Asians are virtual already
How long before we are too?



       Benjamin Joffe | CEO, Plus Eight Star Ltd.
   Virtual Wor...
The Challenges

• "Who would pay for things that don't exist?"

• "Asians are not like us"

• "Online friends are not real"
“Love Plus” by Konami
Just Married In Guam
     (Nov. 2009)
                  Fiancée
Gartner’s Hype Cycle


    Are we here?
Second Life’s Second Life
Past the Trough of Disillusionment
Why me?

• SL: Limited flight hours

• Avatar provided

• Asia? Not Asian

• East time in San Francisco :-)
However…




4 years      1 year        5 years

          @benjaminjoffe
What I do
• CEO, Plus Eight Star | www.plus8star.com
      • Digital Strategy & “Innovation Arbitrage”
      • Best practi...
The future is already here –
it is just unevenly distributed




        William Gibson
        Science Fiction Writer
INNOVATION
& DIGITAL
CULTURES
Social Aspects of Technology


“When a technology
becomes boring, that's
when the social effects
become interesting.”
    ...
Today

• Half-way through the valley of disillusion

• Nothing better than SL since 2003?!

• Business issues getting sort...
Understanding Online Behavior
20+ years of research…




Howard Rheingold   Habitat (Lucasfilm, 1986)
Not new!
Plan

1. Learning from Asia

2. Semantic prisons

3. Learning from offline behavior

4. Some ideas about the future, and o...
Chapter 1.
Learning from Asia
Digital Goods Market for 2009



                   Asia                 $7 bln
                   USA                  $1...
Virtual Worlds?

• Most virtual worlds have failed

• Online games make millions

• Social games too, and grow fast
Quiz
Answers


World’s #3 largest
Internet company
 after Google and
     Amazon
                                              ...
Market Caps (May 2010)

        $35.3B




        $4.2B




        $2.5B




        $900M
QQ IM & QZone
More on Tencent

• Revenue 2009                         $1.8B

• Net Profit Margin                    40%

• Revenue from ...
11:30
                               Shin Takamiya

            Advertising

Gree Home                     Advertising &
 ...
Mobile App Platform since Oct.09
                (330 apps as of February 2010)




City Building     Harvest Moon     Sho...
Online Games in China

• 2009: $3.75B

• 105 million game users
  – SNS games = 87.7% (92 mln)
  – MMOs = 22.7% (24 mln)
 ...
Is Asia’s success unique?
    Two major shifts


     1. Business shift

     2. Mindset shift
Business shift

• Packaged software legacy

• Online business models
  – Subscription
  – Digital goods

• Obvious in Face...
Chinese Online Games Companies
• Listed on NASDAQ
     •   NETEASE             NTES    $3.93B
     •   SHANDA             ...
Total Market Cap
• And the total is…
     • 8 Gaming Companies       $13.3B
     • TENCENT                  $30.6B
     • ...
More Comparables
• Korea
     • NHN (Naver, Hangame)           $7.6B
     • NC SOFT                        $3.8B
     • NE...
Virtual Worlds

• Strengths
  – Exploration
  – Creativity
  – Online Economy

• Weaknesses
  – No social graph
  – No fun...
(from Web 2.0 Conference, 2010.05)


• Revenue 2009: $22 million (x2)
  – Became profitable & cash flow positive


• Reven...
Pigg
(by CyberAgent)
Pigg
                  (by CyberAgent)

• 1Q2010 Revenue >$7M
  – 3M+ users (2010.04)
  – TV ads!

• Paying Users
  – 80% ...
Proven Models Spreading

• Asian companies expanding
  – Bring online & social games overseas
  – Acquire IP from Japan, U...
Remaining Barriers in the West

• Semantic prisons

• Payment infrastructure
  – Getting better, but still far off


• Ind...
Chapter 2.
Semantic Prisons
Mindset Shift: Semantic Prisons
“There are plenty of semantic prisons
which do not permit us to think straight”

   Aldous Huxley, The Human Situation
Cell 1: Virtual (Goods)
Virtual???

• Connotations
  – “Not real”
  – Valueless
  – “Who would be stupid enough to pay for that!”


• Opposite of ...
The reality


• It’s Digital but it’s Real

• Pure symbolic value
Virtual Goods = Digital FMCG?

