An overview of Asia's social gaming scene given at Casual Connect in Hamburg in February 2011.

1. Social Gaming in Asia
@benjaminjoffe
|
CEO,
+8*
Casual
Connect,
Hamburg
|
2011.02

2. ngmoco:)
+
DeNA
(October
2010)
$400M
<
2010
Profit!

3. Riot
Games
+
Tencent
(January
2011)
$400M
=
1/3
of
2010
profit

4. Tencent
CollaboraJon
Fund
(January
2011)
$760m
Fund!

5. @benjaminjoffe

6. 4
years
1
year
5
years

7. • CEO,
Plus
Eight
Star
|
www.plus8star.com
– Best
pracJces
from
Asia’s
digital
space
– Research,
Strategy
&
“InnovaJon
Arbitrage”
• References

8. Angel
Investor,
Advisor,
Keynote
Speaker
• Speaker
100+
talks
in
16
countries
• Advisor
to
Incubators
• Investor
in
Asia-­‐based
global
companies

9. IntroducJon
Quiz!
Chapter
1
South
Korea
Chapter
3
Japan
Chapter
4
China
Chapter
6
Conclusions

10. Quiz!

11. Quiz!

12. Quiz

13. Quiz

14. Quiz

15. Quiz

16. Quiz

17. More
than
Facebook
and
USA
• Facebook
• LinkedIn
• QQ
(Tencent)
• Qzone
• RenRen
• Kaixin001
• Xiaonei
• 51.com
• Mixi
And
more…
• Mobile
Game
Town
• Gree
• Cyworld
• Friendster

18. Billion
Dollar
Brands
$B
$B
• Facebook
• LinkedIn
$B
$B
• QQ
(Tencent)
• Qzone
$B
$B
• RenRen
• Kaixin001
• Xiaonei
• 51.com
• Mixi
$B
And
more…
• Mobile
Game
Town
• Gree
• Cyworld
• Friendster

19. Market
Caps
(2011.02)
$800M
$3.5B
$5.2B
$45B

20. South
Korea

21. Cyworld
• SNS/VG
pioneer
since
10
years
ago
– Stagnant
for
several
years
– “The
new
MySpace”?

22. 2009.10
|
Nate
App
Store
• Leverages
Nate’s
reach
• Slow
rise
(2M
users)
• Semi-­‐open
• Rev
share
(70/30)

23. Portals
join
the
dance
• .
Naver
Social
Apps
• .
Yozm
by
Daum
• Results
– Just
started
– No
social
graph

24. Facebook
Rising
• Facebook
in
Korea
– Usage
growing
– Local
office
– Hired
from
Cyworld
• Why?
– Users
bored
of
Cyworld
– Virtual
goods
market
– Games
market

25. Online
Games
• Online
games
market
$3B+
• Leaders
Nexon,
NHN,
NC
Sos
• Expanding
overseas
China,
Japan,
US,
Emerging
markets
Source:
KOCCA

26. Answer
• #1
in
Online
Gaming
• Pioneer
in
virtual
goods
• First
MMO
in
1996!
Min
Seo,
CEO

27. Nexon
Today
• Revenue
2010:
$1
billion
(E)
– Over
half
from
overseas
– Market
lisJng
in
2011
(rumor)
• Some
famous
games
• Kart
Rider
(200M
reg.
users)
• Dungeon
&
Fighter
(200M
reg.
users)
• Maple
Story
(95M
reg.
users)
• Combat
Arms
(FPS)
• Sudden
Avack
(FPS)
• Etc.
Source:
Nexon

28. Foreign
Players
in
Korea?
Some
limited
successes…

29. Summary:
South
Korea
• 3
social
plaworms
(+
Facebook)
• Young
market
(<$10M)
• But
strong
in
online
gaming
($
bln)

30. Japan

31. Mobile
SNS
Make
a
Killing
• Revenue
$2
billion!
• Walled
Garden
mobile
app
plaorm
• Mass
promoJon
TV,
Billboards,
Posters…
• Publish
+
Develop
1st,
2nd,
3rd
Party
dev.

