Eastern Europe Digital Games Market 2014

1Eastern Europe’s Digital Games Market, 2014 | Copyright © 2014 SuperData Research. All rights reserved. | www.superdataresearch.com

DIGITAL GAMES MARKET

EASTERN EUROPE20

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http://www.superdataresearch.com

• Eastern Europe’s digital games revenue rises 7% year-over-year. Russia makes up half of the Eastern Europe digital games market with over $1B in revenue. Turkey and Poland take 14% and 20% of the market, respectively.

• Turkish digital gamers play and pay longer than their Eastern European counterparts, with an average playing lifetime of over three months and an average paying lifetime almost 30% higher than the regional average.

• eWallets and credit/debit cards account for almost half of all payments in Eastern Europe. Top markets Russia, Turkey and Poland also show a preference for bank transfers as local payment providers continue to dominate the region.

• The pay-to-play MMO market shows a slower decline in Eastern Europe than in other regions, proving more resilient in countries like Russia and Poland. The market is currently at $205MM, set to decline 7% by next year.

• High spending and conversion in Eastern Europe makes free-to-play MMOs the largest market in the region at almost $800MM in 2014E revenues. Eastern Europe’s conversion is higher than the continental average and spending is only slightly lower.

• Localized social networking sites helps social gaming continue its strong growth in Eastern Europe, giving it a 16% annual boost. Although spending lags behind European ARPPU, Eastern Europe’s conversion is on par with the rest of the region showing an increasing maturity for the social market.

• Growing Android smartphone penetration makes mobile the third largest gaming market in Eastern Europe. Spending continues to trail behind western markets, but high disposal income in Poland and the Czech Republic make them lucrative countries for mobile.

• Digital PC growth is largely due to high full game conversion and ARPPU. Eastern European countries continue to show wariness toward regular in-game payments to due payment security concerns so full game spending is high. However, piracy continues to be an issue in the region.

• Digital console is the fastest growing market with 23% year-over-year growth but consoles continue to struggle to find their place in Eastern Europe. Players continue to prefer cheaper and more ubiquitous gaming devices like smartphones and PCs, making digital console the smallest digital games market in Eastern Europe.

Executive summary

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SuperData | Digital games market intelligence

Eastern Europe’s Digital Games Market, 2014 | Copyright © 2014 SuperData Research. All rights reserved. | www.superdataresearch.com


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OVERVIEW



Index What’s in here.


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1 OVERVIEW Index Methodology !2 MARKET OVERVIEW Eastern Europe Digital Games Revenue, 2014E: Top Eastern Europe Markets 2014E Eastern Europe Digital Games Revenue Market Share, 2014E Lifetime Value of Eastern European Online Gamers by country and region, 2014E Payment Preferences for Online Gamers in Eastern European Markets, 2014E

3 MMO GAMES MARKET Worldwide Pay-To-Play MMO Games Market, 2013-2017E Worldwide and Regional Pay-To-Play MMO Games Market, 2014E Eastern Europe Pay-To-Play MMO Games Market by Region and Country, 2014E Eastern Europe vs. Europe Digital Pay-To-Play MMO Revenues, 2013-2017E Worldwide Free-To-Play MMO Games Market, 2014E Eastern Europe vs. Europe Free-To-Play MMO Games Revenue, 2013-2017E Eastern Europe Free-To-Play MMO Games Revenue and Audience Size by Region and Country, 2013-2017E Eastern Europe vs. Europe Free-To-Play MMO ARPPU, 2014E Monthly Eastern Europe Free-To-Play MMO ARPPU by Country, 2014E Free-To-Play MMO Consumer Profile: Russia, Turkey, Poland, 2014E Free-To-Play MMO Player Behavior: Russia, Turkey, Poland, 2014E Free-To-Play MMO Payer Behavior: Russia, Turkey, Poland, 2014E Free-To-Play MMO Payment Method Preference: Russia, Turkey, Poland, 2014E





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4 SOCIAL GAMES MARKET Worldwide Social Games Market, 2014E Eastern Europe vs. Europe Social Games Revenue, 2013-2017E Eastern Europe Social Games Revenue and Audience Size by Region and Country, 2013-2017E Eastern Europe vs. Europe Social Games ARPPU, 2014E Monthly Eastern Europe Social Games ARPPU by Country, 2014E Social Games Consumer Profile: Russia, Turkey, Poland, 2014E Social Games Player Behavior: Russia, Turkey, Poland, 2014E Social Games Payer Behavior: Russia, Turkey, Poland, 2014E Social Games Payment Method Preference: Russia, Turkey, Poland, 2014E !5 MOBILE GAMES MARKET Worldwide Mobile Games Market, 2014E Eastern Europe vs. Europe Mobile Games Revenue, 2013-2017E Eastern Europe Mobile Games Revenue and Audience Size by Region and Country, 2013-2017E Eastern Europe vs. Europe Mobile Games ARPPU, 2014E Monthly Eastern Europe Mobile Games ARPPU by Country, 2014E Mobile Games Consumer Profile: Russia, Turkey, Poland, 2014E Mobile Games Player Behavior: Russia, Turkey, Poland, 2014E Mobile Games Payer Behavior: Russia, Turkey, Poland, 2014E Mobile Games Payment Method Preference: Russia, Turkey, Poland, 2014E

6 DIGITAL PC GAMES MARKET Worldwide Digital PC Games Market, 2014E Eastern Europe vs. Europe Digital PC Games Revenue, 2013-2017E





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6 DIGITAL PC GAMES MARKET (cont’d) Eastern Europe Digital PC Games Revenue and Audience Size by Region and Country, 2013-2017E Eastern Europe vs. Europe Digital PC Games ARPPU, 2014E Monthly Eastern Europe Digital PC Games ARPPU by Country, 2014E Digital PC Games Consumer Profile: Russia, Turkey, Poland, 2014E Digital PC Games Player Behavior: Russia, Turkey, Poland, 2014E Digital PC Games Payer Behavior: Russia, Turkey, Poland, 2014E Digital PC Games Payment Method Preference: Russia, Turkey, Poland, 2014E !7 DIGITAL CONSOLE GAMES MARKET Worldwide Digital Console Games Market, 2014E Eastern Europe vs. Europe Digital Console Games Revenue, 2013-2017E Eastern Europe Digital Console Games Revenue and Audience Size by Region and Country, 2013-2017E !8 EVERYTHING ELSE About Contact Fine Print ! !



Data: • 14,048,625 unique transactions • 1,161 survey responses from digital gamers

18+ in Russia, Turkey and Poland !Time Period: • Transactions: October 2011 to April 2014 • Survey: May 2014 !User Base: 3,324,133 unique Eastern European online gamers !Analysis: Comparative analysis based on industry-relevant metrics.

For a more detailed overview and explanation of our methodology and data collection, please refer to our website:

http://www.superdataresearch.com/methodology

Methodology What we do and how we do it.

