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Talk given in June 2012 at Kontagent's conference in San Francisco. Can you be big in Asia?

Talk given in June 2012 at Kontagent's conference in San Francisco. Can you be big in Asia?

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    Gaming in asia Gaming in asia Presentation Transcript

    • Game Internationalization: Where to Start May  31,  2012  |  Benjamin  Joffe,  CEO,  +8*    |  Jason  Lee,  Sr.  Manager,  Customer  Success  APAC,  Kontagent    Lifetime value starts here. @Kontagent    |    #KK2012  
    • CASE  STUDY  –  Becoming  Big  in  Asia   @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • HI!  Benjamin  Joffe  @benjaminjoffe   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • 12  YEARS  ABROAD   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • PLUS  EIGHT  STAR     Research  &  Strategy  ConsulRng   Best  PracRces  &  Market  Entry   China,  Japan  &  South  Korea   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • CLIENTS   EUROPE USA ASIA @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • STARTUP  MENTOR   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • 100+  talks,  20  countries   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Get  this  talk  at  >  www.slideshare.net/plus8star  AGENDA  •  7  Cases  for  Market  Entry  •  Ecosystems  101   •  China   •  Japan   •  Korea  •  Case  Study:  Uberstrike   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • 7  Cases  for  Market  Entry   @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • 7  CASES  FOR  MARKET  ENTRY   Opportunity  1.  Surprise  success  2.  Copycat   1.  OpportunisRc  entrepreneur   2.  Hopeful  entrepreneur   3.  Independent  inventor  3.  Business  contact  4.  IdenRfied  opportunity  5.  Unclear  opportunity  6.  Hope  7.  Necessity   DesperaRon   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • ARE  YOU  THE  ONE?  •  Concept  Suitability   •  Product  /  Market  Fit   •  Cultural  Match  •  LocalizaRon  Ability   •  Copy   •  Graphics   •  Layout  /  white  space   WIRED   •  Payment   Top  15  Most  Influen/al  Games  of  the  Decade   •  Support   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Ecosystems  101   @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • DEFINING  ASIA   Asia! @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • DEFINING  ASIA   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • THE  WORLD  AS  CIVILIZATIONS  Western! Chinese! Muslim! Indian!Orthodox! Japanese! African! Latin American! @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • “Asia  was  a  concept  of  Western  Civiliza5on.”     @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • ECOSYSTEMS  101  •  Macro   •  GDP   •  GDP/capita   •  Demographics  •  Culture   •  Language(s)   •  Religion(s)  •  Infra   •  Web  &  Mobile  Infrastructures   •  Dominant  Players   •  Payment  systems   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • DOUBLING  AUDIENCE  IS  NOT  DOUBLING  REVENUE   “Zynga  Aims  for  400  Million   Tencent  Users  in  China.  Starts   with  CityVille”   BizTechDay,  August  2011   “Just  by  going  to  China,   we  could  double  the  audience,”   Peter  Relan,  CEO,  Crowdstar   May  2012   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • @Kontagent  |  #KK2012  Kontagent  Konnect  2012  
    • Country   PopulaHon   GDP/Capita  (USD)   China   1.3  billion   4,500   Japan   128  million   42,000  South  Korea   49  million   20,000   Taiwan   23  million   20,000   Hong  Kong   7  million   32,000   Singapore   5  million   57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900   Vietnam   90  million   1,500   Philippines   94  million   2,500   Thailand   65  million   5,800  North  Korea   24  million   1,000   @Kontagent  |  #KK2012   Not all markets are created equal" Kontagent  Konnect  2012  
    • Country   PopulaHon   GDP/Capita  (USD)   China   1.3  billion   4,500   Japan   128  million   42,000   South  Korea   49  million   20,000   Taiwan   23  million   20,000   Hong  Kong   7  million   32,000   Singapore   5  million   57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900  
 Vietnam   90  million   1,500  - 1 JPPhilippines   = 10 CN users for monetization
 user 94  million   2,500  
 Thailand   65  million   5,800  - Hong Kong, Taiwan,24  million   North  Korea   Singapore, Malaysia 1,000  medium-sized" @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Country   PopulaHon   GDP/Capita  (USD)   China   Large user bbases but:
