Gaming guide to big in asia

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Can your game make millions in Asia? If 1% of Asians would pay a $1! This presentation is a bit of a reality check given for Yetizen given in May 2012 in San Francisco.

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Gaming guide to big in asia

  1. 1. The  Gaming  guide   to   Big  in  Asia   Misconcep3ons   &  Reali3es   @benjaminjoffe   ceo,  +8*  
  2. 2. @benjaminjoffe  
  3. 3. 100+ Keynotes in 20 Countries!
  4. 4. Startup Mentor!
  5. 5. Investor in Global Startups from Asia!
  6. 6. CEO of +8* | Research & Market Entry to Asia! EUROPE   USA   ASIA  
  7. 7. 12 years abroad – my cultural DNA!I  spent  most  of  my  working  life  (11  years)  overseas,  especially  in  Japan,  China,   South  Korea  and  USA.  My  cultural  DNA  has  become  rather  complex.  
  8. 8. Asia!This is Asia!
  9. 9. But “Asia” does not cover the diversity!
  10. 10. China   Japan   South  Korea   Singapore   Indonesia   …   Russia   Turkey   …   48  Countries!  48 countries with major differences!
  11. 11. “Asia  was  a  concept  of  Western  CivilizaEon.”  This is probably the best definition of Asia!
  12. 12. There  is  no  Asia  •  GDP  •  GDP/capita  •  Demographics  •  Language(s)  •  Religion(s)  •  Web  &  Mobile  Infrastructures  •  Dominant  Players  •  Payment  systems   Just consider the radical differences…!
  13. 13. To give some perspective: view from Taiwan!
  14. 14. …with translation!
  15. 15. “Just  by  going  to  China,   we  could  double  the  audience,”   –  Peter  Relan,  CEO,  Crowdstar  Doubling audience is not doubling revenue!
  16. 16. 4 Asian countries in top 10? How big are they?!
  17. 17. Country   PopulaEon   GDP/Capita  (USD)   China   1.3  billion   4,500   Japan   128  million   42,000  South  Korea   49  million   20,000   Taiwan   23  million   20,000   Hong  Kong   7  million   32,000   Singapore   5  million   57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900   Vietnam   90  million   1,500   Philippines   94  million   2,500   Thailand   65  million   5,800  North  Korea   24  million   1,000   Not all markets are created equal!
  18. 18. Country   PopulaEon   GDP/Capita  (USD)   China   1.3  billion   4,500   Japan   128  million   42,000   South  Korea   49  million   20,000   Taiwan   23  million   20,000   Hong  Kong   7  million   32,000   Singapore   5  million   57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900  - 1 user in Japan is possibly worth 101,500   Vietnam   90  million   inChinaPhilippines   in terms of monetization
 94  million   2,500  
 Thailand   65  million   5,800   North  Korea   24  million   1,000  - HK, SG and Malaysia are smaller but quitedecent medium-sized markets!
  19. 19. Country   PopulaEon   GDP/Capita  (USD)   China   1.3  billion   4,500   Japan   128  million   42,000   On the contrary, the million   South  Korea   49   countries below are 20,000   going to be hard to monetize due 20,000   Taiwan   23  million   to low Hong  Kong   7  million   32,000   GDP/capita.! Singapore   5  million   57,000   Malaysia   28  million   9,500   Indonesia   240  million   3,900   Vietnam   90  million   1,500   Philippines   94  million   2,500   Thailand   65  million   5,800   North  Korea   24  million   1,000  4 Asian countries in top 10? How big are they?!
  20. 20. Mobile  Users   China   Japan   Korea   Total   1.02  billion   127  million   50  million   Android   ?   15  million   17  million   (es3mates)   iPhone   <20  million   <10  million   3  million   (es3mates)   3G  Users   10%   100%   70%  - China, Japan, Korea have embraced Android.!- iPhones are for the 1% richer in China!- Very few reliable numbers are available (sendme yours!)!
  21. 21. Online  Game  Companies  Market  Cap   China   $bln   Japan   $bln   Korea   $bln   Tencent   57.5   GREE   6.3   Nexon   8   Netease   7.8   DeNA   4.6   NHN  (Hangame)   10.5   Renren   2.6   Mixi   <1   NCso`   5.3   Shanda   2.2  Shanda  Games   1.4   as  of  May  5,  2012   Giant   1.2   Changyou   1.2   Facebook   (100)  NetDragon  (91)   <1   Ac3vision  Blizzard   13.8  Perfect  World   <1   Zynga   6.1   The9   <1   EA   5.0   Gaming giants dominate in each country.! Very few foreign players do well.!
  22. 22. Reality  of  China  •  Local  partners  are  preky  much  mandatory  for   foreigners  to  get  any  distribu3on  and  operate.  •  Successes  are  rare,  generally  accidental,  and   mostly  by  dominant  players   –  Mobile      Angry  Birds,  Fruit  Ninja,  a  few  more   –  Web      Korean  companies  via  licensing   Easiest to do in China is iOS!
  23. 23. Reality  of  China  •  Social  networks  are…  TENCENT   –  Likle  money  on  Renren   –  No  Facebook  •  Online  Game  Giants   –  Developing  their  own  games   –  Licensing  from  Korea   –  Rarely  from  other  places  (WoW)   –  Excep3on:  League  of  Legends  (but  bought  by  Tencent)   Web-based is almost impossible alone!