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1

2

3

4

data

colle

ction

analy

sisre

porti

ng

Q: What type of data do we have and where do we get it?A: Every month we collect the spending data of millions of unique paying online gamers directly from publishers and developers, totaling 50+ publishers and 450+ game titles.

Q: What do we do with the data?A: We clean, aggregate, and analyze these data to establish market benchmarks for all segments of digital games, then build title-level models to speak to the KPIs of top performing games.

Q: How do we analyze the data?A: We combine the digital point-of-sale data with qualitative consumer insights to speak to the “why” of the market.

Q: What do we send to you?A: Our research covers everything from worldwide genre benchmarks to title-level KPIs, country-level deep dives to brand equity.

Aggregated Market Data

PC

Social Mobile

MMO

anonymize, aggregate

filtering, using tailored datasets

surveys and expert interviews

Standardized Metrics & Trends

Country-level Analyses

Revenue Estimates

Publisher Market Share

Conversion Rates


*Data on demographics and player/payer behavior for Russia, Turkey and Poland were extrapolated from survey data. **Demographic data was created by analyzing respondents who had played each segment at least once in their lifetime. Player and payer behavior data was created for each segment by analyzing respondents who primarily played each segment. ***Some percentages may not add up to 100% due to rounding.

http://www.superdataresearch.com/methodology


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Methodology, cont’d Definitions & terminology.

TERMINOLOGY • ARPPU (historic): average revenue per paying user per month. • Boxed/Full game: Full game client purchases that are purchased via download on Internet capable devices. The two

major channels of distribution are consoles and PCs. • Compound annual growth rate (CAGR): The year-over-year growth rate of an investment over a specified period of time. It

is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered.

• Conversion rate: The number or percentage of users that have shifted from non-paying to a paying status. • Daily active users (DAU): The number of unique users that have used an application at least once over the course of a

day. • DAU/MAU (Daily active users/monthly active users): Ratio indicating how many of active users play each day, showing

player engagement. Also known as the stickiness factor. • Digital games: Digital gaming here defined as mobile (table smartphone and feature phone), PC (MMO, FPS, social,

etc), and console DLC. Revenue estimates include virtual item sales, full game purchases, subscriptions and DLC add-on purchases. Data does not include gambling or any other real money gaming transactions.

• F2P/Free-to-play/Freemium: Offering a game, product or service free of charge (such as software, web services or other) while charging a premium for advanced features, functionality, or related products like digital games and services.

• Lifetime value (LTV): The average revenue generated over the entire lifespan of a player in a single game. • MAU: The number of unique users that have used an application at least once over the course of a month. • Monthly unique users (MUU): Monthly unique users removes double counting from monthly active user count since

gamers often play multiple titles a month. MAU is used for revenue estimation while MUU is better used for comparing player numbers.

• P2P/Pay-to-play/Premium: Requiring an initial cost for a game, product or service (such as software, web services or other) while also charging a premium for advanced features, functionality, or related products like digital games and services.



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GAME PLATFORMS & CATEGORIES • Social: Games played on a social networking platform. These games earn digital revenue from one-off app purchases

and in-game purchases across PC and mobile devices such as smartphones and tablets. • Mobile: Games played on mobile devices that are strictly not played on a social networking platform. These games

earn digital revenue from one-off app purchases and in-game purchases across mobile devices such as smartphones and tablets.

• MMO: Massively multiplayer online games that involve both persistent and instance worlds in which users can interact one another as well as a simulated environment.

• Free-to-play MMO: Massively multiplayer online games that earn revenue according to a free-to-play model and from non-subscribing players in games with hybrid subscription revenue models. Revenue is earned from expansion packs and micro-transaction based virtual items and services.

• Pay-to-play MMO: Massively multiplayer online games that earn revenue from subscriptions, expansion packs, and micro-transaction based virtual items and services.

• Digital console: Games played on consoles and earn revenue from boxed game purchases, expansion packs, and downloadable content sales. The price to entry is not redeemable for any in-game currency or subscription value.

• Digital PC: Games played on PCs and earn revenue from boxed game purchases, expansion packs, and downloadable content sales. The price to entry is not redeemable for any in-game currency or subscription value.



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GEOGRAPHIES • Asia: China, Japan, South Korea, Philippines, Thailand, Vietnam, Indonesia and India. • Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Monaco,

Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Russia, Bulgaria, Belarus, Estonia, Romania, Lithuania, Turkey, Czech Republic, Slovakia, Serbia, Ukraine, Latvia, Poland, and Hungary. • Eastern Europe: Belarus, Czech Republic, Hungary, Poland, Russia, Turkey, and Ukraine. • Western Europe: Denmark, Germany, Finland, France, Italy, Norway, Spain, Sweden, and United Kingdom.

• Latin America: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, French Guyana, Guatemala, Guyana, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Suriname, Uruguay and Venezuela.

• North America: Canada and the United States. • Rest of World: Oceania and Africa. !



MARKET OVERVIEW

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Eastern Europe digital games revenue, 2014E

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Russia takes hold of almost half of the market Russia, Turkey and Poland dominate 84% of the Eastern European market with $1.9B.


Belarus - 2%

$2.2B Eastern Europe online

games market in 2014E

Russia 50%

Turkey 20%

Poland 14%

Ukraine - 3%

Czech Republic

7%

Hungary - 4%

Russia $1,118MM

Belarus $48MM

Ukraine $68MM

Turkey $434MM

Poland $311MM

Hungary $100MM

Czech Republic $147MM


0%

25%

50%

75%

100%

2013 2014E

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Eastern Europe digital games market revenue by game category

• Free-to-play MMOs remain the largest digital games segment in Eastern Europe as subscription-based MMOs decline by 6%. Free-to-play MMOs continue to nudge out pay-to-play, commanding 36% of the market in 2014E and gaining $45MM in additional revenue year-over-year.

•Social games show highest monetary growth, accruing $61MM more revenue in 2014E. As social penetration continues to catch up to western markets, social games bring in 16% of Eastern Europe’s total digital games revenue.

• Low spending and slow smartphone penetration keep mobile market share at 19% year-over-year. Only 6% of Ukraine, the region’s third most populous country, use smartphones. This coupled with slowing smartphone growth throughout the region keep mobile spending and revenue low.

•Although bootleg PC and console games still run rampant in the region, console shows the highest percentage of annual growth with 23% more revenue. The increasing popularity of credit card payments in Eastern Europe has made it easier for gamers to legitimately download digital content onto PCs and consoles.

+ 9%

+23%

+ 5%

+16%

+ 6%

YoY Growth %

- 6%

Social

$794MM

$192MM

$267MM

$451MM

Mobile

ConsoleP2P MMO

$409MM

PC

F2P MMO

$101MM

EEU digital games revenue rises 7% YoY Growth in the region is largely driven by social games and free-to-play MMOs.

Shar

e of m

arke

t tot

al



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Customer lifetime value metrics, 2014E

Turkish gamers play and pay longest Lifetime value soars in Turkey, coming in 22% higher than the regional average.

*Playing lifetime refers to the average number of days between a player’s (paying and non-paying) first and last login of paying and non-paying users; playing lifetime refers the average number of days between a payer’s first and last purchase.

• On average, Turkish players play and pay for almost a month longer than the regional average. Turkish players are not the highest spenders, but their longevity nudges lifetime value more than $20 higher than its regional counterparts.

• Markedly low spending makes Ukraine’s lifetime value the lowest in Eastern Europe. Despite the country’s large population and long play life, Ukraine’s lifetime value comes in at just under $60 versus the regional average of almost $100.

• Russia tops the region for average spending per payer per month, coming in 9% higher than the average. A large gaming population coupled with the most monthly transactions in the region make Russia a revenue powerhouse.

Geography Playing lifetime (days)

Paying lifetime (days between first and last

purchase)

Avg. spent per purchase

Avg. spent per payer per

month

Avg. total spent during

player lifetime

Monthly transactions

per payer

Digital games market size 2014E

($ mil)

Russia 70 115 $3.63 $22.10 $84.65 6.1 $1,118Turkey 106 184 $3.51 $19.22 $117.95 5.5 $434Poland 86 153 $3.96 $17.57 $89.61 4.4 $311Czech Republic 68 116 $3.51 $19.07 $73.71 5.4 $147Hungary 69 109 $3.76 $19.35 $70.41 5.2 $100Ukraine 82 135 $2.91 $13.12 $59.11 4.5 $68Belarus 66 108 $3.22 $19.14 $68.96 5.9 $48Eastern Europe Total 83 144 $3.81 $20.21 $96.88 5.3 $2,226



• Lack of trust in the security of online card payments pushes Eastern European gamers toward alternative payments. Alternative payments in Eastern Europe make up almost 80% of digital gaming transactions within the region.

• Eastern European gamers favor local payment providers. Eastern Europe-based brands such as Yandex, QIWI, WebMoney and Przelewy24 dominate their payment categories. These local brands address security concerns as well as the preference to pay by cash, functioning without bank accounts or credit cards.

• Mobile payment use is growing across Eastern Europe. Mobile payments have huge potential in Eastern Europe since they provide immediate gratification and security, and do not require bank accounts or credit cards. However, while use is increasing the total value of mobile payments remain low at $309MM since gamers use them mainly for small transaction amounts.

• Economic growth in Eastern Europe drives increase in credit card penetration and use. Despite concerns over security, many Eastern European gamers feel the convenience and ubiquity of credit cards are unmatched. Credit card/debit cards market share in Eastern Europe increased from below 16% in 2013 to over 21% in 2014E.

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Digital games market size

2014E (mil $)

Credit card/Debit Card

Direct debit Prepaid Mobile eWallet

Bank transfer (Offline)

Phone Other

Russia $1,118 20.5% 2.5% 8.8% 15.6% 33.7% 13.8% 5.2%Turkey $434 19.7% 5.2% 14.5% 7.8% 40.1% 11.9% 0.8%Poland $311 21.7% 6.3% 11.9% 19.3% 23.3% 12.4% 5.1%Czech Republic $147 13.0% 1.9% 31.8% 18.7% 21.8% 6.1% 2.5% 4.3%Hungary $100 24.8% 4.3% 15.5% 9.0% 15.5% 21.9% 9.1%Ukraine $68 29.3% 2.0% 9.3% 6.4% 33.0% 15.6% 4.4%Belarus $48 19.1% 8.8% 18.2% 5.9% 18.9% 18.0% 11.1%Eastern Europe $2,226 20.5% 3.7% 12.4% 14.0% 31.6% 13.2% 0.2% 4.5%

Payment preferences for digital games in Eastern Europe, 2014E

Local brands dominate Eastern European market eWallets and credit/debit card payments account for almost half of payments.



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MMO GAMES

MARKETEastern Europe’s Digital Games Market, 2014 | Copyright © 2014 SuperData Research. All rights reserved. | www.superdataresearch.com


$134$222

$678

$724

$894

EEU market for pay-to-play proves more resilient Compared to overall WW and European market, EEU pay-to-play declines at lower rate.

Europe vs EEU digital pay-to-play MMO revenues ($ mil)

2013 2014E 2015E 2016E 2017E

$554$605$661$724$805

$172$175$192$205$229

Eastern EuropeEurope

17



Asia

Europe

North America

Rest of world

Latin America

Worldwide

$2,651 2014E Pay-to-Play MMO Revenue (mil)

Worldwide pay-to-play MMO revenue ($ bil)

2013 2014E 2015E 2016E 2017E

$2.1$2.3$2.5$2.7$2.9

• Russia dominates EEU’s $205M market. Revenue distribution in EEU shows key roles for Russian, Turkish and Polish market.

• Russia leads EEU pay-to-play market. However, free-to-play titles like World of Tanks continue to do well in major EEU markets like Russia, furthering the decline of the pay-to-play market.

$5$10$12

$13

$33

$39

$93

RussiaTurkey

Poland

Czech Republic

UkraineHungary Belarus

• WW pay-to-play market declines to $2.1B. More flexible and accessible game play alternatives on mobile and free-to-play MMOs drive down overall market for subscription-based MMOs, from $2.6B in 2014E to $2.1B in 2017E.

• European spending on pay-to-play MMOs totals $724 in 2014E. Europe accounts for over a quarter of worldwide revenues.

E. Europe

$205 2014E Pay-to-Play MMO Revenue (mil)


Asia

$3.3 billion

North America

$1.5 billion

Latin America

$0.7 billion

Europe

$2.1 billion

Rest of world

$0.3 billion

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Eastern European F2P to reach $908M by 2017E At 38% of European market, Eastern EU grows slighter faster with 4.9% CAGR.

• Asia continues to lead the worldwide market for free-to-play MMOs, but Europe is second largest with $2.1B in revenues for 2014E.

• Eastern Europe represents 38% of total spending on free-to-play MMOs in Europe, and shows continued growth of 4.93% CAGR to 2017E.2013 2014E 2015E 2016E 2017E

$2.3$2.2$2.1$2.1$1.9

$0.9$0.9$0.8$0.8$0.7


Free-to-play MMO gaming revenues ($ bil)

Worldwide free-to-play MMO gaming revenues, 2014E



$533$529

$489$464

$432

$129$122

$117$117

$117

$87$82$77

$70$69

$47$45$45$46

$42

$53

$46

$45

$44

$40

$38

$34

$34

$31

$29

$22

$20

$22

$22

$20Belarus Ukraine Hungary Czech Republic Poland Turkey Russia

• Smaller EEU markets are key in strategic rollout for publishers. As competition over EEU between western and eastern publishers intensifies, smaller markets emerge as a key battlefront.

• Hungary fastest growing free-to-play audience. Despite its modest overall size, Hungary is set to catch up on Czech Republic by 2017E, with almost 2 million MAUs. Russian audience expected to grow by almost 4%, reaching over 20 million MAUs in that same period.

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Major EEU markets show signs of saturation Russia and Turkey forecasted to grow at slower pace than smaller EEU markets.


Eastern Europe free-to-play MMO market (millions)

Reve

nue (

$)

$749$794

$828$879

$908

20.219.1

18.618.1

17.3

6.66.46.36.36.4

4.44.34.14.0

4.0

1.91.91.81.9

1.8

1.91.81.81.8

1.6

3.93.63.73.73.7

1.1

1.0

1.1

1.1

1.1

Audi

ence

(MAU

) 35.836.8

37.438.1

39.9*Belarus revenue and audience account for less than 2% of Eastern European totals. **CAGR for period 2013 - 2017E.

2013

2014E

2015E

2016E

2013

2014E

2015E

2016E

2017E

2017E


$9

$15

$21

$27

Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec

Russia Turkey Poland Czech Republic Hungary Ukraine Belarus

Eastern Europe free-to-play MMO ARPPU, 2014E monthly average

EEU spending on par with overall European market Second-tier markets show especially strong average user spend around at $19 a month.

• Russian audiences are the biggest spenders with $22 in average monthly ARPPU. Minimal spending difference between EEU markets ($20.22) and overall European market ($20.28) suggests promising market potential.

• ARPPU in second-tier markets are on par with regional leader Turkey. Although generally considered less important because of their smaller user base, markets like Czech Republic, Hungary, and Belarus, show comparable spending levels to regional big-hitter Turkey.

• Ukraine and Poland show potential to increase user spending. As the lowest monetizing markets, ARPPU in Ukraine and Poland shows possibility of growth toward the regional average.

$19.07

20


$19.22

$17.57

$19.35

$22.10

$13.12

$19.14

$20.22E. EUROPE ARPPU, 2014E

$20.28EUROPE ARPPU, 2014E


$9

$15

$21

$27actualpredicted


Free-to-play converts at higher rate in EEU Compared to the European average, EEU audiences show greater willingness to spend.

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3%

6%

10%

13%



Eastern Europe free-to-play MMO conversion, 2014E

10.60%

monthly average

8.15%

8.38%

10.59% 9.67%

5.33%

8.51%

• Audiences in Czech Republic and Hungary convert at a higher rate than large markets Russia and Turkey. With an average monthly conversion rate of over 10%, both the Czech Republic and Hungary lead the regional market and show their audience’s willingness to pay for digital entertainment.

• Market maturity means lower conversion rates in Turkey and Russia. As a more mature market, Turkey relies less on an affluent top-layer for monetization, resulting in a regionally low monthly average conversion rate of just over 8%. Russia does show high monthly conversion of almost 10%, but falls behind key second-tier markets like the Czech Republic and Hungary.

• Ukraine’s underperformance pegs it as a riskier market for free-to-play titles. A drastic difference in the percentage of monthly spending indicates that the Ukrainian audience relies predominantly on an affluent sub-segment in the market. This indicates higher risk for publishers, who will have to compete over smaller audience.

8.89%E. EUROPE AVG. CONVERSION, 2014E

8.78%EUROPE AVG. CONVERSION, 2014E


3%

6%

10%

13%


• A higher average income and better educated audience makes Turkey a strong market for free-to-play MMOs. Russians, on the other hand, show higher income in other segments.

• All three countries have relatively high female participation. As a growing number of western publishers seek entrance into the EEU market, developing and localizing for female players may prove to be key.

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Turkish players most desirable in key EEU markets Free-to-play MMO audiences show wide diversity on gender and education.


32$12,400AVERAGE INCOME

19%81%

HIGHER EDUCATION DEGREE HOLDERS*

AVERAGE AGE 58%42%

RUSSIA TURKEY POLAND


63%37%HIGHER EDUCATION DEGREE HOLDERS*

AVERAGE AGE 61%39%31

$17,600AVERAGE INCOME

21%79%


AVERAGE AGE 64%36%

*Higher education degrees include vocational, college, graduate and postgraduate degrees.


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F2P MMO engagement is consistent across EEU Publishers expected to shift toward retention-based strategies to extend player lifetime.


Russia Turkey Poland

4.94.95.0


2217

21

Average play frequency (per month)


2.42.32.3

Average player lifetime (months)

Average play session length (hours)

• Average player lifetime in leading EEU countries is five months. The total length of player engagement is consistent across Russia, Turkey, and Poland. Extending average player lifetime will be a key challenge as more publishers enter these markets. !

• Free-to-play MMO players in Russia and Poland play 26% more frequently than in Turkey. Higher average play frequency in Russia and Poland indicates a strong market and high player engagement. !

• A retention-based strategy will become critical for free-to-play MMO publishers after initial marketing push dies down. Increasing customer loyalty and overall engagement will prove key to building sustainable businesses across core Eastern European markets.


Russians spend 15% more, buy weapon upgrades Expansion packs and in-game currency most popular among Turkish and Polish players.

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RussiaTurkeyPoland 8.4%

8.2%9.7%

$17.57$19.22

$22.10

Average conversion rate Average in-game monthly spending

Class unlocksExpansion packs

Game time extensionsIn-game currency

Additional maps/levelsNew character abilities

New weapon upgradesSide stories

Vanity items

18%13%

23%30%

13%

50%

13%

38%

25%

2%7%

21%17%

26%33%

24%

41%

29%

16%10%

30%22%

6%

49%

19%26%

16%

Percentage of payers who purchase certain in-game items

• Russian free-to-play MMO gamers are strongest spenders. With a relatively high conversion rate and 15% more spending than Turkish players, Russia outperforms other leading markets in Eastern Europe.

• Turkish and Polish players show a distinct preference for expansion packs. When compared to other in-game items, the Turkish market monetizes best on expansion packs and in-game currency. Russians, on the other hand, prefer in-game currency and new weapon upgrades.

• With high spending and game lifetime on par with Turkey and Poland, Russia shows highest free-to-play MMO lifetime value. At $110.50, Russian lifetime value outperforms the other two largest markets in EEU by 17%-28%.


Payment preferences demand custom strategy Publishers will have to tailor their payment strategies to suit each market individually.

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eWallet

SMS/Premium SMS

Credit card

Payment kiosk

Mobile payment

Cash payment

Pre-paid game card

Home phone billing

Internet banking

Other3%

31%

2%

8%

3%

8%

0%

16%

26%

2%

4%

4%

2%

4%

6%

8%

2%

64%

4%

2%

3%

5%

0%

0%

4%

11%

14%

19%

16%

29%

Payment preference: Russia, Turkey and Poland

• Diversity in preferences indicates value of localized payment options. Russians prefer eWallets (29%), Turkish players overwhelmingly choose credit cards (64%), and in Poland Internet banking (31%) is most popular. !

• To capture 70% of the market* each EEU country requires a different payment approach. For the Turkish market, publishers need credit cards and mobile payments (72%). In Russia a more diverse payment strategy is required, including eWallets, credit cards, premium SMS and payment kiosks to reach comparable coverage. In Poland these are Internet banking, premium SMS and credit cards (73%). !

