why mobile social games need a platform now more than ever ethan fassett svp of product
TRANSCRIPT
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Why Mobile Social Games Need a Platform Now More than Ever
Ethan FassettSVP of Product
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Founded
Founder & CEO
January 2011
Naoki Aoyagi
Tokyo
San Francisco
Founded
December 2004
Yoshikazu Tanaka
CEO
International
GREE Overview
Japan’s Leading Mobile Social Gaming Platform
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OpenFeint Overview
Leading Mobile Social Gaming Ecosystem
• Mobile social gaming standard with millions of users globally
• Cross platform ecosystem: iOS + Android
• Open source & customizable UI
• Founded in April 2009 in Burlingame, California
• Acquired by GREE in April 2011
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Net Sales & Operating Profit*
USD 2007 2008 2009 2010 2011
Net Sales 3.8M 34.6M 164.1M 414.5M 750M
O. Profit △ 1.2M 12.3M 98.4M 230.3M 370M
US
D (
Mill
ion
s)
* Fiscal year-end, June
GREE Financial Overview
• $5 Billion market cap
• Fastest Growing Tech Company in Japan* with 2,636% revenue growth over three years
• Net sales and operating profit grew 36% and 35% respectively over Q1 to Q2, FY2012
* Deloitte Technology Fast 50 Japan 2010
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GREE’s Global Reach
San Francisco
London
Tokyo
Beijing
Singapore
Amsterdam
São Paulo
Seoul
Dubai
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2010 2011
7500+Live Games
Live G
am
es
2010 2011
Growing User and Game Network
190+ MM Unique User Accounts
Pla
yers
(M
illio
ns)
2012 2012
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mobile social designA Platform Symbiosis
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Growth in Free-to-Play Games
Game Design Shifting to Freemium with IAP
Premium games monetize users once
F2P games monetize users many times
Virtual goods market was $7.3B in 2010; will double by 2014
Premium Game
Free-to-play with IAP
Longer play = more $$$$
Download App
Time game played
$ Paid
User Revenue
Source: Zynga SEC filing, via In-Stat market intelligence firm.
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Free-to-Play Games Monetize
16 of Top 25 Grossing Games are Free
Source: iTunes store January 18, 2012
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Free Apps Increasingly Generate Revenue
Source: Distimo Report, 2011 (* Top 200 grossing iPhone apps in the US per month)
% of 2011 Apple App Store Revenue from Free Apps
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Goal of Freemium Games
=LifetimeValue(LTV)
Revenue Per User X
Player Engagement
Cost Per Acquisition
(CPA)
Increase Player Lifetime Value (LTV)
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Goal of Freemium Games
=Cost Per
Acquisition (CPA)
Ad Campaign Costs + Marketing Campaign Costs
Users Acquired through Campaigns
Minimize Cost Per Acquisition (CPA)
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SNS or social platform
Game Economics
Social Games are Special
=LifetimeValue(LTV)
Revenue Per User
X
Player Engagement
Cost Per Acquisition
(CPA)
Social is a unique variant of “freemium”, that uses social network effects to increase LTV and lower CPI/A
Request
s fr
om
fr
iends
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Social Gaming Ecosystem
Social Games are More Efficient on Platforms
Facebook: Users Start with SNS, then Discover and Play Games
Mobile: Users Start with Games, then Tap into SNS
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Benefits of Social Games Ecosystem
• App portal optimizes distribution
• Cross promotion builds user base
• Social & communication tools engage users
• Games and platform engage users
• Viral effect cross games
• Standard virtual currency across all games on platform increases ARPU
Optimizes Acquisition, Retention, Monetization
SNS
Acquisition
Retention
Monetization
SNS
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Why Fragmentation is Inefficient
Multiple campaignsAvg optimization
“Loose coupling” of users
Email, SMS, notifications
Dependent on retentionUniv. currency, VG tools
High cost
Lesser results
Low retention
Difficult to increase ARPU
Inhibits Acquisition, Retention, Monetization
Acquisition
Retention
Monetization
Ad Networks
Native Services&
Weak Channels
LimitedEconomic
Scale
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Market comparisonPlatform Examples: JP & US
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GREE Japan Platform
Grew as a Game Platform on a Carrier Platform
Use
rs (
Mill
ion
s)
GREE
2003 2004 2005 2006 2007 2008 2009 20102000 2001 2002
Japanese Mobile Carriers
1st mobile social game
launches GREE goes public
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Launched in 2007.
