C A S U A L G A M E S S E C T O R R E P O R T 2 0 1 6

CGA.

THE MOBILE GAMES MARKET HOW TO COMPETE IN THE CROWDED MARKETPLACE

Consumers will spend $6.5 Bn more on mobile games this year than last, how can you claim your share?

Competitive? Yes. Opportunities to Outsmart Competition? Yes.

Gamers worldwide will generate a total of $99.6 billion in revenues in 2016. For the first time, mobile gaming will take a larger share than PC with $36.9 billion, up 21.3% globally. The top ranks are continuously dominated by a select number of companies. Still, the long tail on mobile devices allowing smaller studios to make a good living is much larger than on PC or Console. Chances of success for smaller studios increase dramatically by making smart decisions in their international roll-out strategy, focused marketing effort, and optimizing gameplay and monetization using the correct metrics.

Source: Newzoo App Store Data/PrioriData

1,436mobile games generated net revenues of

>$1Mon iOS alonein 2015

=

=

=

=

>$100M

$10M-$100M

$1M-$10M

27 GAMES

164 GAMES

1,245GAMES

The Long Tail of Mobile Games on iOSBased on 2015 net revenues (excl. 30% fee)

COMPETING IN MOBILE | CASUAL GAMES ASSOCIATION 3

Source: Newzoo Global Games Market Report Premium

Know the Future of Your Market

Mobile Revenues | Selection of Key Markets | 2016 vs. 2019

Global Games Market Revenues | Per Device | 2016

Source: Newzoo Global Games Market Report Premium

Indonesia will jump from #16 in the global mobile revenue ranks in 2016 to #7 by 2019

$30.8Bn +2.2% YoY

PC

MOBILE

$31.9Bn +2.1% YoY

CONSOLE

$36.9Bn +21.3% YoY

The Mobile Gaming OpportunityGamers worldwide will generate a total of $99.6 billion in revenues in 2016. For the first time, mobile gaming will take a larger share than PC with $36.9 billion, up 21.3% globally.

14.6%2015-2019 CAGR for mobile revenues vs. 6.6% for the total games industry

$52.5Bnrevenues globally by 2019

COMPETING IN MOBILE

2016 TOTAL

$99.6Bn+8.5%YoY

31% 32%

37%

2019

AUSTRALIA$0.5Bn2016

$0.6Bn2019

JAPAN$6.5Bn2016

$7.1Bn2019

SOUTHAFRICA$0.1Bn2016

$0.2Bn2019

RUSSIA$0.4Bn2016

$0.6Bn2019

CHINA$10.0Bn

2016$13.9Bn

2019

UK$1.1Bn2016

$1.3Bn2019

SAUDIARABIA$0.4Bn2016

$0.6Bn2019

BRAZIL$0.4Bn2016

$0.9Bn2019

USA$6.7Bn2016

$7.8Bn2019

TAIWAN$0.6Bn2016

$0.8Bn2019

4

Where Does This Year’s Growth Come From? Global Revenue Growth by Region | 2016

Source: Newzoo Global Games Market Report Premium

Source: Newzoo Global Games Market Report Premium

Choose Your Battleground Wisely

2016REVENUE GROWTH$6.5Bn

2015REVENUES$30.4Bn

Where is Growth?Mobile gamers will spend $6.5 billion more this year than last. The vast majority of this revenue growth will come from APAC, with China alone contributing an impressive $2.9 billion.

CHINA

REST OF APAC

NORTH AMERICA

MIDDLE EAST &AFRICA

LATIN AMERICA

WESTERN EUROPE

JAPAN

EASTERN EUROPE

SOUTH KOREA

OCEANIA

$0.89Bn

$2.91Bn

$0.61Bn$0.57Bn

$0,49Bn$0.47Bn

$0.27Bn$0.14Bn

$0.09Bn$0.03Bn

Share of Mobile Revenues Per Genre | North America vs China | 2016

16%

20%23%

7%

11%25% 39%

13%6%

17%

11%

14%

Other

Action/ Adventure

Roleplaying Strategy & Simulation

Casual Casino & Card (Incl. trading card games)

