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Cross-Screen Impact of
Free-to-Play
Peter Warman | CEO Newzoo | [email protected] Offenbach, November 2012
Let’s lean back for a moment.
© 2012 Newzoo www.newzoo.com
US EU* UK GER FR IT ES BE NL RU BR PL TR AUS JP CN
Newzoo research portfolio
Newzoo | The Total Picture Consumer, Transactional & Financial Data
© 2012 Newzoo 4
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disclosed.
Consumer Research Data Interactive access to over 200 topics across 12+ countries
Export to powerpoint or excel
Select topics & variables Select or compare countries Filters to cross analyze
Relative and absolute numbers
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One year subscription | Free analysis support
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Transactional Data | App Store Data Top 200 grossing and top 300 downloaded games
Easily select the publisher and see their games in the top 200 gross ranking and top 300 free and paid ranking across all app stores.
Revenue and download data. Per country and per App store.
Over 30 datapoints per game.
Stores:
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End 2012:
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investors
“social gaming is dead” “social gaming was a bubble. Its gone now.”
Social Gaming vs Social Network Gaming The real world, The cloud & Social Networks connect all screens & games
Growth Brazil: 200M people 60M active online, 40M Gamers, 54% Pays
Social Network Gaming 2012 vs 2011
Source: The Rise of Social Network Gaming in Brazil (infographic)
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Growth Market Turkey: 78M people 30M active online, 21.8M Gamers, 52% Pays
Top 20 Mobile Publishers August 2012 Based on total iOS revenues in 9 countries across the globe
Based on total iOS (iPad/iPhone) revenues in the following countries
© 2
01
2 N
ewzo
o/D
istimo
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Top 20 Mobile Games August 2012 Based on total iOS revenues in 9 countries across the globe
Based on total iOS (iPad/iPhone) revenues in the following countries
© 2
01
2 N
ewzo
o/D
istimo
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EA & Zynga moving to Casino Games as legislation changes and investor pressure rises.
Zynga Poker, top 5 grossing mobile game in the world.
New Players with New Business Models Zynga Casino | Zynga
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I promised that we would... Lean back
Games as Product
Games as Service
IP ARPPU
US EUROPE ASIA
TREND 2012
Games as Product
Games as Service
IP ARPPU
US EUROPE ASIA
TREND 2013
ARPPU
ARPPU
ARPPU
ARPPU
IP
IP ARPPU
MASPIPPSPP Monthly Average Spending Per IP Per Screen Per User
Lean back and….. Look at the Global/Total Picture
On The Surface Things seem calm … (data not final)
North America $20.7bn
+1% CAGR
Europe $21.3bn +3% CAGR
Latin America $5.4bn
+14% CAGR
Middle-East & Africa $1.4bn +21% CAGR
Asia-Pacific $19.3bn +13% CAGR
Total
$68bn +7% CAGR
Source: Newzoo 2012 Games Market Revenue Report
Global Games Market | 2012
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Under This Surface There is a lot going on… (data not final)
Mobile Devices $6.3bn
+32% CAGR
MMOs $11.6bn
+21% CAGR
Consoles $20.2
-2% CAGR
PC/Mac Download $8.1bn +2% CAGR
Casual Websites $7.7bn
-1% CAGR
PC/Mac Boxed $8.7bn -11% CAGR
Social Networks $5.5bn
+5% CAGR Total
$68bn +7% CAGR
Source: Newzoo 2012 Games Market Revenue Report
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Lean back and….. Think about how to monitor change
Monitoring Change | KPIs To size and seize future growth opportunities
Games Market Growth
Most reports on the games market focus on number of players and/or money. To monitor and understand the changes in the games market this is not enough, especially now free-to-play business models are becoming so dominant. We always also report on Time and number of Paying Gamers (Payers) to provide more perspective.
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players
time payers
money
© 2012 Newzoo 28
Key Growth Indicators | With Key Trends In Between
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players
time payers
money
© 2012 Newzoo
2011-2012
+8%
2011-2012
+26%
2011-2012
+1%
2011-2012
+36%
Key Growth Indicators | With Key Trends In Between
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players
time payers
money
© 2012 Newzoo
2011-2012
+8%
2011-2012
+26%
2011-2012
+1%
2011-2012
2011-2012
+15%
2011-2012
+16%
2011-2012
+19%
2011-2012
+6%
+36%
Key Growth Indicators | With Key Trends In Between
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players
time payers
money
© 2012 Newzoo
2011-2012
+6%
2011-2012
+19%
2011-2012
+4%
2011-2012
2011-2012
+15%
2011-2012
+16%
2011-2012
+19%
2011-2012
+6%
+2%
Lean back and….. Try to understand change
Key Growth Indicators | With Key Trends In Between
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players
time payers
money
© 2012 Newzoo
access
screens
free
biz
z m
od
els
organisation
services
pro
fit
valu
e
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Luxembourg, here we are This place is about more than money….
