Social Games: Why GREE And Mobage Operator DeNA Monetize Better Than Zynga

GREE And Mobage operator DeNA:14 Reasons Why Japan’s Social GamingGiants Monetize Better Than Zynga By Serkan Toto, PhD www.serkantoto.com  Image credit: DeNA 

About Me• Web, mobile and gaming industry consultant• Advisor for startups in Japan and the US• Japan contributor for TechCrunch.com• Based in Japan since 2004• http://www.serkantoto.com

Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: serkan AT serkantoto.com

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AgendaI: Structure And Size Of Japan’s Social Gaming Market II: Top 13 Reasons For Successful MoneDzaDon 

I: Structure And Size Of Japan’s Social Gaming Market 

Japan‘s Social Gaming Market: Dominant Duopoly 

Market Size Stats: Depend On Sources ‐> Yano: Japan‘s social gaming market worth US$1.4 Billion In 2011 

Size Of Japan‘s Social Gaming Market ‐> ProjecDon from Morgan Stanley, January 2012 

Size Of Japan‘s Social Gaming Market ‐> ProjecDon from Nomura Research, January 2012 

II: Top 14 Reasons For Successful MoneDzaDon 

Reason 1: Japan Is A Gaming NaDon • Taito‘s Space Invaders kicked oﬀ the gaming  industry as a whole in 1978 • Japan has 10% share ($6.5 billion) in global video  game market • Games enjoy greater cultural aaenDon in Japan  than elsewhere 

Reason 2: Japan Is A Mobile NaDon  • Social games (and the web at large) are  consumed mainly on mobile phones  • Content is easier to sell on mobile devices  • 99% 3G penetraDon in Japan, crucial for playing  mobile games   Image credit: The Nikkei 

Reason 3: Popularity Of Card Baale Games • Card baale games have proven to be excellent  money makers • Up to 70% of the top 20 games on Mobage and  GREE are social card baale games currently  

Reason 4: Rise Of The Video Game Makers  • All major video game makers produce social  games now • Konami alone is expecDng to generate $390  million in ﬁscal 2011 with social games • Video game makers increasingly use popular IP  for social games 

Reason 5: Acceptance Of Higher Paywalls • Japanese users don‘t really mind higher payment  walls for progressing in social games • Micropayments to progress known from arcade  machine market (*Insert Coin* concept) 

Reason 6: Japan Is A Wealthy Country • Japan has the world‘s No. 3 economy (US$5.5  trillion in 2010) • GDP per capita stands at over US$34,000 per year  (IMF, 2011) • World‘s 2nd highest online spend at $6,688 per  year (Visa, 2009) • Morgan Stanley: 10% of Japan‘s social gamers  were paying in 2010 (projecDon for 2013: 17%) 

Reason 7: FricDonless Mobile Payment • I am hearing from social game makers 80‐90% of  gamers pay via carrier billing (monthly phone bill)   • Wide range of paying opDons: carrier billing,  credit cards, e‐money, pre‐paid cards, Paypal • SubscripDons for virtual items are possible 

Reason 8: Aggressive TV MarkeDng  • DeNA And GREE are invesDng large amounts of  money in TV adverDsing  • In November 2010, both companies showed the  most spots on Japanese TV   Image credit: Social Game Academy 

Reason 9: Zynga’s User Base Is Wide‐Spread  • Zynga has signiﬁcantly more registered and acDve  users, but they are spread across a large number  of regions with smaller economies and weaker  technical infrastructures  • Example: Indonesia is Facebook‘s fourth largest  market, but its GDP per capita is only about 1/8  of Japan  • DeNA and GREE evolved into mulD‐billion dollar  companies without foreign compeDDon 

Reason 10: Pre‐InstallaDon On Handsets  • Mobage is part of the home menu in NTT  Docomo‘s feature phones   • Japan‘s No. 2 mobile carrier KDDI is an investor  and GREE partner (pre‐installaDon deal) 

Reason 11: Zynga Is Weaker WRT MoneDzaDon   • Zynga‘s raDo of paying users is lower than that of  Mobage and GREE  • DeNA director Kenji Kobayashi:   I Think That Zynga Has Not Really Researched  MoneDzaDon‘ (Gamasutra, October 3, 2011) 

Reason 12: Gacha As Major Money Maker  • Gacha mechanism is biggest money maker in  many Japanese social games  • Even Bejeweled has a gacha feature in its  Japanese version 

Reason 13: In‐Game Events And Campaigns  • Japan‘s social game makers are brilliant in using  Dmed events and campaigns to boost revenue  • Example for a campaign: oﬀer an exclusive item  that only users who pre‐register for a game get  • Example for an event in Mobage‘s Ninja Royale  (English version) pictured below 

Reason 14: Virtual Social Graph  • Players use GREE and Mobage anonymously  • Virtual social graph makes mass‐inviDng friends,  showing one‘s gaming addicDon less awkward  

Thank you for listening! Questions?

Contact InformationTwitter: http://twitter.com/serkantotoLinkedIn: http://linkedin.com/in/serkantotoEmail: serkan AT serkantoto.com

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Social Games: Why GREE And Mobage Operator DeNA Monetize Better Than Zynga

by Dr. Serkan Toto on Jun 03, 2012

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Social Games: Why GREE And Mobage Operator DeNA Monetize Better Than Zynga Presentation Transcript