Accidental Gamers: A Multibillion $ Industry




60 slides in 15 minutes. Let’s go.
There are 4 levels in today’s presentation



                                 4
         1




                      2
                                     3
Level 1




This is
Founded in 2003 by a bunch of ex-Spray guys




 Lars Markgren, Sebastian Knutsson, Riccardo Zacconi, Thomas Hartwig & Patrik Stymne
8 years & 200+ high-quality flash games later




30+ million monthly active players

      900+ million monthly game plays
These guys invested in 2005




….and we’ve been profitable every year since.
The games are made by ~100 superstars in Stockholm




    + fantastic offices in London, L.A., San Fran, Milan, Malta & Hamburg.
We create & publish casual games
We do casual skill gaming!




Collect as many points as possible

   A game session is between 1-5 minutes long
Our cross-platform strategy




                  Since 2010


     Since 2011                Since 2003
Homerun = play everywhere




                 Since 2010


    Since 2011                Since 2003
We cracked the Facebook formula in April

3 000 000                    DAILY FACEBOOK PLAYERS
2 500 000


2 000 000


1 500 000


1 000 000


 500 000
                                                                @
       0
        januari   februari   mars   april   maj   juni   juli       augusti

                                                                         Monthly:
                                                                         15 million
Women love casual games




                                       81% female
                                       25-55 years old

                                       Spends 20-30+ minutes per visit

                                       49% have children in household

                                       92% shop online
A very common social gaming profile.
                                       59% are primary household shopper.
                                                                    Comscore
How we monetize our games



               Tournament fees
               (optional)




      In-game purchase
                                 Advertising
      (freemium)
                                 (Classic freemium)
Level 2

The Accidental Gamers




         (A typical King.com-game Launch Party)
If there were a spectrum….




GAMER                                                      NOT A GAMER



          Accidental Gamer sweetspot
                                   Slide imagery courtesy of Chris Trottier, Zynga,
10 years ago…

  HARDCORE       GAMERS            CASUAL
   GAMERS                          GAMERS


                Opportunistic
                   play of
   Passionate                   FIND games they
                 traditional
  about games                   enjoy on the web
                   games,
                  consoles




   …we all made games for people that are INTO games!
Facebook changed the rules of the game….




  …people who would never walk into a GameStop store
             got games right in their face:
“Lars Jörnow played Bubble Saga”
Allowing developers like us to find millions of new players…

     HARDCORE                       CASUAL       “ACCIDENTAL”
                     GAMERS
      GAMERS                        GAMERS         GAMERS



                                                  Don’t seek out
                                                  games (but will
                                                    play when
                                                    prompted)




    …and these accidental gamers don’t consider themselves “gamers”
Bubble Saga

FarmVille                 Poke friend

                                            Status update




                                   Source: AllFacebook.com
Bubble Saga

FarmVille                 Poke friend

                                            Status update




                                   Source: AllFacebook.com
How are the Accidental Gamers different?




                 And how does it affect game design?
DOs and DONTs for Accidental Gamers




             What to consider when designing games
Intuitive gameplay and controls




                          250+ million downloads




   Everyone knows how a slingshot works
Difficult controls


Uhhh?

                                             Errr?


                   What??




 Jump, double-tap C while holding down X and L1…
Make it yummy on the eyes




Out of the top 20 games on Facebook, only Texas Hold’em
                doesn’t fit into this profile
3D navigation / FPS

   Navigating real-life is not a   …but navigating virtually without
   problem…                        moving your own body is a big
                                   challenge




Remember: Accidental Gamers didn’t grow up playing FPS, so
             it’s completely foreign to them
NO #2:   Slow-progress from ultra-easy to deeper mechanics




                  A very easy tutorial is a must!
NO #2:   Slow-progress from ultra-easy to deeper mechanics




                  A very easy tutorial is a must!
NO #2:   Slow-progress from ultra-easy to deeper mechanics




                  A very easy tutorial is a must!
NO #2:   Slow-progress from ultra-easy to deeper mechanics




                  A very easy tutorial is a must!
NO #2:   Slow-progress from ultra-easy to deeper mechanics




                  A very easy tutorial is a must!
Sticking points




Challenging sticking points in games for Accidental Gamers have
          proven to be very detrimental to retention
In summary, the game should be like..




   Yummy on the eyes, easy to understand with a touch of depth
…but not like:
Level 3




Mobile & Tablet
  Looking into the future
10 years ago…




   …people actually read newspapers on the subway.
In 2011? Not so much….




   (now it’s also completely normal to take pictures of random people in the subway)
The mobile revolution has just begun



                                            iPhone
             Relaxed parent




   iPad




                              “Passback gaming”
Why mobile is so important




  88 downloaded applications

  iPhone usage: 84 minutes / day.

10 minutes every day on games…

                                    Source: Appsfire
Mobile Apps passed the Web this summer
Is this only about this guy?




                 No, but with 61% he’s really important
Devices Shipped Q1-2011, Daily




     Android is catching up quickly, but the iPad is unrivaled so far
May ‘11: 500k apps in the App Store!




              500k apps, of which 150k are free = you
              need to make something exceptional
Freemium is the new Black
The mobile & tablet market is like a…




   (Young, immature, growing quickly, loved by everyone)
Level 4

Investing in Accidental Gaming




                     A $6 billion treasure hunt
Social gaming is HOT!




And it’s just getting started.
KPI crash course for social games
 MAU
 Monthly active users

 DAU
 Daily active users

 Stickiness
 DAU / MAU

 DARPU
 Daily av. revenue per user

       These 4 basic metrics work for both Facebook and mobile
KPI crash course for social games
 MAU
                              20% stickiness x $0.02 DARPU =
 Monthly active users

 DAU
 Daily active users

 Stickiness
 DAU / MAU
                              = high-fiving investors!
 DARPU
 Daily av. revenue per user
Social Game Economics
     1             Develop a game: 4 months, 7 people
                                  (~$200-300k)
                                                                         Currently only
                                                                        20 games on FB
     2                       Get 1 million DAU    *
                                  (~$300-500k)


     3                  1M DAU x $0.02 DARPU
                = $20k revenue per day -> $600k / month



                    Breakeven 30-60 days post launch

*Assumes that you have: (a) a fantastic game with 20%+ stickiness, (b) a fantastic
marketing guy, (c) a fantastic sys-ops AND (d) an amazing Business Intelligence team
Social Gaming on Facebook is Maturing
                                                     DAU*

 1                    $20 billion IPO
                      coming up             47.8 M
 2                                          15.2 M
             ~$300M   ~$750M




 3            ($31M raised)                 6.4 M
 4           (          $761M)              5.5 M      YE projection:
                                                            3.5 M
 5                                          2.5 M
 6                                          2.0 M

 7                                          1.8 M


                                        *DAU numbers from
Valuations can be high




(these are all from TechCrunch in the past 6 months)
Mobile: Go Big or Go Home




           A lot of companies will have to go home…
Investing in Accidental Gaming Companies
Please note: this is just my personal advice, and may not reflect the views of King.com


      Look for Superstars                Hit-Driven                     Stickiness is
                                                                         everything




           (as always)                 (find pre-hit?!)            (if a game isn’t sticky, kill it)




   Don’t invest to much in pre-launch development: max 6 months!
       There’s no better indicator of success than a live game.
What we have talked about today
            King.com is awesome, and makes outstanding games


  The typical Accidental Gamer is a 35-45   year-old woman

There are about 300 million players on Facebook every month

                      Think George Clooney when designing
                              games for the Accidental Gamers


               Mobile & tablet is still just a happy   baby
            When investing, focus on Superstars & stickiness
Thank you for listening!




lars.jornow@king.com / +46 760 150 219

Accidental Gamers

  • 1.
    Accidental Gamers: AMultibillion $ Industry 60 slides in 15 minutes. Let’s go.
  • 2.
    There are 4levels in today’s presentation 4 1 2 3
  • 3.
  • 4.
    Founded in 2003by a bunch of ex-Spray guys Lars Markgren, Sebastian Knutsson, Riccardo Zacconi, Thomas Hartwig & Patrik Stymne
  • 5.
    8 years &200+ high-quality flash games later 30+ million monthly active players 900+ million monthly game plays
  • 6.
    These guys investedin 2005 ….and we’ve been profitable every year since.
  • 7.
    The games aremade by ~100 superstars in Stockholm + fantastic offices in London, L.A., San Fran, Milan, Malta & Hamburg.
  • 8.
    We create &publish casual games
  • 9.
    We do casualskill gaming! Collect as many points as possible A game session is between 1-5 minutes long
  • 10.
    Our cross-platform strategy Since 2010 Since 2011 Since 2003
  • 11.
    Homerun = playeverywhere Since 2010 Since 2011 Since 2003
  • 12.
    We cracked theFacebook formula in April 3 000 000 DAILY FACEBOOK PLAYERS 2 500 000 2 000 000 1 500 000 1 000 000 500 000 @ 0 januari februari mars april maj juni juli augusti Monthly: 15 million
  • 13.
    Women love casualgames 81% female 25-55 years old Spends 20-30+ minutes per visit 49% have children in household 92% shop online A very common social gaming profile. 59% are primary household shopper. Comscore
  • 14.
    How we monetizeour games Tournament fees (optional) In-game purchase Advertising (freemium) (Classic freemium)
  • 16.
    Level 2 The AccidentalGamers (A typical King.com-game Launch Party)
  • 17.
    If there werea spectrum…. GAMER NOT A GAMER Accidental Gamer sweetspot Slide imagery courtesy of Chris Trottier, Zynga,
  • 18.
    10 years ago… HARDCORE GAMERS CASUAL GAMERS GAMERS Opportunistic play of Passionate FIND games they traditional about games enjoy on the web games, consoles …we all made games for people that are INTO games!
  • 19.
    Facebook changed therules of the game…. …people who would never walk into a GameStop store got games right in their face:
  • 20.
    “Lars Jörnow playedBubble Saga”
  • 21.
    Allowing developers likeus to find millions of new players… HARDCORE CASUAL “ACCIDENTAL” GAMERS GAMERS GAMERS GAMERS Don’t seek out games (but will play when prompted) …and these accidental gamers don’t consider themselves “gamers”
  • 22.
    Bubble Saga FarmVille Poke friend Status update Source: AllFacebook.com
  • 23.
    Bubble Saga FarmVille Poke friend Status update Source: AllFacebook.com
  • 24.
    How are theAccidental Gamers different? And how does it affect game design?
  • 25.
    DOs and DONTsfor Accidental Gamers What to consider when designing games
  • 26.
    Intuitive gameplay andcontrols 250+ million downloads Everyone knows how a slingshot works
  • 27.
    Difficult controls Uhhh? Errr? What?? Jump, double-tap C while holding down X and L1…
  • 28.
    Make it yummyon the eyes Out of the top 20 games on Facebook, only Texas Hold’em doesn’t fit into this profile
  • 29.
    3D navigation /FPS Navigating real-life is not a …but navigating virtually without problem… moving your own body is a big challenge Remember: Accidental Gamers didn’t grow up playing FPS, so it’s completely foreign to them
  • 30.
    NO #2: Slow-progress from ultra-easy to deeper mechanics A very easy tutorial is a must!
  • 31.
    NO #2: Slow-progress from ultra-easy to deeper mechanics A very easy tutorial is a must!
  • 32.
    NO #2: Slow-progress from ultra-easy to deeper mechanics A very easy tutorial is a must!
