Social Casino Opportunities and Challenges in APAC
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Social casino gaming is a large and growing market, particularly in Asia Pacific regions like China, Japan, and Korea. By 2017, the global social casino market is estimated to generate $4.44 billion in revenue, with Asia Pacific as the second largest region after North America. However, western game developers face challenges in Asia Pacific markets like the need for local support, customized games and art, and local pricing strategies. Successful companies are investing and acquiring both to and from eastern and western markets to expand their reach.
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Social Casino Opportunities and Challenges in APAC
- 1. SOCIAL CASINO AND APAC:SOCIAL CASINO AND APAC: OPPORTUNITIES &OPPORTUNITIES & CHALLENGESCHALLENGES Adi Hanin BusinessDevelopmentManager Playtika adih@playtika.com
- 2. PLAYTIKA OVERVIEWPLAYTIKA OVERVIEW 2010 Founded in 13Platforms 5Games Social Casino global market leader 1000+ Employees
- 3. PLAYTIKA OVERVIEWPLAYTIKA OVERVIEW12 Global offices; Head Quarters in Tel Aviv, Israel
- 4. PLAYTIKA IN NUMBERSPLAYTIKA IN NUMBERS $549.1 Revenues in 2014 millions 5.7 DAU millions 18.5 MAU millions $0.27 DARPU 53%of revenues from mobile
- 6. GAMING MARKET OVERVIEWGAMING MARKET OVERVIEWBy 2017 the gaming market will generate ~106BN$, most of the growth from mobile Global Game Revenues By Region - 2014 NAM $23 BN E-EU $2.4 BN W-EU $15.5 BN MEA $1.6 BN LATAM $3.4 BN APAC $37.5 BN Total $83.4 BN Population 7.2 BN Onlinepopulation 2.9 BN Gamers 1.7 BN Source:Newzoo
- 7. APAC GAMING MARKETAPAC GAMING MARKET OVERVIEWOVERVIEWChina, Japan and Korea generates ~ 90% of the games revenues in the region India:$58 M China:$17.7 BN Japan:$12.5 BN Korea:$3.6 BN Taiwan:$64 M Indonesia:$150 M Australia:$1.14 BN Total $37.5 BN Population 3.9 BN Onlinepopulation 1.3 BN Gamers 815 M Source:Newzoo
- 9. SOCIAL CASINO IN CONTEXTSOCIAL CASINO IN CONTEXT - + SOCIAL CASINO
- 10. SOCIAL CASINO: MARKET SIZESOCIAL CASINO: MARKET SIZE 2012-2017E2012-2017EBetween 2012-2017 social casino revenues from mobile would increase by ~930% Source: Eilers
- 11. MOBILE REVENUES REGIONALMOBILE REVENUES REGIONAL SNAPSHOTSNAPSHOTGlobal Social Casino Revenues By Region - 2014 NAM $1.02 BN EU $158 M MEA $8 M LATAM $32 M APAC $363 M Source: Eilers
- 12. LOCAL GAMES FOR “GLOCAL”LOCAL GAMES FOR “GLOCAL” MARKETMARKET LATAM China&SouthEastAsia MEA India Japan
- 13. LOCAL GAMES FOR “GLOCAL” MARKET LATAM China&SouthEastAsia MEA India Japan
- 14. SOCIAL CASINOSOCIAL CASINO IN APACIN APAC
- 15. CHALLENGES IN APAC FOR WESTERNCHALLENGES IN APAC FOR WESTERN GAME DEVELOPERSGAME DEVELOPERS Local Pricing Local Games & Art Local Support Local CRM
- 16. WEST TARGETING EAST ANDWEST TARGETING EAST AND VICE VERSAVICE VERSAEAST TO WEST WEST TO EAST
- 17. SINGAPORE SNAPSHOTSINGAPORE SNAPSHOT Social casino revenues ~$12 M Population 5.5 M Onlinepopulation ~4 M Mobilesocialcasinoplayers ~181 K Slotsgamesconstitute ~48% ofthetopgrossingsocialcasinorevenuesinSingapore Social Casino Genres
- 18. QUICK RECAPQUICK RECAP • By2017thegamingmarketwillgenerate~106BN$, mostofthegrowthfrommobile. • China,JapanandKoreagenerate~ 90% ofthe$37.5 BN gamingrevenuesintheregion. • By2017,theSocialcasinomarketwillgenerate$4.44 BN,globally. • In2014,APACwasthesecondlargestsocialcasinomarketafterN.America,withrevenuesof$363M. • SomeofthechallengesthatwesterngamedevelopersfaceinAPACinclude:localsupportandCRM,localgamesandArtandlocalpricing. • Investmentsandacquisitionsarebeingmadefromthewesttotheeastandviceversa. • ThereisnosuchathingasanAsianmarket!