Successful for over 4 years.
Goals are to fish, buy special tools, participate in events, and show off skills.
Why so popular?•Popular hobby•Simple rules•The more you play, the more you discover – simple but involved game play
World’s First Mobile Social Game
GREE’s Tsuri Star Shows Early Design
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Facebook & Zynga Users
Zynga DAU Grew on Facebook Platform
Sources: Zynga SEC Filing and Facebook SEC Filing.
Daily
Act
ive U
sers
(M
illio
ns)
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Zynga Revenue Growth CityVille
Farmville
Café World
Daily
Act
ive U
sers
(M
illio
ns)
Reven
ue (M
illion
s)
FacebookDAU
ZyngaDAU
Zynga Annual
Revenue
*
Note: FY 2011 Zynga revenue is speculated based on the assumption that Q4 revenue will be the same as Q3 revenue.
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Case Study: Zynga
Acquired 400K new users Acquired 1M new users
Sources: http://www.pocketgamer.biz/r/PG.Biz/NaturalMotion+Games+news/news.asp?c=37153http://www.gamasutra.com/view/news/39747/Analyst_Zynga_is_losing_150_per_new_paying_customer.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fingergaming+%28FingerGaming%29
Lost $150 Per New Paying Customer
Earned $30 Per New Paying Customer
Each new user
spends $150
Each new user
spends $150
A B
Zynga Spent $120M on Marketing (Jan-Sep 2011)
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Current global marketEmerging Mobile Social Platforms
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High-DAU vs. High-ARPU
CityVille
•10MM+ DAU•Highest MAU FB game•Lions share of FB users•Leverage DAU to cross promote other games
Strategies Differ with Platform Conditions
Kingdoms of Camelot
•210K DAU•High % paying users•Maximize LTV•Competitive strategy in consolidated market
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NimbleBit: Tiny Tower
Social games can be successful without platforms and viral friending loops
Apple named Tiny Tower the 2011 iPhone Game of the Year
Boasts 1 million DAU
Zynga recently announced similar title on mobile called Dream Heights
Mobile Social Game Without a Platform
Sources: http://www.pocketgamer.biz/r/PG.Biz/Tiny+Tower/news.asp?c=36660http://www.gamesbrief.com/2011/07/ios-tiny-tower-on-track-to-make-3-million-in-its-first-year/
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Global Mobile Market Challenges
… but several platforms are emerging
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Potential Platform Landscape
SNS Focus
Game Focus
Social Platforms Meta-Platforms
Studio PlatformsOS Platforms
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Business Field
SNS Platform
✔
✔
-
-
Game Mobile
✔ ✔ ✔✔
✔
DeviceGlobal
Unified ID
✔ ✔ ✔ ✔ -
✔
✔
✔
✔
✔
Business Strength
✔
GREE Integrates User IDs, SNS, Games, Platform
Game Center
Google+
✔ ✔ ✔
✔ ✔ ✔
✔ ✔
- ✔
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GREE global platform
GREE Platform:Addressing a Global Mobile Audience
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Social Games7,000+ Games
Current
GREE Japan
Platform
Current
OpenFeint Platform
New Global
GREE Platform
140MM users 12,000+ developers
27MM High-ARPUusers, plus social
know-how
GREE + OpenFeint
A New Global Platform for Developers and Gamers
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GREE Platform Strategy
Global
Social
Open
Offer developers the most robust toolset to take advantage of the global mobile gaming market
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Comprehensive Offering
Distribution
Analytics
150 MM Users
Unified global platform Key regional distribution partners
Localization services
Cross promotions through developer announcements
Promotional programs
Wall posting
Gifting
Social sharing
Push Notifications
Universal billing
International currency management
Friend invites
Incentivized invites
Social sharing
Gifting
Dashboard access to game analytics
Game, player, and monetization data
Acquisition
Engagement Virality
Monetization
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33
We’re Hiring! Apply Now
- Art & UX- Business Analysis- Biz Dev & Operations- Engineering
- Legal- Marketing & PR- Operations- Product - Sales
San Francisco office apply at GREEjobs.com
London, Beijing, Singapore, and Seoul offices apply at corp.gree.net/uk/en/
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Thanks! Questions?
@fassetthound