2. Table of Contents
1. Executive Summary ..................................................................................................................................................... 3
2. Market Overview .......................................................................................................................................................... 4
Accumulated Number of Users ..................................................................................................................................... 4
Number of New Users ...................................................................................................................................................... 4
Total Revenue of Nate AppStore ................................................................................................................................. 4
Gender Ratio …………………………………………………………………………………………………………………………………… 5
Age Group Distribution (Male / Female) ………………………………………………………………..……………………... 5
3. Few Successful Games Lead the Trend ........................................................................................................... 6
DAU of Pet & Management Genre ............................................................................................................................ 6
Revenue of Pet & Management Genre ………………………………........................................................................... 6
DAU of Sports Genre ........................................................................................................................................................ 7
Revenue of Sports Genre ................................................................................................................................................ 7
4. RPG Shows Potential as a Social Game ........................................................................................................... 8
DAU of RPG Genre ............................................................................................................................................................. 8
Revenue of RPG genre …………………………………......................................................................................................... 8
ARPU of All Genres …………………………………………………………………………………….…………………….…………….. 9
ARPPU of All Genres …………………………………………………………..…………………………..……………………………… 10
Gender Ratio of RPG ……………………………………………………………………………………………………….……………… 10
5. Boom of the Business Simulation Games ………………………..…………………………………………………… 10
Accumulated Number of Installs of All Genres …………………………………………………………………………..… 11
DAU of All Genres ……………………………………………….……………………………………………………..…………….……. 11
Revenue of All Genres …………………………………………………………………………………………………………………… 12
Number of Installs of Business Simulation Genre ………….………………………………………..………………..….. 12
6. Simulation Games Still More Profitable …………………………………….……………………….…………...……. 13
Total User Ratio of Simulation and Non-simulation Games ..…..…………………………………………..……… 13
Total Revenue Ratio of Simulation and Non-simulation Games ……..………...……………………….…….…. 13
Revenue of Simulation & Non-simulation Games ……………………………….…………………………………....… 14
DAU of Simulation and Non-simulation Games …………………………………….……………….…………………… 15
ARPPU of Simulation and Non-simulation Games ………………………………………………………………….…… 16
7. Conclusion ………………………………………………………………………………………………..…………….………………... 17
2
3. Korean SNG Market Trend Report
2010 Fourth Quarter (Vol. 2)
By Sung-Hwan Ahn
Rubicon Games Inc.
Editor’s Note
2010 was indeed a busy year for social game developers in Korea. New social gaming
platforms were launched by major portal sites, many new start-ups as well as online game
developers have entered the market, and success stories from small start-ups were introduced
here and there. With the growing interest from both inside and outside the market, information
about the current trend becomes more pressing. And still, the thought that useful information
must be shared around has unchanged and thanks to Nate AppStore for being on the same side
by sharing precious information with everyone.
* Please note that stats are given in bundles of genres, due to privacy issues. To find out more
about Korean social gaming industry, visit http://blog.playrubi.com or e-mail info@playrubi.com or
devsquare@nate.com *
Executive Summary
- Despite the consensus that there are more female users in Nate AppStore, there are actually
more male users (51:49). However, in terms of number of installs, female users outnumber male
users by 45:55.
- Few successful games still alters the overall trend of the genre. This is due to the lack of games
in the market and users being concentrated into few successful titles.
- RPG was one of the fastest growing genres in 4th quarter. RPG, especially, shows a high ARPPU
from both male and female users, earning around 14,000 won per user. RPG also showed a
male-biased gender ratio together with Sports and Defense genre.
- Once used to be the most lagging simulation genre, Business Simulation games spurs in 4th
quarter by accumulating over 300,000 users in just one month. Contrastingly, Business
Simulation genre is the most female-biased genre along with Pet & Management.
- Simulation games (Pet & Management, City Building, Farming, Aquarium, Business Simulation)
are still more profitable compared to non-simulation games in the macro-perspective. However,
looking into ARPPU, RPG doubles most of the simulation games.
3
4. Market Overview
Nate AppStore has continuously grown throughout 4th quarter 2010
2010. Users are
continuously increasing, exceeding 35 million by mid December.
December. New user inflow rate managed
rd
to bounce back since its long stagnant state in 3 quarter, attracting average of 7,5 users daily.
arter, 7,500
Revenue curve have also escaped from its stagnant state, pulling in over 540 million KRW
state,
(approximately 0.5 million USD) in December.
<Line graph 1: Total Revenue of Nate AppStore>
:
<Line graph 2: Total Revenue of Nate AppStore>
:
4
5. Unlike the consensus that majority of the users are female, there are actually more male
users (51:49) in Nate AppStore. However, in terms of accumulated number of installs, there are
more female users (45:55) than male users. It can be interpreted that there are less contents for
male users to consume, thus current game trend leans towards female users.