Editor's Notes
- Playtika is a global company that has 12 studios around the world. From Santa Monica to Tokyo, Argentina, Ukraine etc.
- Darpu- is gross
- Just to put things into a context, how many of you come from the real money world? And how many from the social casino world? How many are neither? As you know, RMG and social casino companies use different KPIs to measure success. So, Before I start I would like to make sure that we all speak the same language. So, when I refer to the gaming market , it includes : MMOs (massively multiplayer online games), computer games, tablet and smartphone games, consoles etc.),
- Also, according to predictions by 2017 the games market will generate 106 BN$ You can see that almost 60% of the online population are gamers, and that the largest market is APAC with revenues of 37.5 BN$
- With a population of 3.9 BN people, third of them are online APAC is one of the most lucrative markets in the gaming industry. Within APAC, China, japan and Korea are responsible for 90% of the games revenue In the area.
- Playtika is part of the entertainment industry, our players choose our games over going to their favorite restaurant, or watching an episode of their favorite tv show. We are much more like King and Zynga than we are like Playtech and 888 and other real money gambling companies
- OK, a little context about the world that Playtika operates in – the social casino world. Games of chance have been played since the times of the ancient Greeks, The first slot machine was invented in the 1890’s. The innovation of Social Casino is in the adaptation of casino games into a non-gambling environment, using modern platforms. There is an interesting story about Uri and Robert, the founders of Playtika. When they were looking for investors, they literally got the door slammed in their face as no one believed that people would play casino style games if they can’t cash out win real money. And we all know what happened since…
- This year, the social casino market has generated 2.84 BN $. By 2017 it is expected to generate 4.44 BN $ . The majority of revenues comes from mobile, and this trend will only get stronger in the next years. Between 2012 and 2017 the social casino revenues from mobile alone will grow by 930%
- Recently we see that when people analyze the social casino industry they look at it from a regional perspective and not as a whole. After north America, which is a pretty saturated market, APAC is the second largest market for social casino with revenues of $363 M in 2014. Take into consideration that there is a black hall in the revenues in china, due to the multiple Google Play Appstores that are not considered in this number. Just to give you a sense of scale , by 2019 , 110M smartphones will be sold in NAM. And 2 BN smartphones will be sold in APAC. the smartphone penetration in NAM is high comparing to APAC where we currently see the tip of the iceberg. Considering that everyone are gamers, you can do the math and see where the growth in the next years will come from.
