Top Banner
The impact of digitization My gravity theory in the game industry 19 November 2015 Laurent MICHAUD Head of Consumer Electronics Practice, IDATE
13

DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Jan 26, 2017

Download

Devices & Hardware

IDATE DigiWorld
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

The impact of digitizationMy gravity theory in the game industry

19 November 2015

Laurent MICHAUD

Head of Consumer Electronics Practice, IDATE

Page 2: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 2

I’m responsible for studies related to consumer electronics and video games industry

through changing uses, technology innovation, market analysis, business strategy, industrial

perspectives, forecasts and prospective issues.

Laurent MICHAUD, Head of Consumer Electronics & Digital Entertainment Practice

I act as economic advisor forgame companies andsubcontractors working forvideo game industry.

I carry out techno-economicappraisals for innovationagencies and incubators onthe issues of video gamingand multimedia contentdevelopment.

I’m the originator of GameSummit, which takes placeduring the Digiworld Summitin November each yearwww.gamesummit.pro.

I hold a Master's degree in Economic and Financial Engineering.

Page 3: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 3

• The video game market has risen from 35.3 billion EUR in 2008 to 47.7 billion EUR in 2014.

• Dematerialisation affects all segments of the video game industry.

Source: IDATE, Video Games in the Cloud, June 2015

Breakdown of the video game software market by type of revenue, 2008

and 2014

Dematerialisation of the video game industry (1/2)

Source: IDATE, Video Games in the Cloud, June 2015

Video game software market, 2008–2014(billion EUR)

35,3 34 0 35,4 36,9 37,741,1

47,7

2008 '09 '10 '11 '12 '13 '14

22%

69%

78%

31%

0%

25%

50%

75%

100%

2008 2014

Physical

Digital

Page 4: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 4

• Home console: eventually the expectedgame changer

• PC: power and variety of the pioneer

• Mobile: the next big deal

• Connected TV

• Handheld consoles

Source: IDATE, Video Games in the Cloud, June 2015

Breakdown of the PC gaming market by type of revenue,

2008 and 2014

Dematerialisation of the video game industry (2/2)

Source: IDATE, Video Games in the Cloud, June 2015

Mobile gaming and TV gaming markets, 2008–2014

(million EUR)

Source: IDATE, Video Games in the Cloud, June 2015

Breakdown of the console gaming market by type of revenue,

2008 and 2014

1 723 2 4193 692

5 6577 899

10 27412 811

0,3 4,5 19,3 45,193,7

0

500

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

2008 '09 '10 '11 '12 '13 '14

Video Games TV

1%24%

99%76%

2008 2014

Physical

Digital 69%93%

31%7%

2008 2014

Physical

Digital

Page 5: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 5

Dematerialisation and value displacement• Digitization has shortened value chains, let’s speak about disintermediation

• Functions have been redistributed to downstream players, new advantages imply new skills

• Digitization has moved video game market segments revenue along the value chain

• Disintermediation has appeared making possible for developers to be closer to their customers. customers

Page 6: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 6

Dematerialisation and value displacement : PC

• PC gaming and distribution services, pioneers of dematerialisation

• Massively multiplayer gaming services

Source: IDATE, Video Games in the Cloud, June 2015

Physical and digital PC gaming value chains

Breakdown of online video game revenues by

type of game, 2015

Source: IDATE, Video Games in the Cloud, June 2015

12%

33%

17%

38%

Online…Premium Massively MultiplayerFree Massively MultiplayerCasualSocial… Video Game Market

Page 7: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 7

Dematerialisation and value displacement: consoles

• In terms of distribution

• In terms of consumption patterns

• The 8th console generation made the shift to dematerialisation by turning to the cloud for

data storage and processing.

Physical and digital console gaming value chains

Source: IDATE, Video Games in the Cloud, June 2015

Page 8: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 8

• The spread of smartphones has reduced the importance of telecom operators and content aggregators in the

distribution of games.

Source: IDATE, Video Games in the Cloud, June 2015

Mobile gaming revenue distribution, 2008 and 2015 (%)

Dematerialisation and value displacement: mobile

Source: IDATE, Video Games in the Cloud, June 2015

Mobile gaming value chains

5%

35%

54%

39%

40% 11%

1%15%

2008 2015

Game Studio Publisher Telco Appstore

Page 9: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 9

Dematerialisation and value displacement: mobile• An underlying trend, the huge popularity of Free-to-Play

• Increasing number of ubiquitous games

• The mobile gaming segment was behind a massive and unprecedented phenomenon

• Increased competition from smartphones and tablets is seriously harming the handheld console gaming

business

Global mobile gaming sector revenue growth, 2000–2015(billion EUR)

Source: IDATE, Video Games in the Cloud, June 2015

Page 10: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 10

• Internet service providers now offer video games through their set-top boxes. Their services fall into two

categories

• The GoDP may also choose to offer an Over-The-Top cloud gaming service, meaning it can directly address

users and bypass the ISP managed service (OTT Streaming). Two scenarios are therefore possible

Source: IDATE, Video Games in the Cloud, June 2015

The OTT video game value chain

Dematerialisation and value displacement: cloud gaming

Source: IDATE, Video Games in the Cloud, June 2015

The IPTV video game value chain

Page 11: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 11

The global video game software market will rise from 57.7 billion EUR in 2015 to 80.7 billion in 2019, an average annual growth rate of 8.7% over

the period.

The share of console games in the total video game software market will continue to decrease over the 2015–2019 period. Mobile device games

will continue to grow.

In 2015, 71% of video game software revenues will be generated by digital sales, compared with 88% in 2019.

Revenues from digital sales will experience an average annual growth of 14.7% over the period, compared with -13.1% for revenues from

physical sales.

Source: IDATE, Video Games in the Cloud, June 2015

Breakdown of the video game software market by type of revenue,

2015 and 2019

Global video game software market

Source: IDATE, Video Games in the Cloud, June 2015

Video game software market, 2015–2019(billion EUR)

57,765,5

71,074,9 80,7

2015 '16 '17 '18 '19

29%12%

71%88%

2015 2019

Digital

Physical

Page 12: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 12

With increasing rates of dematerialisation, we see that the benefits of this value redistribution are felt higher up the chain, mainly

by developers.

The other link in the value chain to benefit from dematerialisation is retail sales. However, the players have changed.

Although the publishing link still captures the largest share of the sector's revenues over the period, retailers will catch up to it in

terms of value and relative share in 2019 as they increasingly benefit from the direct relationship with gamers/customers.

Publishers benefit from cyclical growth in the market, but their share of total revenues in the sector will gradually be reduced as

developers take over more publishing tasks.

Source: IDATE, Video Games in the Cloud, June 2015

Revenues earned by the various links in the video game market value

chain (%)

Impact of dematerialisation on value distribution

12

Source: IDATE, Video Games in the Cloud, June 2015

Revenues earned by the various links in the video game market value

chain (million EUR)

0

10 000

20 000

30 000

2008 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

Developer Publisher Distributor

Retailer … revenue

0%

10%

20%

30%

40%

2008 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

Developer Publisher Distributor

Retailer … revenue

Page 13: DWS15 - Game Summit - The impact of digitization - Laurent Michaud - IDATE

Copyright © IDATE 2015, 13

MERCI