  • 33.
    NO #2: Slow-progress from ultra-easy to deeper mechanics A very easy tutorial is a must!
  • 34.
    NO #2: Slow-progress from ultra-easy to deeper mechanics A very easy tutorial is a must!
  • 35.
    Sticking points Challenging stickingpoints in games for Accidental Gamers have proven to be very detrimental to retention
  • 36.
    In summary, thegame should be like.. Yummy on the eyes, easy to understand with a touch of depth
  • 37.
  • 39.
    Level 3 Mobile &Tablet Looking into the future
  • 40.
    10 years ago… …people actually read newspapers on the subway.
  • 41.
    In 2011? Notso much…. (now it’s also completely normal to take pictures of random people in the subway)
  • 42.
    The mobile revolutionhas just begun iPhone Relaxed parent iPad “Passback gaming”
  • 43.
    Why mobile isso important 88 downloaded applications iPhone usage: 84 minutes / day. 10 minutes every day on games… Source: Appsfire
  • 44.
    Mobile Apps passedthe Web this summer
  • 45.
    Is this onlyabout this guy? No, but with 61% he’s really important
  • 46.
    Devices Shipped Q1-2011,Daily Android is catching up quickly, but the iPad is unrivaled so far
  • 47.
    May ‘11: 500kapps in the App Store! 500k apps, of which 150k are free = you need to make something exceptional
  • 48.
    Freemium is thenew Black
  • 49.
    The mobile &tablet market is like a… (Young, immature, growing quickly, loved by everyone)
  • 51.
    Level 4 Investing inAccidental Gaming A $6 billion treasure hunt
  • 52.
    Social gaming isHOT! And it’s just getting started.
  • 53.
    KPI crash coursefor social games MAU Monthly active users DAU Daily active users Stickiness DAU / MAU DARPU Daily av. revenue per user These 4 basic metrics work for both Facebook and mobile
  • 54.
    KPI crash coursefor social games MAU 20% stickiness x $0.02 DARPU = Monthly active users DAU Daily active users Stickiness DAU / MAU = high-fiving investors! DARPU Daily av. revenue per user
  • 55.
    Social Game Economics 1 Develop a game: 4 months, 7 people (~$200-300k) Currently only 20 games on FB 2 Get 1 million DAU * (~$300-500k) 3 1M DAU x $0.02 DARPU = $20k revenue per day -> $600k / month Breakeven 30-60 days post launch *Assumes that you have: (a) a fantastic game with 20%+ stickiness, (b) a fantastic marketing guy, (c) a fantastic sys-ops AND (d) an amazing Business Intelligence team
  • 56.
    Social Gaming onFacebook is Maturing DAU* 1 $20 billion IPO coming up 47.8 M 2 15.2 M ~$300M ~$750M 3 ($31M raised) 6.4 M 4 ( $761M) 5.5 M YE projection: 3.5 M 5 2.5 M 6 2.0 M 7 1.8 M *DAU numbers from
  • 57.
    Valuations can behigh (these are all from TechCrunch in the past 6 months)
  • 58.
    Mobile: Go Bigor Go Home A lot of companies will have to go home…
  • 59.
    Investing in AccidentalGaming Companies Please note: this is just my personal advice, and may not reflect the views of King.com Look for Superstars Hit-Driven Stickiness is everything (as always) (find pre-hit?!) (if a game isn’t sticky, kill it) Don’t invest to much in pre-launch development: max 6 months! There’s no better indicator of success than a live game.
  • 60.
    What we havetalked about today King.com is awesome, and makes outstanding games The typical Accidental Gamer is a 35-45 year-old woman There are about 300 million players on Facebook every month Think George Clooney when designing games for the Accidental Gamers Mobile & tablet is still just a happy baby When investing, focus on Superstars & stickiness
  • 61.
    Thank you forlistening! lars.jornow@king.com / +46 760 150 219