- Local Games for Local Markets Social Casino: Asia is the biggest gaming market on the globe (B$) as we saw before, and the key to success in our eyes is localization. Here a few examples for companies that create local games for different local markets: OCTRO – the developer of teenpatti, moonfrog- also a developer of teenpatti, just announced that it has raised 15M $ from Sequoia Boyaa – for china and south east asia – with titles like: Boyaa Dou Di Zhu and Boyaa texas hold’em poker, localized per country Akamon and playspace in Latam- title like Parcheesi Butterfly corp- which has moba7 – a pachislot an pachinko game MEA- pinch-point (Al Mamlaka – Arabic card game), PlayGem – social Backgammon, Peak-games (okey plus – Turkish version of Rummikub) Taking a closer look at the top grossing social casino apps in APAC , we can find some local games such as : dragon Poker, japaneese version of poker (Asobism) – 60M revenues in the last year (ios and GP), and landlord poker (by shenzen tencent)- a Chinese poker game with revs of 11.5M $ in the last year
- We all took long flights… our eyes are in the right place…
- The first challenge is Local CRM, every country has different events and holidays throughout the year, and this are all great opportunity to engage your players. Here you can see an example of a pop up promotion we had offered our Japanese slotomania players. Apparently there is a holyday in Japan called Hinamatsuri (doll’s day- the Japanese celebrate the belief that the dolls take away the bad spirits) so we have created a special promotion for them. In that case I am almost sure an American thanksgiving promotion wouldn’t work as good as it did. The second challenge is the local Pricing -in the industry of social casino we deal with virtual currency, and virtual goods unlike RMG. In our case its not enough to just convert dollar into yen and baht etc. building your local pricing strategy there are a lot of economic factors that needs to be considered , one of them is GDP ((gross domestic product) but there are many more. The third challenge is local games and local art- I’ve mentioned before that in order to penetrate a new region successfully, you should consider offering local games to local markets. In any country you look into, you’ll discover a verity of local games that most chances are you’ve never heard of them before. Here you can see two examples for local games: the first one is Teen Patti (by Octro) which I have mentioned in the previous slide– there is actually an interesting story about teen patti – our research department is always tracking the top grossing charts and looking for new interesting products and what we’ve seen about this game has actually blown our mind - they have scaled from 0-7 Million in few months, this is an example of a local game in a country that doesn’t monetize very well, but it gives a sense of the scalability of a popular local game. The second example is another local game called mahjong, which is a Chinese version of rummikub. The last challenge is the local support- your players would highly appreciate getting support in their own language with the specific costumer service nuances that they are used to. Your reward would be seeing them in your game again, which is quite an achievement. This slide does not intend to scare you (though it might be easier competition wise), but just to give you a sense of what you should consider,
- Despite everything I just said, there are many companies that are already stepping in that direction (east) and also companies from the east that try to crack the western market. If I need to summarize the what we are seeing in one sentence, I would say that every company that has established its position at its home territory, is now trying to break into new and less familiar markets. Few recent examples of western companies that have their eyes on Asia: Seqouia –American venture capital, recently invested 15M$ in a teen patti game (moonfrog), after investing in Octro’s. Imangi studios (usa) and the Australian Halfbrick , both published their games in asia using iDreamSky- one of the largest publishers in Asia has localized temple run and Fruit ninja to suit the Asian market and published them in Asia This trend has not skipped the Asian companies, Lets see what attempts has been made to date: The telecoms group SoftBank Corp (based in japan) paid $1.53 billion for the majority rights (51 percent stake) in clash of clans developer: Supercell (finland) Chinese ecommerce giant Alibaba has invested around $280 million in the American messaging app -Tango, that also has games platform The Japan’s GREE Acquires Another U.S. Studio, App Ant, To Build Games For Western Audiences Japanese game developer Gumi has published ‘brave frontier ‘ in the western market And last, Tencent ,Chinese Internet giant recently paid $126 million for 14.5% of Glu (developer of Kim Kardeshian). Tencent also owns Riot games, the developer League of Legends. half of epic games and has recently bought the majority stake at Mini clip (the leading European mobile and web game publisher ). West to east: So, apparently attempts are being made in this direction, regardless of the challenges I have mentioned before
- I would like to give you a small example of the reason we shouldn’t look as the Asian market as a whole, bet per country. here you can see a snapshot of Singapore. A market with 5M $ revenues from social casino. In Singapore, 48% of the top grossing social casino apps are slots and Bingo barely has a market there. Top grossing in Singapore (2014, ios+gp) – Slotomania – non-localized Hof- not localized Zynga poker - ? op grossing in HK (2014, ios+gp) – Boyaa Texas Poker – localized version of texas holde’m Slotomania – non-localized Pokerist Texas Poker (AMAGAMES LTD) – not localized