Games Keynote - Presentation by Tim Merel, Founder & CEO of Digi-Capital at the NOAH 2013 Conference in London, Old Billingsgate on the 14th of November 2013.

1. Games Keynote
Contact: tim.merel@digi-capital.com
www.digi-capital.com
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© Digi-Capital 2013

2. The games market is undergoing massive transformation
Mobile/Online
Casual
Hardcore
Console/PC
2

3. Driven by mobile internet – the most disruptive long term force
Estimated range of economic impact by disruptive technology in 2025 ($ Trillion annual)
0
2
4
6
8
10
Mobile Internet
Mobile Internet
Automation of knowledge work
Mobile
Internet to
create up
to $11
trillion
value
across
industries*
annually
in 2025
Internet of things
Cloud
Advanced robotics
Autonomous and non-autonomous vehicles
Next-generation genomics
Energy storage
3-D printing
Advanced materials
Advanced oil and gas exploration and recovery
Renewable energy
3
Source: McKinsey Global Institute, May 2013 (estimates adapted)
* Across all industries, not just games

4. Leveraging massive industry and consumer investment
Well developed, global mobile tech stack
Devices/OS
Cross-platform
development
Global smart devices with mobile connection (B)
4.0
Mobile web
development
3.5
3.0
2.5
2.0
Programming
languages
Development
kits
1.5
Mobile Enterprise
App Platforms
1.0
0.5
0.0
2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F
Smartphone
Tablet/Other Mobile
Global mobile data traffic (PB/Month)
Global mobile broadband subscriptions (B)
6
14,000
5
12,000
10,000
4
8,000
3
Large and
rich
mobile
app, game
and tech
potential
on top of
underlying
growth
6,000
2
4,000
1
2,000
-
0
2010
2011
2012 2013F 2014F 2015F 2016F 2017F 2018F
Smartphone
Tablet/Other Mobile
2010
2011
2012 2013F 2014F 2015F 2016F 2017F 2018F
Smartphone
4
Tablet/Other Mobile
* Sources: ITU, Ericsson, Cisco , Gartner (estimates adapted)

5. Games dominate mobile app usage, downloads and revenue
iOS/Android (Mobile/Tablet) Usage
Health &
Fitness
1%
News
2%
Lifestyle
1%
25
Other
5%
Utilities
10%
Games
43%
Entertainment
10%
20
Games monetise ~4x more effectively
than all other mobile app types
15
Social
Network
26%
Note: Games = 67% tablet usage
Games = 72% revenue
Productivity
2%
Global mobile apps/games revenue ($B)
10
Top 5 mobile app countries (revenue)
5
0
2010
2011
Non-games mobile app revenue
5
2012
2013F
Mobile games revenue
* Sources: Flurry, AppAnnie, Gartner

6. Free-to-play and communal gameplay changing sector dynamics
Communal Gameplay
Communal vs standalone gameplay user/revenue uplift
(competitive/collaborative)
Subscription MMO
Free-to-play
MMO
13x
OTT+
12x
>10x
Social
10x
Paid
Tech/Gamification
8x
Free
To
Play
6x
4x
Mobile/tablet
2x
+7%
Casual online
0x
Paying users
Single Player
Single player
6
ARPPU
PvE* only
PvP* only
ARPU
PvP and PvE
Sources: Companies, Kongregate
* ARPPU = average revenue per paying user, ARPU = average
revenue per user, , LTV = lifetime value, PvE = Player vs
environment, PvP = Player vs player
+ Over-the-Top

7. With long term mobile migration to free-to-play business models
Global mobile app downloads (B)
Global mobile app revenue ($B)
350
80
70
300
60
250
50
55% of
revenue
200
40
150
30
100
20
50
0
2010
45% of
revenue
10
2011
2012
2013F
Free-to-play
2014F
2015F
0
2010
2016F
2011
2012
Paid download
Paid
7
2013F
2014F
In-App purchase
Source: Gartner
2015F
2016F
Advertising

8. The Big V is accelerating the split into Value and Volume markets
Value
Volume
(large long-term niche)
(mass market growth)
Europe
China
America
Mobile/
tablet
Japan
India
Console
South Korea
Subscription MMO
Brazil
Mobile-social
Over-the-Top
Free-to-play MMO
Tech/gamification
Social/casual online
Users: thousands to tens of millions
ARPU: $-$$$
Costs: $ millions to tens of millions
Operating profit: negative to 20%+
Growth rates: negative to <10%
Business model: unit sales, subscriptions, virtual goods
Users: thousands to hundreds of millions
ARPU: ¢ - $$
Costs: $ tens of thousands to millions
Operating profit: negative to 70%+
Growth rates: negative to 100%+
Business model: unit sales, free, virtual goods, ads
8

9. Asia’s potential dominance accelerating vs Western markets
Global Video Games Sector Revenue ($B)
90
80
70
60
50
40
30
20
10
0
2007
2008
2009
2010
Console
2011
Online
2012
Mobile
2013F
PC
2014F
2015F
2016F
2015F
2016F
Advertising
Regional Mobile/Online Games Revenue ($B)
50
40
30
20
10
0
2007
2008
2009
2010
North America
2011
2012
Europe
2013F
Asia Pacific
9
2014F
Latin America
Sources: PWC (excludes hardware revenue), Companies
* Note: Pure console excludes MMO
† Note: Online includes MMO, casual and social games
** Average Revenue per User

10. Games investment gap in 2013, M&A at record $5.2B to date
6,000
180
160
5,000
140
4,000
120
100
3,000
80
2,000
60
40
1,000
20
-
0
2005
2006
Investment Value
2007
2008
2009
M&A Value
2010
2011
Investment Volume
10
2012
2013P
(projected
from Q3)
M&A Volume
Sources: CapitalIQ (excludes Vivendi Activision and Vivendi Universal Publishing deals), NPD
Group, Charttrack, GfK, Activision Blizzard, Companies, Bloomberg, VentureBeat, NY Times
Note: Funds raised/transaction value only includes disclosed or estimated amounts, including
announced earn outs where applicable
* Note: IPO market capitalisation estimates
+ Excludes Shanda take private, LucasArts component of Disney/Lucas Film, Microsoft/BesTV
JV, Forgame IPO, Activision-Blizzard/Vivendi

11. With a changing pyramid of potential consolidators
8 of the10 largest M&As to Q3
2013 had Chinese, Japanese
or South Korean buyers
Today’s growth companies
could become tomorrow’s
consolidators
11
Note: Companies are for illustrative purposes only