SG market & Pricing in Health and Fitness

ParisParis28 November 201128 November 2011

European Commission Information Society and Media

SIG3.3 Workshop

GaLAGame and Learning Alliance

The European Network of Excellence on Serious Games

SG market & Pricing in Health and Fitness

AtoS (Wp4), ORT

1

Thierry Nabeth,AtoS Alumnus

Giusy Fiucci, ORT



SIG3.3 Workshop

Table of content

• SG market & Pricing – A very fragmented market – Very little data available– Some facts

• SG market & Pricing in Health and Fitness– The 3 components– Some facts

• Conclusion

2



SIG3.3 Workshop

SG market & Pricing

Findings from WP4

• Little data available• Comparing oranges (games) and apples (serious games)?• Yet some data

3



SIG3.3 Workshop

WP4: Looking at the Business Dimension of SGs

The role of WP4 -Industry and Stakeholder Engagement is about:

4

Looking at theBusiness dimensionof Serious Games

First stage of the work:

Looking about the information available. (reports from analysts, websites, etc.)



SIG3.3 Workshop

Findings: Little information available

Few reports from the Analysts (and more notably: the IDate reports)• J. Alvarez, L. Michaud (2008) Serious Games : Advergaming, edugaming,

training and more, IDATE Study 2008 (free)

• Julian Alvarez, Véronique Alvarez, Damien Djaouti, Laurent Michaud (2010); Serious Games: Training & Teaching - Healthcare - Defence & security - Information & Communication, IDATE Report 2010 (> 3000 Euros)

• Some information (very little) from general analyst such as Forrester research. (who seem mostly focussed on the game market)

The web sites:• The serious game market web site of Elian Alhadeff. But it remains largely

qualitative even if some numbers and facts are sometime provided (Reconciling Serious Games Market Size Different Estimates (blog post), Serious games market blog 8 April 2008). Such as the estimation of a market size in 2008 of 1.5-2 Billion dollars.

5



SIG3.3 Workshop

Example of facts

6

Alhadeff 2008

Elian Alhadeff.: Reconciling Serious Games Market Size Different Estimates (blog post), Serious games market blog 8 April 2008

Although the information was posted in a blog, it originates from a person (Elian Alhadeff) that is following for many years the market of serious game, and can be considered as an expert.

$ 1.5 - 2 billion dollar estimate for 2008

Market value forecast



SIG3.3 Workshop

Example of facts

7

TJ Keitt 2009

TJ Keitt 2009: Demand Insights: Serious Games Break Through 11 March 2009 Forrester research

Forrester research. Generalist analyst of technologies.

Forrester's research finds that 10% of North American online adults have played at least one of three types of serious games, and the reviews are generally positive.

adoption



SIG3.3 Workshop

Example of facts

8

K. Corti 2009

Kevin Corti (2009): Corporate Learning Games, Siege Conference 2009, 3 October 2009. Presentation (slides)

Presentation (slides) from the CEO of PixelLearning (serious game design company)

Costs/pricing (“What’s the going price of a serious game?”)Work for hire...$50k - $250k normal range$500k - $1m possibleOTS product/solutions approach...$10 - $100 per seat$10k - $100k site licensesannual licenses

Cost



SIG3.3 Workshop

Example of facts

9

Alvarez & Michaud (2008)

J. Alvarez, L. Michaud (2008) Serious Games : Advergaming, edugaming, training and more, IDATE Study 2008

This report, that is now freely available (a new report from IDate is available since 2010) appears to be the more valuable information about the serious game market and business so far.

At the end of 2007 the serious gaming market was estimated to be worth between 1.5 and 10+ billion USD.

Market valueSource: IDC

In the USA alone, advergaming is said to be worth 262 million USD in 2008.

The brain fitness market is currently thriving; in 2007, it generated 227 million USD in the USA alone

Market valueSource: Nintendo (?)

Advertising-linked communication titles are playing an increasingly significant role in the ingame advertising market, an industry estimated to be worth 205 million USD in the USA (2008)

Market value



SIG3.3 Workshop

Tendency of Comparing Oranges and Apples

The Myth: Serious game market is of same nature as the game market, and therefore that the players of each market can easily enter in the other one?

10

Game market Serious game market

The reality: are we not comparingOranges and apples?



SIG3.3 Workshop

Yet there exists fundamental differences

11

Game Serious

game

Objective: entertainment Objective: performance

(serious!)

Hardware: the console Hardware: the laptop

Investments: huge

(products,

Distribution channels)

Investments: moderate

(services)

Customer: the family

(mass market)

Customer:

the corporation



SIG3.3 Workshop

The risks: many illusions

Several illusions• Money illusion: The market value of the serious games

market is the same the one of the game market.• The size illusion: The customer of one market will

become the natural customer of the other market• Competency illusion: the game actors will easily be able

to design games for the other market.

The reality: (personal finding)

The potential of generalization from a market to the other is probably largely exaggerated.

12



SIG3.3 Workshop

Conclusion

• Very little factual information available.• A tendency to mix markets (in particular the game

market) leading to some illusions• A very fragmented and diverse market. It is probably

more than a matter of segmentation but of having different markets.

13



SIG3.3 Workshop

SG market & Pricing

Health and Fitness

• A detailled report available by Physic Ventures: Health e-Games Market Report: Status and Opportunities (2008)• A domain that appears very diverse. (casual games; serious games; exergames)

14



SIG3.3 Workshop

SG market: Little information available

The report:• Andy Donner, Douglas Goldstein and Julia Loughran (2008) Health e-Games Market Report: Status and

Opportunities; Physic Ventures• http://www.physicventures.com/news/health-e-games-market-report

15



SIG3.3 Workshop

SG market: Different markets

The main “markets”: (totally different markets)• The Casual games (fun and easy to learn video games. Such as

brain training)• The Serious games (benefits beyond entertainment, such as

training, education and performance improvement across industries)

• The Exergames (digital interactive physical motion and fitness

games). Nintendo Wii.

16



SIG3.3 Workshop

SG market: Business models

Large variety of Business Models:

• Consumer Direct: Nintendo’s Wii, Wii Fit, Brain Age;• Enterprise: Expresso Fitness’ S2U and S2R; Konami’s

DDR, …• Advertising: Fit Brains• Subscription: Lumos Lab’s Lumosity, Happy Neuron• Sponsorship: Kraft Game Pad, HopeLab’s Re-Mission• Nonprofit/Government Grants: Archimage’s Escape from

Diab (NIH);

17



SIG3.3 Workshop

SG market: Different platforms

Result of the Technology Platforms of 300 eHealth games (2008)

18



SIG3.3 Workshop

Conclusion

19



SIG3.3 Workshop

Conclusion

• … discussion

20



SIG3.3 Workshop

THANK YOU!

21



SIG3.3 Workshop

The illusion of a same market

22

Game market Serious game market

Fun

Laptops

Big money

Customers

Smaller money

Performance

ConsolesCorporation

Serious games market appears to be a market with its specificities, even if some overlaps exist