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WELCOME TO WEBINARON
DIGITAL GAMING MARKET & INVESTMENT TREND
Breaking New Ground: How Innovation in Digital Gaming Market will Drive the Next Wave of Growth
http://mergeralpha.com/webinar_details.php?id=MzA=
KABIR AHMAD
Research, Consultancy, and Training Professional
•Digital Gaming
•Gamificaiton
•Wearable
Technology
•Cloud Technology
•Big Data
•Digital Business
•Mobile OTT
Business
WEBINAR AGENDA
Digital Gaming Market Overview: Technology,
Platform, Market Value, Business Model
Industry Transition: Middleware, Wearable
Investment Trend in Gaming: Deal, VC, M&A,
Value vs. Volume Region and Investment
Consideration
Opportunity Sectors in Gaming and Key
Investment Consideration
ARCADE GAME
80 & 90’s Decade
COMPUTER GAME
FEATURE PHONE GAME
CONSOLE GAME
Game is Alive
It’s Just the Platform, Technology and
Consumption Pattern
New Era of Digital Gaming
SMARTPHONE
TABLET
ONLINE
SOCIAL AND LOCATION
SOCIAL CASINO
USER GENERATED CONTENT
CONVERGENCE AND CLOUD
GAMIFICATION
WEARABLE
DIGITAL GAME
A digital game is an interactive program
for one or more players, meant to provide
entertainment at the least, and quite
possibly more.
An adaptation of traditional game systems,
with rules, player representation, and
environment managed through electronic means
TREND
PLATFORM / TECHNOLOGY CONSUMPTION / MONETIZATION
o Virtual Reality
o Augmented Reality
o Gamification
o Multiplayer Online/Social &
Local
o UGC
o Cloud & HTML 5
o Mobile Messaging Platform
o Freemium
o Free to Play & In-game
Microtransaction
o In-game Advertising
o Advergaming
COMMUNAL GAME PLAY TREND & OTT DELIVERY
2014 +
• Paying user 1.07%
• ARPU 13 times
• ARPPU 10 times
DIGITAL GAME MARKET VALUE
o 60% Software Market
o 40% Hardware Market
Geography:
o Asia – 65%
o Europe - 15%
o US – 12%
o ROW – 8%
Emerging Market
o Latin America
o South East Asia
o Middle East 0
20
40
60
80
100
120
2014 2015 2017
$ Billion
PLATFORM REVENUE SOURCE
o Mobile (including Tablet) –
60%
o PC – 24%
o Console – 12%
o Wearable – 4%
o In-Game Transaction – 40-
50%
o Download – 20 – 30%
o Adverts – 10 – 20%
o Data Transmission – 2-5%
GAME SECTOR
DEAL & VALUE
VIDEO GAME M&A
IPO BY COUNTRY
SECTOR WISE M&A TREND
VC TREND
OPPORTUNITY CHART
VALUE VS. VOLUME REGION
VALUE VS. VOLUME REGION
Value Driven Volume Driven
Nature Large Long Term Niche Mass Market Growth
Platform Niche Console, MMO
Online
Mobile, Social and
Middleware
Users thousands to tens of
millions
thousands to hundreds
of millions
ARPU $-$$$ (High) ¢ - $$ (Low)
Costs $ millions to tens of
millions
$ tens of thousands to
millions
Operating profit negative to 20%+ negative to 70%+
Growth rates negative to <10% negative to 100%+
Business model unit sales, subscriptions,
virtual goods
unit sales, free, virtual
goods, ads
KEY CONSIDERATION
• Portfolio company M&A to major games consolidators
• Early to late stage with focus on cross-platform
• Investment in social/casual strategic roll-ups
• Follow-on investments in portfolio companies pivoting from
mobile to cross-platform mobile-social to middleware and
wearable
• Selective growth equity investment in online/mobile tech
and gamification strategic roll-ups
SELECTING PROFITABLE SECTOR
o Multiscreen endeavor especially covering mobile, tablet &
social platform, and wearable.
o It is not the console; it’s mobile that will dominate living
room
o The middleware technology market will grow rapidly in
coming years including consumer adoption. Most likely
gamification and game technology software business will
end up as B2B SaaS model generating volume driven
business. It’s the perfect time of investing out in such
endeavor
o Wearable gaming like VR will boom but need to be careful
o Real money gaming such as social casino gaming is a
growing trend in terms of consumer adoption. Considering
the legality of particular market, the sector is good for short
term investment under portfolio strategy
o Investors need to consider value vs. volume driven
market. Value driven market will be better for small term
investment expecting better return in shorter timeframe
whereas large investment should pour into volume driven
emerging markets like Brazil, Russia, China, and some
sectors for Korea & Japan.
o Investors need to consider the revenue generating
business models such as freemium and free-to-play with
virtual goods.