• Russian payment kiosks account for 14% of transactions. As a unique option in Russia, the ability to pay for digital content by making cash deposits in a kiosk is very popular and used by 1 in 7 free-to-play MMO gamers.

*In conversations with major publishers looking at emerging markets, we found that most firms initially focus on capturing 70% of the audience using as few payment options as possible.


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SOCIAL GAMES



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Worldwide social gaming revenues, 2014E

North America

$2.1 billion

Latin America

$1.1 billion

Europe

$1.9 billion

Asia

$2.9 billion

Rest of world

$0.5 billion

2013 2014E 2015E 2016E 2017E

$2.16$2.06$1.97$1.91$1.76

$0.53$0.51$0.47$0.45$0.39


Social gaming revenues ($ bil)


Social gaming revenues grow 17% year-over-year Eastern Europe sees a 16% revenue increase in the face of waning growth in the west.

• Worldwide social games revenue surpasses $8B as annual growth doubles to 17%. Social gaming fatigue hits North America and Europe with less than 10% in revenue growth. However, Asia’s already massive market sees a half-a-billion-dollar increase and Latin America breaches $1B with 27% in growth.


28


Localized sites boost social in Turkey and Russia EEU’s revenue shows 16% CAGR to 2017E due to booms in Turkey and Russia.


Eastern Europe social games market ($ mil)

*Belarus revenue and audience account for less than 2% of Eastern European totals. **CAGR for period 2014 - 2017E.

• Localized platforms in Turkey and Russia increase Eastern Europe’s social revenue by more than 5%**. Though social gaming stagnates in growth in smaller E. European markets, collective social revenue and audience for the two largest markets in the region, Turkey and Russia, is expected to show 8.4% and 5.2% CAGR through 2017E, respectively.

• Turkish social gaming company Peak Games finds regional success through localization. Peak Games has continued to grow in popularity in Turkey and the MENA (Middle East/North Africa) regions with Turkish games like Okey and Batak as well as games with international appeal like farming and battle strategy games.

• Localized social networking sites in Russia and Poland rival Facebook and contribute to growing social games revenue. In Russia, VK.com, Odnoklassniki and Mail.ru-My World continue to outperform Facebook and NK.pl in Poland is a popular alternative. These sites use language and game types native to these countries, allowing people to connect with friends in the region on a platform that looks and feels like Facebook while staying localized.

69.763.7

58.056.6

50.5

40.236.9

33.531.5

30.6

17.016.9

15.515.0

13.0

5.04.95.04.8

4.5

5.55.65.65.5

5.2

14.013.613.814.0

12.6

2.5

2.6

2.6

2.7

2.4

Audi

ence

(MAU

) 118.7130.1

134.1144.1

153.8

2013

2014E

2015E

2016E

2017E

Reve

nue (

$)

$390$451

$471$506

$527

2013

2014E

2015E

2016E

2017E $241$229

$212$207

$176

$131$120

$112$103

$97

$66$68

$60$56

$47

$44$43$41

$38$30

$22

$22

$23

$22

$20

$16

$16

$16

$16

$13

$6

$6

$7

$7

$6Belarus* Ukraine Hungary Czech Republic Poland Turkey Russia


$5

$12

$18

$25



Eastern Europe social game ARPPU, 2014E monthly average

Western Europeans outspend those in the east Western spending is more than double that of the east, bumping up European ARPPU.

• Overall European spending is more than $10 higher than in Eastern Europe. Due to large and emerging central European markets, Eastern Europe’s ARPPU still lags behind the regional average by 30%.

• Social spending is substantially lower in Eastern Europe than in the west, causing social games to earn only a third of the west’s revenue. The west has only 75% the audience of the east but western revenue comes in three times higher as a result of more than twice the spending.

• Social spending in top markets is almost $20 while smaller markets barely breach $10. Russia’s monthly average comes in over $20 with Poland and Turkey about $2 behind. Ukraine and Belarus, on the other hand, hover near $11, well below the regional average.

$20.46

29


$18.47$18.30

$15.23$15.20

$11.18$11.79


$27.74EUROPE ARPPU, 2014E $5

$12

$18

$25


actualpredicted


EEU social conversion about the same as Europe High Czech disposable income means conversion almost double 2x regional average.

30


0%

1%

3%

4%



Eastern Europe social game conversion, 2014E

3.23%

monthly average

1.47%

1.70%

2.21%2.01%

0.87%

1.88%

• Eastern European countries see a slight dip in ARPPU during slow summer months. Traditionally slow summer months bring in less payers, fluctuating down 20%-30% as compared to busier winter months.

• Czech social players convert at a far higher rate than any of their regional counterparts. At over 3%, the Czech Republic leads the region in social conversion, approaching 4% in winter months. Hungary’s conversion rate comes in second at almost half that of the Czech Republic.

• Ukrainian social gamers convert at a far lower rate than any other country in the region. At less than 1%, Ukraine’s conversion comes in at about half the conversion for Eastern Europe.


1.79%EUROPE AVG. CONVERSION, 2014E 0%

1%

3%

4%



31


Women outnumber men in Russia and Poland Turkish social gamers are mostly male, unlike their Russian and Polish counterparts.



25%75%


AVERAGE AGE 38%62%






20%80%


AVERAGE AGE 58%42%


• Social gamers in Turkey make more money and are more likely than Russian or Polish gamers to have a higher education degree.

• Female social gamers in Russia and Poland outnumber males whereas in Turkey men make up the majority.


32


Average player lifetime is slightly lower in Turkey Russians overall play longer and more frequently than Turkish or Polish social gamers.



4.03.1

3.9


1213

22



2.01.92.5



• Russian and Polish social gamers play almost a month longer than Turkish players. With highly localized social platforms, Russian and Polish players stick around longer than their Turkish counterparts.

• Russians far outplay their counterparts, playing three weeks out of the month. Turkish and Polish social gamers play on average less than two weeks of each month.

• Turkish and Polish social gamers play for roughly a half hour less than Russian players. Social gamers in Turkey and Poland play for about two hours at a time while Russians play for about 25% longer.


Poland has highest lifetime value in social games Russians pay more often but Turkish and Polish players spend more on average.

33




1.5%2.0%

$18.30$18.47

$15.20

Average conversion rate Average in-game monthly spending





Vanity items

7%9%12%

33%20%

32%28%37%

25%

4%8%

25%31%14%

40%37%39%29%

9%9%22%16%13%

78%

25%31%19%


• Although more Russians convert, Polish and Turkish social gamers spend more each month. Social gamers in Turkey and Poland pay more than $3 more than their Russian counterparts.

• In-game is most popular amongst Russian players, while interest from Turkish and Polish players is fairly evenly distributed amongst other items. 8 out of 10 payers in Russia buy in-game currency, while less than half of payers do in Poland and Turkey. However, players in the latter countries spread their interests amongst class unlocks, expansion packs, time extensions, in-game currency and new character abilities.


eWallets are top choice for Russian social payers Russia, Poland and Turkey see wide differences in social gaming payment methods.