 1.3   illion   4,500   Japan   128  million   42,000  South  Korea   
 49  million   20,000   Taiwan   - few smartphones
 23  million   20,000   Hong  Kong   - even fewer PCs
 7  million   32,000   Singapore   - hard to million   5   monetize" 57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900   Vietnam   90  million   1,500  Philippines   94  million   2,500   Thailand   65  million   5,800  North  Korea   24  million   1,000   @Kontagent  |  #KK2012   Pick your markets right!" Kontagent  Konnect  2012  
    • Mobile  Users   China   Japan   Korea   Mobile  users   1.02  billion   127  million   50  million   Android   ?   15  million   17  million   (esRmates)   iPhone   <20  million   <10  million   3  million   (esRmates)   3G  Users   10%   100%   70%  - China, Japan, Korea embracing Android"- iPhones for the 1% in China"- Few reliable numbers available" @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Online  Game  Companies  Market  Cap   China   $bln   Japan   $bln   Korea   $bln   Tencent   57.5   GREE   6.3   Nexon   8   Netease   7.8   DeNA   4.6   NHN  (Hangame)   10.5   Renren   2.6   Mixi   <1   NCso`   5.3   Shanda   2.2  Shanda  Games   1.4   as  of  June  2012   Giant   1.2   Changyou   1.2   Facebook   (75)  NetDragon  (91)   <1   AcRvision  Blizzard   13.8  Perfect  World   <1   Zynga   6.1   The9   <1   Electronic  Aarts   5.0   Gaming giants dominate in each country." @Kontagent  |  #KK2012   Very few foreign players do well." Kontagent  Konnect  2012  
    • China  @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • CHINA’S  GAMING  MARKET  •  1Q2012  $1.78B  •  2012  (E)  $8B+  (=  2  x  Facebook  2011)   >  80%   Source: Analysys International" @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • REALITY  OF  CHINA  •  Local  partners  are  prevy  much  mandatory  for  foreigners   to  get  any  distribuRon  and  operate.  •  Successes  are  rare,  generally  accidental,  and  mostly  by   dominant  players   •  Mobile      Angry  Birds,  Fruit  Ninja,  Nubee  (JP),  etc.   •  Online  Games  Koreans,  Blizzard  (licensing),  Riot  Games   •  Social  Games    Avempts  (PopCap,  Zynga)   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • SOCIAL  NETWORKS  IN  CHINA  •  Social  networks  are…  TENCENT   •  Livle  money  on  RenRen   •  No  Facebook  •  Online  Game  Giants   •  Developing  their  own  games   •  Licensing  from  Korea   •  Rarely  from  other  places  (WoW)   •  ExcepRon:  League  of  Legends  (but  bought  by  Tencent)   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • TENCENT  •  Revenue        US$4.5  billion   o  Mostly  gaming!   o  Mobile      10%   o  AdverRsing    7%   •  Net  Profit      US$1.6  billion  (35%)  •  Services   o  Qzone        552  million  MAU   o  Pengyou      202  million  MAU   o  Open  plaxorm  40,000  apps   –  Revenue  share  improved  from  90/10  to  70/30  (though  variable)   –  A  dozen  have  10m+  MAU   –  BUT  ARPPU  =  1/10th  USA  (var.)   –  QQ  Farm  =  $10m  /  month?  (2011  rumor)   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • RENREN  •  Revenue      US$118.0  million   •  ~50%  from  adverRsing  •  Net  Loss      US$5  million   •  Net  loss  does  not  count  sale  of  eLong  for  US$50  million   •  PromoRng  its  Groupon  clone  Nuomi  (spending  US$30  million)  •  Plaxorm   •  Average  50/50  revenue  share  •  Curb  your  enthusiasm!   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • MOBILE  IN  CHINA  •  iPhone  is  for  the  1%  •  Android  stores  are  fragmented   •  Over  a  dozen  app  stores   •  Lots  of  copies   •  Payment  systems  not  sorted  out   •  AdverRsing  don’t  make  much  money  •  New  smartphones  by  the  day!   Aliababa’s  Aliyun   •  Xiaomi   Custom  Linux  mobile  OS   •  Alibaba   Runs  Android  apps!   Yours  for  <  $250!   •  Baidu   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • IOS  IN  CHINA  •  Click  to  add  text   •  Click  to  add  text   o  Click  to  add  text   Source: AppAnnie.com" @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • ANDROID  IN  CHINA  •  Click  to  add  text   •  Click  to  add  text   o  Click  to  add  text   Source: AppAnnie.com" @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Japan  @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • REALITY  OF  JAPAN  •  GREE   •  Revenue  1Q2012      $575  million   •  Acquired  OpenFeint    ($104m)   •  Acquired  Funzio      ($210m)  •  DeNA   •  Revenue  1Q2012      $526  billion   •  Acquired  Ngmoco      ($400m)  •  (Konami)   •  $360  million  from  social  games  in  2011   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • FOREIGN  SUCCESSES  IN  JAPAN?  •  Koreans,  Chinese,  Western  •  Online  games   o  Hangame  (Korean  online  &  casual  games  by  NHN)   o  NCso}  (Korean  MMOs)   o  Nexon  (Korean  MMOs)   o  Perfect  World  (Chinese  MMO)  •  Social  games   o  Zynga,  Crowdstar,  Playfish  -­‐>  ?   o  Rakoo,  Rekoo  (China)  •  Mobile  apps   o  Many  non-­‐Japanese   o  LINE  (mobile  IM  by  NHN)  •  Web:  Twiver,  Facebook,  Evernote,  Tumblr   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • SMARTPHONE  GAMING  OPPORTUNITY   Core Gamers 2011 2014 PC More than $1.2 billion Overall Console market size Game About $3.6 billion growing software Smartphone games Official sites, $1 billion Mobile Social games over $1.8 billion Casual Gamers Arcade games, Card games, Edutainment @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • “IT’S  PERFECT”  •  What  is  quality?   •  USA                  “It  works”   •  Japan      “It’s  perfect”   •  Korea      “It’s  new”   •  China      “It  gives  me  status”  •  Consequently   •  Requirements  in  Japan  exceed  your  imaginaRon   •  Copy  =  strong  indicator   •  On  the  upside:  People  pay  for  quality   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Korea  @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • GAMING  MARKET   US$  million   US$  million   7.1   863   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • KOREA  •  Outliers   •  Blizzard  (local  operaRon)   •  EA/FIFA  (partnership)     •  League  of  Legends  (hired  Blizzard  staff)  •  Mobile   •  iOS   •  Several  Android  app  stores  (Google,  SKT,  KTF,  LGT,  Samsung)  •  Regulatory  limitaRons   •  Game  RaRng  Board  (GBR)   •  Local  partner  necessary  for  smaller  companies   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • “Rest  of  Asia”   @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • “REST  OF  ASIA”  •  Rich  &  English-­‐friendly   •  Singapore  (English)   •  Hong  Kong  (Cantonese,  Mandarin,  English)  •  Somewhat  wealthy  &  somewhat  English-­‐friendly   •  Malaysia  (some  –  most  revenue  from  Chinese  populaRon)   •  Taiwan  (Taiwanese)  •  Not  there  yet   •  Vietnam   •  Indonesia   •  Philippines   •  Thailand…   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • COMING  SOON:  $50  ANDROID  PHONES   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • UBERSTRIKE  CASE  STUDY  •  Social  FPS   •  First-­‐Person  Shooter     •  Free-­‐to-­‐play  •  4  Channels   •  #1  on  Facebook   •  #1  on  Mac  App  Store   •  Uberstrike.com   •  Kongregate  •  Upcoming:  iOS  &  Android   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • @Kontagent  |  #KK2012  Kontagent  Konnect  2012  
    • GEOGRAPHY  OF  WEALTH:  FACEBOOK  •  Users   •  Only  need  a  PC  in  Internet  café   •  Many  users  from  emerging  markets  •  Revenue   •  Kids  in  Internet  café  in  emerging  markets  do  not  spend   •  Best  revenue  from  large  first  world  countries   •  USA   •  Germany,  France,  UK,  Australia,  Canada,  etc.   •  Singapore,  HK,  Taiwan,  Malaysia   •  Others.   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • GEOGRAPHY  OF  WEALTH:  MAC  OS  &  IOS  •  Users   •  Hardware  cost  $500  to  $2,000   •  Only  “rich”  people  can  really  afford!  •  Revenue   •  Anyone  with  such  device  has  money   •  USA,  China,  Russia   •  Germany,  France,  UK   •  Etc.   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • GEOGRAPHY  OF  WEALTH:  ANDROID  •  Users   •  Hardware  cost:  from  $100  •  Revenue   •  Lots  of  free  apps   •  Fragmented  app  stores   •  MarkeRng  is  hard   •  It’s  like  the  old  days  of  Java!   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • Conclusions  @Kontagent    |    #KK2012   Kontagent  Konnect  2012  
    • CONCLUSION:  SMARTPHONES!  •  “Big  in  Asia”  =  Pick  your  country!  •  Japan  =  Smartphones  &  Mobile  Plaxorms  •  Korea  =  Smartphones  &  MMOs  •  China  =  Smartphones  •  Singapore  +  HK  +  Malaysia  +  Taiwan  •  Rest  of  the  world:  check  ecosystems!   @Kontagent  |  #KK2012   Kontagent  Konnect  2012  
    • GOOD  LUCK!                     www.slideshare.net/plus8star   benjamin@plus8star.com   @Kontagent  |  #KK2012   Kontagent  Konnect  2012