Europe’s Tech Hub #1: Mobile Monetization made in Germany - Julia Oentrich, Germany Trade & Invest


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Presented at the Mobile Monetization Summit 2013

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Europe’s Tech Hub #1: Mobile Monetization made in Germany - Julia Oentrich, Germany Trade & Invest

  1. 1. ©Chris Schmidt - istockphoto Europe’s Tech Hub #1: Mobile Monetization made in Germany Julia Oentrich
  2. 2. Agenda I. Germany Trade and Invest II. Germany’s Mobile Ecosystem III. In-App Purchase Behavior in Germany IV. Contact
  3. 3. One Face to the Customer Germany Trade & Invest serves as a consultant to the investing company with German expertise, supported by the federal states Foreign Company Our Consulting Services         Market and industry reports Business, labor law and tax law information Advice on the financing of the project (including incentives) Assistance in applying for incentives Support in location selection process Site visit organization Local partner and network facilitation Public and private partner coordination
  4. 4. Agenda I. Germany Trade and Invest II. Germany’s Mobile Ecosystem III. In-App Purchase Behavior in Germany IV. Contact
  5. 5. Mobile Broadband Networks in Germany Germany’s LTE Networks are essential for the future growth of the mobile ecosystem Availability of LTE by Provider Covered area 65% 60% 5-10% Number of Cities ~ 180 ~ 100 ~ 12 Reach in million people >51 >45 <1 Source:
  6. 6. The German Mobile Economy at a Glance Revenues with mobile apps are growing enormously in Germany Turnover with mobile apps in Germany (in EUR million) 700  176  +625 % 523 112 12 100 2010 App sales Source: MS&C 2013 Revenues from ads Turnover with mobile apps is expected to have reached 700 million Euro (~ 3.4 bn NIS) in 2013 Most revenues come from direct app sales followed by income generated by ads
  7. 7. Mobile Operating Systems in Germany Android is by far the most popular mobile OS in Germany Market share of mobile OS in Germany (in percent; 2012) 78% Android 78% 12% iOS Windows Phone Blackberry Other 10% 3% +6% 9% 2% 1% -1.5% -0.7% 6% 2% Summer 2012 -3.5% Summer 2013 Source: Kantar Worldpanel ComTech 2013 -0.2%      Android is by far the most popular OS for mobile devices in Germany iOS comes second – with a big distance Windows Phone gained market share Blackberry is not expected to recover Alternative OS such as Firefox OS, Bada and Tizen currently only play a niche role
  8. 8. Mobile Phone Usage in Germany Apps are gaining increasing importance What web-based functions do you use your mobile phone for? 18.7 23.3 23.9 Email 22 Websites 17.9 Free Apps Paid Apps VoiP 2011 Q1 Source: MS&C 28.3 30 25.2 26.7 11.1 9.1 8.7 7 6.6 6.2 2012 Q1 2013 Q1      Email is still gaining relevance Visiting websites is still more popular than using apps Trend from paid apps to free apps Free apps are mostly freemium apps VoiP services are rather a niche market
  9. 9. Motivations to download apps in Germany Usability and added value are key for downloading apps What motivates you to download an app? (in percent) Usability 91 Added Value 88.2 Price 85.3 Technical specs 78.3 Ratings in the app store 71.6 Up-to-dateness 68.3 Recommendations 65.3 Design 58.4 Fun factor 54.1 Rating on tech websites 52.3 Rating in communities Other Source: MS&C ; multiple answers possible 39 24.9    The functionality of an app is the most important motivation for downloading apps Pricing is important but only comes third Recommendations of peers and media are relevant but less crucial than functional aspects
  10. 10. Mobile Companies in Germany Germany is home to many mobile companies – Want to join them? Mobile tech companies based in Germany
  11. 11. Agenda I. Germany Trade and Invest II. Germany’s Mobile Ecosystem III. In-App Purchase Behavior in Germany IV. Contact
  12. 12. In-App Purchases: The Example of Games I The market for virtual goods is growing continuously Revenues with in-game item-selling in Germany (in million Euro) 415 387 353 315 251 256 271  The market for virtual items is growing steadily  In-game transactions are an effective way to monetize less committed players  It is expected that item-selling will expand its relevance beyond F2P games in order to expand monetization possibilities also for premium games 2011 2012 2013 2014 2015 2016 2017 Source: PWC 2013 12
  13. 13. In-App Purchases: The Example of Games II New game experiences and more fun are the motivations for German gamers to purchase virtual goods What factors motivate you to buy virtual items? Additional levels +++ Additional ressources ++ More fun +++ Faster game play ++ Individual avatar design ++ Advertisement-free version ++ Additional features to be able to continue the game +++  Extending the game, for example by additional levels, is the biggest motivator  A higher fun factor is also a reason for gamers to buy additional items  Designing an own avatar or making the game play faster is less relevant +++ 30-40% of gamers ++ 20-30% of gamers + 10-20% of gamers Source: PWC 2013 13
  14. 14. In-App Purchases: The Example of Games III Monetization stays a challenge but social aspects and sound payment solutions can make a difference In-game item-selling in Germany: Experiences and opinions I consider games financed through in-game itemselling unfair I already made use of a virtual currency I think the prices for virtual goods are usually fair I would buy virtual goods in order to pursue a common goal with friends in a game I would spend more on virtual goods if the payment systems were… 54.6% 25.8% 23.9%  Almost 55% of gamers in Germany are skeptical about games financed through in-game item-selling  Customer friendly payment solution are expected to bring 22.6% higher acceptance of virtual goods  Social media is important for 20.8% When I see on social networks that my friends bought a virtual good, I… 13.9% I post the purchase of virtual goods in my social networks selling virtual goods in games 13.2% Source: PWC 2013 14
  15. 15. In-App Purchases: The Example of Games IV For younger gamers at least occasional spending on virtual goods are common Money spent on virtual goods in Germany (in percent)  40% of all young gamers spend >5 euro/month 70 1-5 Euro/month occasionally <1 Euro/month 55  Young gamers are more willing to 51 occasional purchases purchase virtual goods no purchase but willingness to pay  A big share of gamers is not yet no purchases, no willingness to pay considering spend money on virtual goods: Challenge to 18 76 9 money on virtual goods at least 5 17 7 9 7 9 monetize them! 10 8 444 18-30 yrs. old31-45 yrs. old46-65 yrs. old Source: PWC 2013 15
  16. 16. Conclusions To make a long story short: Germany offers sound business opportunities for Israeli tech companies in the field of mobile products and services  If you would like to grow your tech business internationally:  Come to Germany!  If you want to be part of a great digital ecosystem:  Come to Germany!  If you are looking for serious and reliable business partners:  Come to Germany!  If you need support with coming to Germany:  Contact me! 16
  17. 17. Agenda I. Germany Trade and Invest II. Germany’s Mobile Ecosystem III. In-App Purchase Behavior in Germany IV. Contact
  18. 18. Thank you for your attention! Questions? Julia Oentrich Manager ICT Germany Trade and Invest GmbH Friedrichstraße 60 10117 Berlin, Germany Tel. +49 30 200 099 -306 Fax +49 30 200 099 111 © 2013 Germany Trade & Invest All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided.