Lifetime value starts here. @Kontagent | #KK2012 Game Internationalization: Where to Start May 31, 2012 | Benjamin Joffe, CEO, +8* | Jason Lee, Sr. Manager, Customer Success APAC, Kontagent
May 06, 2015
Lifetime value starts here. @Kontagent | #KK2012
Game Internationalization: Where to Start
May 31, 2012 | Benjamin Joffe, CEO, +8* | Jason Lee, Sr. Manager, Customer Success APAC, Kontagent
@Kontagent | #KK2012
Kontagent Konnect 2012
CASE STUDY – Becoming Big in Asia
@Kontagent | #KK2012
Kontagent Konnect 2012
HI!
Benjamin Joffe @benjaminjoffe
@Kontagent | #KK2012
Kontagent Konnect 2012
12 YEARS ABROAD
@Kontagent | #KK2012
Kontagent Konnect 2012
PLUS EIGHT STAR
Research & Strategy ConsulRng Best PracRces & Market Entry China, Japan & South Korea
@Kontagent | #KK2012
Kontagent Konnect 2012
CLIENTS
EUROPE
USA
ASIA
@Kontagent | #KK2012
Kontagent Konnect 2012
STARTUP MENTOR
@Kontagent | #KK2012
Kontagent Konnect 2012
100+ talks, 20 countries
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Kontagent Konnect 2012
• 7 Cases for Market Entry • Ecosystems 101
• China • Japan • Korea
• Case Study: Uberstrike
AGENDA
Get this talk at > www.slideshare.net/plus8star
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Kontagent Konnect 2012
7 Cases for Market Entry
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Kontagent Konnect 2012
1. Surprise success 2. Copycat
1. OpportunisRc entrepreneur 2. Hopeful entrepreneur 3. Independent inventor
3. Business contact 4. IdenRfied opportunity 5. Unclear opportunity 6. Hope 7. Necessity
7 CASES FOR MARKET ENTRY
Opportunity
DesperaRon
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Kontagent Konnect 2012
• Concept Suitability • Product / Market Fit • Cultural Match
• LocalizaRon Ability • Copy • Graphics • Layout / white space • Payment • Support
ARE YOU THE ONE?
WIRED Top 15 Most Influen/al Games of the Decade
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Kontagent Konnect 2012
Ecosystems 101
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Kontagent Konnect 2012
DEFINING ASIA
Asia!
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Kontagent Konnect 2012
DEFINING ASIA
@Kontagent | #KK2012
Kontagent Konnect 2012
THE WORLD AS CIVILIZATIONS
Western!Latin American!African!Orthodox!Indian!Muslim!
Japanese!Chinese!
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Kontagent Konnect 2012
“Asia was a concept of Western Civiliza5on.”
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Kontagent Konnect 2012
• Macro • GDP • GDP/capita • Demographics
• Culture • Language(s) • Religion(s)
• Infra • Web & Mobile Infrastructures • Dominant Players • Payment systems
ECOSYSTEMS 101
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Kontagent Konnect 2012
“Zynga Aims for 400 Million Tencent Users in China. Starts with CityVille”
BizTechDay, August 2011
DOUBLING AUDIENCE IS NOT DOUBLING REVENUE
“Just by going to China, we could double the audience,”
Peter Relan, CEO, Crowdstar May 2012
@Kontagent | #KK2012
Kontagent Konnect 2012
@Kontagent | #KK2012
Kontagent Konnect 2012
Country PopulaHon GDP/Capita (USD)
China 1.3 billion 4,500
Japan 128 million 42,000
South Korea 49 million 20,000
Taiwan 23 million 20,000
Hong Kong 7 million 32,000
Singapore 5 million 57,000
Malaysia 28 million 9,500
Indonesia 240 million 3,900
Vietnam 90 million 1,500
Philippines 94 million 2,500
Thailand 65 million 5,800
North Korea 24 million 1,000
Not all markets are created equal"
@Kontagent | #KK2012
Kontagent Konnect 2012
Country PopulaHon GDP/Capita (USD)
China 1.3 billion 4,500
Japan 128 million 42,000
South Korea 49 million 20,000
Taiwan 23 million 20,000
Hong Kong 7 million 32,000
Singapore 5 million 57,000
Malaysia 28 million 9,500
Indonesia 240 million 3,900
Vietnam 90 million 1,500
Philippines 94 million 2,500
Thailand 65 million 5,800
North Korea 24 million 1,000
- 1 JP user = 10 CN users for monetization - Hong Kong, Taiwan, Singapore, Malaysia medium-sized"
@Kontagent | #KK2012
Kontagent Konnect 2012
Country PopulaHon GDP/Capita (USD)
China 1.3 billion 4,500
Japan 128 million 42,000
South Korea 49 million 20,000
Taiwan 23 million 20,000
Hong Kong 7 million 32,000
Singapore 5 million 57,000
Malaysia 28 million 9,500
Indonesia 240 million 3,900
Vietnam 90 million 1,500
Philippines 94 million 2,500
Thailand 65 million 5,800
North Korea 24 million 1,000
Large user bases but:
- few smartphones- even fewer PCs- hard to monetize"
Pick your markets right!"