© 2012 Newzoo
screens
access
bizz models
free
organisation
service
profit
value
Consumers want continuous access games that are, in principle, free. Ideally, their game continuously improves and expands, as a service. If the game gives them value, they have no problem to spend money.
Game companies need to make their games accessible via all screens as well as adapt their business models. The latter requires organisational change. Hard but it is the only way to remain profitable in this competitive market.
New Players with New Business Models World of Tanks | Wargaming.net
Free-to-play MMO surpasses $100M revenues in 2012
Retail: Free-to-play boxed MMOs
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Most played game in the world with 1bn hours per month, grossing >$100M. Free-to-play.
Trend: Asian acquisitions Tencent owns RiotGames. DOTA2 still with Valve.
New Players with New Business Models League of Legends | Riot Games (Tencent)
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Community Services Crucial to New Games League of Legends | Competitions & Viewer Mode
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8% growth in users per month and even faster growth in time per month
Community Services Crucial to New Games League of Legends | Competitions & Viewer Mode
Watch Live Games
CCP (Eve Online) launches Free-to-play PS3 game this year.
One of the first triple A Free-to-play
games on console
New Players with New Business Models Dust 514 | CCP
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Kabams first mobile game is best grossing iOS game in the world, on track to gross over $100M annual revenues
Free-to-play business model is well balanced
New Players with New Business Models Kingdoms of Camelot | Kabam
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© 2012 Newzoo/Distimo
F2P vs P2P on Mobile Example: Infinity Blade I/II vs Kingdoms of Camelot
iOS Downloads US
iOS Revenues US
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F2P: Downloads drop but revenues keep rising. P2P: Price changes have big effect (April). NB: iPad revenues overtake iPhone revenues for immersive mid-core games
Lean back and….. Think about what free-to-play means
“free-to-play is not a business model but a way
to run your business” - Peter Warman, CEO Newzoo
Quote of the month Why big publishers struggle amidst all the change
Just check out how Star Wars the Old Republic was launched compared to League of Legends (Wikipedia)
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Source: Newzoo 2012 Games Market Revenue Report / Custom
(Paying) Players Avg. Spend / Month
The Effect of Free-to-Play | US Players, Payers & Average Spending | US 2010-2013
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Source: GlobalCollect/Newzoo Whitepaper August 2012
The Effect of Free-to-Play | US + EU Players, Payers & Average Spending
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German MMO market shows resilience In the US, spending on MMOs declines from $27 to $17 a month
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P2P F2P*
MMO Payment Methods Transaction volume and value (flow) | Q3 2012
Frequency
Amount
* Free to play models (incl. F2P Subs, F2P Virtual Currencies, Item Selling, Extensions/Extra levels)
The Effect of Free-to-Play Om Payment Methods
Lean back and….. Think about Amazon
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www.amazon.com/freetoplay
Amazon becoming one of worlds biggest players in games. Huge rollout in Europe and moving with the new bizz models.
Price: $0.00 NB. The Game Connect service
Old Players vs New Business Models Amazon.com/Freetoplay | Amazon
Old Players vs New Business Models Amazon.com/Freetoplay | Amazon
Lean back and….. Think how we can predict, size and seize future opportunities
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*
Source: GlobalCollect Whitepaper Cr0ss-Screen Monetization of Games *Europe as aggregate of UK, Germany, France, Netherlands, Belgium
Highest cross-platform spending ratios
Cross-Platform Gaming Of Paying MMMO Gamers
Consumers vs Screens Newzoo Screen Segmentation Model TM
22% of US gamers (2012) play on all four screens
21% of EU gamers (2012) play on all four screens
market growth All Screens Connected By: • Social Networks • The Cloud • The Real World
17% of German gamers (2012) play on all four screens
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2.62B euro
59%
81% payers
20.0M
35.9M players
93%
68% hrs/week
267M
The Computer Screen | 2012 Newzoo Screen Segmentation Model TM
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1.0B euro
23%
55% payers
13.5M
20.8M players
54%
12% hrs/week
46.3M
The Entertainment Screen | 2012 Newzoo Screen Segmentation Model TM
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276M euro
6%
30% payers
7.4M
22.3M players
58%
12% hrs/week
48.8M
The Personal Screen | 2012 Newzoo Screen Segmentation Model TM
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514M euro
12%
32% payers
8.0M
11.5M players
30%
8% hrs/week
30.1M
The Floating Screen | 2012 Newzoo Screen Segmentation Model TM
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Lean back and….. Compare two similar games
World of Tanks Bubble Shooter
US UK GER FR IT ES BE NL RU BR PL TR AUS
Cross-Screen Spending Of (paying) players per IP
Players
MMO Spenders
US UK GER FR IT ES BE NL RU BR PL TR AUS
13,500,000
7,900,000
52% 49% 30%
Cross-Screen Spending Of World of Tank players
4.1M WoT players also spend money on games on their phone or tablet.
