[2013] Newzoo Mobile Games Trend Report Free

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More ScreensOnly fi ve years ago, gamers played mainly on two screens: The TV and the PC. That number has since doubled giving room for more time and ultimately money spent on gaming. For now, gamers spread their budget across all screens.

Free GamesConsumers have gotten used to the idea of trying a game to the full before they decide to spend money. The days of low quality free games have passed as in-game spending business models have proven success-ful. Next stop: The TV screen...

Business Model Balancing ActNow that games are services, the business model requires continuous balancing between value for the consumer and profi t for the publisher. Monetization of the game should keep free gamers happy and provide room for spending by the “whales”. The launch of a game is just the start...

Games are ServicesAs monetization now takes place within the game at a moment the consumer chooses, publishers and devel-opers are even more incentivized to keep their gamer engaged as long as possible. Beta periods are crucial involving the gamers in the fi nal settings of the game.

Global Market PlaceThe games market is now, per defi nition, a global playground. Online connectivity allows companies to localize and launch games anywhere on the planet. To secure growth, emerging markets are a necessary part of any game companies strategy.

ABOUT NEWZOOINTRODUCTION

THE 5 KEY TRENDS LEADING CHANGE IN THE GLOBAL GAMES MARKET

Newzoo is an international full service market research and consulting fi rm, 100% focused on the games industry. We aim to provide the best and most actionable independent market data across all segments, business models and continents. Our clients benefi t from our unique mix of primary consumer research, transactional data and fi nancial analysis.Using our extensive network and deep involvement in the industry, we aim to stay ahead of the curve and at least two steps ahead of traditional research companies.

Our clients include Wizards of the Coast, Plantronics, Incomm, SEGA, ProSieben, Konami, Blizzard, GlobalCollect, NamcoBandai, GameHouse, Microsoft, Valve, Coca-Cola and VISA.

WWW.NEWZOO.COM

Only fi ve years ago consumers played games primarily using the PC and TV screen. The uptake of smartphones and tablets has since doubled the number of screens used by consumers to engage with entertaining content. Consumers are spreading their time and money accordingly, resulting in rising pressure on single-screen revenues. At the same time, the use of jargon and hyped terminology within the industry has confused external investors who sliced their investment volume in half in 2012. Misleading headlines by traditional press and research organizations about a games market in decline have exacerbated this problem that we, as an industry, need to resolve. This has motivated Newzoo to consolidate our eff orts further in pro-viding the total and global picture in 2013 and beyond.

Part of this eff ort is already refl ected in this Mobile Games Trend Report. This includes our Screen Segmentation ModelTM that we use in parallel with the traditional segmentation, which will fade out over time.

Full EU/US mobile report available. Order at Newzoo.com

“To truly understand change and spot future

opportunities we need to place single-screen data in a

global and multi-screen perspective.

Ultimately, changes are driven by

consumers and not metrics”

PETER WARMAN, CEO NEWZOO

KEY TRENDS AND GROWTH KPI’SFUELING MARKET GROWTH

© 2013 Newzoo

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In all countries the majority of gamers plays on their smartphone or tablet, ranging from 53% in Belgium to 79% in the UK. Spain has the second largest share of mobile gamers (77%), followed by Brazil (71%) and Russia (70%). As the share of paying gamers continues to grow, the UK leads the fi eld with 38% of mobile gamers actually spending money. Brazil, Australia and Italy follow closely behind, with at least 35% of their mobile gamers paying to play.

Fueled by simultaneous uptake in Western, Emerging and Asian markets, mobile games show a substantial growth compared to other games market segments. Most impressive are the fi gures shown here on app downloads and spending. One in three app downloads are games and two thirds of all mobile app spending is on gaming. Examining the global fi gures we can see there are more than 500 million mobile gamers, with 35% of these (175 million) spending money.


KEY GLOBAL FACTSON SMARTPHONE AND TABLET GAMING

MOBILE (PAYING) GAMERS PER COUNTRYSHARE OF ALL (PAYING) GAMERS, AGE 10 TO 50 (2012)

© 2013 Newzoo / Distimo

© 2013 Newzoo

SMARTPHONE AND TABLET GAMINGTHE GLOBAL PICTURE

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Investors are lostOur jargon and over-hyped terminology in com-bination with misinterpreted headlines (about the decline of traditional sales) is damaging our industry. We are confusing investors without giving them the total picture. Result: Investments from outside our industry have dropped by 50% compared to 2011.

The Newzoo Screen Segmentation Model™ distinguishes between four types of screens: the Computer, Entertain-ment, Personal and Floating Screen. According to this new model, each of the four screens plays a diff erent role, yet all of them are fi rmly present in consum-ers’ lives and therefore continuously used. To examine “mobile games”, we focus on the fl oating screen which accounts for the use of tablets as well as handheld consoles and the personal screen which covers smart-phones.

Spread of budgetConsumers are spreading their time and budget across double the number of screens than fi ve years ago. Result: Game companies are forced to follow their consumers and take a multi-screen approach.

Single-screen marketing unaff ordableSingle-screen cost of acquisition has risen too high to secure lasting success through a pure (sin-gle-screen) metrics approach. Result: mobile game companies need to attract (paying) players across the other screens.

Reports on the games market pre-dominantly focus on the number of players and/or money generated. To monitor and fully understand changes in the games market, these fi gures alone are not enough. This is especially true now that free-to-play is becoming the dominant business model. The growth in time spent gaming and number of paying gamers are key indicators of future growth.

FOUR GROWTH KPI’S

YEAR-ON-YEAR-GROWTHUS AND EU MOBILE GAMES MARKET (2012 vs 2011)

THREE REASONS WHYTHIS NEW SEGMENTATION IS NEEDED

NEWZOO SCREEN SEGMENTATION MODEL™

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© 2013 Newzoo

© 2013 Newzoo

A NEW LOOK AT THE GAMES MARKETCONSUMERS AND THEIR FOUR SCREENS

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Examining F2P games, such as Kingdoms of Camelot by Kabam, we can see the revenues rise alongside the downloads and continue to rise even as the download fi gures drop. Thus, F2P games generate steady and continuous revenues long after their downloads have slowed. This is not true for P2P games such as Infi nity Blade, which see a direct linear relationship between revenues and downloads.

Free-to-play has continued to prove the most profi table busi-ness model in the mobile sector and has further increased its domination in 2012. Comparing iOS revenue splits from December 2011 with December 2012, we see F2P games taking 70% of the revenue pie across the EU and the US. This is an average increase of 20% from the same period in 2011. Paid games with an in-app business model are performing slightly better in Europe than in the US.

MOBILE GAMES AS A SERVICE

THE STEADY RISE OF F2P

REVENUESDOWNLOADS

REVENUE AND DOWNLOAD DEVELOPMENT OVER TIME

iOS REVENUES SPLIT BY BUSINESS MODEL


FREE TO PLAYTHE KING OF MOBILE GAMING


© 2013 Newzoo/Distimo

© 2013 Newzoo/Distimo

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Even as Google Play begins to take a larger slice of mobile revenues, the iOS store continues to dom-inate in Europe and the U.S., taking 81% and 87% of revenues respectively. Interestingly, Japan sees a more even picture, with the Google Play Store taking 35% of mobile revenues. This fi gure is due, in part, to the under performance of the iPad in Japan.

Examining the demographics of iOS and Play Store gamers, we can better understand the above split in revenues. Almost half of IOS gamers are in full-time employment compared to 38% of Google Play gamers. iOS gamers also boast higher incomes, with 28% in the High Income category, compared to 17% of gamers who use Google Play.

In recent years, we have seen an increase in the number of female gamers, to the extent that most Western countries now have a 50/50 split, with some boasting more female than male gamers. This split however, doesn’t hold when we examine paying gamers. Men are much more willing to pay for their gaming experience, making up 61% of all payers in the US. This trend is even more salient in emerging markets such as Turkey and Poland, where 70% of all paying gamers are male.

PROFILING THEMOBILE GAMER

SHARE OF REVENUES BY STORE

WOMAN PLAY, MEN PAY

WORK SITUATION AND INCOME

TOP 200 GROSSING GAMES, DECEMBER 2012

GENDER SPLIT FOR PAYING MOBILE GAMERS


© 2013 Newzoo

© 2013 Newzoo


APPLE VS GOOGLE PLAYCLOSING THE GAP

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Of all smartphone, tablet or handheld gamers in the US, 50% play only on their smartphone, 12% use both a tablet and a smartphone and 11% use a smartphone and a handheld console. The greatest insights can be gleamed by looking at the changes in these fi gures between March and Sep-tember 2012. The number of people using both a tablet and a smartphone is up by an impressive 52%. Thus, personal and fl oating screens are complementary and developing games for both platforms is essential.

Consumers now play across four screens and spread their budget spread across the enter-tainment (29%), computer (50%), personal (7%) and fl oating (14%) screens. As we can see, of all the paying gamers in the US, 32% of them spend money on the personal screen (mobile) and 37% spends money on the fl oating screen (tablet & handheld consoles). Although only 7% of money goes to mobile, we expect this fi gure to rise as the number of mobile payers increases. A remarkable 21% (EU) / 22% (US) already plays games on all four screens.

OVERLAP AND GROWTHSMARTPHONES VS TABLETS VS HANDHELDS CONSOLES

SCREEN MONETIZATIONSPLIT OF MONEY AND SHARE OF PAYING GAMERS THAT PAY ON A SCREEN


© 2013 Newzoo

© 2013 Newzoo

CROSS-SCREEN GAMINGFOLLOWING THE CONSUMER

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iOS PUBLISHERS - DECEMBER 2012

PLAYSTORE PUBLISHERS - DECEMBER 2012




TOP MOBILE GAMES PUBLISHERSiOS VS PLAYSTORE (GROSSING)

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iOS GAMES - DECEMBER 2012

PLAYSTORE GAMES - DECEMBER 2012




TOP MOBILE GAMESiOS VS PLAYSTORE (GROSSING)

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KNOW YOUR GAMERCONSUMER INSIGHTS AND APP METRICS

Together with our App Analytics partner Distimo, we off er an on-line dashboard that allows you to analyze daily download and revenue estimates for a selection of iOS and PlayStore games. It provides insight into daily, weekly and monthly leader-boards of the top 44 countries worldwide and enables the analysis of any app in the market – whether it is a competitor, po-tential partner or an investment opportunity.

Newzoo provides a unique subscription service combining both consumer and transactional data. Both are accessed and analyzed online. By providing the best app analytics in the world with the best games market research expertise, we can give you continuous insight that your competitors do not have.

Newzoo’s Data Explorer helps our clients to develop marketing strategies and eff ectively target paying gamers. The tool includes 200 topics for 15 countries and allows for the sizing and com-parison of markets in terms of players, payers and money. It makes it easy to profi le paying vs. non-paying gamers and understand cross-platform or screen potential. Subscription to the data explorer allows access to the market intelligence needed to support growth across all screens and segments.

PROFILING THE PAYER

MONITORING APPS

“Newzoo has been working with Distimo data for almost two years and knows this industry inside-out. We believe the strength of this partnership lies in the combination of Newzoo’s global games market expertise and our data, which delivers the best actionable insights for leading

game companies.”

BEST OF BOTH WORLDS

-Vincent Hoogsteder - CEO DISTIMO

needed to support growth across


More information on this subscription, a monthly summary report service and custom analysis possibilities can be found

on Newzoo.com.


© 2013 Newzoo

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Amsterdam,the perfect city for your game company

Payments Intelligence,the fastest way to increase revenues

> 115 million gaming payments in 2012

GlobalCollect has deep gaming knowledge and provides advice to clients on paymentization practices including checkout fl ows,

multi-acquirer management, alternative payment method optimization, localization best practices and benchmarking for credit card processing.

Central location in EuropeThe Netherlands sits nicely and independently in between Europe’s largest markets: the UK, Germany and France and is known to be a perfect test market for new digital media products.

Excellent InfrastructureAmsterdam is home to the Amsterdam Internet Exchange, the world’s largest internet hub in terms of both traffi c and members.

Multilingual WorkforceAmsterdam has always been very international in terms of people, languages and business. It is also easy to attract talent from other parts of Europe to spend some years in Amsterdam.

Financial Framework Many international companies, such as IKEA have set up their fi nancial HQ in the Netherlands.Please contact me to see what advantages

apply to your specifi c situation.

Annelies in ‘t VeldSenior Manager Foreign InvestmentsCity of Amsterdam | Economic Aff [email protected]

+31 (0)20 552 3204

Nathan SalisburyGlobal Market Director - [email protected]

+31 (0)23 567 1500

GlobalCollect is the worlds’ premier provider of payment ser-vices. It processes payments across the globe for the majorityof leading game publishers and distributors.

In 2012 GlobalCollect processed over 148M video gaming transactions globally.

Gaming payments data and benchmarks are available to clients based on gaming platform, game type, monetization model and genre.

Payment specifi c data includes global payment method popularity, average trans-action values, fraud benchmarks, country specifi c volumes, transaction volume fi gures etc.

Four reasons why game companies such as PerfectWorld, Gamania and DeNA have chosen the Amsterdam Metropolitan Area for their European offi ce.

NEWZOO PARTNERSSUPPORTING YOUR GLOBAL BUSINESS DEVELOPMENT

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Full EU/US mobile report available. Order at Newzoo.comFull EU/US mobile report available. Order at Newzoo.com

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[2013] Newzoo Mobile Games Trend Report Free