Learning From Asian Social Networks
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Learning From Asian Social Networks

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Social apps all over the place + mobile booming and why innovation is not only in Silicon Valley.

Social apps all over the place + mobile booming and why innovation is not only in Silicon Valley.

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Learning From Asian Social Networks Learning From Asian Social Networks Presentation Transcript

  • iGaming Marketing Masterclass Macau | 2010.02 Lessons from Asian Social Networks +8* | Plus Eight Star Benjamin Joffe, CEO
  • Benjamin Joffe 本杰明 ベンジャミン 벤자민
  • 5 years 1 year 4 years
  • Consulting | Startups | Community
  • | Plus Eight Star • “Innovation Arbitrage” • Internet & Mobile Digital strategy • Best practices from China, Japan & Korea • Published reports • Inside Cyworld (2007) • Inside Tencent (2009) • Inside Alibaba (upcoming) • Contact • benjamin@plus8star.com
  • References EUROPE USA ASIA
  • Cmune • 3D Social Games • First “Social Shooter” – Facebook – Apple.com – Web • Check it out! – www.facebook.com/paradisepaintball
  • Asian Leaders
  • Common Assumptions 1. Social Networks 1. The definition of “social network” is clear 2. All social networks are variations of Facebook 2. Asia 1. Asia is homogeneous 2. Asia is all about copy 3. What happens in Asia stays in Asia
  • Quick Survey!
  • How about those?
  • On the Origin of SNS in Asia
  • Charles Darwin “On The Origin of Species” (1859)
  • Voyage of “The Beagle”
  • “Diverging” from common ancestors
  • 150 years later…
  • IT Infrastructure 100% Avg. 7 Mbps 80% Avg. 15 Mbps 60% 3G users 40% C hi n 20% a Avg. 4 Mbps www.plus8star.com 0% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai, 4Q08)
  • Diverging digital species
  • Revenue vs. Profit (2008) 70% 60% 50% Profit Margin 40% 30% 20% 10% 0% 0 200 400 600 800 1,000 1,200 Million USD
  • Market Caps (February 2010) $34.5B $3.3B $2.2B $800M
  • Evolution of Social Networks
  • SNS Timeline: USA 1967 1996 2002 2003 2004
  • Facebook • Real-name • Revenue models – Advertising (90%) – Some digital gifts (10%) • Application platform – Leverage social graph – Mostly games • Text games • Flash games • (3D games) – All for developers!
  • SNS Timeline: Korea 1967 1999
  • Cyworld “Mini-hompy” (Initial Model) • Real-name • Digital goods – Avatars – Page designs – Music – Fonts – Many payment systems • Advertising – Brand pages
  • Cyworld Integrated Into SK Communications’ Ecosystem • 20M reg. users (40% of web users) • Revenue 2Q09: 50M USD – (Includes IM + Portal) – Community 40% – Ads 40% – Other 20% • Revenue 2009: 200M USD – (Minor loss) – 1,000 staff – 10 years! Getting old?
  • 3D Evolution
  • Application Platforms
  • Source: Web20Asia.com
  • 3D Social Networks Converging with Games & Virtual Worlds
  • Conclusions for Korea 1. Convergence of SNS, gaming & virtual worlds 2. Cyworld still dominant, but young users 3. Branded pages main way to advertise 4. Social apps growing
  • SNS Timeline: Japan 2004 2006 2006
  • SNS Timeline: Japan
  • Mixi (Initial Model) • Nickname • Advertising – Banners – Brand pages • Premium services – Storage
  • PC vs. Mobile • Registered Users 18.6M – Monthly UV 12.6M • Monthly PV 27.6B – Monthly PV / UV >2,000!
  • Going Mobile
  • Social Apps on PC + Mobile!
  • From PC to Mobile Unit: 100M PV Unit: 10K Users Application platform introduced PV (mobile) PV (PC) Users Monthly PV 27.6B – Mobile (80%) 22.5B – PC (20%) 5.1B 2007.12 2008.12 2009.12
  • Demographics Total Mobile Total Mobile Most active social life?
  • Mobile 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
  • Parenthesis How is this Possible? 1. 3G everywhere (>95% users) 2. Unlimited data widespread (>50%) 3. Flash on all mobiles
  • Web Apps • Over 500 titles – Tougher selection than FB – Farm & Pet games leading • Usage & Monetization – 4.6M users for #1 (~25%) – 800K USD in 1 month for #1 – Revenue share with Mixi • Top developers are Chinese!
