Gdc2013 magid-play span-game-biz-models

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Presentation given at GDC 2013 by Magid Associates of the PlaySpan commissioned report on video games business models

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Gdc2013 magid-play span-game-biz-models

  1. 1. Video Game Business Models and Presented at:Emerging Trends Among ConsumersCommissioned by:©2013 Visa and Magid Associates
  2. 2. Methodology  Frank N. Magid Associates conducted an online survey in December 2012 that focused on the attitudes and behavior among a broad range of gamers.  Using a highly qualified sample provider, Research Now, Magid surveyed a representative sample by gender, age (13-54 years old) and ethnic background. A screening question (Which platform do you own and use regularly for gaming?) was used to identify current gamers. Those who did not select at least one of the platforms screened out.  The overall incidence (the chance of finding a gamer) of this study was 81%, up from 75% in the previous research. The incidence of gamers is highest among 13-54 men (96%) and lowest among 45-54 women (67%)  Therefore, within the United States population (13 -54 years old) 144,000,000 are playing games on some type of platform.  Among gamers, 52% are men and 48% are women. Notes: Unless otherwise stated all data showed was sourced from this survey. Any references to specific game titles are used solely for representing the consumer provided information and does not imply product endorsement1 ©2013 Visa and Magid Associates
  3. 3. Are You Prepared For This?  The current gaming model strongly favors Free-To-Play and the momentum also favors Free-To-Play. Two-thirds of all gamers now prefer the Free-To-Play model with only one in ten preferring Pay-To-Play.  Where is the momentum in your games? Are you using today or considering moving towards a free to play game model or possibly a hybrid model combining free to play with a subscription package premium option?  Pay-To-Play has the image of a “better experience” but is at parity on all other game images. In fact Free-To-Pay games are as likely named over Pay-To-Pay when it comes to:  Having a wide variety of games  Games that allow you and your friends to play  Games that are more fun2 ©2013 Visa and Magid Associates
  4. 4. Are You Prepared For This? (continued)  Free-To-Play gamers named “money - value” as the top reason for playing.  How can you make the gaming experience easier when it comes to Free-To-Play transactions?  Quality is a unique trait for Pay-To-Play.  How can you maintain quality over increased competition from Free-To-Play? Are your pay-to-play games competing by claiming better graphics and quality? These are no longer differentiators - Storyline and gameplay experience matter most – they always have.3 ©2013 Visa and Magid Associates
  5. 5. Are You Prepared For This? (continued)  The time is rapidly approaching when gamers will spend more money on Free-To-Play. This will happen when:  More consumers become gamers;  The number of Free-To-Play gamers increase;  These players increase in the number of micro-transactions;  An easy to purchase model in place that increases the average spend.  Based on the current assumptions, when the average spent on Free- To-Play moves slightly from $10 to $17, then Free-To-Play “wins” on the dollars spent per year.  What model are you exploring to make Free-To-Play an easy model to connect to those not spending money?4 ©2013 Visa and Magid Associates
  6. 6. The Gaming Market Continues Its Rapid Expansion – More Than 8 in 10 Consumers Are Now Gamers. This Growth Can Be Attributed To Growth In Smartphones As A Popular Gaming Platform. U.S. Total Non- Demos Population Contacts Gamers Gamers (N=743) (N=601) (N=115) % % % % 13-17 6 6 7 1 18-24 9 8 9 6 Males 25-34 12 12 14 3 35-44 11 11 12 11 45-54 12 12 10 22 13-17 6 6 6 3 Females 18-24 8 8 8 7 25-34 12 12 12 9 Gamers exist in all 35-44 11 11 11 15 demographic groups, but are 45-54 13 14 11 24 slightly more likely to be White 64 64 62 77 young, 13-34 years old males. Hispanic 16 17 18 10 Race Black 12 11 12 4 Asian 5 5 5 3 Other 3 3 3 55 ©2013 Visa and Magid Associates
  7. 7. Smartphones Now Equal To Consoles As The Preferred Gaming Platform (Single mention – preferred gaming platform) 35% 34% 11% 6% 3% Console Smartphone Tablet Computer Handheld6 ©2013 Visa and Magid Associates
  8. 8. While The Console Still Reigns Top Game Platform For Men, Women Prefer The Smartphone And Tablet As Their Gaming Platform By Almost Double Over Men (Single mention – preferred gaming platform) Men Women 49% 45% 25% 18% 15% 7% 9% 4% 3% 4% Console Smartphone Tablet Computer Handheld7 ©2013 Visa and Magid Associates