32. Mixi
• Inspired
by
• Friends
(PC)
• Mobile
(mobile)
• FB
(apps,
“like”)
• Twiver
(micro-­‐blog)
• 21
million
users
• Pageviews
– 14
million
MAU
– Mobile
28
billion
PV
– PC
5
billion
PV

33. Mixi
Page
(PC)

34. Mixi
Page
(mobile)

35. Mixi
• Revenue
2010
(E)
$166
million
– Profit
margin
20%
• 2Q2010
$49M
– Profit
margin
25%
– Run
rate
2010
$200M

36. Mixi
|
Users
• Gender-­‐Balanced
• 90%
above
20
y.o.
Total
Mobile
Total
Mobile

37. Mixi
|
Pageviews
2009.10
PC
ApplicaJons
Plaworm
2009.08
Mobile
Ad
prices
for
mobile
=
1/3
of
PC
price

38. Mixi
|
Apps
• Apps
– PC
>
1,000
– Mobile
>
600
• Apps
contribuJon
– Minor
for
revenue
<10%
– High
for
PV
• Smartphone
UI
“Mixi
Touch”
Machi
Tsuku
(3M
MAU)
by
Unoh
/
Zynga
Japan
Source:
Masaru
Ikeda
@
Asiajin

39. Mixi
|
Popular
Games
Game MAU Category Developer
1 Sunshine Farm 5.4M RPG Rekoo
2 Mixi Xmas 2010 2M Entertainment
Mixi
3 City Builder
3.3M Simulation Unoh (now Zynga)
4 Bandit Nation Royale
4.3M RPG
DeNA
5 Star sky bar town
1.5M Simulation
CyberX
6 Source of Decision 3.2M Fortune Telling Grafio
7 Let’s play together
5.5M Entertainment
Community Factory
8 Funny Face 2M Entertainment Cybird
9 Farming story 1.5M Simulation Liveware
10 Calm Down Advice
0.3M Fortune Telling
Digital Tact

40. Answer
• CEO
of
DeNA
• Operates
“Mobile
Game
Town”,
a
top
mobile
SNS
in
Japan
Tomoko
Namba,
CEO

41. DeNA
• Revenue
2010
$1.2~1.3
billion
• Profit
margin
50%
• Revenue
source
90%
digital
goods

42. Users

43. Mobile
Game
Town
|
Open
Plaworm
• 154
partners
companies
• Avatars
in
open
• 350
Jtles
(July
2010)
plaworm
games
too
• In-­‐house
games
too
• Common
currency

44. Mobage
|
Popular
Games
Game Category Developer
1 Bandit Nation Royale RPG
DeNA
2 “Sengoku” (Warring State) Royale RPG DeNA
3 Hokkorina (Okinawa Farm) RPG
DeNA
4 Hoppin City Simulation
DeNA
5 Aquasquare Simulation DeNA
6 Space Debries Simulation DeNA
7 Pirates’ treasure RPG DeNA
8 Nobunaga's Ambition
RPG/Strategy Tecmo Koei
9 Monster Hunter Airu Village RPG Capcom
10 Our baseball field Entertainment Kayac

45. DeNA
|
Target:
Global
Leader

46. Yahoo
Mobage
(PC)
• Launched
2010.10
• 2M
users
(=
FB
Japan)
• 70
partners,
104
Jtles
• Rev
share
– Plaworm
30%
– OperaJons
13%
– Developer
57%

47. By
2014,
DeNA
wants
to
have
$4
billion
in
revenue,
50%
in
Japan
and
50%
overseas.
I
want
DeNA
to
become
a
$40
billion
market
cap
company.
Tomoko
Namba
CEO
of
DeNA

48. Answer
• CEO
of
GREE,
top
mobile
SNS
in
Japan
• #2
youngest
self-­‐made
billionaire
in
the
world
(aser
Mark
Zuckerberg)
Yoshikazu
Tanaka,
CEO

49. GREE
• Users
22
million
• 2010
revenue
$600
million
(E)
– Digital
goods
80%
– Ads
20%
• Profit
margin
50%

50. Adver`sing
Gree
Home
Adver`sing
&
Affiliates
Avatars
&
items
B2C
virtual
goods
Games
(avatar
+
games)

51. GREE
|
Service
Strategy
Members
SNS
Social
Games
Diary/Notes
Q&A
Community/BBS
Page
views
Virtual
Goods
Media
Ad
Sales
VG
Sales
GREE

