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Bundling – Mobile & Social Innovation for 2017 | Andrew Sheppard

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Delivered at Casual Connect Europe 2017. Mobile, social and online gaming have grown tremendously over the past few years and will continue to do so in 2017. Join GREE Interactive Entertainment CEO Andrew Sheppard as he discusses industry innovations we can expect to see in 2017. What concepts will lead change – and who will lead them? The concept of bundling will be a center point of discussion.

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Bundling – Mobile & Social Innovation for 2017 | Andrew Sheppard

  1. 1. 2017 INDUSTRY INNOVATIONS Presented by: Andrew Sheppard, CEO GREE International Entertainment, Inc. San Francisco // Melbourne // Berlin
  2. 2. 2016 HOW DID WE GET HERE?
  3. 3. EROSION OF THE MIDDLE CLASS
  4. 4. “Middle” has neither the scale benefits nor the agility of smaller teams, and has not participated in growth & maturity of the mobile platform “Rich” receive recursive benefits from scale, brand, ability to leverage top IPs “Poor” can continue to innovate with small teams, access platform featuring MOBILE GROWTH ELUDES “MIDDLE” *AppAnnie Estimates, US Revenue in January 2017
  5. 5. 4 KEY TRENDS 1. CREATIVE EXITS 2. VERTICAL PARTNERSHIPS 3. RISE OF INTERNATIONAL MARKETS 4. BUNDLING
  6. 6. 1.CREATIVE EXITS
  7. 7. 2. VERTICAL PARTNERSHIPS • From audience to IP holder: how should developers build hits today? • Vertical partnerships can come in the form of: • Moving older games to low cost developers • Co-developing • IP Partnerships • For Hire Partnerships • This can impact a number of roles within a company including: • Publishing • UA • Brand/Franchise Marketing • Live Ops • PR • Platform Relationships • As a result you’ll see companies outsourcing development without losing revenue • Development • Art • Engineering • Product • Design • Product Marketing
  8. 8. 3. RISE OF INTERNATIONAL MARKETS
  9. 9. COST OF LIVING BERLIN 65% WARSAW 41% SHANGHAI 54% DUBLIN 80% SAN FRANCISCO: 100%
  10. 10. DIFFERENCES BETWEEN INTERNATIONAL MARKETS • Content approvals are required • Must partner with a Chinese company & only with government approval • Hands out $4Bn in government subsidies • SR&ED (“SHRED”) tax breaks - one of the biggest sources of government cash for private sector innovation & research • Hiring subsidies more common • Favor the conversion of temporary contracts into open-ended ones, e.g. reactivating long- term unemployed, supporting groups at risk of labor-market exclusion, etc.
  11. 11. “There’s only two ways I know of to make money – bundling and unbundling.” ~ Jim Barksdale, VC, Netscape CEO 4. BUNDLING & UNBUNDLING
  12. 12. A strategy that joins products or services together in order to sell them as a single combined unit. BUNDLING: UNBUNDLING The process of breaking apart a product or service into smaller parts.
  13. 13. ECONOMIC WAVES OF BUNDLING & UNBUNDLING Bundling Broadcast → Cable Bundling 45s → LPs Unbundling CDs → MP3s Bundling iTunes → Spotify Unbundling Cable → Netflix → YouTube Bundling ICQ → AIM → Facebook Unbundling Facebook → Messenger
  14. 14. • Shooting / Combat • Driving / Racing • RPG • Storytelling • PvP / Multiplayer BUNDLING IN AAA GAMING TOP AAA GAME … incorporates multiple gameplay styles
  15. 15. UNBUNDLING IN MOBILE GAMING • Shooting / Combat • Driving / Racing • RPG • Storytelling • PvP / Multiplayer TOP AAA GAME … deconstructed for mobile
  16. 16. BUNDLING CASE STUDY SimulationMatch 3 2015* 20M Installs $30M revenue 2016* 100M installs $180M revenue (+20% RPI, unlocks ability to increase UA) For January 2017*, Playrix’s total mobile revenues ($17M) are greater than Zynga’s ($14M) *AppAnnie Estimates
  17. 17. BUNDLING CHECK LIST ● Provide a clear, 'better together' value proposition ● Focus on 'attach products' with low penetration, high potential ● Stick with higher-margin attach products ● Ensure value of attach product is high enough vs. core product HOW TO TAKE ONE GAME AND MARKET TO THREE, NON-OVERLAPPING AUDIENCES:
  18. 18. THANK YOU & QUESTIONS

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