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Games Industry Outlook
      NY Games Conference
       September 30, 2009
Good Morning



            J oost



      SuperData Research, Inc. 2009
Top 5 Trends in Gaming

I. Smartphones
II. Digital Distribution
III. Trading Card Games
IV. Prepaid Game Cards
V. Growing ...
I. Rise of the Smartphones
       A ‘market within a market,’ expected to grow ~4 times
       faster than the overall han...
II. Digital Distribution Marches On
      Different Technology, Different Consumer Behavior


                            ...
II. Digital Distribution Marches On
        As consoles step up online offerings, digital distribution of
        video ga...
III. Trading Card Games
TCGs are very compatible with Internet-based play,
without surrendering any portability




      ...
III. Trading Card Games
 This sleeping giant has a loyal following, strong licenses
 and capable of a smooth transition in...
III. Trading Card Games
      TCGs are a natural extension for F2P, especially those
      with a strong brand or license
...
IV. Prepaid Game Cards
     Rising popularity of online game play has also spurred
     growth in prepaid game sector



T...
V. Growing Free2Play Market
 Emerging markets show growing appetite for F2P and
 offer advantages that developed market do...
Conclusion

Smartphones: Growing market, but not infinite
Digital Distribution: Exchange seasonality for economic
vulnerabi...
Thanks



   joost@superdataresearch.com




         SuperData Research, Inc. 2009
Fine Print
Conditions
SuperData Research (“SuperData”) has made every attempt to verify the
accuracy and completeness of i...
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NY Games Conference 2009

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This is an edited version of the presentation I did at the NY Games Conference. It is a discussion piece on the top trends in gaming that I'm observing for the coming year. This includes remarks on Smartphones, prepaid game cards, F2P, and Trading Card Games.

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NY Games Conference 2009

  1. 1. Games Industry Outlook NY Games Conference September 30, 2009
  2. 2. Good Morning J oost SuperData Research, Inc. 2009
  3. 3. Top 5 Trends in Gaming I. Smartphones II. Digital Distribution III. Trading Card Games IV. Prepaid Game Cards V. Growing Free2Play Market SuperData Research, Inc. 2009
  4. 4. I. Rise of the Smartphones A ‘market within a market,’ expected to grow ~4 times faster than the overall handset industry WW Handset Shipments (% of units) 70.0 As annual shipments 52.5 for Low End and Mid- Tier handsets are 35.0 declining, shipments for Smartphones expected to reach 17.5 almost 300MM units by 2010E 0 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E Low End Mid-tier Smartphones SuperData Research, Inc. 2009
  5. 5. II. Digital Distribution Marches On Different Technology, Different Consumer Behavior Monthly Sales as % of Annual 30.0 Shift toward digital distribution reduces seasonality, attracts 22.5 consumers outside of traditional holiday season 15.0 Decreased dependence 7.5 on “once-a-year casual shoppers” 0 J F M A M J J A S O N D Games Software Overall Software SuperData Research, Inc. 2009
  6. 6. II. Digital Distribution Marches On As consoles step up online offerings, digital distribution of video game grows from 19% in 2008 to 23% for 2009E U.S. Video Games Sales: 1999 - 2009E 15.00 11.25 Worldwide digitally downloaded game 7.50 sales expected to reach $10.8 billion by 3.75 2012 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E Physical Games Sales Digital Games Sales % of Video Games Sold Online SuperData Research, Inc. 2009
  7. 7. III. Trading Card Games TCGs are very compatible with Internet-based play, without surrendering any portability Online Game Play Offline Social Play SuperData Research, Inc. 2009
  8. 8. III. Trading Card Games This sleeping giant has a loyal following, strong licenses and capable of a smooth transition into digital age Japan 23% U.S. Total TCG market 40% estimated at $2.2 billion worldwide Europe 37% mil $ 2002 2003 2004 2005 2006 2007 2008 2009E U.S. Retail Sales 750 850 700 475 550 600 800 845 SuperData Research, Inc. 2009
  9. 9. III. Trading Card Games TCGs are a natural extension for F2P, especially those with a strong brand or license Free Realms (SOE) Club Penguin (Disney) MapleStory (Nexon) World of Warcraft (Blizzard Ent.) Pokémon (Nintendo) Yu-Gi-Oh! (Konami Digital) SuperData Research, Inc. 2009
  10. 10. IV. Prepaid Game Cards Rising popularity of online game play has also spurred growth in prepaid game sector Traditionally cheaper than using credit cards Gives younger audiences controlled access Infrastructure already in place SuperData Research, Inc. 2009
  11. 11. V. Growing Free2Play Market Emerging markets show growing appetite for F2P and offer advantages that developed market do not Growth % Emerging Market Jan-April ‘09 Turkey 158.4% In emerging markets, most Brazil 100.0% players play at PC Cafés, Taiwan 78.4% and do not want to buy and Sri Lanka 72.0% download a game to a Philippines 69.8% machine they don’t own Russian Federation 63.6% South Africa 51.6% Limited competition from China 46.8% consoles in these markets Vietnam 37.5% India 34.4% Average Growth 71.2% SuperData Research, Inc. 2009
  12. 12. Conclusion Smartphones: Growing market, but not infinite Digital Distribution: Exchange seasonality for economic vulnerability Trading Card Games: Great ancillary venue for cool IP Prepaid Game Cards: Expanding addressable market by lowering boundaries for financial transactions Growing Free2Play Market: Great model to penetrate emerging markets SuperData Research, Inc. 2009
  13. 13. Thanks joost@superdataresearch.com SuperData Research, Inc. 2009
  14. 14. Fine Print Conditions SuperData Research (“SuperData”) has made every attempt to verify the accuracy and completeness of information here presented from sources we believe to be reliable. It is understood, however, that our estimates, forecasts, opinions and recommendations represent the judgment of our analysts, based on the best information available at the time of publication. It is recommended that purchasers also consult other available business sources and not rely solely on this analysis as the basis for major strategic, financial, or management decisions. SuperData makes no warranty or representation, either expressed or implied, with respect to the information in this report. In no event will SuperData be liable for direct, indirect or consequential damages resulting from any defect or inaccuracy in this report, even if advised of the possibility of such damages. Information about specific companies is not intended to be a complete description, nor of their securities, nor is this study an offer to buy or sell such securities. SuperData’s liability, if any, shall not exceed the amount paid for this study. SuperData Research, Inc. 2009

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