$7.2BnMobile

revenues

$10.0BnMobile

revenues

COMPETING IN MOBILE | CASUAL GAMES ASSOCIATION 5

COMPETING IN MOBILE

39%

Research Realistic OpportunitiesTop 1,000 Games Revenues By Company | iOS | Global | April 2016

Source: Newzoo App Store Data / PrioriData

Consolidation versus the Long TailThe top grossing mobile game charts are consistently dominated by familiar names. In April, the top 10 mobile publishers accounted for 44% of revenues generated by the top 1,000 games in the iOS store. For Google Play, the share is 42%. This consolidation of mobile revenues will continue as these publishers funnel their significant resources into R&D, marketing, and user acquisition. In April, 80% and 77% of app store revenues of the top 1000 games went to the top 50 developers in the Apple App Store and Google Play, respectively. This means the remaining publishers (447 on Apple App Store and 431 on Google Play) took around 20% of the money spent on mobile apps in April.

Top 1,000 Games Revenue Share by Top 50 Companies | iOS | Global | April 2016

COMPETING IN MOBILE

431COMPANIES

447COMPANIES

Top 50COMPANIES

Top 50COMPANIES

56%

9%

8%

6%

4%

20%

80%

23%

77%

44%

of revenues from Top 10

Top 10 grossingPublishers on iOS (April 2015)

Top 10 grossingPublishers on Google Play (2015)

1 SUPERCELL2 KING3 LINE CORPORATION4 BANDAI NAMCO5 NETMARBLE GAMES6 MIXI7 COLOPL8 SQUARE ENIX9 GUNGHO10 ANIPLEX

SUPERCELLTENCENT KINGNETEASE GAMES MACHINE ZONELINE CORPORATION BANDAI NAMCOMIXI EPIC WAR LLCCOLOPL

4%

3%3%

3%3%

3%

OTHER

6

Understand Your Power UserA Demographic Profile of the North American Big Mobile Spender | Age Split

Reasons to Pay for a Game | North American Big Mobile Spender

of North American mobile gamers spend over $25/month on mobile games

Source: Newzoo Global Games Market Report Premium

35

30

25

20

15

10

5

0

20%

18%

7% 8% 8%7%

10%

14%

28% 29%

38%

25%

21%

31%

21%19%

17% 17%

3%

6%

COMPETITIVE ADVANTAGE

NEED TO PAY IN ORDERTO PLAY (NO FREE TRIAL)

UNLOCK(EXTRA)LEVELS

TO BE ABLE TO COMPETE WITH OTHERS

PREMIUM ACCOUNT

GET RID OF ADVERTISEMENTS

MAKE GAMINGEXPERIENCE MORE FUN

TO BE ABLE TO PLAY EXTENSIONS

AVOID WAITING

OTHER

Hearthstone Gamers

Candy Crush Gamers

6%

11%

12%

15%

12%

9.6MILLION

16%

14%

15%

6%

LIVES WITH CHILDREN

SPENDS BIG ON PC GAME

FAVORITE SPORT TO PARTICIPATE

WATCHES TWITCH >1/MONTH

FEMALEMALE70% 30%

45%

53%

50%

MAIN TELEPHONE BRAND

BASKETBALL

iPHONE

10-15 16-20 21-25 26-30

31-35 36-40 41-45 46+

COMPETING IN MOBILE | CASUAL GAMES ASSOCIATION 7

Outsmart Competition Using Metrics

COMPETING INMOBILE

Mobile Intelligence on Australia | KPI Examples Casino Genre | FY2016 / April 2016

Source: Newzoo Mobile Monetization Metrics / deltaDNA

Average is not good enoughAll game monetization and retention metrics on this page are 75th percentile figures (for a full month). The reason is that, in general, average performance is not enough to secure a profitable game. Using average metrics in a business plan provides the wrong benchmark for companies that are seeking success in this competitive space.

Mobile intelligence can help developers to outsmart competition by setting priorities in terms of countries, stores, devices, marketing effort and game optimization targets. This total picture also ensures realistic business plans that have a non-traditional approach with a higher chance of success. Many developers focus solely on app store data, which only provides one single angle to the mobile challenge.

