GMGC2015 - A Strategic Guide to Key Growth Markets in Southeast Asia

A Strategic Guide to S.E.A.Global Mobile Game Congress APR 2015

Actionable tips to planning for and approaching the (6) markets within 2 quarters

This is Me (and how my perspective has been shaped)

Co-Founder and CEO

Inzen Studio

Research and Innovation Game Development

Industry Development and Funding

11 years in the Industry

Current Focus:Business DevelopmentStrategic Partnerships

Strategic PlanningFinancingOperations

FinancingGame Design

Operations

Industry PlanningCo-financing

Mentoring

Worked with world-class publishers via studios:

FinancingGame Design

Operations

These are some of the people who shape my views through Inzen’s Board

Harveen NarullaExecutive ChairmanHatcher (Singapore)

Middle East & Africa MARKET ACCESS

Song WeiSecretary General

Global Mobile Game Confederation (China)

China MARKET ACCESS

Specialises in investments for technology companies and

platforms in finance and media

over US$600m in funds managed

Other Portfolio Companies:

Leading business network of mobile game business leaders globally

A snapshot of someGMGC Member Companies:

Masahiko HonmaCo-Founder and General Partner

Incubate Fund (Japan)

Japan and KoreaGAME SOURCING

Backed by:

Other Portfolio Companies:

3

Here’s a sample structure of a game company – see if you can identify with it

Average Game Developer

Prototyping Team

Production Team

Product/Biz Team

~US$400,000 per year

~US$33,000 per month

Average Publisher

Evaluation Team

Product/Biz Team

Marketing and Ops Team

Support Team



And here’s the operating cost, on average

To sustain and grow, you must find markets that are big enough to support your monthly burn

Average Game Developer



Average Publisher



Main Market Revenue

Secondary Market Revenue

?

To assess that, let’s take a look at the Value Chain first

Average Game Dev Average Publisher Average Platform Player

- Develops Game- Develops Content

Updates- Makes Content Tweaks

for various markets

- Finds Appropriate Platforms for the game

- Markets Game to player base

- Operates In-Game events- Plans Co-marketing

Activities- Plans Content Updates

- Provides Storefront for users

- Provides Billing- Markets Game to users

- Plays- Pays- Refers friends

$0.35 $0.35 $0.30 $1

$0.28 $0.42 $0.30

50:50

40:60

$1

Let’s assume that the total sales revenue is $100,000



for various markets








$28,000 $42,000 $30,000 $100,000

~US$33,000 per month ~US$63,000 per month


40:60

Let’s try for an assumption that sustains both the Publisher and the Developer



for various markets








$56,000 $84,000 $60,000 $200,000

~US$33,000 per month ~US$63,000 per month


40:60

Let’s go macro, here’s the Broad Data on S.E.A.

Thailand (TH)

Malaysia (MY)

Singapore (SG)

Indonesia (ID)

Vietnam (VN)

Philippines (PH)

China(CN)

Game Rev (in m) 230.3 214.2 201.6 181.1 155.8 96.8 4,400.00Total Players (in m) 13.8 13.5 2.7 30.7 29.6 25.1 357

Game Rev/Total Players $16.69 $15.87 $74.67 $5.90 $5.26 $3.86 $12.32

Sources: 1. Data in table from: 2015 Global Mobile Games Whitebook, Newzoo2. Data on total players and in China from: http://technode.com/2015/02/10/chinese-mobile-games-revenue-grew-145-percent-in-2014/3. Data on % of paying players in China from: http://venturebeat.com/2014/08/04/chinas-mobile-game-market-to-grow-a-scorching-93-to-2-9b-in-2014/

% who spent money in the last 3 months 49% 43% 38% 29% 49% 48% 38%

The top 3 in each category

http://technode.com/2015/02/10/chinese-mobile-games-revenue-grew-145-percent-in-2014/

http://venturebeat.com/2014/08/04/chinas-mobile-game-market-to-grow-a-scorching-93-to-2-9b-in-2014/

Let’s look at how Chinese games/Chinese companies are doing in SEA – What do we observe?

TH VN ID

6 8 6 8 3 5

Here’s an overview of some of the key players and possible partners?

Game Developer Publisher Platform

VN | Appota | VN and ID

TH | ini3 | TH

SG | Garena | TH, VN and SG

CN | Elex | TH

CN | Digital Sky Entertainment | VN and ID

CN | Kunlun Games | TH, VN, ID

CN | Camel Games| ID

VN | VNG | VN

TH | NHN/Line | TH and ID

Backed by Softbank

Backed by Tencent

A Step-by-Step Guide to Market Entry in 6 months

Study Phase: (1-3 months)1. For the game: test in one market first, preferably your home market2. Identify a potential audience in a secondary market.a) Study the revenue potential.b) Study the games.c) Understand audience tastes.3. See who the value chain players are.4. Assess the potential partners for mutual fit.5. Try to find a way to be introduced in.

Evaluation Phase: (1 month)1. Understand how you fit into their growth plans2. Understand how your game fits into their portfolioa) Is your game a traffic builder? Revenue generator? Part of the portfolio

Discussion Phase: (1-2months)1. License fees2. Advances3. Marketing commitments4. Revenue share

In Summary

1. Operation Model2. Minimum Survival Requirement3. Value Chain and Revenue Shares4. Conceptual Market Assessment and Possible Entry Criteria5. An overview of the key parties in SEA.6. A Step-by-step guide to Market Entry