Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Digital Goods, Real Billions Asia’s Digital Life & What it means for the West @benjaminjoffe  | CEO, +8* Virtual Goods Sum...
@benjaminjoffe
4 years 1 year 5 years
<ul><li>CEO, Plus Eight Star | www.plus8star.com </li></ul><ul><ul><li>Best practices from Asia’s digital space </li></ul>...
<ul><li>Speaker </li></ul><ul><ul><li>100+ talks in 16 countries </li></ul></ul><ul><li>Advisor </li></ul><ul><li>Investor...
My Interests <ul><li>Technology, Sociology and Anthropology </li></ul><ul><li>Virtual economies </li></ul><ul><li>Digital ...
All the world’s a… All the world’s a  stage … All the world’s a  game … … And one man in his time plays many  avatars . Wi...
<ul><li>Introduction Quiz! </li></ul><ul><li>Chapter 1 South Korea </li></ul><ul><li>Chapter 3 Japan </li></ul><ul><li>Cha...
Quiz!
Quiz!
Quiz
Quiz
Quiz
Quiz
Quiz
More than Facebook and USA <ul><li>Facebook </li></ul><ul><li>LinkedIn </li></ul><ul><li>QQ (Tencent) </li></ul><ul><li>Qz...
Billion Dollar Brands <ul><li>Facebook </li></ul><ul><li>LinkedIn </li></ul><ul><li>QQ (Tencent) </li></ul><ul><li>Qzone <...
Market Caps (2010.10) $780M $3.3B $43B $4.2B
ngmoco:) news $400M < 2010 Profit!
South Korea
Cyworld <ul><li>SNS/VG pioneer since 10 years ago </li></ul><ul><ul><li>Stagnant for several years </li></ul></ul><ul><ul>...
2009.10 | Nate App Store <ul><li>Leverages Nate’s reach </li></ul><ul><li>Semi-open </li></ul><ul><li>Slow rise  (2M users...
Portals join the dance <ul><li>. </li></ul><ul><li>Naver Social Apps </li></ul><ul><li>. </li></ul><ul><li>Yozm by Daum </...
Facebook Rising <ul><li>Facebook in Korea </li></ul><ul><ul><li>Usage growing </li></ul></ul><ul><ul><li>Local office </li...
Virtual Worlds <ul><li>3D virtual worlds  still early, even for Korea </li></ul><ul><ul><li>Non-gaming not working </li></...
 
PuppyRed
PuppyRed | Conversion <ul><li>225,000 MAU </li></ul><ul><ul><li>18,000 paying (8%) </li></ul></ul><ul><ul><li>Top 2,000 = ...
PuppyRed | Monetizing <ul><li>Time investment </li></ul><ul><ul><li>Since reg. </li></ul></ul><ul><ul><li>In-world </li></...
Online Games <ul><li>Online games market  $3.3 billion? </li></ul><ul><li>Leaders  Nexon, NHN, NC Soft </li></ul><ul><li>E...
Answer <ul><li>#1 in Online Gaming </li></ul><ul><li>Pioneer in virtual goods </li></ul><ul><li>First MMO in 1996! </li></...
Nexon Today <ul><li>Revenue 2009:  $561 million  (+56%) </li></ul><ul><ul><ul><li>Over half from  overseas  (first in 2009...
Foreign Players in Korea? <ul><li>Some limited successes… </li></ul>
 
And… Starcraft Cheating Scandal! <ul><li>April-May 2010 </li></ul><ul><li>Largest scandal in e-sports history in Korea </l...
Japan
Mobile SNS Make a Killing <ul><li>Revenue total > $1 billion ! </li></ul><ul><li>All 3 have a  mobile app platform </li></...
Mixi <ul><li>Inspired by </li></ul><ul><li>21 million users </li></ul><ul><ul><li>14 million MAU </li></ul></ul><ul><li>Fr...
Mixi <ul><li>Revenue 2009 $166 million </li></ul><ul><ul><li>Profit margin 20% </li></ul></ul><ul><li>2Q2010 $49M </li></u...
Mixi | Users <ul><li>Gender-Balanced </li></ul><ul><li>90% above 20 y.o. </li></ul>Total Mobile Mobile Total
Mixi | Pageviews Applications Platform 2009.08 Mobile 2009.10 PC Ad prices for mobile =  1/3  of PC price
Mixi | Apps <ul><li>Apps </li></ul><ul><ul><li>PC > 1,000 </li></ul></ul><ul><ul><li>Mobile > 600 </li></ul></ul><ul><li>A...
Answer <ul><li>CEO of DeNA </li></ul><ul><li>Operates “Mobile Game Town”, a top mobile SNS in Japan </li></ul>Tomoko Namba...
DeNA <ul><li>Revenue 2009  $517 million </li></ul><ul><ul><li>Profit 2009   $228 million (44%) </li></ul></ul><ul><li>Reve...
