Open Gaming Alliance @ CES VR Fest 2016

© Copyright Open Gaming Alliance 2016 - Page 1
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The Open Gaming Alliance (OGA) is a non-profit trade association focused on the
supporting the business of the games industry ecosystem.
• Be of service to developers and the industry
• Respond to our members’ needs
• Promote developers’ contribution to the economy and society
• Analyze and report on the industry’s growth, strength and vitality
• Support opportunities for entrepreneurs and innovators
• Provide positive leadership and embrace diversity of thought, gender, religion, and ethnicity
OGA’s Mission
OGA’s Commitment to the Industry

New OGA Members in 2015 (not all announced yet)

OGA Special Interest Groups (SIGs)
• Research SIG
• VR/AR SIG
• eSports SIG
• Software SIG
• Security SIG
• Indie SIG
• Diversity SIG
• Serious Games SIG
• Education SIG
• Monetization SIG
• Cloud Gaming SIG

VR Development has Changed
1980s-2000s
• Tools very expensive or custom built
• Specialized high-end systems
• Cost millions of dollars to build
• Applications: Training, Experimental
Nicole Stenger, 1992
2016
• Indies developers are leading the charge on
content = 62% are indies
• Unity and Unreal democratized market
• 8%+ of developers doing VR games
• Applications: Games and Film & Enterprise
Playful Corp. – Lucky’s Tale
Source: M2 Advisory Group

What We Know About VR
Key Players:
• Oculus Rift (VR - Facebook) – Q1 2016 $599
• Samsung Gear VR, Sony Morpheus – Q1 2016
• Razer OSVR, Google Cardboard, Magic Leap, Envelop VR (Uber Games spin off startup), Microsoft HoloLens,
Valve & HTC VR (aka Steam VR), Starbreeze, GearVR, Vuzix (Intel invests $25m), Immersion, Fove.
Considerations:
• Expect slow volume ramp time
- Comparison: Consoles in full swing typically sell between ~9-15m annually on average when fully ramped
• Estimated *entry* Price Points of HMD: ~$350-$650
• Risk Factors:
- Cost of produce the content
- High barrier to entry for what is roughly mainstream to high end.
- Oculus Recommended Specs for the full Rift experience: ($800 - $1000 not including monitor)
- NVIDIA GTX 970 / AMD 290 equivalent or greater (starts at $350)
- Intel i5-4590 equivalent or greater
- 8GB+ RAM
- Compatible HDMI 1.3 video output
- 2x USB 3.0 ports
- Windows 7 SP1 or newer
2/2/2016 Open Gaming Alliance Confidential - For OGA members only

2015-2016 Projections
• 2016: 38 million VR headsets will be sold –
This is very high for year 1 sales
• 2016: VR/AR market $5 billion –
Again, high for year 1 of sales
• Q4 2014 & 2015: $1B in M&A (2015 = $250M)
This is actual
Market Size of VR and AR – Who Knows?
Analyst are aggressive on projections, a little too optimistic:
2020: Total VR & AR Market = $150 Billion
This is very aggressive for 4 year growth

State of Gaming – What We DO Know
1. PC Gaming Software growth 12% in 2014 > 13% for CY 2015!!! Great Year for PC Gaming!
2. Biggest Games
 CoD BO III, Newly Released: Fallout 4, Battlefront, CoD BO III, etc. Existing: LoL, Dota 2, Hearthstone,
Minecraft
 Big Games continue to drive sell up & increased frequency to refresh
3. VR, & AR (HMD = Head Mounted Display)
 Potential for additional opportunities in sell up & refresh
4. Microsoft
 Windows 10, & DirectX 12 – now on your Xbox One!? Universal Apps
5. Valve’s Steam OS, Machine, & Controller – launches!
6. GDC 2016
 Expect focus to be around VR
7. eSports: Popularity hits a minimum of ~150+m viewers
8. 4K (UHD) display prices continue to drop
 1080p is the new 720p
9. Smart Toys Growing
- Disney Infinity 3.0

Gaming Demographics
PC Gaming Install Base: Estimates 711 Million ‘Active Users’ from an estimated ~1.2+ Billion PC Gaming TAM
CY 2014 Open Gaming Alliance Confidential - For OGA members only
Enthusiast
Mainstream
Entry (Casual – Web)
36m
250m
425m
3+
Years
5+
Years
7+
Years
PC Refresh &
Upgrade Cycle
Sources: Open Gaming Alliance Pinnacle Report, DFC, JPR, IDC, ISV Discussions, Public Domain PR Releases, and Intel Est.
Recognize that there’s no
perfect system. Gamer
habits, spending, time
spent highly variable.

Hardware
OGA Estimates - PC Gaming Hardware Market
•Gaming Hardware Market = $86.1B
• How do we get this #?
- Total HW Market = $631 Billion.
- Combination of public records/filings vetted against private and other sources.
- Removing all OEM Consumer PCs, & Apple still nets $31.1B directly coming from Gaming Hardware.
• Key Segments
1. OEM PC sales for gaming (Attribution less than the OGA est) = $50B
2. OEM Gaming Branded(“Boutique”) PCs for Gaming = $5.5B
3. Apple = 22mu 2014 OSX devices w/25% gamer attribution = $5B
4. DIY AIB/Components = $10B
5. DIY/MOBO = $1.5B
6. Displays = attributed at $8.5B
7. Audio = attributed at $2B
8. Peripherals = $3.6B
- NOTE: Subject to change when more accurate data becomes available
Sources: Open Gaming Alliance Pinnacle Report, Public Domain & Filings

2007 to 2018
The OGA view of the transition to F2P & Digital Distribution
• Business models: Dominance of F2P/Freemium the #1 Driver due to low cost/barriers to entry
- Over 56% of PC Gaming SW Revs coming from APAC region
Sources: Open Gaming Alliance (DFC) Pinnacle Report

We Will Need Diversity
Diversity of: Development, Content, Applications, Consumers

Partnership
• Provide collaboration across markets
• Support standardization for development and consumer adoption
• Build unified initiatives that support growth of ecosystem
OGA & ITA PARTNERSHIP

Wanda Meloni
Executive Director, OGA
wanda@m2research.com
Open Gaming Alliance – Thank You

Open Gaming Alliance @ CES VR Fest 2016

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