52. GREE
|
Monthly
Page
Views
35.7
Billion
Google
Images
=
30
billion

53. Self-­‐Published
Games

54. Fishing
Star
Sea
River

55. GREE
• 2010.06
|
Open
plaworm
• 2010.10
|
Non-­‐gaming
apps
(27
coming
up)

56. GREE
|
Popular
Games
Game Category Developer
RPG (Card
1 Dragon Collection Konami
game)
2 My Darling is a Celebrity RPG Voltage
3 Three Kingdoms RPG Tecmo Koei
4 My lover is in the Special Police RPG Voltage
Simulation /
5 Fashion Coordination Mania Sumzap
avatar
6 My New Boyfriend RPG Winlight
7 Our Love Affairs in College RPG Style Walker
8 Love Affairs, Handsome Boys College RPG Voltage
9 Princess Love (Hime Koi) RPG Winlight
10 The Legend of Derby King RPG Alt Plus

57. Community
Safety
• DeNA
– 861
employees…
– Many
doing
content
monitoring
Pipo-­‐kun
Tokyo
Police
Mascot
– Monitoring
24/7
since
2006.11
– “Patrol
Center”
built
in
2008.03
Gree’s
Patrol
Center

58. Who’s
AcJve
in
Japan?
Ac`ve
Not
Ac`ve
• Zynga
• Playdom
• Playfish
/
EA
• Kabam
• CrowdStar
• Digital
Chocolate
• RockYou
Happy
Aquarium
• And
also
– Rekoo
– Rakoo
– Five
Minutes

59. Zynga
in
Japan
SosBank
CEO
Masayoshi
Son
(Les),
Zynga
Japan
CEO
Robert
Goldberg
(Middle)
Mixi
CEO
Kenji
Kasahara
(Right)

60. Have
you
heard
of…?

61. CyberAgent
• History
– Started
as
ad
network
– Branched
into
blogs
(10M
users),
virtual
world
&
social
games
– 1,900
employees
• Sales
2009
$1.1
billion
– Profit
2009
$55
million
• Sales
2010
(E)
$1.1
billion
– Profit
2010
(E)
$98
million

62.
|
Social
Games
• DeNA
10
Jtles
• Gree
3
Jtles
• Mixi
8
Jtles
• Facebook
7
Jtles

63.
|
Social
Games
• $13M
in
4Q2010
– Run-­‐rate
2011
>
$50M
(
>
ngmoco
?)

64.
|
2D
Virtual
World

65.
|
2D
Virtual
World
• PromoJon
– Leveraging
Ameba’s
blog
plaworm
– TV
ads
• Paying
Users
– 80%
are
20
to
40
y.o.
– 70%
female
• Payment
– 68%
Mobile,
20%
Webmoney,
12%
Credit
Card

66.
|
Revenue
split
• Sales
2Q2010
$10
million

67.
|
Subs
&
ARPU
4.3
million
users
(2010.06)
monthly
ARPU
=
$15

68.
|
Fishing
Game

69. Facebook
Making
Inroads
• Facebook
in
Japan
– Growing
(2M)
– Mobile
JP
version
– Real-­‐Name
• Why?
– GDP
– Online
adverJsing
– Virtual
goods
KDDI’s
Summer
Line-­‐Up
– Mobile!

70. Foreign
Players
in
Japan
• Zynga
– Acquired
local
company
Unoh
– JV
with
Yahoo!
Japan
(#1
portal)
for
games
• Chinese
social
games
doing
well
– Rekoo,
Rakoo,
Elex
…
but
for
how
long?
• Online
games
growing
too
– Perfect
World
(China)
acquired
local
licensee

71. Summary:
Japan
• 3
social
plaworms
(+
Facebook)
• Walled
gardens
• Mostly
mobile
($2
bln)

72. China

73. Social
Games
Growing
But…
• Fragmented
market
– 4
compeJng
social
networks
– Facebook
sJll
blocked
• SNS
revenue
not
great
(esp.
for
third
parJes)
– Low
adver`sing
– Plaworms
develop
games
in-­‐house
– Rev
share
variable
&
osen
unajrac`ve

74. …Online
Games
SJll
Dominate
• Online
games
biggest
money
maker
– $900M
in
2Q2010
– Tencent
(20%),
Shanda
(20%),
Netease
(13%)
• Social
networks
channel
users
to
MMOs
• China
=
30%
of
global
online
games
market
$4
billion
in
2010
Source:
iResearch,
Lazard
Capital
Markets

75. Answer
• CEO
of
Tencent!
• #3
Internet
company
in
the
world
Ma
Huateng
(Pony),
CEO

77. QQ
IM
&
QZone

78. Digital
Goods?
• Iden`ty
related
• Game
related
• Music
related
• And
more…

79. Tencent
Bigger
Than
Ever?
• Sales
2010
(E)
$2.8
billion
– Sales
1H2010
$1.3
billion
– Profit
2010
(E)
$1
billion
Internet
penetraJon
sJll
only
30%!