34



eWallet

SMS/Premium SMS

Credit card

Payment kiosk

Mobile payment

Cash payment

Pre-paid game card

Home phone billing

Internet banking

Other2%

17%

3%

4%

5%

9%

3%

23%

31%

3%

2%

5%

3%

8%

6%

10%

3%

45%

10%

10%

0%

0%

4%

7%

7%

9%

9%

13%

16%

36%

Payment preference: Russia, Turkey and Poland• eWallets are the payment choice of

preference for Russians. More than a third of Russians prefer eWallets, outnumbering players who prefer runner-up SMS payments 2 to 1.

• Almost half of Turkish social payers prefer credit cards over other payment methods. No other payment method comes close for Turkish payers, with eWallets, SMS payments or mobile payments a far second at 10% each.

• A third of Polish players prefer SMS payments, followed by credit cards and internet banking. 31% of Polish payers use SMS payments, making it the most popular method in the country.


Overview

35


MOBILE GAMES



36


Asia

$11.3 billion

North America

$3.8 billion

Latin America

$1.7 billion

Europe

$3.4 billion

Rest of world

$1.3 billion

2013 2014E 2015E 2016E 2017E

$3.53$3.46$3.41$3.41$3.18

$0.51$0.47$0.43$0.41$0.39


Mobile gaming revenues ($ bil)

Worldwide mobile gaming revenues, 2014E

• Worldwide mobile gaming revenues hit almost $21.5B in 2014E, gaining a 19% increase year-over-year. Much of this growth is due to an almost 30% increase in Asia as smartphones become more affordable and ubiquitous in the region. Similarly, North America leads the world in spending growth with ARPPU jumping more than $3 and revenue growing 16%.


Mobile games revenues breach $21B in 2014E Asia’s booming mobile growth pushes worldwide revenues up 19% year-over-year.


Audi

ence

(MAU

) 2013

2014E

2015E

2016E

2017E

Reve

nue (

$) 2013

2014E

2015E

2016E

2017E

37


EEU’s mobile audience struggles to catch up ARPPU and conversion growth increase revenue by a quarter over the next three years.


Eastern Europe mobile games market ($ mil)

$245$224

$209$197

$185

$129$119

$105$98

$97

$97$85

$79$78

$74

$20$20$20$20$18

$7

$7

$7

$7

$7

$5

$5

$4

$4

$4

$6

$7

$6

$6

$6Belarus* Ukraine* Hungary* Czech Republic Poland Turkey Russia

44.143.1

42.741.7

40.5

23.421.5

20.820.4

19.9

13.112.212.1

11.510.7

2.5

2.6

2.5

2.4

2.5

1.51.61.51.41.5

1.51.61.51.41.5

1.8

1.8

1.8

1.7

1.7 78.080.5

82.684.0

87.8*Belarus, Ukraine and Hungary revenue and audience each account for no more than 2% of Eastern European totals. **CAGR for period 2014 - 2017E.

$389$409

$428$464

$506

• Steady increases in mobile spending give regional revenue a 7.3% boost**. As Eastern Europeans become more comfortable with mobile gaming and payment security, spending and conversion give way to constant increases in annual mobile revenue.

• Eastern Europe still has a relatively small mobile audience as smartphone penetration continues to find its footing in the region. Smartphone penetration is showing rapid growth in the region, roughly doubling in most Eastern European countries between 2012 and 2013. However, free-to-play and social have gathered steam and taken over would-be mobile players.


$19.61

$17.33$16.97

$15.15

$6

$12

$18

$24



Eastern Europe mobile game ARPPU, 2014E monthly average

EEU ARPPU is roughly 3/4 the European average Czech players spend most while Ukrainian gamers spend well below the average.

• Average spending in the east comes in roughly $5 below the European average. Western European countries see spending at roughly $24, offsetting the continental average well above the Eastern European average.

• Czech Republic’s exceptionally high smartphone penetration contributes to high spending. Czech mobile gamers are comfortable spending more due to the above-average ubiquity of smartphones in Czech Republic versus the country’s regional counterparts.

• Ukrainian mobile gamers spend 85% less than the average for the region. Ukraine once again shows low spending with exceptionally low smartphone penetration and, thus, less assurance in the mobile payment model.

$19.71

38


$9.43

$18.30$17.50E. EUROPE ARPPU, 2014E

$22.64EUROPE ARPPU, 2014E $6

$12

$18

$24


actualpredicted


Conversion shows growth through the end of 2014 High conversion from Poland and Czech Republic help offset other EEU countries.

39


0%

2%

3%

5%



Eastern Europe mobile game conversion, 2014E

3.49%

monthly average

2.36%2.41%

2.27%

0.97%

1.98%

• Eastern European countries see conversion fall more than a percentage below the continental average. Europe’s conversion rate is on par with most other regions worldwide, with North America breaking from the pack at almost 5%.

• Conversion slowly rises throughout the year. As smartphone penetration continues to grow rapidly through the region, Eastern Europe see increase in spenders over the course of 2014.

• Once again, Czech players show highest comfort spending in mobile games. At almost 3.5%, Czech mobile conversion comes close to the European average and is well above most Eastern European countries.



3.09%

0%

2%

3%

5%




40


Income is roughly the same across countries Male players are equal to females in Russia and Poland but outnumber women in Turkey.



20%80%


AVERAGE AGE 50%50%






20%80%


AVERAGE AGE 65%35%


• Mobile gamers in Russia and Turkey show similar incomes and education levels. Polish mobile gamers make roughly 5% more income but half the percentage of players with higher education degrees.

• Gender is roughly even amongst Polish and Russian players, but male players outnumber females in Turkey roughly 7 to 3. Average age, however, stays near 30 years old for each country.


41


Android smartphones reign supreme in EEU Although Russians have a short mobile lifetime average, they play more frequently.



4.03.93.4


131419



1.71.91.6



Android smartphone Android tablet iPhone iPad

9%6%

34%

51%

5%

23%16%

55%

8%15%20%

57%Device preference amongst mobile players in Russia, Turkey and Poland*

*Kindle play preference accounts for 1% of Polish mobile gamers.

• Android smartphones dominate in all three countries. More than half of mobile gamers in all three countries play on an Android smartphone. A third of Polish mobile gamers choose Android tablets but overall, tablets are far less popular than smartphones.

• Average player lifetime is lower in Russia but Russians play more often. Polish and Turkish gamers play for roughly two weeks longer than Russians, but Russians play five to six days longer each month.

• Turkish gamers play roughly 15 minutes longer on their mobile phones than Russian or Polish players. Turkish gamers play for almost two hours at a time on their mobile phones while Russian and Polish players for a little over an hour and a half.


• The ratio of in-game versus upfront spending for mobile is 2 to 3. Gamers in all three countries spend about 60% more on upfront purchases than in-game items each month. Because players in the region are still easing into mobile spending, less frequent upfront purchases provide peace of mind regarding payment security.