@Kontagent | #KK2012
Kontagent Konnect 2012
Mobile Users China Japan Korea
Mobile users 1.02 billion 127 million 50 million
Android (esRmates) ? 15 million 17 million
iPhone (esRmates) <20 million <10 million 3 million
3G Users 10% 100% 70%
- China, Japan, Korea embracing Android"- iPhones for the 1% in China"- Few reliable numbers available"
@Kontagent | #KK2012
Kontagent Konnect 2012
Online Game Companies Market Cap China $bln Japan $bln Korea $bln Tencent 57.5 GREE 6.3 Nexon 8 Netease 7.8 DeNA 4.6 NHN (Hangame) 10.5 Renren 2.6 Mixi <1 NCso` 5.3 Shanda 2.2
Shanda Games 1.4 as of June 2012 Giant 1.2
Changyou 1.2 Facebook (75) NetDragon (91) <1 AcRvision Blizzard 13.8 Perfect World <1 Zynga 6.1
The9 <1 Electronic Aarts 5.0
Gaming giants dominate in each country."Very few foreign players do well."
@Kontagent | #KK2012
Kontagent Konnect 2012
China
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Kontagent Konnect 2012
• 1Q2012 $1.78B • 2012 (E) $8B+ (= 2 x Facebook 2011)
CHINA’S GAMING MARKET
Source: Analysys International"
> 80%
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Kontagent Konnect 2012
• Local partners are prevy much mandatory for foreigners to get any distribuRon and operate.
• Successes are rare, generally accidental, and mostly by dominant players • Mobile Angry Birds, Fruit Ninja, Nubee (JP), etc. • Online Games Koreans, Blizzard (licensing), Riot Games • Social Games Avempts (PopCap, Zynga)
REALITY OF CHINA
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Kontagent Konnect 2012
• Social networks are… TENCENT • Livle money on RenRen • No Facebook
• Online Game Giants • Developing their own games • Licensing from Korea • Rarely from other places (WoW) • ExcepRon: League of Legends (but bought by Tencent)
SOCIAL NETWORKS IN CHINA
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Kontagent Konnect 2012
• Revenue US$4.5 billion o Mostly gaming! o Mobile 10% o AdverRsing 7%
• Net Profit US$1.6 billion (35%)
• Services o Qzone 552 million MAU o Pengyou 202 million MAU o Open plaxorm 40,000 apps
– Revenue share improved from 90/10 to 70/30 (though variable) – A dozen have 10m+ MAU – BUT ARPPU = 1/10th USA (var.) – QQ Farm = $10m / month? (2011 rumor)
TENCENT
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Kontagent Konnect 2012
• Revenue US$118.0 million • ~50% from adverRsing
• Net Loss US$5 million • Net loss does not count sale of eLong for US$50 million • PromoRng its Groupon clone Nuomi (spending US$30 million)
• Plaxorm • Average 50/50 revenue share
• Curb your enthusiasm!
RENREN
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Kontagent Konnect 2012
• iPhone is for the 1%
• Android stores are fragmented • Over a dozen app stores • Lots of copies • Payment systems not sorted out • AdverRsing don’t make much money
• New smartphones by the day! • Xiaomi • Alibaba • Baidu
MOBILE IN CHINA
Aliababa’s Aliyun Custom Linux mobile OS Runs Android apps! Yours for < $250!
