social games: why gree and mobage operator dena monetize better than zynga

GREE And Mobage operator DeNA: 14 Reasons Why Japan’s Social Gaming Giants Monetize Better Than Zynga

By Serkan Toto, PhD www.serkantoto.com

Imagecredit:DeNA

About Me

•  Web, mobile and gaming industry consultant •  Advisor for startups in Japan and the US •  Japan contributor for TechCrunch.com •  Based in Japan since 2004 •  http://www.serkantoto.com

Contact Information

Twitter: http://twitter.com/serkantoto

LinkedIn: http://linkedin.com/in/serkantoto

Email: serkan AT serkantoto.com

Visit My Website For Free Information On Japan’s Social Game Industry (http://www.serkantoto.com)

Agenda

I:StructureAndSizeOfJapan’sSocialGamingMarketII:Top13ReasonsForSuccessfulMoneDzaDon

I:StructureAndSizeOfJapan’sSocialGamingMarket

Japan‘sSocialGamingMarket:DominantDuopoly

MarketSizeStats:DependOnSources‐>Yano:Japan‘ssocialgamingmarketworthUS$1.4BillionIn2011

SizeOfJapan‘sSocialGamingMarket‐>ProjecDonfromMorganStanley,January2012

SizeOfJapan‘sSocialGamingMarket‐>ProjecDonfromNomuraResearch,January2012

II:Top14ReasonsForSuccessfulMoneDzaDon

Reason1:JapanIsAGamingNaDon

•  Taito‘sSpaceInvaderskickedoffthegamingindustryasawholein1978

•  Japanhas10%share($6.5billion)inglobalvideogamemarket

•  GamesenjoygreaterculturalaaenDoninJapanthanelsewhere

Reason2:JapanIsAMobileNaDon•  Socialgames(andthewebatlarge)areconsumedmainlyonmobilephones

•  Contentiseasiertosellonmobiledevices

•  99%3GpenetraDoninJapan,crucialforplayingmobilegames

Imagecredit:TheNikkei

Reason3:PopularityOfCardBaaleGames•  Cardbaalegameshaveproventobeexcellentmoneymakers

•  Upto70%ofthetop20gamesonMobageandGREEaresocialcardbaalegamescurrently

Reason4:RiseOfTheVideoGameMakers•  Allmajorvideogamemakersproducesocialgamesnow

•  KonamialoneisexpecDngtogenerate$390millioninfiscal2011withsocialgames

•  VideogamemakersincreasinglyusepopularIPforsocialgames

Reason5:AcceptanceOfHigherPaywalls•  Japaneseusersdon‘treallymindhigherpaymentwallsforprogressinginsocialgames

• Micropaymentstoprogressknownfromarcademachinemarket(*InsertCoin*concept)

Reason6:JapanIsAWealthyCountry•  Japanhastheworld‘sNo.3economy(US$5.5trillionin2010)

•  GDPpercapitastandsatoverUS$34,000peryear(IMF,2011)

• World‘s2ndhighestonlinespendat$6,688peryear(Visa,2009)

• MorganStanley:10%ofJapan‘ssocialgamerswerepayingin2010(projecDonfor2013:17%)

Reason7:FricDonlessMobilePayment•  Iamhearingfromsocialgamemakers80‐90%ofgamerspayviacarrierbilling(monthlyphonebill)

• WiderangeofpayingopDons:carrierbilling,creditcards,e‐money,pre‐paidcards,Paypal

•  SubscripDonsforvirtualitemsarepossible

Reason8:AggressiveTVMarkeDng•  DeNAAndGREEareinvesDnglargeamountsofmoneyinTVadverDsing

•  InNovember2010,bothcompaniesshowedthemostspotsonJapaneseTV

Imagecredit:SocialGameAcademy

Reason9:Zynga’sUserBaseIsWide‐Spread

•  ZyngahassignificantlymoreregisteredandacDveusers,buttheyarespreadacrossalargenumberofregionswithsmallereconomiesandweakertechnicalinfrastructures

•  Example:IndonesiaisFacebook‘sfourthlargestmarket,butitsGDPpercapitaisonlyabout1/8ofJapan

•  DeNAandGREEevolvedintomulD‐billiondollarcompanieswithoutforeigncompeDDon

Reason10:Pre‐InstallaDonOnHandsets

• MobageispartofthehomemenuinNTTDocomo‘sfeaturephones

•  Japan‘sNo.2mobilecarrierKDDIisaninvestorandGREEpartner(pre‐installaDondeal)

Reason11:ZyngaIsWeakerWRTMoneDzaDon

•  Zynga‘sraDoofpayingusersislowerthanthatofMobageandGREE

•  DeNAdirectorKenjiKobayashi:'IThinkThatZyngaHasNotReallyResearchedMoneDzaDon‘(Gamasutra,October3,2011)

Reason12:GachaAsMajorMoneyMaker

•  GachamechanismisbiggestmoneymakerinmanyJapanesesocialgames

•  EvenBejeweledhasagachafeatureinitsJapaneseversion

Reason13:In‐GameEventsAndCampaigns

•  Japan‘ssocialgamemakersarebrilliantinusingDmedeventsandcampaignstoboostrevenue

•  Exampleforacampaign:offeranexclusiveitemthatonlyuserswhopre‐registerforagameget

•  ExampleforaneventinMobage‘sNinjaRoyale(Englishversion)picturedbelow

Reason14:VirtualSocialGraph

•  PlayersuseGREEandMobageanonymously•  Virtualsocialgraphmakesmass‐inviDngfriends,showingone‘sgamingaddicDonlessawkward

Thank you for listening! Questions?

Contact Information

Twitter: http://twitter.com/serkantoto

LinkedIn: http://linkedin.com/in/serkantoto

Email: serkan AT serkantoto.com