Gate2Shop Games Industry Overview

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GAMES INDUSTRY

OVERVIEW January, 2011

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Agenda

Agenda

Segments and Business Models

The Market

US Market

EU Market – Top 5

Industry Specifics

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Agenda

Agenda


The Market

US Market

EU Market – Top 5

Industry Specifics

Online Game Segments

Main Segments:

• Mobile Games, for example for mobile phone or PDA

• Online Games: Casual, Social, MMOs, Browser-

Based (often considered MMOs)

• Console Games – distribution available both offline

(DVD) or online (wi, PS, Xbox Live, etc)

• Standard PC Games – if purchased online fall under

retail market

Business Models

• Pay-to-Play (client based) – customers have to pay

an initial amount in order to start playing – Star Craft

II, Diablo, Guild Wars, most Yahoo Games

• Customer in most cases have to download the game

in order to play it

• This business model is slowly shifting towards Free-

to-Play

• Some major MMOs are based on this business model

Business Models

• Free-to-Play – customer can play the game without

paying anything.

• Virtual currencies are available to advance in the

game – Mafia Wars, Farmville

• Customers most play such games in a web browser

• Most gaming developers and publishers are moving

towards this business model

Business Models

• Play-to-Pay at “x” – Customers pay based on a

certain criteria - level reached (every 5th level),

special DLCs (unlocking special areas)

• In most cases, customer have to download the game

in order to play it

• Sometimes this business model is coupled with a

small initial amount

• One of the best ways to monetize games

Business Models

• Subscription based– Customers pay a small initial

amount to have the game + monthly fee to play it –

World of Warcraft, Conan

• In most cases, customer have to download the game

in order to play it

• The best monetization business model but also the

most difficult to achieve

• Only a few gaming companies have managed to use

it successfully

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Agenda

Agenda


The Market

US Market

EU Market – Top 5

Industry Specifics

Share of Games Wallet Across Platforms

Source: gamesindustry.com. Black Book 2011

MMO Revenue 2010


Playing vs Paying I MMOs 2010


Playing vs Paying I Game Portals 2010


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Agenda

Agenda


The Market

US Market

EU Market – Top 5

Industry Specifics

US Market – Survey 2010


US Market 2010


Social Games 2009


MMO Game Revenue 2009


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Agenda

Agenda


The Market

US Market

EU Market – Top 5

Industry Specifics

UK 2010


Germany 2010


France 2010


Netherlands 2010


Belgium 2010


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Agenda

Agenda


The Market

US Market

EU Market – Top 5

Industry Specifics

Industry Specific

• MMO games represent the largest portion of online

games, followed by wireless games

• Wireless games are expected to grow by 14% on an

annual basis reaching to up to $13 billion in 2013

• The three largest game producers are – the US,

Japan and the UK, followed by Germany and

Australia

• Around 41% percent of gamers are women

Industry Specific

• Predominant payment method used for game

purchases – credit cards

• Larger MMOs depend heavily on alternative payment

methods

• The industry is one with many chargebacks,

especially in the Free-to-Play business model

• Games will shift towards the Free-to-Play business

models in the next couple of years

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Thank you!