7.9M WoT players spend money on MMO games (WoT or any otherF2P or P2P MMO).
Players
Online Casual Spenders
US UK GER FR IT ES BE NL RU BR PL TR AUS
40,600,000
11,400,000
51% 52% 22%
Cross-Screen Spending Of BubbleShooter players
5.9M Bubble Shooter players also spend money on games on their phone or tablet.
11.4 M Bubble Shooter players spend money on casual game websites (regardless of which game)
“your paying players spend a maximum of 30%
of their budget on your single screen game”
- Peter Warman, CEO Newzoo
Key Take-Away Paying players spend money across screens
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Lean back and….. Think about mobile….
Tablets, Handhelds & Smartphones Competing or complementary
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Source: Newzoo Mobile Trend Report, October 2012
95M Americans Smartphone, Tablet or Handheld Console Gamers
Growth of segments In 6 months: March 2012 – September 2012
+9%
+23%
-8%
Mobile Gamers | EU vs Germany 2012 Smartphones vs Tablets vs Handhelds
Source: Newzoo Mobile Trend Report, November 2012
62.4M European* Gamers (47% of all gamers) |20.7M German Gamers (54%) Smartphone, Tablet or Handheld Console Gamers
Smartphones
Tablets
Handheld consoles
50% 10.1M
18% 3.7M
4% 0.7M
6% 1.3M
2% 0.4M
17% 3.6M
4% 0.9M
Smartphones
Tablets
Handheld consoles
42% 26.4M
19% 12.1M
4% 2.4M
7% 4.1M
3% 1.9M
20% 12.3M
5% 3.2M
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* Aggregate of UK, GER, FR, NL, BE, IT
27M
Mobile Gamers per Country Phone & Tablet Gamers and Paying Gamers aged 10 to 50.
96M
Pay
ing
Gam
ers
22M 21M 14M 2.0M 4.0M 11M 12M 26M
79% 68% 62% 53% 62% 69% 77% 70% 71%
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Source: Newzoo , September 2012 Consumer Research * Source: Newzoo, March/April 2012 Consumer Research Data
33% 32M
15M* 7.5M*
69% 68%
38% 22M 30%
6.3M 23% 3.2M
20% 0.4M
22% 0.8M
35% 3.8M 31%
3.8M 25% 6.4M
37% 10M 28%
2.1M
69%
34% 5.2M
No
n-P
ayin
g M
ob
ile G
amer
s
share of all gamers
Majority of paying mobile gamers in the US is male: 61%
In growth markets such as Turkey the
share of male payers is highest: 70%
A small but growing share of mobile gamers spend money
US UK GER FR BE NL IT ES RU BR TUR POL
Rank Game Last Month Publisher
1 The Simpsons™: Tapped Out 1 Electronic Arts
2 Clash of Clans 15 Supercell
3 Hay Day 9 SuperCell
4 Poker by Zynga 5 Zynga
5 Lords & Knights - Medieval Strategy MMO 4 XYRALITY GmbH
Top 5 Games Germany September 2012 Based on total iPad, iPhone and Google Play store revenues
Rank Game Last Month Publisher
1 Clash of Clans 10 Supercell
2 The Simpsons™: Tapped Out 1 Electronic Arts
3 Hay Day 5 SuperCell
4 Lords & Knights - Medieval Strategy MMO 4 XYRALITY GmbH
5 Ice Age Village 2 Gameloft
Rank Game Last Month Publisher
1 Rage of Bahamut 2 Mobage
2 Ice Age Village 1 Gameloft
3 Arcane Empires 584 Kabam
4 Airport City 3 Game Insight International
5 Zynga Poker 4 Zynga
Lean back and….. Think how we can help each other
my wish is
Come visit our new office (when its done)
And lean back for a monent (with coffee or beer)
We need each other (to make sure these guys understand our stuff)
Cross-Screen Impact of
Free-to-Play
Peter Warman | CEO Newzoo | [email protected] Offenbach, November 2012
Lean forward vs lean back
© 2012 Newzoo www.newzoo.com