  9. 9. The Momentum In Gaming Is Towards Free-To-Play Games, 110 Million U.S. Gamers Are Now Playing More Free-To-Play Games, With Women Leading The Movement Towards This Model 82% 77% 72% Total Men Women Which of the following phrases best describes you? • You are playing less free-to-play and more pay-to-play games • You are playing more free-to-play and less pay-to-play games • I play both types of games equally8 ©2013 Visa and Magid Associates
  10. 10. The Majority Of Gamers Are Now Playing Free-To-Play Games 21 Million Gamers 13 Million Gamers Free-To-Play Pay-To-Play Equal 110 Million Gamers9 ©2013 Visa and Magid Associates
  11. 11. Men Spend Nearly Three Times More Than Women On Free-To-Play Games.$20.00$15.00 $13.38$10.00 $4.84 $5.00 $0.00 Men Women10 How much money did you spend on Free-to-Play games last month? ©2013 Visa and Magid Associates
  12. 12. Young (13 – 24) Are Driving The Overall Average Money Spent On Free-To-Play Games.$20.00 $17.43$15.00 $12.85$10.00 $6.91 $6.89 $6.26 $5.00 $0.00 13-17 18-24 25-34 35-44 45-5411 How much money did you spend on Free-to-Play games last month? ©2013 Visa and Magid Associates
  13. 13. Young Men (13-24) Dominate Women In Average Money Spent On Free-To-Play Games$35.00 $30.54 Men Women$30.00$25.00 $19.94$20.00$15.00$10.00 $9.38 $8.60 $6.66 $5.93 $5.03 $4.04 $5.16 $5.00 $3.95 $0.00 13-17 18-24 25-34 35-44 45-5412 How much money did you spend on Free-to-Play games last month? ©2013 Visa and Magid Associates
  14. 14. 18 – 24 Year Old Men Are Spending Nearly Eight Times What Women Do Per Month on Free to Play Games$35.00 $30.54$30.00$25.00$20.00$15.00$10.00 $5.00 $3.95 $0.00 Men Women13 How much money did you spend on Free-to-Play games last month? ©2013 Visa and Magid Associates
  15. 15. However, The Average Money Spent On Pay-To-Play Pay-To- Play Games Is Three Times Greater Than Free-To-Play (Based on those play each type of game)$40.00 Free-To-Play is skewed lower$35.00 by the 46% who currently are$30.00 spending zero. $28.86$25.00$20.00$15.00$10.00 $9.15 $5.00 $0.00 Free-to-Play games Pay-To-Play Games14 How much money did you spend on ________? ©2013 Visa and Magid Associates
  16. 16. Men Are Driving The Total Dollars Spent On Pay-To-Play Games$50.00$45.00$40.00 $34.53$35.00$30.00$25.00 $22.59$20.00$15.00$10.00 $5.00 $0.00 Men Women15 How much money did you spend on pay-to-play games last month? ©2013 Visa and Magid Associates
  17. 17. Pay-To-Play Games Monthly Average Remains Steady Among 25 To 54 Year Old Gamers$50.00 $46.69$45.00$40.00 $34.29$35.00$30.00 $22.81 $23.79 $24.39$25.00$20.00$15.00$10.00 $5.00 $0.00 13-17 18-24 25-34 35-44 45-5416 How much money did you spend on pay-to-play games last month? ©2013 Visa and Magid Associates
  18. 18. 18-24 Year Old Women Outspend Men On Average Money Spent On Pay-To-Play Games$60.00 $58.26 Men Women$55.00$50.00 $48.60$45.00$40.00 $37.52 $36.74$35.00$30.00 $27.29$25.00 $23.61 $25.18 $20.29$20.00$15.00 $13.24$10.00 $8.27 $5.00 $0.00 13-17 18-24 25-34 35-44 45-5417 How much money did you spend on pay-to-play games last month? ©2013 Visa and Magid Associates
  19. 19. Little Differences In Imagery Exist Between The Types Of Games Other Than “Better Quality” Is Owned By Pay-To-Play. Parity Exists Between The Game Format On The Image Of “More Fun To Play” Free-to-play MMO/Pay-to-play Both equal Neither Has a wider variety of games 22 25 40 13 Has the games your friends are talking 21 18 41 19 aboutHas the games that are more fun to play 20 19 49 12 Allows you to play with your friends 19 17 52 13 Has better quality games 13 35 40 13 Has the games that get better critic 13 26 41 20 reviews Regardless of which gaming model you typically play (free-to-play and pay-to-play games,) we would like you to compare each on the following elements. Please check the box that you feel the model the statement best describes. You can also check both or neither. Which gaming models is best described by the following18 statements? ©2013 Visa and Magid Associates
  20. 20. Over Half Of Free-To-Play Gamers Feel Their Games Are As Good As Pay-To-Play Games Strongly agree Agree Neutral Disagree Strongly disagreeMoney is more of a concern to you now 41 35 17 43You can control your spending better on 35 42 20 2 1 free-to-play games The free-to-play games are more available now on all your gaming 16 39 37 53 systems The free-to-play games are as good as 16 35 35 11 2 pay-to-play games now Using the scale of 1 to 5, where “5” is “strongly agree” and “1” is “strongly disagree,” how much do you agree with each19 of the following in your decision to play more free-to-play and less pay-to-play games? ©2013 Visa and Magid Associates