  24. 24. Reality  of  China  •  iPhone  is  for  the  1%  •  Android  is  fragmented   –  Numerous  app  stores   –  Lots  of  copies   –  Adver3sing  don’t  make  much  money   iOS is easier, Android still hard!
  25. 25. Top  Ranking  Apps  on  iPhone   Source: AppAnnie.com!Foreign games and apps do well!
  26. 26. Top  Ranking  Apps  on  Android   Source: AppAnnie.com!Android is much harder + Competing stores!
  27. 27. Tencent  in  2011  •  Revenue        US$4.5  billion   •  Mobile      10%   •  Adver3sing    7%   –  Net  Profit      US$1.6  billion  (35%)  •  Services   •  Qzone        552  million  MAU   •  Pengyou      202  million  MAU   •  Open  plaqorm  40,000  apps   –  More  than  10  have  10m+  MAU  Money: 10m MAU in China = 1m MAU in USA!
  28. 28. Renren  in  2011   •  Revenue      US$118.0  million   –  ~50%  from  adver3sing   •  Net  Loss      US$5  million   •  Net  loss  does  not  count  sale  of  eLong  for  US$50  million   •  Promo3ng  Nuomi,  its  Groupon  clone  (US$30  million)   •  Curb  your  enthusiasm!  Renren is not quite the “Facebook of China” yet!
  29. 29. Reality  of  Japan   Smartphone games market Core Gamers 2014 PC More than $1.2 billion Overall Console market size Game About $3.6 billion growing software Smartphone games Official sites, $1 billion Mobile Social games over $1.8 billion Casual Gamers Arcade games, Card games, Edutainment Mobile / Smartphone games is going really big!
  30. 30. Mobile  Social  Games  in  Japan   •  GREE   –  Revenue          $785  million   –  Acquired  OpenFeint  ($104m)   –  Acquired  Funzio      ($210m)   •  DeNA   –  Revenue          $1.4  billion   –  Acquired  Ngmoco      ($400m)   •  Konami   –  $360  million  from  social  games  in  2011  The platforms are making most of the money, but somethird-party do well. However, Most Western companies failed on those platform so far (including Zynga)!
  31. 31. Reality  of  Korea  •  Aside  from  Blizzard  (local  opera3on),  FIFA   (partnership)  and  League  of  Legends  (hired   Blizzard  staff),  not  many  successes  •  On  mobile,  it  is  possible  to  make  money,   especially  via  iOS  •  Android  is  big,  but  fragmented  among  several   app  stores  +  regulatory  limita3ons  (GRB)  iOS doable, Android harder, web very hard!
  32. 32. Reality  of  Korea  The market figures are including exports, butstill a big market for web, less so for mobile.!
  33. 33. Nexon  •  Revenue   –  2011  Revenue  $1.1  billion   Market   Revenue   –  Net  revenue    $313  million   China   $398m  (38%)   Korea   $348m  (33%)   •  19%  margin   Japan   $158m  (15%)   •  China  licensing:  Tencent  =  85%   Rest  of  World   $105m  (14%)   TOTAL   $1.1  billion  •  Titles   –  Maple  Story  (RPG),  Mabinogi  (RPG),  Dungeon  &   Fighter  (RPG),  Kart  Rider  (fantasy  kart  racing),   Counter  Strike  Online  (FPS)   Nexon does great in China and Japan!
  34. 34. NCsov  •  2011  Income    $540  million  •  Net  income      $157  million   Market   Revenue   Title   Revenue   Korea   $360m  (66%)   Lineage  1   35%   Japan   $75m  (14%)   Lineage  2   18%   China  (royalty)   $50m  (10%)   Aion   40%   Rest  of  World   $55m  (10%)   Other   5%   TOTAL   $540m  NCsoft has few titles, mostly missed China!
  35. 35. Hangame  •  Part  of  NHN  Group   –  Naver      65%  of  search  market   –  Hangame    Casual  games,  #2  player  •  Revenue   –  NHN  2011    $1.9  billion   –  Net  profits      $400m  (20%)  •  Gaming  brought  $570m  in  2011   –  Japan  =  $267  million  Hangame is #1 in Japan, lots of casual games!
  36. 36. Hangame  sourcing  mobile  games  •  20-­‐30  mobile  games  for  Korea  and  40  games  for   Japan  in  2012  
  37. 37. Game  Ra3ng  Board   For  All  Users Over  12  Years  Old   Over  15  Years  Old Over 18 Years OldRegister game Apply online Deliberation Reflect result on a social (send application form, By Game Rating Result on the game platform executable file, instructions) Board To launch in Korea, approval is needed!
  38. 38. Payment  Methods   Recharge  (Purchase)  Dotori   1.  Credit  Card   2.  Mobile  Payment   3.  Online  Banking   Payment  method   4.  Fixed  Phone   10  Dotori   5.  Loyalty  Points      =  1,000  KRW   from  partnerships    =  USD  1     (OK  Cashbag)   6.  Prepaid  Giv  Coupons   7.  Prepaid  Cards  In all 3 countries, payment methods are mostly local. No way around it.!
  39. 39. Reality  of  “Rest  of  Asia”  •  Rich  &  English-­‐friendly   –  Singapore  (English)   –  Hong  Kong  (cantonese,  mandarin,  English)  •  Somewhat  wealthy  &  somewhat  English-­‐friendly   –  Malaysia  (some  –  most  revenue  from  Chinese  popula3on)   –  Taiwan  (Taiwanese  =  tradi3onal  Chinese  script)  •  Not  there  yet   –  Vietnam   –  Indonesia   –  Philippines   –  Thailand…  Some markets can provide decent revenue!
  40. 40. Coming  soon:  $50  Android  Phones   Android booming with cheap phones!
  41. 41. benjamin@plus8star.com
 @benjaminjoffe  Questions & Comments are welcome!!

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