DeNA | Sales
Mobile Game Town| Sales Breakdown 78% 12% 9% 1% $250 million (2010.04~06)
Mobile Game Town | Users <ul><li>20 million  users </li></ul><ul><li>74%  over 20 y.o. </li></ul>
Mobile Game Town | Open Platform <ul><li>154 partners companies </li></ul><ul><li>350 titles (July 2010) </li></ul><ul><li...
DeNA | Target: Global Leader
Answer <ul><li>CEO of GREE, top mobile SNS in Japan </li></ul><ul><li>#2 youngest  self-made billionaire  in the world (af...
Gree Home Advertising Avatars & items Games Advertising & Affiliates B2C virtual goods (avatar + games)
GREE | Service Strategy Media Ad Sales VG Sales Social Games Virtual Goods SNS Diary/Notes Q&A Community/BBS Page views Me...
GREE <ul><li>ARPU = $2.2 / month! </li></ul><ul><li>ARPPU > $20? </li></ul>20M $133M Users Revenue 2010.06 2010.04-06 Digi...
GREE <ul><li>Year to June 2010 </li></ul><ul><ul><li>Sales $430 million </li></ul></ul><ul><ul><li>Operating profit $240 m...
GREE | Monthly Page Views 35.7 Billion Google Images = 1 billion/day
GREE <ul><li>2010.06 | Open platform </li></ul><ul><li>2010.10 | Non-gaming apps (27 coming up) </li></ul>
2010.09 | GREE on iPhone  ( + Android soon)
Community Safety <ul><li>DeNA </li></ul><ul><ul><li>861  employees… </li></ul></ul><ul><ul><li>Many doing  content monitor...
Have you heard of…?
CyberAgent <ul><li>History </li></ul><ul><ul><li>Started as  ad network </li></ul></ul><ul><ul><li>Branched into  blogs (1...
    | Social Games <ul><li>DeNA 10 titles </li></ul><ul><li>Gree 3 titles </li></ul><ul><li>Mixi 8 titles </li></ul><ul><l...
<ul><li>$4M  in July 2010 </li></ul><ul><ul><li>Run-rate 2010 = $50M ( > ngmoco ? ) </li></ul></ul>    | Social Games
| 2D Virtual World
<ul><li>Promotion </li></ul><ul><ul><li>Leveraging Ameba’s blog platform </li></ul></ul><ul><ul><li>TV ads </li></ul></ul>...
<ul><li>April-June 2010 $10 million </li></ul>| Revenue split
| Subs & ARPU <ul><ul><ul><li>4.3 million users (2010.06) </li></ul></ul></ul><ul><ul><ul><li>monthly ARPU = $15 </li></ul...
| Fishing Game
Facebook Making Inroads <ul><li>Facebook in Japan </li></ul><ul><ul><li>Growing (1.2M) </li></ul></ul><ul><ul><li>Mobile J...
Foreign Players in Japan <ul><li>Zynga </li></ul><ul><ul><li>Acquired local company  Unoh </li></ul></ul><ul><ul><li>JV wi...
China
Social Games Growing But… <ul><li>Fragmented  market </li></ul><ul><ul><li>4 competing social networks </li></ul></ul><ul>...
…Online Games Still Dominate <ul><li>Online games  biggest money maker </li></ul><ul><ul><li>$900M in 2Q2010 </li></ul></u...
Answer <ul><li>CEO of Tencent! </li></ul><ul><li>#3 Internet company in the world </li></ul>Ma Huateng (Pony), CEO
QQ IM & QZone
Digital Goods? <ul><li>Identity  related </li></ul><ul><li>Game  related </li></ul><ul><li>Music  related </li></ul><ul><l...
Tencent Bigger Than Ever? <ul><li>Sales 2009 $1.8 billion </li></ul><ul><ul><li>Net profit 2009 42% (= $750M) </li></ul></...
PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd.
PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd. Hardware Innovation: “Shanzhai” ( 山寨 )
PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd.
QQ Farm
Rest of Asia
Time-Shifted Markets <ul><li>Vietnam </li></ul><ul><ul><li>~$150M from online games </li></ul></ul><ul><ul><li>86 million ...
Mig33 <ul><li>“We have decided  we want to be like QQ  for  mobile  in the rest of the  emerging world .” </li></ul><ul><u...
Mig33 <ul><li>“We have decided  we want to be like QQ  for  mobile  in the rest of the  emerging world .” </li></ul><ul><u...
About Mig33 <ul><li>Nationality </li></ul><ul><ul><ul><li>Founders from  Australia </li></ul></ul></ul><ul><ul><ul><li>Mov...
Conclusions
Conclusions <ul><li>Social games  = growing fast </li></ul><ul><li>Online games  still > Social games (except Japan) </li>...
Conclusions <ul><li>CJK companies  expanding   globally </li></ul><ul><li>Transition to  digital goods  is a  tidal wave <...