• “Virtual Goods are Consumer Products”
  – Cary Rosenzweig, CEO, IMVU Inc.
  – 7 years at ...
Already buying virtual goods?
Field Research: Halloween
       (San Francisco)
Field Research: Santa Con
         (London)
Analog vs. Digital Experiences
World Cup! Concerts, Travels, Encounters…
Cell 2: (Video) Games
Video Games
• Connotations
  – Childish
  – Waste of time

• Adults don’t play games!

• Updated terminology
  – Video = D...
Benefits of games

• Great way to learn

• Games already sell digital goods
  – Three quarters of digital goods sold in As...
Field Research: My Aunt
     (Mountain View)
Conclusion
         (Get out of Jail Free Card)

• “Virtual” terrible term. Call it “digital”.
• “Game” is “entertainment”...
Chapter 3.
Offline Behavior
Let’s look into

• Social Psychology

• Zoology

• Anthropology

• Social Dynamics
Sociology
  (esp. Social Psychology)




       Stanley Milgram (1933-1984)
“Small world experiment” / 6 degrees (1967)
  ...
Sociology
(esp. Social Psychology)




      Philip Zimbardo (1933~)
 Stanford Prison Experiment (1971)
      The Lucifer ...
Learning 1




     People’s behavior
shaped by their environment
Zoology




Desmond Morris (1928~)
“The Naked Ape” (1967)
“The Human Zoo” (1969)
Learning 2




Behavior guided by
mammal instincts
Anthropology




Robin Dunbar (1947~)
  (Dunbar Number)
Learning 3




Socialization (“strong ties”)
 limited by brain structure
Social Dynamics




Erik von Markovik “Mystery” (1971~)
         “Mystery Method”
Learning 4




Attraction mechanisms
exist online just as well
Chapter 4.
Possible Future
Obama Outfitted With
238 Motion Capture Sensors
For 3-D Record Of Presidency
…or not.
Help fix what is broken
          in offline socialization

• Engagement & Disengagement

• Multi-tasking

• Social skills...
Toward the digital third place
The hope with games

• Path of least resistance: nothing to explain!

• Game = 3D world with rules, fun and targets

• Gam...
Paradise Paintball | World’s First Social FPS!




                                                        www.cmune.com
 ...
Online Socialization
              =
Necessary skill for the future?
Business is online
              =
Online identity & reputation
Increase awareness
of the risks to avoid them
Celebrate
the benefits
Thanks!


www.plus8star.com

benjamin@plus8star.com
                                       +81 | Japan

benjamin0123      ...
Asians are virtual, what about us
Asians are virtual, what about us
Asians are virtual, what about us
Asians are virtual, what about us
Asians are virtual, what about us
Upcoming SlideShare
Loading in...5
×

Asians are virtual, what about us

2,378

Published on

Talk in

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

No Downloads
Views
Total Views
2,378
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
80
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide

Asians are virtual, what about us

  1. 1. Asians are virtual already How long before we are too? Benjamin Joffe | CEO, Plus Eight Star Ltd. Virtual World Conference| Second Life, 2010.09
  2. 2. The Challenges • "Who would pay for things that don't exist?" • "Asians are not like us" • "Online friends are not real"
  3. 3. “Love Plus” by Konami
  4. 4. Just Married In Guam (Nov. 2009) Fiancée
  5. 5. Gartner’s Hype Cycle Are we here?
  6. 6. Second Life’s Second Life Past the Trough of Disillusionment
  7. 7. Why me? • SL: Limited flight hours • Avatar provided • Asia? Not Asian • East time in San Francisco :-)
  8. 8. However… 4 years 1 year 5 years @benjaminjoffe
  9. 9. What I do • CEO, Plus Eight Star | www.plus8star.com • Digital Strategy & “Innovation Arbitrage” • Best practices from Asia’s web and mobile world • Partner, Cmune | www.cmune.com • Online gaming company • First 3D FPS on Facebook, MySpace and Apple.com • Founder | Mobile Monday Beijing • Monthly forum for mobile professionals • 36 events, 130 speakers, 3,000 participants • Angel Investor, Advisor, Keynote Speaker
  10. 10. The future is already here – it is just unevenly distributed William Gibson Science Fiction Writer
  11. 11. INNOVATION & DIGITAL CULTURES
  12. 12. Social Aspects of Technology “When a technology becomes boring, that's when the social effects become interesting.” Clay Shirky, Professor, NYU Author, Here Comes Everybody
  13. 13. Today • Half-way through the valley of disillusion • Nothing better than SL since 2003?! • Business issues getting sorted thanks to games
  14. 14. Understanding Online Behavior
  15. 15. 20+ years of research… Howard Rheingold Habitat (Lucasfilm, 1986)
  16. 16. Not new!
  17. 17. Plan 1. Learning from Asia 2. Semantic prisons 3. Learning from offline behavior 4. Some ideas about the future, and our role
  18. 18. Chapter 1. Learning from Asia
  19. 19. Digital Goods Market for 2009 Asia $7 bln USA $1 bln Sources: www.plus8star.com (Asia) - Inside Virtual Goods, Oct 2009 (US)
  20. 20. Virtual Worlds? • Most virtual worlds have failed • Online games make millions • Social games too, and grow fast
  21. 21. Quiz
  22. 22. Answers World’s #3 largest Internet company after Google and Amazon #2 youngest self- made billionaire in the world after Mark Zuckerberg of Facebook Pony Ma, CEO, Tencent Yoshikazu Tanaka, CEO, GREE
  23. 23. Market Caps (May 2010) $35.3B $4.2B $2.5B $900M
  24. 24. QQ IM & QZone
  25. 25. More on Tencent • Revenue 2009 $1.8B • Net Profit Margin 40% • Revenue from Digital Goods 90% – Digital currency – Multiple payment methods – Purchase, rental, subscriptions…
  26. 26. 11:30 Shin Takamiya Advertising Gree Home Advertising & Affiliates | 25% Avatars & items B2C virtual Games goods | 75% 60% avatars 40% games
  27. 27. Mobile App Platform since Oct.09 (330 apps as of February 2010) City Building Harvest Moon Shopkeeper Furauni By Liveware By Liveware By Geisha Tokyo By Konami
  28. 28. Online Games in China • 2009: $3.75B • 105 million game users – SNS games = 87.7% (92 mln) – MMOs = 22.7% (24 mln) – Single-player PC games = 36.1% (38 mln)
  29. 29. Is Asia’s success unique? Two major shifts 1. Business shift 2. Mindset shift
  30. 30. Business shift • Packaged software legacy • Online business models – Subscription – Digital goods • Obvious in Facebook and IMVU • Second Life “pivoting”
  31. 31. Chinese Online Games Companies • Listed on NASDAQ • NETEASE NTES $3.93B • SHANDA SNDA $2.65B • SHANDA GAMES GAME $1.56B • PERFECT WORLD PWRD $1.20B • CHANGYOU CYOU $1.49B • GIANT INTERACTIVE GA $1.64B • Listed on HKSE • TENCENT 0700 $30.6B • NET DRAGON 0777 $250M • KINGSOFT 3888 $595M Data as of: 21 June 2010
  32. 32. Total Market Cap • And the total is… • 8 Gaming Companies $13.3B • TENCENT $30.6B • TOTAL $43.9B • Comparables • ACTIVISION BLIZZARD $14.27B • ELECTRONICS ARTS $5.28B • TAKE TWO INTERACTIVE $853M • UBISOFT $817M • ATARI Delisted from NASDAQ • TOTAL $21.2B Data as of: 21 June 2010
  33. 33. More Comparables • Korea • NHN (Naver, Hangame) $7.6B • NC SOFT $3.8B • NEXON Private ($6B offer?) • Japan • SEGA SAMMY $4.1B • KONAMI $2.5B • SQUARE ENIX $2.3B • NAMCO BANDAI $2.2B • CAPCOM $1.2B • (NINTENDO $44.2B) Data as of: 21 June 2010
  34. 34. Virtual Worlds • Strengths – Exploration – Creativity – Online Economy • Weaknesses – No social graph – No fun! • IMVU, Second Life “pivoting”
