DeNA, GREE: Demystifying       Japan’s Social Gaming Market                        By Serkan Toto, PhD                    ...
About Me• Tokyo-based web, mobile and gaming  industry consultant• Advisor for startups in Japan, Asia and the US• Japan c...
Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: totoserkan AT g...
Visit My Website For Free Information On Japan’sSocial Game Industry (http://www.serkantoto.com)
AgendaI: Structure Of The Domestic MarketII: Japan’s Social Games Vs. The WorldIII: Future Trends In Japan’s Social Gaming...
I: Structure Of The Domestic Market
Japan‘s Unique Social NetworkingLandscape•  Basic structure: real social graph vs.   virtual social graph•  3 homegrown so...
Fragmented Industry Structure•  Hundreds of social application providers•  2 dominant companies double as platform   and g...
Dominant Duopoly
Size Of Japan‘s Social Gaming Market•  Annual sales of DeNA and GREE   combined reach over $2 billion•  Different sources ...
II: Japan’s Social Games Vs. The World
Key Peculiarity: Gaming Nation Japan•  Taito‘s Space Invaders kicked off the gaming   industry as a whole in 1978•  Ninten...
Key Peculiarity: Mobile •  Social games (and the web at large) are consumed    mainly on mobile phones •  Yahoo Mobage onl...
Key Peculiarity: Facebook Japan•  Active Facebook members (potential social gamers)   in Japan in September 2011: 5 millio...
Key Peculiarity: Special Genres•  Some social gaming genres are as popular in   Japan as elsewhere, i.e.  – farming  – pet...
Key Peculiarity: Special Genres•  Example 1: Manga-based social games•  Gundam Royale racked up 1 million players in 6 days
Key Peculiarity: Special Genres•  Example 2: Social RPGs•  Square Enix‘ Gleipnora is exclusively   available on Mobage
Key Peculiarity: Special Genres•  Example 3: Social dating and love simulations•  Renai games are especially popular among...
Key Peculiarity: Special Genres•  Example 4: Social idol-raising games•  Goal: Train and guide girls on their way to becom...
Key Peculiarity: Special Genres•  Example 5: Social collectible card games•  Konami‘s Dragon Collection has been #1 on   G...
III: Future Trends In Japan’s    Social Gaming Industry
Growth Is Expected To Continue•  Growth in the domestic social gaming market   has slowed down, but still ongoing•  Projec...
Growth Is Expected To Continue •  Yano Research: $406 million in 2009,    $900 million in 2010, $1.4 billion in 2011:
Japan‘s Mobile Future Is All Smartphones •  GREE CEO Yoshikazu Tanaka: “By 2015,    feature phones in Japan will vanish.“ ...
Video Game Makers Going Social•  Many Japanese video game makers starting   to produce social games•  Konami alone expecti...
GREE: Internationalization•  More cautious approach•  US office in January 2011•  Offices in Seoul, Dubai, London, Singapo...
DeNA: Internationalization•  DeNA‘s 3-market approach with Mobage for   Smartphone:   – Japan   – China   – Rest of the wo...
Future International Positioning ForGREE And DeNA •  Tens of thousands of free/cheap games in    the App Store and Android...
Thank you for listening!
Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: totoserkan AT g...
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DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

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This is an edited version of a presentation on Japan's social games market I gave a few weeks ago.

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DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

