NY Games Conference 2009
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The 2009 Games Industry Outlook highlights five key trends in gaming: the rise of smartphones, digital distribution, the popularity of trading card games, the growth of prepaid game cards, and the expanding free-to-play market. It notes that smartphones are anticipated to grow significantly, digital sales are on the rise, and trading card games are transitioning well to digital platforms. Emerging markets are showing a growing appetite for free-to-play games, which could offer advantages over developed markets.
NY Games Conference 2009
- 1. Games Industry Outlook NY Games Conference September 30, 2009
- 2. Good Morning J oost SuperData Research, Inc. 2009
- 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Thanks [email protected] SuperData Research, Inc. 2009
- 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