  • Revenue • Revenue 2009: 130M USD – 10 USD / active user / year! • Revenue Sources – Advertising 89% – Paid Services 7% – Job Search 4% • New Sources – Applications & Payment (PC & Mobile)
  • Mixi (New model) • Saturation of user base – Need for new revenue models • Full throttle on mobile – Mobile 4 times more active than web! • Tapping into digital goods revenue – Mobile & Web social apps – Revenue share on apps
  • Mobile Game Town
  • Source: DeNA
  • 3D Avatars For Self-Expression & Gaming
  • National Brands on Board!
  • Mobile Open Platform • Launched January 2010 – 40 partners – 92 games – Virtual goods, ads, avatars – Leverage expertise from in- house games – Some games also released on Mixi Mobile! • Target: Become the #1 Social Entertainment Platform
  • Revenue
  • Revenue 70 MUSD in Q3! PV x2 With apps 35M USD = games!
  • Gree (Initial Model) • Web-based • Real name • Advertising • Competing with Mixi!
  • Gree Model Change! • Web-based > Mobile > Mobile + Web • Real name > Nickname • Advertising > Digital goods • Competing with Mixi! > With MBGT!
  • Usage & Demographics • PageViews • Demographics – 99% Mobile – Gender parity – 24.7 bln/month – 75% users 20+ y.o.
  • Gree
  • Advertising Gree Home Advertising & Affiliates | 25% Avatars & items B2C virtual Games goods | 75% 60% avatars 40% games
  • 4Q09 Revenue 81M USD Profit 50M USD!
  • Results • Spent millions of USD on ads! • Users skyrocketed – 15 million! (15% of mobile users) – Mostly thanks to 2 games titles! (fishing & pet games) • Opening mobile platform too
  • Conclusion for Japan 1. Mobile SNS is a Business – Facebook makes $0 on mobile 2. Mobile SNS is a Media – Not only for kids! – Various FMCG already on it 3. Mobile Social Games – In-house vs. Third-party – Ecosystem getting more complex
  • SNS Timeline: China 1996 1998
  • Digital Goods
  • Will it blend?
  • In 2008 • Revenue: 1bln USD – 90% from digital goods • (35% from games) – 10% from ads • Net margin: 40% • 2009: >1.5 bln USD
  • Facebook Influence Kaixin001.com
  • Fighting Dirty Kaixin001.com Kaixin.com
  • Tencent Joins the Dance Kaixin001.com Kaixin.com
  • Happy Farm!
  • Main Model • Advertising is not enough! • Social games – First farm game was in China! – Advertising in games
  • Demographics & Users • Young – 70% of Internet users in China < 30 y.o. – Urban white collars (have PC) – University students – Many women! • Average income – Avg. salary 500 USD / month
  • Key Numbers • Users – Tencent 1B+ (485M active) – Qzone 310M users – RenRen 200M (50M also mobile) – Kaixin001 75M – 51.com 160M (38M MAU) • Multiple accounts!
  • Conclusion for China 1. Tencent dominates with IM – BUT other SNS competing – Huge ad inventory for all 2. Social games = major revenue model – Social games are media too!
  • Leaders Going Global?
  • International Expansion • Korea – Cyworld early mover! China, Japan, USA, Europe, etc. – Most operations closed by now. – Online game companies growing globally. • Japan – DeNA (Mobile Game Town) acquisition in China, subsidiary in US. – Gree at home. – Mixi office in Shanghai but no traction so far. • China – Tencent: partnerships & investments (including US). – Kaixin001, RenRen, 51.com busy at home. Social networks are cultural products!
  • DeNA Buys TX.com.cn (July 2009) • 9M members • Leverage expertise in – Avatars – Games – Content
  • Conclusion
  • SNS in Asia 1. Social networks = media 2. Japan = mobile innovation 3. Korea = web innovation 4. China = leads by all numbers
  • How do you think? 1. Social Networks 1. The definition of “social network” is clear 2. All social networks are variations of Facebook 2. Asia 1. Asia is homogeneous 2. Asia is all about copy 3. What happens in Asia stays in Asia
  • Thanks! More about “Innovation Arbitrage” www.plus8star.com benjamin@plus8star.com +81 | Japan benjamin0123 +82 | Korea +86 | China http://twitter.com/plus8star Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star