Asia: $7 Billion USA: $1 Billion US market potential $35 Billion ? Digital Goods in 2009 Source:  +8* , October 2009
Digital Goods in 2010 Asia: $10 Billion USA: $2 Billion Source:  +8* , October 2010
$100 billion within the decade? <ul><li>“ The virtual goods market would likely exceed globally $100 billion within this d...
Market Potential? <ul><li>From analog to digital </li></ul><ul><ul><li>Global video game market  $35 billion </li></ul></u...
Globalization Durian Strudel (Singapore)
Ideas, Talent & Markets <ul><li>Ideas First farm game = made in China! </li></ul><ul><li>Dev. Zynga (JP, CN) Playfish (CN)...
Platform Partnership <ul><li>Cyworld, Mixi, RenRen join forces for  one-stop  “Social Application Platform” </li></ul><ul>...
Virtual Goods in Asia The US Gold Rush Begins Benjamin Joffe | CEO, Plus Eight Star Virtual Goods Summit, San Francisco | ...
Nexon <ul><li>Ndoor   M&A 2010.05 Korea </li></ul><ul><li>GameHi   M&A 2010.05  Korea </li></ul><ul><li>BoomBang  Invest. ...
DeNA <ul><li>ngmoco:) M&A USA </li></ul><ul><li>Astro Ape Invest. USA </li></ul><ul><li>Aurora Feint Invest. USA </li></ul...
Tencent <ul><li>Sanook Invest. 2010.08 Thailand </li></ul><ul><li>Comsenz M&A 2010.08 China </li></ul><ul><li>Shenzhen DN ...
Other Chinese Companies <ul><li>Emerging markets, Japan, US </li></ul><ul><li>Rekoo  &  Yicha  doing great with social gam...
China + Russia + South Africa 29% 10% 35% $35B $3B $18B Source:  +8* , October 2010
DST | Digital Sky Technologies <ul><li>Invested $180M in  Zynga </li></ul><ul><li>Invested ~$350M in  Facebook  (~10%) </l...
NASPERS
From Asia to the World Durian Strudel (Singapore)
Paradise Paintball  by  Cmune <ul><li>World’s first  FPS  on social networks! </li></ul><ul><li>Over  500,000 users  in op...
Paradise Paintball |  World’s First Social FPS! www.facebook.com/paradisepaintball     www.cmune.com Disclosure I am an in...
<ul><ul><li>What we do </li></ul></ul><ul><ul><ul><ul><li>Best practices from Asia </li></ul></ul></ul></ul><ul><ul><ul><u...
Upcoming SlideShare
Loading in …5
×

Ben Joffe\'s Virtual Goods in Asia at Virtual Goods Summit West

5,753 views

Published on

Published in: Technology, Business
  • Be the first to comment

Ben Joffe\'s Virtual Goods in Asia at Virtual Goods Summit West

  1. 1. Digital Goods, Real Billions Asia’s Digital Life & What it means for the West @benjaminjoffe | CEO, +8* Virtual Goods Summit, San Francisco | 2010.10
  2. 2. @benjaminjoffe
  3. 3. 4 years 1 year 5 years
  4. 4. <ul><li>CEO, Plus Eight Star | www.plus8star.com </li></ul><ul><ul><li>Best practices from Asia’s digital space </li></ul></ul><ul><ul><li>Research, Strategy & “Innovation Arbitrage” </li></ul></ul><ul><li>Clients </li></ul>
  5. 5. <ul><li>Speaker </li></ul><ul><ul><li>100+ talks in 16 countries </li></ul></ul><ul><li>Advisor </li></ul><ul><li>Investor in Asia-based global companies </li></ul>Angel Investor, Advisor, Keynote Speaker
  6. 6. My Interests <ul><li>Technology, Sociology and Anthropology </li></ul><ul><li>Virtual economies </li></ul><ul><li>Digital third places </li></ul><ul><li>Artificial artificial intelligence (AAI) </li></ul><ul><li>Online social dynamics </li></ul>
  7. 7. All the world’s a… All the world’s a stage … All the world’s a game … … And one man in his time plays many avatars . William Shakespeare Gabe Zichermann Benjamin Joffe
  8. 8. <ul><li>Introduction Quiz! </li></ul><ul><li>Chapter 1 South Korea </li></ul><ul><li>Chapter 3 Japan </li></ul><ul><li>Chapter 4 China </li></ul><ul><li>Chapter 5 Rest of Asia </li></ul><ul><li>Chapter 6 Conclusions </li></ul><ul><li>Chapter 7 Globalization </li></ul>
  9. 9. Quiz!
  10. 10. Quiz!
