Industry Analysis of the Social Network Gaming in Turkey
2304 Media Management Group 6A
- The Stardollperspective
Turkey is an interesting market due to the high number of young and educated people – people are interested in social games and are willing to pay for them.
The competition level in Turkish social gaming industry can be regarded as high and is increasing as the market attracts new players of both origin: foreign and domestic. Stardoll is a popular social game operating in the Turkish market. The main threats in the social gaming industry include uncertainty and fast pace of technological changes, governmental regulation as well as difficulty to maintain the leadership position and competitive advantage. Facebook provides a distribution channel reaching the majority of social network users yet poses a threat to independent platform developers. Other opportunities in the social gaming industry of Turkey include the booming fashion industry with partnership and co-creation possibilities related to that.
Executive summary
Mission– Develop a creative environment for everyone who loves fashion, celebrities and all there is to it!
Growth - 20 languages, 80+ million users worldwide, since 2004
Platform – Web based
Business model– Free entry (a small share of userspay a lot plus ads)
Stardoll
The 2nd biggest population of the region (71,158,647 (July 2007) )1, which is young (60% are under 35) and educated.
Turkey is the 3rd most engaged Internet audience in the world.
The Turkish online social games market is one of the biggest in Europe and is rapidly growing.
Average gamer: male (about 60%), age – 18-20 y.o. (27% under the age of 14).
Hours per week spent on games: 3,7 hours (in 2009). Most preferred platform: PC (in 2009). This leaves plenty of room for growth outside of this
segment in the future (for ex.: games targeted to kids, girls and adults).
1 Turkey Population statistics. http://www.irantour.org/turkey/populationturkey.html
Why Turkey?Why Turkey?
Main operators Early entrants: Joymax, K2 Networks and Gameforge.Very successful -> no local competitors. GameSultan, GGChave started as Internet-café, became local
operators handling distribution, payment systems, localization. (20,000 Internet-café by 2009).
Knight Online earned about $1M/month from Turkish operations.
Metin2 has about 3 Million active Turkish users. New entrants (like Korean publisher NHN) are preparing Turkish
version of their games.
Virtual worlds Virtual worlds are growing
(for ex.: Sanalikagrew to 3Million registered users in 6 months).
General overview of the market in Turkey
Facebook Turkey is the 3rd biggest
country on the platform. More than 18.5M members
(02.01.2010). 44% of users are 18-24 y.o. Popular games: Farmville,
City of Wonder.
Main business models used for social network games:
1) in-game ads; 2) micro-transactions.
General overview of the market in Turkey
Competitive rivalry within social network games industry (high)
Bargaining power of
suppliers (high to low)
Bargaining power of
customers (low)
Threat of new entrants (high
to low)
Threat of substitutes
(high)
Industry analysis of social network games in Turkey using the five forces
Independent game developers - low bargaining power.
Using external platform= High costs of switching suppliers for game developers – when games are adapted to the platform dependency increases. Few number of platforms in relation to the number of game developers
network games
industry
Bargaining power
of suppliers
Bargaining power
of customer
s
Threath of new
entrants Threat of
substitutes
Bargaining power of suppliers
Large customer base – low volumes
Differentiated products
Switching costs could be present (psychological)
Competitive rivalry
within social network games
industry
Bargaining
power of suppliers
Bargaining power
of customers
Threath of new
entrants Threat of substitut
es
Bargaining power of customers
Developing a new platform requires substantial investments.
Strict governmental policies Independent game developers could
emerge at any time Value of product increased by
number of users.
Competitive rivalry within social
network games
industry
Bargaining power of suppliers
Bargaining power of customers
Threath of new
entrants Threat of
substitutes
Threat of new entrants
Many available substitutes from both a narrow and broad perspective
Technological advances may change the future game market
Time spent on Facebook increasing, both threath of substitute (own platform) and
opportunity (usingFacebook)
High taxes on importing video games
Competitive rivalry within
social network games industry
Bargaining power of suppliers
Bargaining power of
customers
Threath of new entrants
Threat of substitutes
Threat of substitutes
Numerous equally big competitors Currently in Turkey there are comparable
few independent social network games Low barriers of exit Commited actors Industry primarily not figthing for monetary
resources, rather people’s time Innovation and first mover advantage
crucialdifficult to maintain leadership over time Aspiration to drive industry change
Competitive rivalry within
social network games industry
Bargaining power of suppliers
Bargaining power of
customers
Threath of new
entrants
Threat of substitutes Rivalry among existing
competitors
The threat of the most popular platform – Facebook◦ Rapid technological changes/updates◦ Dependency on Facebook micro payment solutions (currently
could be seen as an opportunity)◦ Bargaining power of platform supplier, increased dependency
Difficulty to maintain competitive advantage and leadership position – innovation required
Governmental regulations, interventions and restrictions Uncertain and fast-changing industry Increasing density (level) of competition
◦ Foreign competitors with strong financial and IT background, Korean companies entering the market
◦ Domestic competitors with strong competences and know-how of the local market
◦ The potential threat of mobile games (future substitute)
Threats for Stardoll
The market: massive potential◦ Young audience – young market◦ Men
The dominant (standard) platform Facebook – highly used and hence a good distribution channel
The Turkish fashion industry is growing and is hence young and dynamic possibility for Stardoll integrate and leverage
Turkish people willing to pay when liking the game Exploit opportunities in young target groups e.g. Stardoll
merchandise Market becoming more western – chance to anticipate change
◦ Developing high quality games to satisfy increasing knowledge of the European market, Turkey might follow the same pattern
Opportunities for Stardoll
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Reference