• In-game currency reigns supreme once again in Russia and just under half of players purchase expansion packs. As with social games, in-game currency remains a favorite amongst Russian mobile payers. However, at least 10% of payers purchase each type of in-game item.

• Turkish players show interest in a variety of items; however, vanity items and side stories are largely unpopular. The percentage of Turkish payers who purchase certain in-game items ranges between 20-40% except for side stories and vanity items, with less than 10% of payers purchasing either.

Polish mobile payers spend the most per month Polish players convert at a rate about 35% higher than in Russia and Turkey.

42







Vanity items

25%14%

27%21%18%

27%

41%34%34%

3%9%

21%28%

17%

30%31%37%36%

17%19%29%24%

12%

57%

26%

45%

19%



2.4%2.3%

$7.05$6.65$6.67

Average in-game monthly spending

$11.41$10.32$10.66

Average conversion rate

Average upfront monthly spending


Credit cards are method of choice for Turks Credit cards show growing popularity in Russia and Poland as they become more safe.

43



eWallet

SMS/Premium SMS

Credit card

Payment kiosk

Mobile payment

Cash payment

Pre-paid game card

Home phone billing

Internet banking

Other7%

25%

3%

4%

4%

14%

0%

18%

25%

1%

3%

3%

2%

3%

4%

8%

1%

61%

9%

7%

4%

4%

5%

3%

3%

13%

5%

28%

5%

30%

Payment preference: Russia, Turkey and Poland• More than half of Turkish gamers on

mobile prefer credit card payments. No other payment method holds a candle to credit cards for Turkish mobile gamers.

• SMS payments are less popular amongst Russian gamers in mobile games than in social. Although almost 20% of Russian social gamers prefer SMS payments, only 5% use them in mobile games.

• SMS and internet banking payments tie for first amongst Polish mobile gamers. Half of Polish gamers use either SMS or internet banking for their mobile payments.


44


DIGITAL PC GAMES



45


North America

$2.8 billion

Rest of world

$0.5 billion

Europe

$2.3 billion

Latin America

$0.3 billion

2013 2014E 2015E 2016E 2017E

$2.65$2.56$2.50$2.35$2.07

$0.37$0.34$0.30$0.27$0.24


Digital PC gaming revenues ($ bil)

Worldwide Digital PC gaming revenues, 2014E

• Worldwide digital PC revenue surpasses $6B as North America contributes to growth with a 12% increase in revenue. Digital PC continues as a young platform, coming in about $2B below free-to-play MMO. However, as growth continues in western regions, the market is poised to hit $8B worldwide by 2018E.


WW digital PC revenue grows 11% year-over-year North America and Europe are the largest contributors to digital PC growth.

Asia

$0.2 billion


46


EEU digital PC grows almost 10% year-over-year Poland’s revenue rivals that of Turkey due to high full game conversion.


Eastern Europe Digital PC games market ($ mil)

$132$119

$104$99

$91

$98$85

$73$66

$59

$95$90

$79$64

$57

$22$22

$21$19$20

$12

$11

$10

$10

$9

$2

$5

$5

$4

$5

$5

$4

$4

$5

$4Belarus* Ukraine* Hungary Czech Republic Poland Turkey Russia

Reve

nue (

$)

$244$267

$297$337

$368

15.314.5

13.613.5

12.9

7.16.8

6.36.2

5.9

3.23.02.8

2.72.6

1.4

1.4

1.4

1.3

1.4

1.51.41.41.3

1.2

2.62.72.72.72.7

0.9

0.8

0.8

0.8

0.7

Audi

ence

(MUU

) 27.528.6

29.030.5

32.0*Belarus and Ukraine revenue each account for no more than 2% of Eastern European totals. **CAGR for period 2014 - 2017E.

2013

2014E

2015E

2016E

2017E

2013

2014E

2015E

2016E

2017E

• Eastern Europe’s digital PC revenue is set to grow by more than 11%**. Although the Eastern European makes up roughly half of the digital PC audience in Europe, it is expected to grow by only 12%, pointing to increased spending as the main reason for overall market growth.

• Despite the fact that Poland’s digital PC audience is less than half the size of Turkey’s, the two countries bring in roughly the same revenue. This is largely due to exceptionally high full game conversion in Poland.

• Although Ukraine’s 2014E digital PC audience comes in third, the country’s revenue makes up less than 2% of the regional average. As conflict and instability continue in Ukraine, the country’s digital PC market lags behind other Eastern European countries and is the only one to show a decline in market size through 2017E.


$10.84$9.99

$10.04$8.88

$0

$5

$10

$15

$20



Eastern Europe digital PC additional content ARPPU, 2014E monthly average

EEU digital PC payers prefer upfront purchases Full game ARPPU is much closer to the EU average than in-game purchases.

• Eastern Europe’s full game ARPPU nears the continental average while in-game purchases are far lower. Following a pattern of wariness toward multiple payments and concern for payment security, Eastern Europeans are more inclined toward upfront purchases than ongoing in-game spending.

$12.78

47


$5.46

$10.90$10.20E. EUROPE ARPPU, 2014E

$17.61EUROPE ARPPU, 2014E


$28.26


EUROPE ARPPU, 2014E

Eastern Europe digital PC full game ARPPU, 2014E

$24.41

$15.88

$26.72

$37.20

$28.34

$26.88

$29.28

$0

$5

$10

$15

$20actualpredicted


Poland conversion outpaces the rest of the region EEU digital PC conversion remains far below the continental average.

48


0%

1%

2%

3%

4%



Eastern Europe digital PC additional content conversion, 2014E

2.08%

monthly average

1.46%

1.67%1.45%

0.61%1.30%



2.83%


Eastern Europe digital PC full game ARPPU, 2014E

1.34%

0.64%

1.66%

2.55%

6.01%

2.76%

1.58%2.20%E. EUROPE AVG. CONVERSION, 2014E


• Polish gamers convert far above the Eastern European average, which remains well below the rest of Europe. The ease and prevalence of piracy through Eastern Europe make it difficult for digital PC to make a stake in the region. However, in Poland, because pirated games are more difficult to come by, full game conversion is almost twice the regional average.

0%

1%

2%

3%

4%


49


Men outnumber women in top 3 countries Higher education remains high in Russia and Turkey, with Poland trailing behind.



20%80%


AVERAGE AGE 59%41%






23%77%


AVERAGE AGE 68%32%


• Male digital PC players outnumber women in Russia and Poland by roughly 3 to 2 and Turkey by 2 to 1. Income stays steady between the three countries as well, hovering near $15,000. Higher education continues to show higher penetration amongst Russian and Turkish gamers, with roughly twice the percentage of higher education degree holders than Poland.


50


Russian PC players show highest engagement Russians play more often and for longer than Turkish and Polish digital PC gamers.