  35. 35. (from Web 2.0 Conference, 2010.05) • Revenue 2009: $22 million (x2) – Became profitable & cash flow positive • Revenue 2010: $44 million? (x2) • Begin pivot… Virtual World to Social Entertainment – “From Dress Up to Level Up” – Game Mechanics – 2D and 3D Games
  36. 36. Pigg (by CyberAgent)
  37. 37. Pigg (by CyberAgent) • 1Q2010 Revenue >$7M – 3M+ users (2010.04) – TV ads! • Paying Users – 80% are 20 to 40y.o. – 70% female • Payment – 68% Mobile, 20% Webmoney, 12% Credit Card
  38. 38. Proven Models Spreading • Asian companies expanding – Bring online & social games overseas – Acquire IP from Japan, US, Europe? • Huge opportunities in emerging markets – “Tencents” of… Russia, Brazil, Vietnam, Indonesia… • Globalization of dev & publishing abilities
  39. 39. Remaining Barriers in the West • Semantic prisons • Payment infrastructure – Getting better, but still far off • Industry legacy – Content production & operation
  40. 40. Chapter 2. Semantic Prisons
  41. 41. Mindset Shift: Semantic Prisons
  42. 42. “There are plenty of semantic prisons which do not permit us to think straight” Aldous Huxley, The Human Situation
  43. 43. Cell 1: Virtual (Goods)
  44. 44. Virtual??? • Connotations – “Not real” – Valueless – “Who would be stupid enough to pay for that!” • Opposite of Real = Imaginary
  45. 45. The reality • It’s Digital but it’s Real • Pure symbolic value
  46. 46. Virtual Goods = Digital FMCG? • “Virtual Goods are Consumer Products” – Cary Rosenzweig, CEO, IMVU Inc. – 7 years at P&G!
  47. 47. Already buying virtual goods?
  48. 48. Field Research: Halloween (San Francisco)
  49. 49. Field Research: Santa Con (London)
  50. 50. Analog vs. Digital Experiences World Cup! Concerts, Travels, Encounters…
  51. 51. Cell 2: (Video) Games
  52. 52. Video Games • Connotations – Childish – Waste of time • Adults don’t play games! • Updated terminology – Video = Digital (is this needed?) – Games = Entertainment
  53. 53. Benefits of games • Great way to learn • Games already sell digital goods – Three quarters of digital goods sold in Asia – Main revenue maker for games on Facebook • Spending to have fun / a better experience
  54. 54. Field Research: My Aunt (Mountain View)
  55. 55. Conclusion (Get out of Jail Free Card) • “Virtual” terrible term. Call it “digital”. • “Game” is “entertainment” • “Virtual Goods are Consumer Goods” – Cary Rosenzweig, CEO, IMVU
  56. 56. Chapter 3. Offline Behavior
  57. 57. Let’s look into • Social Psychology • Zoology • Anthropology • Social Dynamics
  58. 58. Sociology (esp. Social Psychology) Stanley Milgram (1933-1984) “Small world experiment” / 6 degrees (1967) “Behavioral Study of Obedience” (1963)
  59. 59. Sociology (esp. Social Psychology) Philip Zimbardo (1933~) Stanford Prison Experiment (1971) The Lucifer Effect (2007)
  60. 60. Learning 1 People’s behavior shaped by their environment
  61. 61. Zoology Desmond Morris (1928~) “The Naked Ape” (1967) “The Human Zoo” (1969)
  62. 62. Learning 2 Behavior guided by mammal instincts
  63. 63. Anthropology Robin Dunbar (1947~) (Dunbar Number)
  64. 64. Learning 3 Socialization (“strong ties”) limited by brain structure
  65. 65. Social Dynamics Erik von Markovik “Mystery” (1971~) “Mystery Method”
  66. 66. Learning 4 Attraction mechanisms exist online just as well
  67. 67. Chapter 4. Possible Future
  68. 68. Obama Outfitted With 238 Motion Capture Sensors For 3-D Record Of Presidency
  69. 69. …or not.
  70. 70. Help fix what is broken in offline socialization • Engagement & Disengagement • Multi-tasking • Social skills & Social dynamics • Virtual worlds as additional physicality: The concept of digital third place
  71. 71. Toward the digital third place
  72. 72. The hope with games • Path of least resistance: nothing to explain! • Game = 3D world with rules, fun and targets • Games as excuses for social interactions • Games drive revenues
  73. 73. Paradise Paintball | World’s First Social FPS! www.cmune.com www.facebook.com/paradisepaintball
  74. 74. Online Socialization = Necessary skill for the future?
  75. 75. Business is online = Online identity & reputation
  76. 76. Increase awareness of the risks to avoid them
  77. 77. Celebrate the benefits
  78. 78. Thanks! www.plus8star.com benjamin@plus8star.com +81 | Japan benjamin0123 +82 | Korea +86 | China http://twitter.com/benjaminjoffe Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×