Korean social game_market_trend_report_(2010 4_q)_eng

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Korean social game_market_trend_report_(2010 4_q)_eng

  1. 1. Korean Social Game MarketTrend Report2010 Fourth Quarter (Vol.2)
  2. 2. Table of Contents1. Executive Summary ..................................................................................................................................................... 32. Market Overview .......................................................................................................................................................... 4Accumulated Number of Users ..................................................................................................................................... 4Number of New Users ...................................................................................................................................................... 4Total Revenue of Nate AppStore ................................................................................................................................. 4Gender Ratio …………………………………………………………………………………………………………………………………… 5Age Group Distribution (Male / Female) ………………………………………………………………..……………………... 53. Few Successful Games Lead the Trend ........................................................................................................... 6DAU of Pet & Management Genre ............................................................................................................................ 6Revenue of Pet & Management Genre ………………………………........................................................................... 6DAU of Sports Genre ........................................................................................................................................................ 7Revenue of Sports Genre ................................................................................................................................................ 74. RPG Shows Potential as a Social Game ........................................................................................................... 8DAU of RPG Genre ............................................................................................................................................................. 8Revenue of RPG genre …………………………………......................................................................................................... 8ARPU of All Genres …………………………………………………………………………………….…………………….…………….. 9ARPPU of All Genres …………………………………………………………..…………………………..……………………………… 10Gender Ratio of RPG ……………………………………………………………………………………………………….……………… 105. Boom of the Business Simulation Games ………………………..…………………………………………………… 10Accumulated Number of Installs of All Genres …………………………………………………………………………..… 11DAU of All Genres ……………………………………………….……………………………………………………..…………….……. 11Revenue of All Genres …………………………………………………………………………………………………………………… 12Number of Installs of Business Simulation Genre ………….………………………………………..………………..….. 126. Simulation Games Still More Profitable …………………………………….……………………….…………...……. 13Total User Ratio of Simulation and Non-simulation Games ..…..…………………………………………..……… 13Total Revenue Ratio of Simulation and Non-simulation Games ……..………...……………………….…….…. 13Revenue of Simulation & Non-simulation Games ……………………………….…………………………………....… 14DAU of Simulation and Non-simulation Games …………………………………….……………….…………………… 15ARPPU of Simulation and Non-simulation Games ………………………………………………………………….…… 167. Conclusion ………………………………………………………………………………………………..…………….………………... 17 2
  3. 3. Korean SNG Market Trend Report 2010 Fourth Quarter (Vol. 2) By Sung-Hwan Ahn Rubicon Games Inc.Editor’s Note 2010 was indeed a busy year for social game developers in Korea. New social gamingplatforms were launched by major portal sites, many new start-ups as well as online gamedevelopers have entered the market, and success stories from small start-ups were introducedhere and there. With the growing interest from both inside and outside the market, informationabout the current trend becomes more pressing. And still, the thought that useful informationmust be shared around has unchanged and thanks to Nate AppStore for being on the same sideby sharing precious information with everyone.* Please note that stats are given in bundles of genres, due to privacy issues. To find out moreabout Korean social gaming industry, visit http://blog.playrubi.com or e-mail info@playrubi.com ordevsquare@nate.com *Executive Summary- Despite the consensus that there are more female users in Nate AppStore, there are actuallymore male users (51:49). However, in terms of number of installs, female users outnumber maleusers by 45:55.- Few successful games still alters the overall trend of the genre. This is due to the lack of gamesin the market and users being concentrated into few successful titles.- RPG was one of the fastest growing genres in 4th quarter. RPG, especially, shows a high ARPPUfrom both male and female users, earning around 14,000 won per user. RPG also showed amale-biased gender ratio together with Sports and Defense genre.- Once used to be the most lagging simulation genre, Business Simulation games spurs in 4thquarter by accumulating over 300,000 users in just one month. Contrastingly, BusinessSimulation genre is the most female-biased genre along with Pet & Management.- Simulation games (Pet & Management, City Building, Farming, Aquarium, Business Simulation)are still more profitable compared to non-simulation games in the macro-perspective. However,looking into ARPPU, RPG doubles most of the simulation games. 3