4.0

5.14.8


2020

23



2.52.2

2.7



• Russian and Turkish digital PC gamers play for roughly a month longer than their Polish counterparts. Turkish digital PC gamers play for the longest, breaching 5 months, while Russians come in second at just under 5 months.

• Russian play frequency and session length is only slightly higher than that of Poland and Turkey. Russians play for just over three weeks while Turkish and Polish gamers play just under three weeks. Although Russians play the longest, they play just 12 minutes longer than Polish players and a half hour longer than Turkish players.


Digital PC lifetime value highest in Poland Polish gamers convert at a higher rate and outspend Turkish and Russian payers.

51







Vanity items

33%

11%

24%15%11%

22%13%

52%

15%6%10%

23%19%16%

36%

6%

32%32%

16%

3%

41%

25%

3%

53%

28%31%

13%



2.8%1.6%

$15.26$14.88

$7.99

Average monthly upfront spending

$8.90$8.64

$4.88

Average conversion rate Average monthly in-game spending


1.5%1.5%

Full game

Additional content

• Polish digital PC players convert at a much faster rate than players in Russia and Turkey. Additional content conversion in Poland is almost twice that of Russia and Turkey while Polish full game conversion far outpaces the other two markets.

• Russian spending is close to half that of Poland and Turkey. Russia’s spending is well below both upfront and in-game spending in Poland and Turkey. Poland and Turkey’s combined revenue is 20% higher than Russia’s despite having a combined audience at almost 70% of Russia’s.

• Expansion packs and in-game currency show highest popularity in the three countries. More than half of Polish players purchase expansion packs while 53% of Russian players spend money on in-game currency. A third of Turkish players purchase the two item types, in addition to class unlocks.


Russians prefer eWallets and credit cards The commonality of local brands make online banking a choice payment in Poland.

52



eWallet

SMS/Premium SMS

Credit card

Payment kiosk

Mobile payment

Cash payment

Pre-paid game card

Home phone billing

Internet banking

Other3%

41%

0%

8%

4%

12%

0%

14%

16%

1%

4%

6%

0%

0%

11%

2%

0%

69%

4%

6%

2%

5%

0%

2%

9%

5%

5%

37%

7%

28%

Payment preference: Russia, Turkey and Poland

• Almost 70% of Turkish digital PC gamers use credit cards for their purchases. Credit cards dominate Turkish gamer payment preferences, with the closest runner-up being cash payments at just over 10%.

• 65% of Russian payers use an eWallet or credit card. Credit cards are most popular amongst Russian digital PC payers as accessing content online becomes more secure.

• Internet banking is the payment method of choice for Polish payers. Local brands give Polish players security and comfort, making internet banking the top choice for digital PC payers.


DIGITAL P GAMES

MARKET53


DIGITAL CONSOLE



54


North America

$1.0 billion

Latin America

$0.3 billion

Europe

$0.9 billion

Rest of world

$0.1 billion

2013 2014E 2015E 2016E 2017E

$1.02$0.98$0.93$0.91$0.71

$0.14$0.12$0.11$0.10$0.08


Digital console gaming revenues ($ bil)

Worldwide digital console gaming revenues, 2014E


Digital console struggles in the global landscape At more than $2B, worldwide digital console revenue grows 27% year-over-year.

$0.1 billion

Asia

• Digital console remains a small market outside of North America and Europe, with worldwide revenue of only $2.4B. The ease of playing on computers and smartphones and the low penetration rate of consoles in certain regions has made it difficult for digital console to become a major player outside of western regions.


55


Digital console is EEU’s smallest segment Poland and Czech Republic’s full game spending helps their revenues rival Turkey’s.


Eastern Europe digital console games market ($ mil)

$85$72

$61$58

$46

$13$12

$11$11

$9

$15$14

$12$10

$9

$13$12

$11$11

$9

$6

$6

$6

$7

$5

$3

$3

$3

$3

$2

$3

$3

$3

$3

$2

Belarus* Ukraine Hungary Czech Republic Poland Turkey Russia

Reve

nue (

$)

$82$101

$108$122

$138

2013

2014E

2015E

2016E

2017E

14.213.0

12.512.0

11.1

6.25.7

5.55.4

5.0

2.92.8

2.62.4

2.3

1.3

1.3

1.2

1.2

1.2

1.21.21.2

1.11.0

2.62.52.52.5

2.2

0.8

0.8

0.8

0.7

0.7

Audi

ence

(MUU

) 23.525.5

26.327.4

29.3

2013

2014E

2015E

2016E

2017E

• Eastern European digital console revenue grows 23% year-over-year but remains a small portion of Europe’s revenue. Due to low spending, Eastern Europe’s digital console revenue accounts for just over 10% of Europe’s total despite boasting a third of the continent’s audience.

• Poland and Czech Republic boast higher full game spending averages than North America, inflating their revenues. The two country’s digital console markets rival Turkey’s despite having a fraction of Turkey’s audience.


56


EVERYTHING ELSE



57

SuperData provides market intelligence on the online, digital and mobile games industry.

Every month we collect point-of-sale data directly from developers, publishers and payment providers, across six major digital game categories: social games, free-to-play MMOs, subscription-based MMOs, digital console, downloadable PC games, and mobile games. Based on the spending of 37 million unique digital gamers, we are able to provide an accurate reading of the global digital games market, identify key industry trends, offer reliable forecasts, establish market share, and evaluate marketing spend.

SuperData offers insight into the next generation of interactive entertainment.

Using our proprietary panel of 37 million unique digital gamers, we establish key industry benchmarks such as monthly active users, conversion rates, average revenue per paying user, and title-level revenue estimates. Combined with qualitative consumer studies, customers use our data to evaluate their performance, identify key growth opportunities, assess revenue potential, optimize their efforts, and better understand their audience’s wants and needs.

About Who we are.

For more information, please visit: www.superdataresearch.com.





58

MARKET-LEVEL DATA

50 CONTRIBUTING PUBLISHERS

4 KEY METRICS

450+ UNIQUE TITLES

37MM UNIQUE PAYING USERS

200MM+ TRANSACTIONS

country-level and regional data available

regional data available only

We take a ‘big data' approach when establishing market size. By analyzing millions of transactions worldwide, we are able to gain both a macro- and micro-level grasp on how digital gamers pay and play. Our transactional dataset goes back over a decade and offers reliable payment insights that we couple with other market data such as device penetration rates, population and spending power to create our proprietary model. We report on key metrics such as monthly active users, conversion rates, average revenue per paying user by both month and year. Our estimates span across six key digital gaming segments, including mobile, social, free-to-play and pay-to-play MMO, PC and console.

6 GAMING SEGMENTS

26 COUNTRIES

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!!!!Senior Analyst, Consumer Insights Stephanie Llamas [email protected] !Manager, Data Analytics Albert Ngo [email protected] !401 Park Ave. South, 10th Floor New York, NY 10016 (646) 248 5241 www.superdataresearch.com Twitter @_SuperData

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Eastern Europe Digital Games Market 2014