  11. 11. Quiz
  12. 12. Quiz
  13. 13. Quiz
  14. 14. Quiz
  15. 15. Quiz
  16. 16. More than Facebook and USA <ul><li>Facebook </li></ul><ul><li>LinkedIn </li></ul><ul><li>QQ (Tencent) </li></ul><ul><li>Qzone </li></ul><ul><li>RenRen </li></ul><ul><li>Kaixin001 </li></ul><ul><li>Xiaonei </li></ul><ul><li>51.com </li></ul><ul><li>Mixi </li></ul><ul><li>Mobile Game Town </li></ul><ul><li>Gree </li></ul><ul><li>Cyworld </li></ul><ul><li>Friendster </li></ul>And more…
  17. 17. Billion Dollar Brands <ul><li>Facebook </li></ul><ul><li>LinkedIn </li></ul><ul><li>QQ (Tencent) </li></ul><ul><li>Qzone </li></ul><ul><li>RenRen </li></ul><ul><li>Kaixin001 </li></ul><ul><li>Xiaonei </li></ul><ul><li>51.com </li></ul><ul><li>Mixi </li></ul><ul><li>Mobile Game Town </li></ul><ul><li>Gree </li></ul><ul><li>Cyworld </li></ul><ul><li>Friendster </li></ul>And more… $B $B $B $B $B $B $B
  18. 18. Market Caps (2010.10) $780M $3.3B $43B $4.2B
  19. 19. ngmoco:) news $400M < 2010 Profit!
  20. 20. South Korea
  21. 21. Cyworld <ul><li>SNS/VG pioneer since 10 years ago </li></ul><ul><ul><li>Stagnant for several years </li></ul></ul><ul><ul><li>“The new MySpace”? </li></ul></ul>
  22. 22. 2009.10 | Nate App Store <ul><li>Leverages Nate’s reach </li></ul><ul><li>Semi-open </li></ul><ul><li>Slow rise (2M users) </li></ul><ul><li>Rev share (70/30) </li></ul>
  23. 23. Portals join the dance <ul><li>. </li></ul><ul><li>Naver Social Apps </li></ul><ul><li>. </li></ul><ul><li>Yozm by Daum </li></ul><ul><li>Results </li></ul><ul><ul><li>Just started </li></ul></ul><ul><ul><li>No social graph </li></ul></ul>
  24. 24. Facebook Rising <ul><li>Facebook in Korea </li></ul><ul><ul><li>Usage growing </li></ul></ul><ul><ul><li>Local office </li></ul></ul><ul><ul><li>Hired from Cyworld </li></ul></ul><ul><li>Why? </li></ul><ul><ul><li>Users bored of Cyworld </li></ul></ul><ul><ul><li>Virtual goods market </li></ul></ul><ul><ul><li>Games market </li></ul></ul>
  25. 25. Virtual Worlds <ul><li>3D virtual worlds still early, even for Korea </li></ul><ul><ul><li>Non-gaming not working </li></ul></ul><ul><ul><li>Nurien (3D social world) fail, revamp into social app </li></ul></ul><ul><li>Only PuppyRed seems successful </li></ul><ul><ul><li>Yet not that big… </li></ul></ul><ul><ul><li>$4M in 2008, equivalent to $40M in US? (= IMVU) </li></ul></ul>
  26. 27. PuppyRed
  27. 28. PuppyRed | Conversion <ul><li>225,000 MAU </li></ul><ul><ul><li>18,000 paying (8%) </li></ul></ul><ul><ul><li>Top 2,000 = 46% sales </li></ul></ul><ul><li>Ideas </li></ul><ul><ul><li>Ratio > Social games </li></ul></ul><ul><ul><li>1% users = 50% sales </li></ul></ul>Source: Inside Social Games, Oct 2010, PuppyRed data from Nov 2009 to Jan 2010
  28. 29. PuppyRed | Monetizing <ul><li>Time investment </li></ul><ul><ul><li>Since reg. </li></ul></ul><ul><ul><li>In-world </li></ul></ul><ul><li>Friends </li></ul><ul><ul><li>More value to items </li></ul></ul><ul><ul><li>Gifts </li></ul></ul><ul><li>Items balance </li></ul><ul><ul><li>Limit free items </li></ul></ul><ul><ul><li>Large inventory (15,000+) </li></ul></ul>Source: Inside Social Games, Oct 2010, PuppyRed data from Nov 2009 to Jan 2010
  29. 30. Online Games <ul><li>Online games market $3.3 billion? </li></ul><ul><li>Leaders Nexon, NHN, NC Soft </li></ul><ul><li>Expanding overseas China, Japan, US, Emerging markets </li></ul>Source: KOCCA
  30. 31. Answer <ul><li>#1 in Online Gaming </li></ul><ul><li>Pioneer in virtual goods </li></ul><ul><li>First MMO in 1996! </li></ul>Min Seo, CEO
  31. 32. Nexon Today <ul><li>Revenue 2009: $561 million (+56%) </li></ul><ul><ul><ul><li>Over half from overseas (first in 2009 !) </li></ul></ul></ul><ul><li>Some famous games </li></ul><ul><ul><ul><li>Kart Rider (200M reg. users) </li></ul></ul></ul><ul><ul><ul><li>Dungeon & Fighter (200M reg. users) </li></ul></ul></ul><ul><ul><ul><li>Maple Story (95M reg. users) </li></ul></ul></ul><ul><ul><ul><li>Mabinogi </li></ul></ul></ul><ul><ul><ul><li>Combat Arms (FPS) </li></ul></ul></ul><ul><ul><ul><li>Sudden Attack (FPS) </li></ul></ul></ul><ul><ul><ul><li>Etc. </li></ul></ul></ul>Source: Nexon
  32. 33. Foreign Players in Korea? <ul><li>Some limited successes… </li></ul>