  21. 21. The Image Of “A Better Experience” Is Drawing Gamers To Pay-To-Play Games Strongly agree Agree Neutral Disagree Strongly disagree The gaming experience is better on pay- 24 35 33 45 to-play games The best games are always pay-to-play 18 31 40 7 4 You need pay-to-play games on the 13 25 44 9 9 devices you own You have more money now to spend on 9 22 40 16 13 games Using the scale of 1 to 5, where “5” is “strongly agree” and “1” is “strongly disagree,” how much do you agree with each20 of the following in your decision to play less free-to-play and more pay-to-play games? ©2013 Visa and Magid Associates
  22. 22. Key Factors In The Purchasing Decision When Buying Games Major consideration A consideration Neutral Not a consideration Not at all a consideration The price 39 36 17 2 5 The genre of the game 31 39 20 46 Friends’ recommendations 23 47 20 46 The ease of buying the game 15 39 28 8 9 User reviews 13 42 25 9 10 Whether I can play it with my friends 12 30 29 12 16 The ranking of a game you see or read 10 34 30 12 13 about Using a scale of 1 to 5 where “5” is “a major consideration” when you buy a game and “1” is “not at all a consideration,” how much do each of the following effect your purchase decision?21 ©2013 Visa and Magid Associates
  23. 23. Top Genres Played Strategy 43% Arcade Games 38%Games on a smartphone or tablet 33% First or Third Person Shooter 31% Adventure games 29% Racing Games 27% RPG 27% Action/Fighting Games 26% Sports Games 24% Free web based casual games 21%Games on social networking sites 20% Simulation Games 17% Music / Rhythm Games 16% 22 Which of the following video game genres do you play on _______? ©2013 Visa and Magid Associates
  24. 24. Men Play Shooters Three Times More Than Women And Over Twice As Much Play Time On RPG, Action And Sports Genres Than Women Men Women 47% 35% 37% 33% 35% 33% 23% 21% 15% 15% 13% 13% First Or Third Adventure RPG Racing Games Action/Fighting Sports GamesPerson Shooter games Games23 Which of the following video game genres do you play on _______? ©2013 Visa and Magid Associates
  25. 25. Women Are More Than Three Times More Likely To Play Games On Social Networking Sites Compared To Men Men Women 46% 43% 32% 27% 31% 25% 16% 9% Arcade Games Games on a Free web based Games on social smartphone or tablet casual games networking sites24 Which of the following video game genres do you play on _______? ©2013 Visa and Magid Associates
  26. 26. Robert M. Crawford, Ph.D. Robb Lewis Vice President, Research Director of Marketing and One Research Center Consumer Products Marion, IA 52302 PlaySpan bcrawford@magid.com robblew@visa.com @robblewis Download Report - playspan.com/gdc201325 ©2013 Visa and Magid Associates
  27. 27. Extra Slides26 ©2013 Visa and Magid Associates
  28. 28. Are You Prepared For This?  Gamers are becoming more mainstream each day. Currently more than eight in ten consumers can be classified as a gamer. Gamers exist within all demographics groups – this is not a 13-34 year old male experience.  Does your game account for the changing demographics of the gamer?  The mobile platform is beating the more traditional platforms (computer and consoles) for a gamer’s primary play. Women have fueled this growth.  Are you in the business of selling games or selling the platform and the game?  Gamers who prefer the smartphone platform, have almost completely left MMO as a gaming model.  Can you survive by focusing on the young male demographic driven by console and computer platforms? Are you evaluating developing games with business models that reach mobile free to play?27 ©2013 Visa and Magid Associates
  29. 29. 13 – 24 Year Old Men Are Spending More Than Six Times What Women Do Per Month On Free-To-Play Games$35.00$30.00 $26.11$25.00$20.00$15.00$10.00 $5.00 $4.39 $0.00 Men Women28 How much money did you spend on Free-to-Play games last month? ©2013 Visa and Magid Associates
  30. 30. Hours Spent On Platforms Playing Games (Based on those who use platform most often) 20+ 16-20 10-15 5-9 Less than 5 Basic Computer 41 9 13 20 16 Computer 25 10 15 25 18 Smartphone 15 14 14 23 33 Console 10 14 19 23 33 Tablet 10 14 27 21 26 Handheld 10 24 24 43 How many hours a week do you spend on ______?29 ©2013 Visa and Magid Associates
  31. 31. A Surprising Four In Ten Gamers Admit To Not Playing Pay- To-Play Games Free-to-Play games Pay-To-Play 49% 36% 39% 22% 10% 8% 9% 3% 1% 5% 2% 4% 5% 5% 20+ 16-20 10-15 5-9 Less than None DK/NS 530 How many hours a week do you spend playing _______? ©2013 Visa and Magid Associates
  32. 32. No Free-To-Play Game Stands Out As One They Would Really Miss 6% 6% 6% 5% 3% 2% 2% 1% If you could keep one free-to-play game, which one of the following would it be?31 ©2013 Visa and Magid Associates
  33. 33. Call Of Duty and Halo 4 Are Most Likely The Pay-To-Play Games That Would Be Missed 21% 10% 4% 4% 2% 2% 1% Call of Halo 4 Minecraft World of Diablo III StarCraft Guild Duty Warcraft II Wars II If you could keep one paid title, either a full game price or subscription MMO, which one of the following would it be?32 ©2013 Visa and Magid Associates

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