marketing & entrepreneurship

Marketing & Entrepreneurship

#2. Meet (some of) your markets

Arjan Terpstra

What’s up?

• Marketing/markets for games/gaming

What’s up?

• Marketing/markets for games/gaming

• (sorry, no interaction design)

What’s up?

• Marketing/markets for games/gaming

• (sorry, no interaction design)

• A basic analysis of big games

markets (console, PC/Mac, handheld,

mobile) and big market trends

What’s up?

• What we know: (some) games markets in

figures

• What we know: games markets NL

• Trends in entertainment games

• Trends in applied games

• General Trends

1. games markets in figures

• What do we know about the size of games

markets, and how do we know it?

1. games markets in figures

• What do we know about the size of games

markets, and how do we know it?

• ‘Market research companies’

1. games markets in figures

• What do we know about the size of the

games industry, and how do we know it?

• ‘Market research companies’

1. games markets in figures

• Worldwide revenue of total

games industry (Newzoo): 75,5

billion USD (2014)

1. games markets in figures

(Gross National product of countries 2011)

1. games markets in figures

• Worldwide revenue of total games industry

(Newzoo): 75,5 billion USD (2014)

• Prediction 1 (Gartner): 111 billion USD in 2015,

‘mobile and console sales’ are boosters.

1. games markets in figures

• Worldwide revenue of total games industry

(Newzoo): 75,5 billion USD (2014)

• Prediction 1 (Gartner): 111 billion USD in 2015,

‘mobile and console sales’ are boosters.

• Prediction 2 (DFC Intelligence): 100 billion USD in

‘software sales’ by 2018 (from 64).

1. games markets in figures

• Worldwide revenue of total games industry (Newzoo): 75,5

billion USD (2014)

• Prediction 1 (Gartner): 111 billion USD in 2015, ‘mobile and

console sales’ are boosters.

• Prediction 2 (DFC Intelligence): 100 billion USD in ‘software

sales’ by 2018 (from 64).

• Prediction 3 (DFC Intelligence): PC market 2014 : > 25 billion

USD revenu (first time). ‘Core gamers spend more on games

than ever before’

1. games markets in figures

• Prediction 4 (PWC): Mobile market > 15 billion

USD in 2018 (from 7 billion in 2013)

1. games markets in figures

1. games markets in figures

• Prediction 4 (PWC): Mobile market > 15 billion

USD in 2018 (from 7 billion in 2013)

• Prediction 5 (DFC Intelligence): Mobile market >

29 billion USD in 2018 (from 11 billion in 2013)

1. games markets in figures

• Prediction 4 (PWC): Mobile market > 15 billion USD in

2018 (from 7 billion in 2013)

• Prediction 5 (DFC Intelligence): Mobile market > 29

billion USD in 2018 (from 11 billion in 2013)

• Console industry (Gartner): 44 billion USD (2013)

• Handheld industry (Gartner): 15 billion USD (2013)

1. games markets in figures

• Worldwide revenue of total games

industry (Newzoo): 75,5 billion USD

(2014)

1. games markets in figures

• Worldwide revenue of total games

industry (Newzoo): 75,5 billion USD

(2014)

• But….

1. games markets in figures

1. games markets in figures

= 91 billion USD (> Newzoo’s market prediction, 75,5)

1. games markets in figures

• Worldwide revenue (Newzoo): 75,5

billion USD in 2014

• ‘Our’ market forecast: 91 billion USD

in 2014

• But: Gartners’ forecast: 101,6 billion

USD in 2014

1. games markets in figures

• Gartners’ forecast: 101,6 billion USD in 2014

1. games markets in figures

• Recap:

• Figures for the international games industry vary wildly –

between 75,5 and 110 billion in gross revenue.

• The numbers are invariably high – often comparable with

figures on the film industry (88 billion USD gross

revenue)

• All market predictions foresee a future growth of 9-11

percent per annum.

2. Games market NL

2. Games market NL

• There’s a lot we DON’T know!

2. Games market NL

• Question: is there a ‘Dutch

games/gaming market?’

2. Games market NL

• Question: is there a ‘Dutch

games/gaming market?’