  33. 35. And… Starcraft Cheating Scandal! <ul><li>April-May 2010 </li></ul><ul><li>Largest scandal in e-sports history in Korea </li></ul><ul><li>16 pro gamers involved in match set-ups & illegal betting. </li></ul>Pro Gamer sAviOr (Ja Mae-Yoon)
  34. 36. Japan
  35. 37. Mobile SNS Make a Killing <ul><li>Revenue total > $1 billion ! </li></ul><ul><li>All 3 have a mobile app platform </li></ul><ul><li>Mass promotion TV, Billboards, Posters… </li></ul><ul><li>Publish + Develop 1 st , 2 nd , 3 rd Party dev. </li></ul>
  36. 38. Mixi <ul><li>Inspired by </li></ul><ul><li>21 million users </li></ul><ul><ul><li>14 million MAU </li></ul></ul><ul><li>Friends (PC) </li></ul><ul><li>Mobile (mobile) </li></ul><ul><li>FB (apps, “like”) </li></ul><ul><li>Twitter (micro-blog) </li></ul><ul><li>Pageviews </li></ul><ul><ul><li>Mobile 28 billion PV </li></ul></ul><ul><ul><li>PC 5 billion PV </li></ul></ul>
  37. 39. Mixi <ul><li>Revenue 2009 $166 million </li></ul><ul><ul><li>Profit margin 20% </li></ul></ul><ul><li>2Q2010 $49M </li></ul><ul><ul><li>Profit margin 25% </li></ul></ul><ul><ul><li>Run rate 2010 $200M </li></ul></ul>
  38. 40. Mixi | Users <ul><li>Gender-Balanced </li></ul><ul><li>90% above 20 y.o. </li></ul>Total Mobile Mobile Total
  39. 41. Mixi | Pageviews Applications Platform 2009.08 Mobile 2009.10 PC Ad prices for mobile = 1/3 of PC price
  40. 42. Mixi | Apps <ul><li>Apps </li></ul><ul><ul><li>PC > 1,000 </li></ul></ul><ul><ul><li>Mobile > 600 </li></ul></ul><ul><li>Apps contribution </li></ul><ul><ul><li>Minor for revenue <10% </li></ul></ul><ul><ul><li>High for PV </li></ul></ul><ul><li>Smartphone UI “Mixi Touch” </li></ul>Machi Tsuku (3M MAU) by Unoh / Zynga Japan Source: Masaru Ikeda @ Asiajin
  41. 43. Answer <ul><li>CEO of DeNA </li></ul><ul><li>Operates “Mobile Game Town”, a top mobile SNS in Japan </li></ul>Tomoko Namba, CEO
  42. 44. DeNA <ul><li>Revenue 2009 $517 million </li></ul><ul><ul><li>Profit 2009 $228 million (44%) </li></ul></ul><ul><li>Revenue 2Q2010 $279 million </li></ul><ul><ul><li>Profit 2Q2010 $138 million (49%) </li></ul></ul><ul><ul><li>90% from digital goods </li></ul></ul><ul><li>On track for $1 billion in 2010 </li></ul>
  43. 45. DeNA | Sales
  44. 46. Mobile Game Town| Sales Breakdown 78% 12% 9% 1% $250 million (2010.04~06)
  45. 47. Mobile Game Town | Users <ul><li>20 million users </li></ul><ul><li>74% over 20 y.o. </li></ul>
  46. 48. Mobile Game Town | Open Platform <ul><li>154 partners companies </li></ul><ul><li>350 titles (July 2010) </li></ul><ul><li>In-house games too </li></ul><ul><li>Avatars in open platform games too </li></ul><ul><li>Common currency </li></ul>
  47. 49. DeNA | Target: Global Leader
  48. 50. Answer <ul><li>CEO of GREE, top mobile SNS in Japan </li></ul><ul><li>#2 youngest self-made billionaire in the world (after Mark Zuckerberg) </li></ul>Yoshikazu Tanaka, CEO
  49. 51. Gree Home Advertising Avatars & items Games Advertising & Affiliates B2C virtual goods (avatar + games)
  50. 52. GREE | Service Strategy Media Ad Sales VG Sales Social Games Virtual Goods SNS Diary/Notes Q&A Community/BBS Page views Members GREE
  51. 53. GREE <ul><li>ARPU = $2.2 / month! </li></ul><ul><li>ARPPU > $20? </li></ul>20M $133M Users Revenue 2010.06 2010.04-06 Digital goods (82%) Ads (18%)
  52. 54. GREE <ul><li>Year to June 2010 </li></ul><ul><ul><li>Sales $430 million </li></ul></ul><ul><ul><li>Operating profit $240 million ( 56% ) </li></ul></ul><ul><li>Year to June 2011 </li></ul><ul><ul><li>Apr-Jun 2010 $133 million </li></ul></ul><ul><ul><li>2011 revenue run rate >$600 million </li></ul></ul>
  53. 55. GREE | Monthly Page Views 35.7 Billion Google Images = 1 billion/day
  54. 56. GREE <ul><li>2010.06 | Open platform </li></ul><ul><li>2010.10 | Non-gaming apps (27 coming up) </li></ul>
  55. 57. 2010.09 | GREE on iPhone ( + Android soon)
  56. 58. Community Safety <ul><li>DeNA </li></ul><ul><ul><li>861 employees… </li></ul></ul><ul><ul><li>Many doing content monitoring </li></ul></ul><ul><ul><li>Monitoring 24/7 since 2006.11 </li></ul></ul><ul><ul><li>“Patrol Center” built in 2008.03 </li></ul></ul>Pipo-kun Tokyo Police Mascot Gree’s Patrol Center
  57. 59. Have you heard of…?