  4. 4. Market Overview Nate AppStore has continuously grown throughout 4th quarter 2010 2010. Users arecontinuously increasing, exceeding 35 million by mid December. December. New user inflow rate managed rdto bounce back since its long stagnant state in 3 quarter, attracting average of 7,5 users daily. arter, 7,500Revenue curve have also escaped from its stagnant state, pulling in over 540 million KRW state,(approximately 0.5 million USD) in December.<Line graph 1: Total Revenue of Nate AppStore> :<Line graph 2: Total Revenue of Nate AppStore> : 4
  5. 5. Unlike the consensus that majority of the users are female, there are actually more maleusers (51:49) in Nate AppStore. However, in terms of accumulated number of installs, there aremore female users (45:55) than male users. It can be interpreted that there are less contents formale users to consume, thus current game trend leans towards female users. Looking at the age distribution, 19-24 year old college students were the majority group,occupying 35% of the total user. Then followed 16-18 year old high school students (19%),followed by 25-29 year olds (17%), 13-15 year old middle school students (13%), 7-12 year oldelementary students (5%) and 30-34 year olds (5%). The same pattern applies to both gender’sdemography.<Pie graph 1: Gender Ratio (2010. Dec) <Pie graph 2: Age Group Distribution><Pie graph 3: Male User Age Group> <Pie graph 4: Female User Age Group> 5
  6. 6. Few Successful Games Lead the Trend As I’ve mentioned in the previous report (Korean Social Game Market Trend Report 2010 ve3Q), Korean social gaming market is yet heavily dependent on few successful games. Althoughnew developers have entered the market, still there are less than 70 developers with only 127apps in Nate AppStore. s Even among the 1 apps, only 107 of them are games 127 games. The effect of few successful games on the whole market could be observed in therevenue and DAU curve of each genre. Pet & Management genre, for example, have experienceda drastic fall in both revenue and DAU in 3rd quarter. . The positive momentum led by Happy Idolhas quickly faded since August until October. . The downtrend in revenue and DAU has finallycame to an end in October and quickly bounced back in November with the release of two new quicklymanagement game Girls Life and Star Project Online. Both games have quickly accumulated over100,000 users, turning back the trend to a positive state. ,<Line graph 3: DAU of Pet & Management genre><Line graph 4: Revenue of Pet & Management genre genre> 6
  7. 7. On the contrast, genres without successful games or even lack of new games canseriously fall in the mire stagnation. Sports genre, for example, were once introduced as aprofitable male-oriented genre in third quarter. oriented Home Run King and Baseball Wars have shownan outstanding performance in terms of revenue and DAU. However, life span of th these sportsgames didn’t’ last too long. Beginning September, revenue and DAU drastically depreciatedthroughout 4th quarter due to lack of new games.<Line graph 5: DAU of Pet & Sports genre><Line graph 6: Revenue of Sports genre genre> The situation, however, is not so much different in Facebook. Among 500,000applications, only about 250 of them (0.05%) have more than 1 million MAU and in terms of ratio,and majority of the users are concentrated on fewer applications than Nate. Considering the fact Consithat Nate is pretty much in the early phase of market maturity, first mover advantage still seemsvalid. Moreover, only 14% of Cyworld users have experience using Nate AppStore AppStore. Compared toFacebook, which 70% of the users are monthly active users of platform applicatio ive applications, there is yet abig pool of Blue Ocean for developers to penetrate into into. 7
  8. 8. RPG Shows Potential as a Social Game There is no doubt about RPG s success in the online gaming industry in Korea but it RPG’swasn’t really clear whether it could output the same result as a social game. In a market where game.simulation games are outperforming rest of the genres, RPG was still an uneasy choice n choice. Tracingback its footsteps, however, RPG proves that it could perform well as a social game just as it didin the online game market.<Line graph 7: DAU of RPG genre><Line graph 8: Revenue of RPG genre> Revenue of RPG games are quickly growing as new games are released. Revenue startsto rise with the release of Friends Fighters in late September and it soars after the release of GodWars in mid December. In fact, God Wars has only put up its payment on 20th December but theimpact it had on the entire genre is simply overwhelming; doubling the revenue of the previousmonth. 8
  9. 9. RPG’s remarkable growth is clearly visible regarding the ARPU and the ARPPU. AR s ARPU ofRPG quickly rose along with the release of new games. Started off low, however, RPG managedto pick up its revenue since September and finally marks the highest ARPU by the end of 4Q.(*Please note that ARPU was calculated by “Revenue/Accumulated Installs” due to the lack of UVstats. Thus the ARPU listed on the graph is smaller than the actual value*) Regarding the ARPPU, RPG stood high above the others. In December, RPG ARPPU is RPG’stwice bigger than Farming games, which marked the second highest ARP ARPPU. Since theconversion rate of purchase of RPG is only 0.2%, it could be interpreted that one time purchase ofvirtual items are much higher than the others. In fact, the RPG is male dominant game with agender ratio of 77:23. (See pie graph 5). As mentioned in the previous report (3Q), male usersagain show a strong purchasing power in terms of ARPPU as they did in Sports genre in 3rdquarter. Overall, regarding the RPG genre, Nate AppStore may be following the footsteps of the rdingonline game market. As online game trend began with casual mini-games then to simulation gamesgames and later on dominated by RPG, social gaming trend is somewhat showing a similarpattern.<Line graph 9: ARPU of all genres genres> 9
