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Interactive Games:global perspectives & local insights

Matthew Liebmann

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Today’s agenda

1. The global interactive games industry: 2004-2008

2. The good, the bad and the undeniable

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Part 1

The global interactive games industry:2004-2008

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Global Interactive Games

Key drivers of global industry growth will be:

- next generation consoles

- mobile phone handset upgrades

- broadband penetration

- changing attitudes leading to broader customer demographics

Total Revenue

2004 A$37.9 bill

2008 A$85.8 bill

CAGR 20.3%

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Regional performance and market share

2004 2008

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Console Games

Next-gen consoles will boost industry growth, but consoles will lose share to wireless and online revenue streams.

Multifunctional consoles will be a blessing and a curse for developers and publishers.

Consoles appeal to the masses, boosting mass retailers’ share of total sales.

Total Revenue

2004 A$25.5 bill

2008 A$35.8 bill

CAGR 7.8%

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PC Games

PC games revenue peaked in 1999, and have declined ever since.

Share of total games revenue will fall from 16% in 2004 to 6% in 2008, as both units and average prices fall.

As consoles become more advanced and accessible, PCs will lose their appeal.

Total Revenue

2004 A$6.1 bill

2008 A$5.0 bill

CAGR -3.1%

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Online Gaming

Online gaming has raised the average age of gamers, and expanded demographic reach.

43% of frequent gamers have already played online.

Online gaming provides one of broadband’s first true killer applications.

Online gaming extends the life of games, creating additional revenue streams.

Total Revenue

2004 A$3.8 bill

2008 A$23.9 bill

CAGR 59.9%

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Between 2004-08, the number of global online game subscribers will grow from 20 mill to 142 mill (65% CAGR).

Average monthly online revenue per subscriber will fall between 2004-08.

Canada currently has the highest penetration of online gamers amongst broadband subscribers (26%) but by 2008, Asia-Pac will dominate (49%).

Online Gaming

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Asia-Pacific and EMEA exceed the US due to more than twice as many mobile phones and more progressed 3G licenses.

Over time, average monthly spend will decline.

Total Revenue

2004 A$2.5 bill

2008 A$21.0 bill

CAGR 87.6%

Wireless Gaming

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Growth will be driven by:

- upgraded infrastructure

- handset upgrades

- recognisable brands and titles.

Wireless games tap into the ‘handset personalisation’ phenomenon.

Wireless Gaming

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Part 2

The good, the bad and the undeniable

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Online gaming is the first legitimate ‘killer app’ for broadband

Gamers are demonstrating a willingness to stay with you later in life

Interactive games have proven to be entertainment for all occasions

The Good

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The Good

New ways to deliver content enables you to meet your clients for the first time

Improved margins can be achieved by eliminating distribution elements

Advertising: a new revenue frontier

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x One wallet but myriad choices

x PCs and consoles have more and more uses

x Mass retailers’ power is on the rise around the world

The Bad

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x Misperceptions about the industry are holding back some support

x Piracy: what’s yours is everyone’s

x Hollywood is here, and it’s not all good

The Bad

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! You must use your power for good, not evil!

! You will never be in complete control again – accept it and embrace the future

! Just because you embrace the future, doesn’t mean you should promote it

The Undeniable

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The Undeniable

! More release windows = more money.

! Be quick, or you will be the dead

The Undeniable

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Key messages

Focus on gamers and encourage them to stay for life

Continue working as an industry to communicate your legitimacy

Identify what makes you unique and work it into your strategy

Offset margin pressures by maximising efficiencies

Embrace new technology and ride the wave to the future

Key messages

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Interactive Games:global perspectives & local insights

Matthew Liebmann