  58. 60. CyberAgent <ul><li>History </li></ul><ul><ul><li>Started as ad network </li></ul></ul><ul><ul><li>Branched into blogs (10M users) , virtual world & social games </li></ul></ul><ul><ul><li>1,900 employees </li></ul></ul><ul><li>Sales 2009 $1.1 billion </li></ul><ul><ul><li>Profit 2009 $55 million </li></ul></ul><ul><li>Sales 2010 (E) $1.1 billion </li></ul><ul><ul><li>Profit 2010 (E) $98 million </li></ul></ul>
  59. 61. | Social Games <ul><li>DeNA 10 titles </li></ul><ul><li>Gree 3 titles </li></ul><ul><li>Mixi 8 titles </li></ul><ul><li>Facebook 7 titles </li></ul>
  60. 62. <ul><li>$4M in July 2010 </li></ul><ul><ul><li>Run-rate 2010 = $50M ( > ngmoco ? ) </li></ul></ul> | Social Games
  61. 63. | 2D Virtual World
  62. 64. <ul><li>Promotion </li></ul><ul><ul><li>Leveraging Ameba’s blog platform </li></ul></ul><ul><ul><li>TV ads </li></ul></ul><ul><li>Paying Users </li></ul><ul><ul><li>80% are 20 to 40 y.o. </li></ul></ul><ul><ul><li>70% female </li></ul></ul><ul><li>Payment </li></ul><ul><ul><li>68% Mobile, 20% Webmoney, 12% Credit Card </li></ul></ul>| 2D Virtual World
  63. 65. <ul><li>April-June 2010 $10 million </li></ul>| Revenue split
  64. 66. | Subs & ARPU <ul><ul><ul><li>4.3 million users (2010.06) </li></ul></ul></ul><ul><ul><ul><li>monthly ARPU = $15 </li></ul></ul></ul>
  65. 67. | Fishing Game
  66. 68. Facebook Making Inroads <ul><li>Facebook in Japan </li></ul><ul><ul><li>Growing (1.2M) </li></ul></ul><ul><ul><li>Mobile JP version </li></ul></ul><ul><li>Why? </li></ul><ul><ul><li>GDP </li></ul></ul><ul><ul><li>Online advertising </li></ul></ul><ul><ul><li>Virtual goods </li></ul></ul><ul><ul><li>Mobile! </li></ul></ul>KDDI’s Summer Line-Up
  67. 69. Foreign Players in Japan <ul><li>Zynga </li></ul><ul><ul><li>Acquired local company Unoh </li></ul></ul><ul><ul><li>JV with Yahoo! Japan (#1 portal) for games </li></ul></ul><ul><li>Chinese social games doing well </li></ul><ul><ul><li>Rekoo , Rakoo , Elex </li></ul></ul><ul><ul><li>… but for how long? </li></ul></ul><ul><li>Online games growing too </li></ul><ul><ul><li>Perfect World (China) acquired local licensee </li></ul></ul>
  68. 70. China
  69. 71. Social Games Growing But… <ul><li>Fragmented market </li></ul><ul><ul><li>4 competing social networks </li></ul></ul><ul><ul><li>Facebook still blocked </li></ul></ul><ul><li>SNS revenue not great (esp. for third parties) </li></ul><ul><ul><li>Low advertising </li></ul></ul><ul><ul><li>Platforms develop games in-house </li></ul></ul><ul><ul><li>Rev share variable & often unattractive </li></ul></ul>
  70. 72. …Online Games Still Dominate <ul><li>Online games biggest money maker </li></ul><ul><ul><li>$900M in 2Q2010 </li></ul></ul><ul><ul><li>Tencent (20%), Shanda (20%), Netease (13%) </li></ul></ul><ul><li>Social networks channel users to MMOs </li></ul><ul><li>China = 30% of global online games market </li></ul><ul><ul><li>$4 billion in 2010? </li></ul></ul>Source: iResearch, Lazard Capital Markets
  71. 73. Answer <ul><li>CEO of Tencent! </li></ul><ul><li>#3 Internet company in the world </li></ul>Ma Huateng (Pony), CEO
  72. 74. QQ IM & QZone
  73. 75. Digital Goods? <ul><li>Identity related </li></ul><ul><li>Game related </li></ul><ul><li>Music related </li></ul><ul><li>And more… </li></ul>
  74. 76. Tencent Bigger Than Ever? <ul><li>Sales 2009 $1.8 billion </li></ul><ul><ul><li>Net profit 2009 42% (= $750M) </li></ul></ul><ul><li>Sales 1H2010 $1.3 billion </li></ul><ul><ul><li>Run rate 2010 (E) $2.5 billion (1/3 games) </li></ul></ul><ul><ul><li>Profit 2010 (E) $1 billion </li></ul></ul><ul><li>Internet penetration still only 30%! </li></ul>
  75. 77. PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd.