80. RenRen
• Claims
to
be
#1
SNS
in
China
• More
open
than
others
• Tencent
announced
it
would
open
too

81. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

82. Hardware
Innova`on:
“Shanzhai”
( )
PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

83. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

84. QQ
Farm

85. Foreign
Players
in
China?
• Offices
– Zynga
– Playfish
– Kabam
– Cmune
• Games
– Not
launched
locally

86. Summary:
China
• 4
social
plaworms
(-­‐
Facebook)
• Self-­‐serving
plaworms
• Leader
in
MMOs

87. Globaliza`on
Durian
Strudel
(Singapore)

88. Ideas,
Talent
&
Markets
• Ideas
First
farm
game
=
made
in
China!
• Dev.
Zynga
(JP,
CN)
Playfish
(CN)
Kabam
(CN)
• Market
Facebook
(JP,
KR,
SG,
SEA)
Zynga
(JV
with
Sosbank
for
JP)
Rockyou
(JP),
Others?

89. Nexon
• Ndoor
M&A
2010.05
Korea
• GameHi
M&A
2010.05
Korea
• BoomBang
Invest.
2010.10
Spain
• Disney
offering
$6
billion?
(rumor)
• EA’s
market
cap
is
$5.8
billion…
(2010.10)
Source:
+8*,
Nexon

90. DeNA
• ngmoco:)
M&A
USA
• Astro
Ape
Invest.
USA
• Aurora
Feint
Invest.
USA
• GameView
M&A
USA
• Icebreak
M&A
USA
• TX.com.cn
M&A
China
• Social
Gaming
Fund
of
$27.5
million

91. Tencent
• Riot
Games
M&A
2011.01
USA
• Sanook
Invest.
2010.08
Thailand
• Comsenz
M&A
2010.08
China
• Shenzhen
DN
M&A
2010.04
China
• DST
Invest.
2010.04
Russia
• Outspark
Invest.
2008.01
USA

92. Other
Chinese
Companies
• Emerging
markets,
Japan,
US
• Rekoo
&
Yicha
doing
great
with
social
games
• Shanda
buys
Mochi
Media
(2010.01,
$80M)

93. China
+
Russia
+
South
Africa
$18B
$3B
$35B
10%
Source:
+8*,
October
2010

94. DST
|
Digital
Sky
Technologies
• Invested
$180M
in
Zynga
• Invested
~$350M
in
Facebook
(~10%)
• Invested
$135M
in
Groupon
• Acquired
ICQ
for
$188M
• Mail.ru
(portal),
Astrum
(games)
– 70%
of
all
PV
in
the
Russian
speaking
Internet

95. NASPERS

96. Conclusions

97. Conclusions
• Social
games
=
growing
fast
• Online
games
sJll
>
Social
games
(except
Japan)
• Massive
ads
(TV,
billboards,
etc.)
if
ROI
is
good!
• Media
proper`es
entering
social
(portals,
blogs)
• SNS
can
channel
users
to
MMOs
with
bever
ROI
• Mobile
great
in
emerging
&
advanced
markets

98. Conclusions
• CJK
companies
expanding
globally
• TransiJon
to
digital
goods
is
a
`dal
wave
• Epiphanies
in
the
West
like
Korea
10
years
ago

99. Digital
Goods
in
2010
Asia:
$10
Billion
USA:
$2
Billion
Source:
+8*,
2011

100. Market
PotenJal?
• From
analog
to
digital
– Global
video
game
market
>$40
billion
– In
Korea
>50%
of
ALL
GAMES
=
online
games
• PotenJal
=
all
games
in
the
world
– Global
game
market
$120
billion
– With
digital
goods
dominant
model?

101. From
Asia
to
the
World
Durian
Strudel
(Singapore)

102. Facebook’s
First
FPS:
UberStrike
Thursday
2:30pm
Hall
E
|
www.facebook.com/uberstrike

103. Asia
is
part
of
your
world
too!
What
we
do
– Best
pracJces
from
Asia
– Digital
Research
&
Strategy
References
+81
|
Japan
+82
|
Korea
+86
|
China
Telecom
&
Internet
+
Added
Value
Contacts
*
High
quality
– benjamin@plus8star.com
– @benjaminjoffe
– www.slideshare.net/plus8star