Top Countries by Conversion Rate on iOS | April 2016

1. Switzerland2. Australia 3. US 4. Austria5. UK

4.5%4.2% 4.1% 3.9%3.8%

4.9%4.9% 3.0% 2.5%2.9%

PRIORITIZECOUNTRIES

APP STORE & GENRE FOCUS TARGET GROUP PROFILING OPTIMIZATION METRICSu u u

iOS MARKET SHARE

67%

SHARE CASINO GENREREVENUES ON iOS

24.5%

TOP GROSSING CASINOGAME ON iOS

HEART OF VEGAS

2016 MOBILE GAME REVENUES

$510

2015-2019 CAGR

+4.2%

2019 MARKET SIZE

$580M

SPENDERS ON iOS

1.3 M

SHARE OF iOS SPENDERS PLAYING CASINO

8.0%

M/F RATIO OF CASINO PLAYERS ON iOS

55% MALE

ARPDAU iOS GAMES

$0.12

D7 RETENTIONRATE FOR iOS

23.7%

SHARE OF iOS SPENDERS THAT CONVERTED

21.8%

1. iPhone 6

2. iPhone 5S

3. iPhone 5

4. iPhone 6 Plus

5. iPad Air

6. iPad Mini

7. iPhone 4S

8. iPad 2

9. iPhone 6S

10. iPad 4

11. iPhone 5C

12. iPad Air 2

1. iPhone 6

2. iPhone 5S

3. iPhone 5

4. iPhone 6 Plus

5. iPad Air

6. iPad Mini

7. iPhone 4S

8. iPad 2

9. iPhone 6S

10. iPad 4

11. iPhone 5C

12. iPad Air 2

1. iPhone 6

2. iPhone 5S

3. iPhone 5

4. iPhone 6 Plus

5. iPad Air

6. iPad Mini

7. iPhone 4S

8. iPad 2

9. iPhone 6S

10. iPad 4

11. iPhone 5C

12. iPad Air 2

15.8%

11.3%

9.5%

6.4%

6.2%

6.0%

5.5%

5.2%

4.9%

4.0%

3.7%

3.6%

15.8%

11.3%

9.5%

6.4%

6.2%

6.0%

5.5%

5.2%

4.9%

4.0%

3.7%

3.6%

15.8%

11.3%

9.5%

6.4%

6.2%

6.0%

5.5%

5.2%

4.9%

4.0%

3.7%

3.6%

Appstore data is only part of the equation

APPLE DEVICE COVERAGE | 2.1M APPLE DEVICES IN AUSTRALIA | MARCH 2016DEVELOP FOR TOP DEVICES

ABOUT THE CASUAL GAMES ASSOCIATION

When it comes to the health of your business, the more things that work

together, the better. Which is why the Casual Games Association is a

critical portion of the success of your company and the industry as a

whole. It means that you and your team have access to cutting-edge

educational resources and are connected to thousands of other game

industry professionals, members of the press and service providers

around the globe.

Learn more at http://www.cga.global

For press inquiries, please email jessica@casualgamesassociation.org

Learn more about the games industry with the best speakers, networking, lectures and data to help you succeed in a crowded market at:

Casual Connect Tel-Aviv 1 - 3 November 2016Casual Connect Europe in Berlin 7 - 9 February 2017

See you in Tel Aviv

Casual Connect Tel Aviv 1 - 3 November 2016

About NewzooNewzoo is the global leader in mobile, games, and eSports market intelligence with offices in Amsterdam, Shanghai, and San Francisco. We provide our clients with a mix of market trends, platform data, in-game metrics, revenue projections, and consumer insights across all continents, screens and business models. We are proud to work for the majority of top game and eSports companies worldwide along with many independent game developers and leading global technology, internet and media companies.

Casual Connect returns to Tel Aviv in 2016.

Great speakers, interesting and professional industry insiders, and of course, signature evening events.http://telaviv.casualconnect.org

CGA.