  76. 78. PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd. Hardware Innovation: “Shanzhai” ( 山寨 )
  77. 79. PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joffe / Plus Eight Star Ltd.
  78. 80. QQ Farm
  79. 81. Rest of Asia
  80. 82. Time-Shifted Markets <ul><li>Vietnam </li></ul><ul><ul><li>~$150M from online games </li></ul></ul><ul><ul><li>86 million people </li></ul></ul><ul><ul><li>4-5 years behind china </li></ul></ul><ul><li>Indonesia </li></ul><ul><ul><li>#3 on Facebook! </li></ul></ul><ul><ul><li>238 million people! </li></ul></ul><ul><ul><li>Behind Vietnam </li></ul></ul><ul><li>Other places: Thailand (66M), Philippines (92M), etc. </li></ul><ul><li>Biggest potential: online games & mobile SNS </li></ul>Virtual Goods Time Machine
  81. 83. Mig33 <ul><li>“We have decided we want to be like QQ for mobile in the rest of the emerging world .” </li></ul><ul><ul><li>Steven Goh, CEO </li></ul></ul>Source: VentureBeat , March 2010
  82. 84. Mig33 <ul><li>“We have decided we want to be like QQ for mobile in the rest of the emerging world .” </li></ul><ul><ul><li>Steven Goh, CEO </li></ul></ul>Source: VentureBeat , March 2010 Made in China Not iPhone! Not rich countries!
  83. 85. About Mig33 <ul><li>Nationality </li></ul><ul><ul><ul><li>Founders from Australia </li></ul></ul></ul><ul><ul><ul><li>Moved to Silicon Valley </li></ul></ul></ul><ul><ul><ul><li>Relocated to Singapore </li></ul></ul></ul><ul><li>Users </li></ul><ul><ul><ul><li>India, Indonesia, Bangladesh, Vietnam, South Africa… </li></ul></ul></ul>
  84. 86. Conclusions
  85. 87. Conclusions <ul><li>Social games = growing fast </li></ul><ul><li>Online games still > Social games (except Japan) </li></ul><ul><li>Massive ads (TV, billboards, etc.) if ROI is good! </li></ul><ul><li>Media properties entering social (portals, blogs) </li></ul><ul><li>SNS can channel users to MMOs with better ROI </li></ul><ul><li>Mobile great in emerging & advanced markets </li></ul>
  86. 88. Conclusions <ul><li>CJK companies expanding globally </li></ul><ul><li>Transition to digital goods is a tidal wave </li></ul><ul><li>Epiphanies in the West like Korea 10 years ago </li></ul>
  87. 89. Asia: $7 Billion USA: $1 Billion US market potential $35 Billion ? Digital Goods in 2009 Source: +8* , October 2009
  88. 90. Digital Goods in 2010 Asia: $10 Billion USA: $2 Billion Source: +8* , October 2010
  89. 91. $100 billion within the decade? <ul><li>“ The virtual goods market would likely exceed globally $100 billion within this decade .” </li></ul>Trip Hawkins CEO, Digital Chocolate Founder, Electronic Arts Source: Trip’s OMG Blog , April 2010
  90. 92. Market Potential? <ul><li>From analog to digital </li></ul><ul><ul><li>Global video game market $35 billion </li></ul></ul><ul><ul><li>In Korea >50% of ALL GAMES = online games </li></ul></ul><ul><li>Potential = all games in the world </li></ul><ul><ul><li>Global game market $120 billion </li></ul></ul><ul><ul><li>With digital goods dominant model? </li></ul></ul>
  91. 93. Globalization Durian Strudel (Singapore)
  92. 94. Ideas, Talent & Markets <ul><li>Ideas First farm game = made in China! </li></ul><ul><li>Dev. Zynga (JP, CN) Playfish (CN) Kabam (CN) </li></ul><ul><li>Market Facebook (JP, KR, SG, SEA w/ MOL) Zynga (JV with Softbank for JP) Rockyou (JP), Others? </li></ul>