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Kontagent Konnect 2012
• Click to add text • Click to add text
o Click to add text
IOS IN CHINA
Source: AppAnnie.com"
@Kontagent | #KK2012
Kontagent Konnect 2012
• Click to add text • Click to add text
o Click to add text
ANDROID IN CHINA
Source: AppAnnie.com"
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Kontagent Konnect 2012
Japan
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Kontagent Konnect 2012
• GREE • Revenue 1Q2012 $575 million • Acquired OpenFeint ($104m) • Acquired Funzio ($210m)
• DeNA • Revenue 1Q2012 $526 billion • Acquired Ngmoco ($400m)
• (Konami) • $360 million from social games in 2011
REALITY OF JAPAN
@Kontagent | #KK2012
Kontagent Konnect 2012
• Koreans, Chinese, Western • Online games
o Hangame (Korean online & casual games by NHN) o NCso} (Korean MMOs) o Nexon (Korean MMOs) o Perfect World (Chinese MMO)
• Social games o Zynga, Crowdstar, Playfish -‐> ? o Rakoo, Rekoo (China)
• Mobile apps o Many non-‐Japanese o LINE (mobile IM by NHN)
• Web: Twiver, Facebook, Evernote, Tumblr
FOREIGN SUCCESSES IN JAPAN?
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Kontagent Konnect 2012
SMARTPHONE GAMING OPPORTUNITY
About $3.6 billion
More than $1.2 billion
Official sites, $1 billion Social games over $1.8 billion
Core Gamers
Casual Gamers
PC
Console Game software
Mobile
2014
Smartphone games
Overall market size growing
Arcade games, Card games, Edutainment
2011
@Kontagent | #KK2012
Kontagent Konnect 2012
• What is quality? • USA “It works” • Japan “It’s perfect” • Korea “It’s new” • China “It gives me status”
• Consequently • Requirements in Japan exceed your imaginaRon • Copy = strong indicator • On the upside: People pay for quality
“IT’S PERFECT”
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Kontagent Konnect 2012
Korea
@Kontagent | #KK2012
Kontagent Konnect 2012
GAMING MARKET
US$ million US$ million 7.1 863
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Kontagent Konnect 2012
• Outliers • Blizzard (local operaRon) • EA/FIFA (partnership) • League of Legends (hired Blizzard staff)
• Mobile • iOS • Several Android app stores (Google, SKT, KTF, LGT, Samsung)
• Regulatory limitaRons • Game RaRng Board (GBR) • Local partner necessary for smaller companies
KOREA
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Kontagent Konnect 2012
“Rest of Asia”
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Kontagent Konnect 2012
• Rich & English-‐friendly • Singapore (English) • Hong Kong (Cantonese, Mandarin, English)
• Somewhat wealthy & somewhat English-‐friendly • Malaysia (some – most revenue from Chinese populaRon) • Taiwan (Taiwanese)
• Not there yet • Vietnam • Indonesia • Philippines • Thailand…
“REST OF ASIA”
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Kontagent Konnect 2012
COMING SOON: $50 ANDROID PHONES
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Kontagent Konnect 2012
• Social FPS • First-‐Person Shooter • Free-‐to-‐play
• 4 Channels • #1 on Facebook • #1 on Mac App Store • Uberstrike.com • Kongregate
• Upcoming: iOS & Android
UBERSTRIKE CASE STUDY
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Kontagent Konnect 2012
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Kontagent Konnect 2012
• Users • Only need a PC in Internet café • Many users from emerging markets
• Revenue • Kids in Internet café in emerging markets do not spend • Best revenue from large first world countries • USA • Germany, France, UK, Australia, Canada, etc. • Singapore, HK, Taiwan, Malaysia • Others.
GEOGRAPHY OF WEALTH: FACEBOOK
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Kontagent Konnect 2012
• Users • Hardware cost $500 to $2,000 • Only “rich” people can really afford!
• Revenue • Anyone with such device has money • USA, China, Russia • Germany, France, UK • Etc.
GEOGRAPHY OF WEALTH: MAC OS & IOS
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Kontagent Konnect 2012
• Users • Hardware cost: from $100
• Revenue • Lots of free apps • Fragmented app stores • MarkeRng is hard • It’s like the old days of Java!
GEOGRAPHY OF WEALTH: ANDROID
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Kontagent Konnect 2012
Conclusions
@Kontagent | #KK2012
Kontagent Konnect 2012
• “Big in Asia” = Pick your country!
• Japan = Smartphones & Mobile Plaxorms • Korea = Smartphones & MMOs • China = Smartphones
• Singapore + HK + Malaysia + Taiwan
• Rest of the world: check ecosystems!
CONCLUSION: SMARTPHONES!
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Kontagent Konnect 2012
www.slideshare.net/plus8star [email protected]
GOOD LUCK!