Casual games are becoming increasingly popular in Israel. A survey found that over 60% of Israeli internet casual game players are over 35, showing casual games appeal to all ages. Several new companies in Israel are exploring business models for casual games, including subscription and microtransaction-based games on mobile phones and skill-based games. While the Israeli casual game market is still developing, it shows promise as casual games are highly relevant to Israeli players.

1. Casual Games in Israel The Israeli Casual Game Market - Recent Developments Dudi Peles, CTO & Co-Founder QuizArt Yuval Bayrav, Senior Editor Vgames.co.il Program in Science, Technology & Society, Bar Ilan University April 2008

2. Who are we? Dudi Peles – CTO QuizArt Yuval Bayrav – Senior Editor Vgames.co.il Bar Ilan University (Program in Science, Technology & Society)

3. What are Casual Games? Casual Games are video games developed for the mass consumer, who would normally not regard themselves as a “gamers”. 51% 49% 62% 38% Female Male Over 35 Under 35

14. Casual Games vs Hard-Core Hard-Core Casual Characteristic 18-35 years old males, <15% of population All ages, male and female, 100% of population Demographics Home Home, work, on the way… Where Play Exploration, stimulation, adrenaline rush Fun, relaxation, escape Why Play 20 minutes – 2 hours to complete level 5-15 minutes to complete level Play Time Game consoles, hi-end PC PC, Mac, TV, Phone, inexpensive console Platform $30-$60 Free - $20 Game Price

15. Our Definition Little preliminary “gaming knowledge” required to play Very flat “Learning Curve” Very wide “Comfort Zone” Note: gamers play casual games as well

16. Casual Games Business Models Trial to Purchase Advertising Supported Subscription Skill-based Games Microtransactions Mobile Retail Boxes In-Game Advertising & Advergaming

17. Trial to Purchase Big Fish Games: >750,000 downloads a day. Average conversion rate 1%-2% Xbox Live Arcade: ~1.5M downloads a day. Average conversion rate 18% In 2006, “Trial to Purchase” accounted for 42% of the whole market

18. Advertising Supported 34% of internet users play free games (Aug ‘07) Big Portals: Yahoo Games, MSN Games Game Portals: MiniClip, AddictingGames, NeoPets, NewGrounds, Kongregate Messaging Tools: ICQ, LIVE messenger

19. Subscription Club Pogo: 1.5M subscribers paying $6 a month or $35 a year (Dec ’07) Club Penguin: 700,000 subscribers (Aug ‘07) . Acquired by Disney for $350M. Other Web Sites: Shockwave Unlimited, RealArcade, Big Fish Games

20. Skill-Based Gaming King.com - 190 million games played a month (Feb 2008) . Other Web Sites: www.worldwinner.com www.gameduel.com

21. Microtransactions Kart Rider: Over 16 million Koreans (>30% of Korea's population) have played Kart Rider. Maple Story: 72+ million users, $16 million per month worldwide via microtransactions (Apr ’08)

22. Business Models - Summary Global Market Size in 2007: $2.25 billion. 20% year over year growth.

23. Casual games in Israel Major models: Internet free-to-play games, cellular games, TV set-top box games, Retail 50-75% of Internet users play games online – that’s 1.75-2.8M users In 07’-08’ we have conducted a survey among Israeli Internet casual players, with some surprising results…

24. The Israeli Casual Gamer Based on an online survey of >10K players 51% 49% 62% 38% Female Male Over 35 Under 35 25% 75% 31% 69% Female Male Over 35 Under 35

25. Players in the Market - Advertising Supported Big Portals, e.g.: Walla Fun Nana10 Games Game Portals, e.g.: www.flashy.co.il www.netgames.co.il www.moomoo.co.il www.webgames.co.il Many players, low income

26. Players in the Market - Advergaming Usually produced by interactive companies as part of a marketing campaign, targeting young audience. Examples: Dibs (Nestle), Prigat, Bisli Dak (Osem), Bamba (Osem), Elite Puzzles (Elite), Shugi (Telma)…

27. Players in the Market - Mobile 300,000 downloads a month (estimate). Number of downloads increased by 50-60% since 2006

28. Players in the Market - Retail Casual retail is dominated by children’s games and edutainment Disney games, Matah, Comfy, Compedia Compedia has just launched a semi-online virtual world of edutainment called Peleland

29. New Players in the Market - Subscription Orange Games – by Orange (Partner) Launched: early 2008 Price: 19.90 NIS Offering (some of) Oberon Media games Marketing exclusively to Orange’s existing 2.9M cellular telephone clients

30. New Players in the Market - Subscription BGames – by Bezeq Soft Launched: early 2008 Price: 19.90 Offering mainly older (>4 years) and non-AAA games, edutainment Marketing to Bezeq’s existing 2.6M telephone clients

31. Players in the Market - Skill-based Games Play65 – by Interlogic Launched: 2004 Offering backgammon More then 5M registered players Closed (for cash games) on December 2006 and reopened at May 2007.

32. New Players in the Market - Skill-based Games Noobo Launched: May 2007 Close to 200,000 registered users Has a going partnership with the successful TV trivia brand “1 Vs 100” Hosts Popcap games (Zuma, Bejeweled) >1.3M game sessions in the 1 st month >1M NIS played on during the first 3 months.

33. New Players in the Market - Skill-based Games Shapo – by Tapuz Launched: January 2008 Reportedly invested $1M Yuval

34. Israeli Developers Enabling technologies Distributing technologies / platforms Games ? Casual Games ?

36. Summary The casual Israeli market is closer to the global market then the non-casual market. Casual Games are very relevant to Israel. Israel as a casual game market has potential and is still at its infancy Let the games begin… Foe more questions: dudi@quizart.com or editor@vgames.co.il