  10. 10. <Line graph 10: ARPPU of all genres genres><Pie graph 5: Gender ratio of RPG>Boom of the Business Simulation Games Nate AppStore’s fastest growing genre in 4th quarter is indeed business simulation. sOnce used to be the most lagging genre, business games are now considered one of the mostsuccessful genres in Nate. At the center of its success is Fashion City, which managed to attractover 300,000 users in just one month. Thanks to t the rapid growth, Business genre revenue h, genre’ssoared at the start of November, as Fashion City began selling cash items. ovember, 10
  11. 11. <Line graph 11: Accumulated number of installs of all genres genres><Line graph 12: DAU of all genres : genres> 11
  12. 12. <Line graph 13: Revenue of installs of all genres> : Fashion games have been around for a long time in Korean online game industry but itwas not until recently that it was published as a social game. Beginning with My Style in midSeptember to Fashion City in early October, many developers have begun to release their own“fashion mall” games in Nate. . Moreover, since fashion is a captivating content to female users,business simulation genre continues to be the most female-biased (26:74) genre in the market.The second most female-biased genre is Pet & Management with ratio of 29:71 By shaking the biased :71.contents upside-down, what would happen if there s an attractive business game (or Pet game) , there’sfor male users as well? Indeed t there is a big niche market for developers to penetrate into.<Line graph 14: Number of installs of business simulation simulation> 12
  13. 13. Simulation Games Still More Profitable Simulation games (Farming, Aquarium, City Building, Business, Pet & Management) stillholds most of the market share throughout fourth quarter. With relatively smaller pool of users,simulation games’ revenue far exceeded non-simulation games; almost 90% of the total revenuestill comes from simulation games.<Pie graph 6: Total User ratio & Total Revenue ratio of Simulation and Non-simulation Games> Among the simulation games, revenue of Business Simulation and Pet & Managementgenre soared. Five new business games were released just in 4th quarter and among them, thesuccess of Fashion City made it possible for business to achieve quantitative and qualitativegrowth; number of installs, DAU, and revenue greatly rose during the period. Pet & Managementgenre also managed to recover from its long recession since 3rd quarter. With two new titles, Pet& Management genre entered an uptrend phase in November and surged in December. 13
  14. 14. <Line graph 15: Revenue of Simulation Games><Line graph 16: Revenue of Non Non-simulation Games> 14
  15. 15. <Line graph 17: DAU of Simulation Games> imulation<Line graph 18: DAU of Non-simulation Games> imulation Compared to simulation games, most of the non simulation games (excluding RPG) are non-simulationstill having a tough time attracting active users and increasing sales. Sports genre, which was rdonce successful in 3 quarter, also experienced a downtrend in both DAU and revenue sinceSeptember. 15
  16. 16. Although non-simulation games might be lagging behind the simulation games in the simulationmacro -perspective, some of them are actually performing better and more efficient. Comparing perspective,the ARPPU, RPG and Sports genre actually shows better performance than most of the simulationgames. RPG especially, earned twice as more from individual paying users than most of thesimulation games.<Bar graph 1: ARPPU of Simulation Games : Games><Bar graph 2: ARPPU of Non-simulation Games> simulation 16
  17. 17. Conclusion 2010 was a year of growth for Nate AppStore. Although it took off years behind others,it has significantly grown within a short period of time. As more and more developers have settheir foot in the market, including some big online game companies, the perception of socialgames have started to change. Compared to the past when online game giants didn’t acceptsocial games as “real games”, the situation has now improved; G-Star 2010 recognized socialgames as one of its fastest growing branch and even hosted major foreign developers such asZynga, Playdom, Playfish, RockYou Asia, Kabam, 6 Waves, Second Wave and so on. Moreover, bigenterprises have announced their future plans to invest in the social gaming business: Microsoftsupporting free cloud servers, CJ Internet and SK Telecom/Nate investing 10 million USD in socialgaming businesses. All these transitions prove that social games are no longer in the outskirts ofthe gaming industry. The 4th quarter of 2010 was another period of transition: RPG showed its boundlesspossibilities as a social game, catching both DAU and revenue. Pet & Management genremanaged to escape from its long recession. Business simulation games have finally joined themainstream along with other simulation genres. Aqua Story and Ani Sachunsung haveaccumulated over 1 million users as a single title. Moreover, Nate AppStore has finally launchedits mobile AppStore service on mid December and plans to open its new mobile web service inApril 2011, opening new channels for social games to penetrate a fast growing consumer base. Overall, the future Korean social gaming industry looks bright. As social games arebeing described in Korea as the next blue ocean within the IT industry, more and more developersare joining the general trend. According to a survey by Nate, at least 80 new applications areunder development for release in 2011. And not only developers are improving but platformsare also striving to create a better ecosystem for both platform and developers as well. Butabove all, what is most important are the users. Attracting new users as well as sustaining themis the next key problem that platform and game developers must solve. 17

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