  93. 95. Platform Partnership <ul><li>Cyworld, Mixi, RenRen join forces for one-stop “Social Application Platform” </li></ul><ul><li>Catching up on analytics to leapfrog Facebook? </li></ul><ul><li>For reference </li></ul><ul><ul><ul><li>Cyword 25M users (1999, Korea) </li></ul></ul></ul><ul><ul><ul><li>Mixi 21M users (2004, Japan) </li></ul></ul></ul><ul><ul><ul><li>RenRen 150M users (2005, China) </li></ul></ul></ul>Source: Mixi , September 2010
  94. 96. Virtual Goods in Asia The US Gold Rush Begins Benjamin Joffe | CEO, Plus Eight Star Virtual Goods Summit, San Francisco | 2009.10 Chinese family in Oregon during the Gold Rush
  95. 97. Nexon <ul><li>Ndoor M&A 2010.05 Korea </li></ul><ul><li>GameHi M&A 2010.05 Korea </li></ul><ul><li>BoomBang Invest. 2010.10 Spain </li></ul><ul><li>Disney offering $6 billion ? (rumor) </li></ul><ul><ul><ul><li>EA’s market cap is $5.8 billion… (2010.10) </li></ul></ul></ul>Source: +8*, Nexon
  96. 98. DeNA <ul><li>ngmoco:) M&A USA </li></ul><ul><li>Astro Ape Invest. USA </li></ul><ul><li>Aurora Feint Invest. USA </li></ul><ul><li>GameView M&A USA </li></ul><ul><li>Icebreak M&A USA </li></ul><ul><li>TX.com.cn M&A China </li></ul><ul><li>Social Gaming Fund of $27.5 million </li></ul>
  97. 99. Tencent <ul><li>Sanook Invest. 2010.08 Thailand </li></ul><ul><li>Comsenz M&A 2010.08 China </li></ul><ul><li>Shenzhen DN M&A 2010.04 China </li></ul><ul><li>DST Invest. 2010.04 Russia </li></ul><ul><li>Riot Games Invest. 2009.09 USA </li></ul><ul><li>Outspark Invest. 2008.01 USA </li></ul>
  98. 100. Other Chinese Companies <ul><li>Emerging markets, Japan, US </li></ul><ul><li>Rekoo & Yicha doing great with social games </li></ul><ul><li>Shanda buys Mochi Media (2010.01, $80M) </li></ul>
  99. 101. China + Russia + South Africa 29% 10% 35% $35B $3B $18B Source: +8* , October 2010
  100. 102. DST | Digital Sky Technologies <ul><li>Invested $180M in Zynga </li></ul><ul><li>Invested ~$350M in Facebook (~10%) </li></ul><ul><li>Invested $135M in Groupon </li></ul><ul><li>Acquired ICQ for $188M </li></ul><ul><li>Mail.ru (portal), Astrum (games) </li></ul><ul><ul><li>70% of all PV in the Russian speaking Internet </li></ul></ul>
  101. 103. NASPERS
  102. 104. From Asia to the World Durian Strudel (Singapore)
  103. 105. Paradise Paintball by Cmune <ul><li>World’s first FPS on social networks! </li></ul><ul><li>Over 500,000 users in open beta </li></ul><ul><ul><li>“ Paradise Paintball – you feel like you’re playing a console game.” - Gareth Davis, Games Platform Manager, Facebook </li></ul></ul><ul><ul><li>“ Abandoned my clan, crops have withered and my cafe has gone bankrupt. Thank you for creating the first real game on Facebook!” – Facebook user </li></ul></ul>
  104. 106. Paradise Paintball | World’s First Social FPS! www.facebook.com/paradisepaintball www.cmune.com Disclosure I am an investor in Cmune
  105. 107. <ul><ul><li>What we do </li></ul></ul><ul><ul><ul><ul><li>Best practices from Asia </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Digital Research & Strategy </li></ul></ul></ul></ul><ul><ul><li>Clients sample </li></ul></ul><ul><ul><li>Contacts </li></ul></ul><ul><ul><ul><ul><li>[email_address] </li></ul></ul></ul></ul><ul><ul><ul><ul><li>@benjaminjoffe </li></ul></ul></ul></ul><ul><ul><ul><ul><li>www.slideshare.net/plus8star </li></ul></ul></ul></ul>Asia is part of your world too! +81 | Japan +82 | Korea +86 | China Telecom & Internet + Added Value * High quality

×