   AsiaSop  (Sudden   Arack,  AudiBon,   WoW)   30-­‐35%   Garena  (LOL,  HON)   20-­‐25%   Cubinet  (SUN,   CubiGames)   20-­‐25%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Singapore   •  1.53  million  gamers  in  2012   •  $31.0  million  in  2012  online  games  revenues   –  14.0%  growth  over  2011   Hours  per  Week  Playing  Games,  excluding  Mobile     30% Survey  Sample  Size  for   Singapore:     1,197  Gamers   © 2012 Nikopartners Percent  of  Gamers 25% 20% 15% 10% 5% 0% 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • Thailand   •  MMORPGs  very  popular   •  Infrastructure  beyond  major   ciBes  is  weak,  so  I-­‐cafés  are   popular  (20,000  esBmated).   •  High  piracy  for  packaged  games   •  Local  companies  are  strong   •  15%  paying  gamers,  ARPPU   $8-­‐10/month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   AsiaSop  (Point  Blank,   35-­‐40%   Dragon  Nest)   TRUE  (Special  Force,   FIFA  Online  2)   25-­‐30%   Ini3  (FlyFF,  BOOMz)   5-­‐10%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Thailand   •  8.1  million  gamers  in  2012   •  $133.0  million  in  2012  online  games  revenues   –  15.7%  growth  over  2011   Hours  per  Week  Playing  Games,  excluding  Mobile     45% 40% Survey  Sample  Size  for   Thailand:     4,054  Gamers   © 2012 Nikopartners Percent  of  Gamers 35% 30% 25% 20% 15% 10% 5% 0% 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • Vietnam   •  Vibrant  gaming  culture   •  3-­‐year  ban  on  new  game  licenses   was  overturned  in  September   2013   •  Facebook  parBally  blocked  but  sBll   popular   •  Web-­‐browser  games  are  popular   •  15%  paying  gamers,  ARPPU  $7-­‐9/ month   Key  online  operators   Est.  2012   and  top  game  in   market   2012   share   VNG  (Swordsman  2,   ZT  Online,  BOOMz)   50-­‐55%   VTC  (CF,  AudiBon,   FIFA  Online  2)   20-­‐25%   FPT  Online  (Special   Force,  Dragon  Oath,   TLBB)     10-­‐15%   Garena  (via  partner)   (LOL,  HON)   10-­‐15%   Source:  Niko  Partners,  November  2012   © 2012 Nikopartners
    • Vietnam   •  15.7  million  gamers  in  2012   •  $219.6  million  in  2012  online  games  revenues   –  15.6%  growth  over  2011   Hours  per  Week  Playing  Games,  excluding  Mobile     30% Survey  Sample  Size  for   Vietnam:     3,848  Gamers   © 2012 Nikopartners Percent  of  Gamers 25% 20% 15% 10% 5% 0% 0/mobile  only Source:  Niko  Partners,  2012 1  -­‐ 7 8  -­‐ 14 15  -­‐ 21 Hours  per  Week 22  -­‐ 29 Over  30
    • Key  Trends  in  SEA   •  Most  InteresBng  Markets:   –  Growth:  Indonesia,  Thailand,  Vietnam   –  Gaming  Interest:  Philippines   –  Strategic:  Malaysia,  Singapore   •  Mobile  is  taking  share  from  PC  casual  games  and  will   also  command  share  from  hard-­‐core  gamers,  so  we   will  watch  this  and  compare  to  the  trends  in  China.     •  Chinese  games  are  very  popular  in  SEA   –  Niko  started  coverage  of  the  region  specifically  because  of   the  similariBes  in  trends  and  growth  potenBal  –  there  are   many  similariBes  to  be  found.     © 2012 Nikopartners
    • Final  Thoughts   •  China  is  huge  and  conBnues  to  grow   –  $21  Billion  by  2017   •  But  shiping  market   –  Mobile  driving  market,  with  42%  growth  forward   •  Taking  share  from  Casual,  Weibo   •  Tablets  will  be  interesBng  watch   –  Ship  from  iCafe  to  home   –  But  MMO  sBll  rules   •  Southeast  Asia  is  very  interesBng  for  future   –  –  –  –  Large,  growing  market   Similar  in  key  ways  to  China   But  will  develop  quickly   Must  be  approached  on  market-­‐by-­‐market  basis   © 2012 Nikopartners
    • Thank  you!   •  Contact:   –  kevin@nikopartners.com   •  Shameless  Plug:   –  Updated  Southeast  Asia  Report  available  Dec  1   •  Forecasts,  25k  user  survey,  interviews,  and  more   © 2012 Nikopartners