Smart and Social, Next Gen Social Games

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An overview of the interactive entertainment industry, and current trends in the social and mobile game market.

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Smart and Social, Next Gen Social Games

  1. 1. Smart and SocialThe Industry’s Crown Jewel
  2. 2. Introduction• Senior Research Analyst at Robert W. Baird & Co.• Baird is one of the largest private investment banks• Prior experience as software developer, Internet start-up and Wall Street background at JP Morgan and Lazard• Covered Internet and Interactive Entertainment for 10 years• Based in San Francisco 2
  3. 3. Overview• Industry performance• Market forecast• Power of Exponential• Influence of Facebook and shift to Mobile• Conclusions 3
  4. 4. Global Video Game MarketSource: RW Baird & Co. estimates 4
  5. 5. Video Games Fastest Growth MediaSource: RW Baird & Co. estimates 5
  6. 6. Games are the most important form of digital media 6
  7. 7. Platform Growth RatesSource: RW Baird & Co. estimates 7
  8. 8. E-commerce model to monetize gamesSource: RW Baird & Co. estimates 8
  9. 9. Beauty of Free-to-PlaySource: RW Baird & Co. estimates 9
  10. 10. Forecast for Mobile and SocialSource: RW Baird & Co. estimates 10
  11. 11. Significant Opportunity in Mobile AdvertisingSource: RW Baird & Co. estimates 11
  12. 12. Global Video Game Industry Growth will be driven by Smart Devices 12
  13. 13. Smart + Social are exponential• Rapid increase in smart devices• Social game mechanics now available on Mobile O/S• Virtual goods sales expand monetization• Global opportunities• Competitive platform wars good for developers – Android – iOS – Windows – Samsung 13
  14. 14. Smart + Social are exponential 14
  15. 15. Filling the Stadium1) 45 minutes2) 3 hours3) 12 hours4) 2 days 15
  16. 16. Wave of Smart Devices 500 M 400 M 300 M 200 M 100 M M 2008 2009 2010 2011 Android iOSSource: RW Baird & Co. estimates 16
  17. 17. Game Usage on SmartphonesSource: RW Baird & Co. estimates 17
  18. 18. Exponential – GREE mobile users (in M)Source: Company Reports 18
  19. 19. Tablet Sales Growing Faster than PhonesSource: RW Baird & Co. estimates 19
  20. 20. Multi-device Lifestyle 20
  21. 21. % of Internet Traffic from Smart DevicesSource: RW Baird & Co. estimates 21
  22. 22. App Sales are GlobalSource: Flurry 22
  23. 23. % of Internet Traffic from Smart DevicesSource: RW Baird & Co. estimates 23
  24. 24. Payments Growth on Facebook is Slowing Facebook Revenues Zynga Growth RateSource: RW Baird & Co. estimates 24
  25. 25. Focus Turning from Facebook to Mobile 25
  26. 26. Smart Devices are a disruptive force similar in scope to web browsers 26
  27. 27. Platforms are key 27
  28. 28. Conclusions• Huge wave of smart devices• Exponential growth dynamics• Global opportunities• More attractive growth profile vs. Facebook• Efficient distribution – use the tools, play the platforms 28
  29. 29. Questions/DiscussionE-mail: csebastian@rwbaird.com Twitter: @colin_sebastian 29

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