Looking at the age distribution, 19-24 year old college students were the majority group,
occupying 35% of the total user. Then followed 16-18 year old high school students (19%),
followed by 25-29 year olds (17%), 13-15 year old middle school students (13%), 7-12 year old
elementary students (5%) and 30-34 year olds (5%). The same pattern applies to both gender’s
demography.
<Pie graph 1: Gender Ratio (2010. Dec) <Pie graph 2: Age Group Distribution>
<Pie graph 3: Male User Age Group> <Pie graph 4: Female User Age Group>
5
6. Few Successful Games Lead the Trend
As I’ve mentioned in the previous report (Korean Social Game Market Trend Report 2010
ve
3Q), Korean social gaming market is yet heavily dependent on few successful games. Although
new developers have entered the market, still there are less than 70 developers with only 127
apps in Nate AppStore.
s Even among the 1 apps, only 107 of them are games
127 games.
The effect of few successful games on the whole market could be observed in the
revenue and DAU curve of each genre. Pet & Management genre, for example, have experienced
a drastic fall in both revenue and DAU in 3rd quarter.
. The positive momentum led by Happy Idol
has quickly faded since August until October.
. The downtrend in revenue and DAU has finally
came to an end in October and quickly bounced back in November with the release of two new
quickly
management game Girls Life and Star Project Online. Both games have quickly accumulated over
100,000 users, turning back the trend to a positive state.
,
<Line graph 3: DAU of Pet & Management genre>
<Line graph 4: Revenue of Pet & Management genre
genre>
6
7. On the contrast, genres without successful games or even lack of new games can
seriously fall in the mire stagnation. Sports genre, for example, were once introduced as a
profitable male-oriented genre in third quarter.
oriented Home Run King and Baseball Wars have shown
an outstanding performance in terms of revenue and DAU. However, life span of th
these sports
games didn’t’ last too long. Beginning September, revenue and DAU drastically depreciated
throughout 4th quarter due to lack of new games.
<Line graph 5: DAU of Pet & Sports genre>
<Line graph 6: Revenue of Sports genre
genre>
The situation, however, is not so much different in Facebook. Among 500,000
applications, only about 250 of them (0.05%) have more than 1 million MAU and in terms of ratio,
and majority of the users are concentrated on fewer applications than Nate. Considering the fact
Consi
that Nate is pretty much in the early phase of market maturity, first mover advantage still seems
valid. Moreover, only 14% of Cyworld users have experience using Nate AppStore
AppStore. Compared to
Facebook, which 70% of the users are monthly active users of platform applicatio
ive applications, there is yet a
big pool of Blue Ocean for developers to penetrate into
into.
7
8. RPG Shows Potential as a Social Game
There is no doubt about RPG s success in the online gaming industry in Korea but it
RPG’s
wasn’t really clear whether it could output the same result as a social game. In a market where
game.
simulation games are outperforming rest of the genres, RPG was still an uneasy choice
n choice. Tracing
back its footsteps, however, RPG proves that it could perform well as a social game just as it did
in the online game market.
<Line graph 7: DAU of RPG genre>
<Line graph 8: Revenue of RPG genre>
Revenue of RPG games are quickly growing as new games are released. Revenue starts
to rise with the release of Friends Fighters in late September and it soars after the release of God
Wars in mid December. In fact, God Wars has only put up its payment on 20th December but the
impact it had on the entire genre is simply overwhelming; doubling the revenue of the previous
month.
8
9. RPG’s remarkable growth is clearly visible regarding the ARPU and the ARPPU. AR
s ARPU of
RPG quickly rose along with the release of new games. Started off low, however, RPG managed
to pick up its revenue since September and finally marks the highest ARPU by the end of 4Q.
(*Please note that ARPU was calculated by “Revenue/Accumulated Installs” due to the lack of UV
stats. Thus the ARPU listed on the graph is smaller than the actual value*)
Regarding the ARPPU, RPG stood high above the others. In December, RPG ARPPU is
RPG’s
twice bigger than Farming games, which marked the second highest ARP
ARPPU. Since the
conversion rate of purchase of RPG is only 0.2%, it could be interpreted that one time purchase of
virtual items are much higher than the others. In fact, the RPG is male dominant game with a
gender ratio of 77:23. (See pie graph 5). As mentioned in the previous report (3Q), male users
again show a strong purchasing power in terms of ARPPU as they did in Sports genre in 3rd
quarter.
Overall, regarding the RPG genre, Nate AppStore may be following the footsteps of the
rding
online game market. As online game trend began with casual mini-games then to simulation
games
games and later on dominated by RPG, social gaming trend is somewhat showing a similar
pattern.
