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This is an edited version of a presentation on Japan's social games market I gave a few weeks ago.
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DeNA, GREE: Demystifying Japan’s Social Gaming Market
By Serkan Toto, PhD Twitter: @serkantoto
Image credit: GREE International
About Me
• Tokyo-based web, mobile and gaming industry consultant • Advisor for startups in Japan, Asia and the US • Japan contributor for TechCrunch.com • Personal website: www.serkantoto.com
Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: totoserkan AT gmail.com
Visit My Website For Free Information On Japan’s Social Game Industry (http://www.serkantoto.com)
Agenda
I: Structure Of The Domestic Market II: Japan’s Social Games Vs. The World III: Future Trends In Japan’s Social Gaming
Industry
I: Structure Of The Domestic Market
Japan‘s Unique Social Networking Landscape • Basic structure: real social graph vs.
virtual social graph • 3 homegrown social networks with roughly
25 million users each: – Mixi (real/80% mobile social networking) – GREE (virtual/mobile social gaming) – Mobage (virtual/mobile social gaming)
Fragmented Industry Structure • Hundreds of social application providers • 2 dominant companies double as platform
and game providers: GREE and DeNA (“Facebook+Zynga in 1“)
• Mixi as latecomer • Rekoo only really successful foreign player
Dominant Duopoly
Size Of Japan‘s Social Gaming Market • Annual sales of DeNA and GREE
combined reach over $2 billion • Different sources offer different numbers:
– Video game magazine publisher Enterbrain: $0.3 billion in 2009, $1.45 billion in 2010
– Market research firm Seed Planning: $1.46 billion in 2010
II: Japan’s Social Games Vs. The World
Key Peculiarity: Gaming Nation Japan • Taito‘s Space Invaders kicked off the gaming
industry as a whole in 1978 • Nintendo‘s Famicom revitalized industry after
the big crash 1983 • Japan has 10% share ($6.5 billion) in global
video game market • Games enjoy greater cultural attention in
Japan than elsewhere • higher payment walls for progressing in social
games are accepted
Key Peculiarity: Mobile • Social games (and the web at large) are consumed
mainly on mobile phones • Yahoo Mobage only PC-based social gaming
platform worth noting • virtual item payment via carrier billing as catalyst • GREE/Mobage pre-installed on handsets
Image credit: KDDI au
• Active Facebook members (potential social gamers) in Japan in September 2011: 5 million
• ⁓5% of web population (in the US: ⁓68%)
Source: Socialbakers
Key Peculiarity: Facebook Japan
Key Peculiarity: Special Genres • Some social gaming genres are as popular in
Japan as elsewhere, i.e. – farming – pet-breeding – city-building – restaurant management etc.
• But some are especially popular over here
Key Peculiarity: Special Genres • Example 1: Manga-based social games • Gundam Royale racked up 1 million players in 6 days
Key Peculiarity: Special Genres • Example 2: Social RPGs • Square Enix‘ Gleipnora is exclusively
available on Mobage
Key Peculiarity: Special Genres • Example 3: Social dating and love simulations • Renai games are especially popular among female
users • Andamul‘s Delicious Kiss is popular on GREE
(below)
Key Peculiarity: Special Genres • Example 4: Social idol-raising games • Goal: Train and guide girls on their way to become
an idol (star) • Love Kyun! Idol Battle was launched on GREE in
May 2011
Key Peculiarity: Special Genres • Example 5: Social collectible card games • Konami‘s Dragon Collection has been #1 on
GREE for over a year straight
III: Future Trends In Japan’s Social Gaming Industry
Growth Is Expected To Continue • Growth in the domestic social gaming market
has slowed down, but still ongoing • Projection by Mitsubishi UFJ Morgan Stanley
Securities: US$5.2 billion in 2013
• Yano Research: $406 million in 2009, $900 million in 2010, $1.4 billion in 2011:
Growth Is Expected To Continue
Japan‘s Mobile Future Is All Smartphones
Source: The Nikkei / MM Research Institute
• GREE CEO Yoshikazu Tanaka: “By 2015, feature phones in Japan will vanish.“
• iPhone and Android set to dominate in the future
Video Game Makers Going Social • Many Japanese video game makers starting
to produce social games • Konami alone expecting to generate $390
million in fiscal 2011 with social games • A lot of high-quality IP still untapped
GREE: Internationalization • More cautious approach • US office in January 2011 • Offices in Seoul, Dubai, London, Singapore... • Focus on partnerships:
– South East Asia: mig33 – China: Tencent
• Only one sizeable acquisition abroad so far (Openfeint for $104 million)
DeNA: Internationalization • DeNA‘s 3-market approach with Mobage for
Smartphone: – Japan – China – Rest of the world
• Aggressive M&A: – Ngmoco $403 million – Gameview Studios, Rough Cookie, etc.
• DeNA failed twice on a global level: – MiniNation (WAP) – Mobamingle (iOS)
Future International Positioning For GREE And DeNA
• Tens of thousands of free/cheap games in the App Store and Android Market
• Promising social layer services for smartphones already available: – Apple‘s Gamecenter – Scoreloop – Gamewave
• Facebook‘s Project Spartan just launched • Indifference from users abroad?
Thank you for listening!
Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: totoserkan AT gmail.com
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