• Yes: in retail, localised App Stores,

with Xbox One

• No: part of ‘Europe’, ‘Western

Europe’

2. Games market NL

• Size?

• 2012 (PWC): Dutch gaming market =

703 million Euro.

2. Games market NL

• Size?

• 2012 (PWC ‘global media outlook’):

Dutch gaming market = 703 million

Euro. ‘2016: 724 million Euro’

2. Games market NL

• Size?

• 2012 (PWC ‘global media outlook’):

Dutch gaming market = 703 million

Euro. ‘2016: 724 million Euro’

• Want to know more?

2. Games market NL

• Size?

• 2012 (PWC ‘global media outlook’):

Dutch gaming market = 703 million

Euro. ‘2016: 724 million Euro’

• Want to know more?

2. Games market NL

• …so let’s talk a bit about the Dutch

gaming industry….

2. Games industry NL

• Size of total revenue: (Games

monitor 2012): 150 – 225 million

Euro.

• (worldwide: 75,5 billion USD =

58,5 billion Euro)

•

2. Games industry NL

2. Games industry NL• (Games monitor 2012): 150 – 225 million Euro revenue.

• Well-connected and informal infrastructure

• Growing connectivity between schools and working

field

• High quality training

• Good conditions for startups through networks,

incubators, seed funding et cetera.

• A growing number of funds for games studio’s

2. Games industry NL

• ‘Approximately half of the

revenue comes from

applied/serious gaming’.

• B2B market!!!!

2. Games industry NL

• Ca. 330 game companies (but: what

is a game company?)

2. Games industry NL

• Ca. 330 game companies (but: what

is a game company?)

2. Games industry NL

• Ca. 330 game companies (but: what

is a game company?)

2. Games industry NL

• Ca. 330 game companies

• Ca. 3000 people employed

• Many small firms (indies or applied) making

games

• ’70% of Dutch firms has a maximum of five people

in it’

• ’Only ten firms have more than 50 staff’

Trends in entertainment games

Trends in entertainment games

• Trends? Markets?

• Two questions:

• 1. “What are the market trends that

are important for your business? ” 

• 2. “What are you going to do with that

knowledge?”

Trends in entertainment games

• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

Trends in entertainment games

• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

• - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware,

software and service sales)

Trends in entertainment games

• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

• - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware,

software and service sales)

• (Console) games are part of a wider ‘entertainment-hub’ strategy.

Trends in entertainment games

• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

• - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware,

software and service sales)

• (Console) games are part of a wider ‘entertainment-hub’ strategy.

• Growing interconnectivity with devices other than console (‘second screen gaming’) (PS Mobile, MS Smart

Glass)

Trends in entertainment games

• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

• - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware,

software and service sales)

• (Console) games are part of a wider ‘entertainment-hub’ strategy.

• Growing interconnectivity with devices other than console (‘second screen gaming’) (PS Mobile, MS Smart

Glass)

• Constant reflex to integrate promising or succesful technologies. (PS Move, Amiibo, Project Morpheus)

Trends in entertainment games

Trends in entertainment games

• Trends: PC/Mac gaming

Trends in entertainment games

• Trends: PC/Mac gaming

• - Firm comeback through digital

distribution

Trends in entertainment games

• Trends: PC/Mac gaming

• - Firm comeback through digital

distribution

• - Dutch game industry gains

momentum through Steam.

Trends in entertainment games• Trends: PC/Mac gaming

• - Firm comeback through digital

distribution

• - Dutch game industry gains

momentum through Steam.

• - Steam is finding its way to TV

(2015)

Trends in entertainment games

Trends in entertainment games

• - BUT: Steam publishes more and

more games….

