Promoting trade in game development products and services. Presentation to the Board Of Investments (BOI) and the Department of Trade and Industry (DTI). (c. 2010)

1. For the Board of Investments (BOI)
and Department ofTrade and Industry (DTI)
April 17, 2010

2.  Why promote the game development sector
 Global market for video games estimated to be
US$58.9Billion in 2009 (call center industry at US$60
Billion in 2009)
▪ Biggest market segment is on PC games at US$11.8Billion in 2009
(20.0% market share)
▪ Biggest growing is online games (52% CAGR compared to 20% for
all games, but only at $4.8 Billion in 2009, or 8.1% market share)
 Philippines is poised for growth (Philippine market share is
less than 0.006% - the Philippines could still get a bigger
share of world revenues!)
▪ At 0.06% market share in 2010 (US$60 Million), game development
industry could contribute to 1 to 2% of GDP growth

3.  Why promote export trade for the Philippine game
development sector
 90% of revenues currently from foreign market (biggest
contributor to industry growth)
 2009 export revenues of Philippines at US$4.5 Million (about
0.006% market share)
 Un-served global market can be as high as $54 Million in 2009
(or 0.07% market share, more than 10x current size of local
industry)
 Call center industry has achieved 10% share of global market
in less than 10 years while game development industry is only
at 0.006% after 6 years (future growth is certain!)

4.  Why target the game development sector as a
Priority Sector
 Entertainment sector noted to be inflation resistant
 Growing cross-fertilization between film and games
(Resident Evil game/film franchise, Avatar film and
games) – Games are now an indispensible part of
the bigger entertainment industry which is
dominated by films (films = games = films)
▪ Growing the game development industry will also grow
other creative content industries (animation, graphic arts,
etc.)

5.  Grants for trade missions (sponsor participation
of companies in expos and conferences, and
sponsor business matching roundtables with
selected publishers and developers)
 After-mission technical support (to prepare
learning points for use in succeeding missions)
 Other government support
 Provide guarantees on export contracts - may require
companies to get ISO/CMM certification on project
management
 Provide incentives to accelerate growth of companies
(tax incentives, non-tax incentives tied to operations)

6.  Large number of service providers with scaled-up
capacity
 Anino Games, Gameloft, Kuju Manila, Indigo Entertainment,
Modelworks, Digital Octane, Ladyluck Interactive
 Specialized services
 concept design/art (Suspended Animation Media)
 game art (The Studio of Secret 6, Digital Art Chefs)
 motion capture (MoAnima, AnimationVertigo Asia)
 testing (CheQ Systems)
 educational games (Techfactors)
 virtual world (SunGame)
 online games (Vitas Development)
 mobile apps (Glyph Studios)

7.  To better understand the value/supply chain for
game development
Source of ideas -> concept -> programming/art/music ->
testing -> publishing -> distribution -> retailing
Publishers looking for independent developers (that
own IP for acquisition, or IP is licensed by publisher –
IP is usually owned by publisher or its affiliate)
Developers looking for outsourced services (including
end-to-end development, concept design,
programming/art/music, testing, marketing support)

8.  To better understand the dynamics of the
industry
 How publishers choose independent developers
(including measures of success, funding methods,
payback figures on investments)
 How developers choose outsourced service providers
(including measures of success, funding methods,
payback figures on investments)
 How contracts are generated (cycle process and cycle
time)
 How projects are financed (fund sources, payback
period, return rates)

9.  Comprised of 14 companies (industry has at
least 30 players in 1Q 2010)
 Accounts for more than half of industry
revenues (about US$3.5 Million of the US$5
Million for entire industry in 2009)
 Accounts for more than half of workforce in
sector (about 400 of the 640 employees for
entire industry in 2009)
 Actively involved in growing the number of
companies, workforce and manpower supply

10.  Actively involved in elevating quality of work from
its members and in growing market share and
market reach of its members
 Affiliated with International Game Developers
Association (IGDA, forum of game development
professionals)
 Collaborates with government agencies (DFA,
CITEM, BOI, CHED,TESDA, CICT, NCCA, IPO),
business groups (PCCI, BPAP, ACPI, PSIA, Ayala
Foundation) and academic institutions (AIM, DLSU,
DLS-CSB, APC, Mapua, UP ITTC, Ateneo de Manila,
CIIT, St. Scholastica’s College, Phoenix One)