2017INDUSTRY

INNOVATIONSPresented by:

Andrew Sheppard, CEOGREE International Entertainment, Inc.

San Francisco // Melbourne // Berlin

2016HOW DID WE GET HERE?

EROSION OF THE MIDDLE CLASS

“Middle” has neither the scale benefits nor the agility of smaller teams, and has not participated in growth &

maturity of the mobile platform “Rich” receive recursive benefits from scale, brand, ability to leverage

top IPs“Poor” can continue to innovate with small teams, access platform

featuring

MOBILE GROWTH ELUDES “MIDDLE”

*AppAnnie Estimates, US Revenue in January 2017

4 KEY TRENDS

1. CREATIVE EXITS

2. VERTICAL PARTNERSHIPS

3. RISE OF INTERNATIONAL MARKETS

4. BUNDLING

1.CREATIVE EXITS

2. VERTICAL PARTNERSHIPS• From audience to IP holder: how should developers build hits

today?

• Vertical partnerships can come in the form of: •Moving older games to low cost developers•Co-developing•IP Partnerships•For Hire Partnerships

• This can impact a number of roles within a company including: • Publishing• UA• Brand/Franchise Marketing• Live Ops• PR• Platform Relationships

• As a result you’ll see companies outsourcing development without losing revenue

• Development• Art• Engineering• Product• Design• Product

Marketing

3. RISE OF INTERNATIONAL MARKETS

COST OF LIVING

BERLIN65%

WARSAW41%

SHANGHAI54%

DUBLIN80%

SAN FRANCISCO: 100%

DIFFERENCES BETWEEN INTERNATIONAL MARKETS

• Content approvals are required

• Must partner with a Chinese company & only with government approval

• Hands out $4Bn in government subsidies

• SR&ED (“SHRED”) tax breaks - one of the biggest sources of government cash for private sector innovation & research

• Hiring subsidies more common

• Favor the conversion of temporary contracts into open-ended ones, e.g. reactivating long-term unemployed, supporting groups at risk of labor-market exclusion, etc.

“There’s only two ways I know of to make money –

bundling and unbundling.”

~ Jim Barksdale, VC, Netscape CEO

4. BUNDLING & UNBUNDLING

A strategy that joins products or services together in order to sell them as a single combined unit.

BUNDLING:

UNBUNDLINGThe process of breaking apart a product or service into smaller parts.

ECONOMIC WAVES OF BUNDLING & UNBUNDLING

BundlingBroadcast → Cable

Bundling45s → LPs

UnbundlingCDs → MP3s

BundlingiTunes → Spotify

UnbundlingCable → Netflix → YouTube

BundlingICQ → AIM → Facebook

UnbundlingFacebook → Messenger

• Shooting / Combat

• Driving / Racing

• RPG

• Storytelling

• PvP / Multiplayer

BUNDLING IN AAA GAMING

TOP AAA GAME … incorporates multiple gameplay styles

UNBUNDLING IN MOBILE GAMING

• Shooting / Combat

• Driving / Racing

• RPG

• Storytelling

• PvP / Multiplayer

TOP AAA GAME … deconstructed for mobile

BUNDLING CASE STUDY

SimulationMatch 3

2015*20M Installs$30M revenue

2016*100M installs$180M revenue(+20% RPI, unlocks ability to increase UA)

For January 2017*, Playrix’s total mobile revenues ($17M) are greater than Zynga’s ($14M)*AppAnnie Estimates

BUNDLING CHECK LIST

●Provide a clear, 'better together' value proposition

●Focus on 'attach products' with low penetration, high potential

●Stick with higher-margin attach products

●Ensure value of attach product is high enough vs. core product

HOW TO TAKE ONE GAME AND MARKET TO THREE, NON-OVERLAPPING AUDIENCES:

THANK YOU&

QUESTIONS