Trends in entertainment games

Trends in entertainment games

• Trends: Mobile

Trends in entertainment games

• Trends: Mobile

• - Stellar rise of a new gaming

segment

Trends in entertainment games

• Trends: Mobile

• - Stellar rise of a new gaming

segment• Digital distribution (first App Store july 2008)

• The rise and rise of free2play

• Touch interface well suited for gaming

Trends in entertainment games

• (2013) Apple App Store holds 800.000 active apps, counts

40 billion app downloads (game and non-game apps)

Trends in entertainment games

• (2013) Apple App Store holds 800.000 active apps, counts

40 billion app downloads (game and non-game apps)

• Opportunities? Yes, but there are (A) problems with player

demography: who is your gamer? (marketing)

Trends in entertainment games

• (2013) Apple App Store holds 800.000 active apps, counts

40 billion app downloads (game and non-game apps)

• Opportunities? Yes, but there are (A) problems with player

demography: who is your gamer? (marketing)

• And (B) who is your competition?

Trends in entertainment games

Trends in entertainment games

• (2014): 1,75 Billion smartphones worldwide,

195 million tablets

• Android expands through ‘micro consoles’

(Ouya, GameStick, GamePro) -> TV!!

Trends in entertainment games

• Trends: Handheld (Nintendo DSi, 3DS, PS

Vita, PSP)

Trends in entertainment games

• Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP)

• Surprisingly stable market (vs mobile)

Trends in entertainment games• Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP)

• Surprisingly stable market (vs mobile)

• PSVita (2014) 8 million units worldwide, 43,3

million Nintendo 3DS, 154 million units Nintendo

DS/Dsii, DS Lite.

Trends in entertainment games• Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP)

• Surprisingly stable market (vs mobile)

• PSVita (2014) 8 million units worldwide, 43,3

million Nintendo 3DS, 154 million units Nintendo

DS/Dsii, DS Lite.

• PS Vita used as ‘second screen’ with PS4, games

are more ‘platform agnostic’ – migrate from one

device to the next.

Trends in entertainment games• Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP)

• Surprisingly stable market (vs mobile)

• PSVita (2014) 8 million units worldwide, 43,3

million Nintendo 3DS, 154 million units Nintendo

DS/Dsii, DS Lite.

• PS Vita used as ‘second screen’ with PS4, games

are more ‘platform agnostic’ – migrate from one

device to the next.

Trends in entertainment games

• Trends: general

• ‘cloud gaming’ will be a thingy…

Trends in entertainment games

• Trends: general

• ‘cloud gaming’ will be a thingy…

• The ‘democratisation of game design’ gives us new

perspectives on games and game design

Trends in entertainment games• Trends: general

• ‘cloud gaming’ will be a thing…

• The ‘democratisation of game design’ gives us new

perspectives on games and game design.

• ‘Game analytics’ will continue to influence both

game design and games marketing

Trends in entertainment games• Trends: general

• ‘cloud gaming’ will be a thing…

• The ‘democratisation of game design’ gives us new

perspectives on games and game design.

• ‘Game analytics’ will continue to influence both

game design and games marketing

• ‘Free2play’-models are on the rise – not only in

mobile!

Trends in entertainment games• Trends: general

• ‘cloud gaming’ will be a thing…

• The ‘democratisation of game design’ gives us new

perspectives on games and game design.

• ‘Game analytics’ will continue to influence both

game design and games marketing

• ‘Free2play’-models are on the rise – not only in

mobile!

• High expectations for Virtual Reality technology

(Oculus Rift), but no proven market yet.

Trends in applied games

Trends in applied games

• Ongoing definition debate: Applied games/serious

games/persuasive games/engagement

design/gamification?

Trends in applied games

• Definition debate: Applied games/serious

games/persuasive games/engagement

design/gamification?

• Anyhow:

• - 2010: 1,5 billion Euro revenue worldwide

• - 2015: 10,2 billion Euro expected

Trends in applied games

• Centre for Applied Games (Amsterdam):

• “44% of Dutch games companies is exclusively

building applied games” (highest percentage

worldwide)

Trends in applied games

• Strong presence in market segments:

• - maritime

• - security services

• - health care

• - education

• - business

Trends in applied games

• High expectations:

• ‘By 2015, more than 50 % of organisations that

manage innovation processes will gamify those

processes.’ (Gartner)

• ‘40 percent of all Global Top 1000 companies will

utilize some form of gaming in transformational

processes.’ (KPMG)

Trends in applied games

• Low production capacity!!! => there’s room for

you there….

• (there’s a lot more for next time…)