<Line graph 9: ARPU of all genres
genres>
9
10. <Line graph 10: ARPPU of all genres
genres>
<Pie graph 5: Gender ratio of RPG>
Boom of the Business Simulation Games
Nate AppStore’s fastest growing genre in 4th quarter is indeed business simulation.
s
Once used to be the most lagging genre, business games are now considered one of the most
successful genres in Nate. At the center of its success is Fashion City, which managed to attract
over 300,000 users in just one month. Thanks to t
the rapid growth, Business genre revenue
h, genre’s
soared at the start of November, as Fashion City began selling cash items.
ovember,
10
11. <Line graph 11: Accumulated number of installs of all genres
genres>
<Line graph 12: DAU of all genres
: genres>
11
12. <Line graph 13: Revenue of installs of all genres>
:
Fashion games have been around for a long time in Korean online game industry but it
was not until recently that it was published as a social game. Beginning with My Style in mid
September to Fashion City in early October, many developers have begun to release their own
“fashion mall” games in Nate.
. Moreover, since fashion is a captivating content to female users,
business simulation genre continues to be the most female-biased (26:74) genre in the market.
The second most female-biased genre is Pet & Management with ratio of 29:71 By shaking the
biased :71.
contents upside-down, what would happen if there s an attractive business game (or Pet game)
, there’s
for male users as well? Indeed t
there is a big niche market for developers to penetrate into.
<Line graph 14: Number of installs of business simulation
simulation>
12
13. Simulation Games Still More Profitable
Simulation games (Farming, Aquarium, City Building, Business, Pet & Management) still
holds most of the market share throughout fourth quarter. With relatively smaller pool of users,
simulation games’ revenue far exceeded non-simulation games; almost 90% of the total revenue
still comes from simulation games.
<Pie graph 6: Total User ratio & Total Revenue ratio of Simulation and Non-simulation Games>
Among the simulation games, revenue of Business Simulation and Pet & Management
genre soared. Five new business games were released just in 4th quarter and among them, the
success of Fashion City made it possible for business to achieve quantitative and qualitative
growth; number of installs, DAU, and revenue greatly rose during the period. Pet & Management
genre also managed to recover from its long recession since 3rd quarter. With two new titles, Pet
& Management genre entered an uptrend phase in November and surged in December.
13
14. <Line graph 15: Revenue of Simulation Games>
<Line graph 16: Revenue of Non
Non-simulation Games>
14
15. <Line graph 17: DAU of Simulation Games>
imulation
<Line graph 18: DAU of Non-simulation Games>
imulation
Compared to simulation games, most of the non simulation games (excluding RPG) are
non-simulation
still having a tough time attracting active users and increasing sales. Sports genre, which was
rd
once successful in 3 quarter, also experienced a downtrend in both DAU and revenue since
September.
15
16. Although non-simulation games might be lagging behind the simulation games in the
simulation
macro -perspective, some of them are actually performing better and more efficient. Comparing
perspective,
the ARPPU, RPG and Sports genre actually shows better performance than most of the simulation
games. RPG especially, earned twice as more from individual paying users than most of the
simulation games.
<Bar graph 1: ARPPU of Simulation Games
: Games>
<Bar graph 2: ARPPU of Non-simulation Games>
simulation
16
17. Conclusion
2010 was a year of growth for Nate AppStore. Although it took off years behind others,
it has significantly grown within a short period of time. As more and more developers have set
their foot in the market, including some big online game companies, the perception of social
games have started to change. Compared to the past when online game giants didn’t accept
social games as “real games”, the situation has now improved; G-Star 2010 recognized social
games as one of its fastest growing branch and even hosted major foreign developers such as
Zynga, Playdom, Playfish, RockYou Asia, Kabam, 6 Waves, Second Wave and so on. Moreover, big
enterprises have announced their future plans to invest in the social gaming business: Microsoft
supporting free cloud servers, CJ Internet and SK Telecom/Nate investing 10 million USD in social
gaming businesses. All these transitions prove that social games are no longer in the outskirts of
the gaming industry.
The 4th quarter of 2010 was another period of transition: RPG showed its boundless
possibilities as a social game, catching both DAU and revenue. Pet & Management genre
managed to escape from its long recession. Business simulation games have finally joined the
mainstream along with other simulation genres. Aqua Story and Ani Sachunsung have
accumulated over 1 million users as a single title. Moreover, Nate AppStore has finally launched
its mobile AppStore service on mid December and plans to open its new mobile web service in
April 2011, opening new channels for social games to penetrate a fast growing consumer base.
Overall, the future Korean social gaming industry looks bright. As social games are
being described in Korea as the next blue ocean within the IT industry, more and more developers
are joining the general trend. According to a survey by Nate, at least 80 new applications are
under development for release in 2011. And not only developers are improving but platforms
are also striving to create a better ecosystem for both platform and developers as well. But
above all, what is most important are the users. Attracting new users as well as sustaining them
is the next key problem that platform and game developers must solve.
17