  1. 1. DeNA, GREE: Demystifying Japan’s Social Gaming Market By Serkan Toto, PhD Twitter: @serkantotoImage credit: GREE International
  2. 2. About Me• Tokyo-based web, mobile and gaming industry consultant• Advisor for startups in Japan, Asia and the US• Japan contributor for TechCrunch.com• Personal website: www.serkantoto.com
  3. 3. Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: totoserkan AT gmail.com
  4. 4. Visit My Website For Free Information On Japan’sSocial Game Industry (http://www.serkantoto.com)
  5. 5. AgendaI: Structure Of The Domestic MarketII: Japan’s Social Games Vs. The WorldIII: Future Trends In Japan’s Social Gaming Industry
  6. 6. I: Structure Of The Domestic Market
  7. 7. Japan‘s Unique Social NetworkingLandscape•  Basic structure: real social graph vs. virtual social graph•  3 homegrown social networks with roughly 25 million users each: – Mixi (real/80% mobile social networking) – GREE (virtual/mobile social gaming) – Mobage (virtual/mobile social gaming)
  8. 8. Fragmented Industry Structure•  Hundreds of social application providers•  2 dominant companies double as platform and game providers: GREE and DeNA (“Facebook+Zynga in 1“)•  Mixi as latecomer•  Rekoo only really successful foreign player
  9. 9. Dominant Duopoly
  10. 10. Size Of Japan‘s Social Gaming Market•  Annual sales of DeNA and GREE combined reach over $2 billion•  Different sources offer different numbers: – Video game magazine publisher Enterbrain: $0.3 billion in 2009, $1.45 billion in 2010 – Market research firm Seed Planning: $1.46 billion in 2010
  11. 11. II: Japan’s Social Games Vs. The World
  12. 12. Key Peculiarity: Gaming Nation Japan•  Taito‘s Space Invaders kicked off the gaming industry as a whole in 1978•  Nintendo‘s Famicom revitalized industry after the big crash 1983•  Japan has 10% share ($6.5 billion) in global video game market•  Games enjoy greater cultural attention in Japan than elsewhere•  higher payment walls for progressing in social games are accepted
  13. 13. Key Peculiarity: Mobile •  Social games (and the web at large) are consumed mainly on mobile phones •  Yahoo Mobage only PC-based social gaming platform worth noting •  virtual item payment via carrier billing as catalyst •  GREE/Mobage pre-installed on handsetsImage credit: KDDI au
  14. 14. Key Peculiarity: Facebook Japan•  Active Facebook members (potential social gamers) in Japan in September 2011: 5 million•  ⁓5% of web population (in the US: ⁓68%)Source: Socialbakers
  15. 15. Key Peculiarity: Special Genres•  Some social gaming genres are as popular in Japan as elsewhere, i.e. – farming – pet-breeding – city-building – restaurant management etc.•  But some are especially popular over here
  16. 16. Key Peculiarity: Special Genres•  Example 1: Manga-based social games•  Gundam Royale racked up 1 million players in 6 days
  17. 17. Key Peculiarity: Special Genres•  Example 2: Social RPGs•  Square Enix‘ Gleipnora is exclusively available on Mobage
  18. 18. Key Peculiarity: Special Genres•  Example 3: Social dating and love simulations•  Renai games are especially popular among female users•  Andamul‘s Delicious Kiss is popular on GREE (below)
  19. 19. Key Peculiarity: Special Genres•  Example 4: Social idol-raising games•  Goal: Train and guide girls on their way to become an idol (star)•  Love Kyun! Idol Battle was launched on GREE in May 2011
  20. 20. Key Peculiarity: Special Genres•  Example 5: Social collectible card games•  Konami‘s Dragon Collection has been #1 on GREE for over a year straight
  21. 21. III: Future Trends In Japan’s Social Gaming Industry
  22. 22. Growth Is Expected To Continue•  Growth in the domestic social gaming market has slowed down, but still ongoing•  Projection by Mitsubishi UFJ Morgan Stanley Securities: US$5.2 billion in 2013
  23. 23. Growth Is Expected To Continue •  Yano Research: $406 million in 2009, $900 million in 2010, $1.4 billion in 2011:
  24. 24. Japan‘s Mobile Future Is All Smartphones •  GREE CEO Yoshikazu Tanaka: “By 2015, feature phones in Japan will vanish.“ •  iPhone and Android set to dominate in the futureSource: The Nikkei / MM Research Institute
  25. 25. Video Game Makers Going Social•  Many Japanese video game makers starting to produce social games•  Konami alone expecting to generate $390 million in fiscal 2011 with social games•  A lot of high-quality IP still untapped
  26. 26. GREE: Internationalization•  More cautious approach•  US office in January 2011•  Offices in Seoul, Dubai, London, Singapore...•  Focus on partnerships: – South East Asia: mig33 – China: Tencent•  Only one sizeable acquisition abroad so far (Openfeint for $104 million)
  27. 27. DeNA: Internationalization•  DeNA‘s 3-market approach with Mobage for Smartphone: – Japan – China – Rest of the world•  Aggressive M&A: – Ngmoco $403 million – Gameview Studios, Rough Cookie, etc.•  DeNA failed twice on a global level: – MiniNation (WAP) – Mobamingle (iOS)
  28. 28. Future International Positioning ForGREE And DeNA •  Tens of thousands of free/cheap games in the App Store and Android Market •  Promising social layer services for smartphones already available: – Apple‘s Gamecenter – Scoreloop – Gamewave •  Facebook‘s Project Spartan just launched •  Indifference from users abroad?
  29. 29. Thank you for listening!
  30. 30. Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: totoserkan AT gmail.com
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