Interpret 3D gaming presentation

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Q3 2010

Prepared By:

Interpret New Media Measure: 3D Entertainment Study

Michael (Yuanzhe) CaiVP of Research

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Method: 20-minute online interview, US

Field Dates: 8.31.2010 - 9.12.2010

Sample:N=1458 Adults 12-65

(Weighted to U.S. population using Interpret’s New Media Measure® data)Age 12 to 17: 20% (50/50 Male Female)Age 18 to 24: 20% (50/50 Male Female)Age 25 to 34: 20% (50/50 Male Female)Age 35 to 44: 20% (50/50 Male Female)Age 45 to 65: 20% (50/50 Male Female)

Minimum N=400 Theatergoers Watched at least one movie in the theater in the last 6 months

Minimum N=400 GamersPlays video games on a console, handheld device or PCPlays 1+ hours of games / week

Minimum N=400 Home Entertainment UsersPurchased at least one DVD/Blu-ray in the last 6 months orRented at least one DVD/Blu-ray in the last 6 months andMust own a TV

Methodology

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Awareness of and Exposure to 3D Theatrical, Home Entertainment, and GamingUnderstand of, and confusion with, 3D Entertainment3D Theatrical

• 3D Ticket Price Premiums• Preferred 3D Content Types• 3D Satisfaction Drivers and Pain Points

3D Home Entertainment• Current TV ownership profiles and service usage• 3D TV Purchase Interest, Barriers to Interest• Preferred 3D TV Content Types, Channels• 3D Blu-ray Player Interest• 3D Blu-ray Disc Price Points and Premiums• Top Manufacturer Ratings for 3D-Capable Devices

3D Games• Experience Positives and Negatives• Preferred 3D Game Genres• Upcoming Holiday 2010 3D Game Intention• Awareness and Interest in 3D Gaming Solutions• Nintendo 3DS and Mobile 3D

3D Technology• 3D Capture – Camera and Camcorder Awareness, Interest• Anticipated 3D Capture Usage, Desired Features, Barriers

White = Wave 1 Coverage, Trended in Wave 2

Blue = New Coverage Areas for Wave 2

Coverage Areas

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Executive SummaryVideo gaming is considered an important driver for the first wave of 3D TV adoption, as it was for other new consumer technologies such as HDTVs and Blu-ray players (through Playstation 3 integration). However, without a large installed base, game publishers are less inclined to make the additional investment in producing games in 3D, especially since there is a trade-off between resolution and 3D support.

The encouraging news is that the marketing efforts from Hollywood, TV manufacturers, and retailers have paid off. Consumer awareness and experience of various 3D content and technologies grew significantly between Q1 and Q3 2010. Consequently, consumer purchase intent for 3D TVs increased from 13% to 21% during the same period. Among those already planning to buy a new TV in the next 12 months, 35% are interested in buying a 3D TV (PS3 owners significantly over-index among these intenders). Consumers are primarily driven to 3D by the enhanced entertainment experience (they want to enjoy at home what they experienced in movie theaters), although a significant percentage of 3DTV intenders are interested because of the perceived “coolness” of new technologies and in order to future-proof. On the other hand, primary inhibitors include high cost compared to regular HDTVs, the need to wear glasses (and purchase multiple glasses for the family), and fear of bugs in first-generation products. Lack of content is not a primary concern as consumers understand that 3D content will proliferate once more households have capable devices.

In addition to marketing investment, key stakeholders in the 3D industry must launch concerted educational efforts. Consumers are very confused about 3D, which can hamper consumer demand. A large percentage of consumers either don’t know or have the wrong perception of what is required for 3D entertainment at home. In addition, the incompatibility of 3D glasses and 3D TVs from different manufacturers could potentially cause consumer backlash; even among the small percentage of consumers who claim to be knowledgeable, only a quarter know about the incompatibility issue.

Despite these challenges, consumers genuinely enjoy the 3D experience. Less than 20% of consumers think 3D is a gimmick. The percentage of consumers who prefer 3D over 2D is growing across content types, including gaming. One half of all consumers (not just gamers) prefer gaming in 3D over 2D. Gaming ranks lower than movies alone in driving purchase intention for a 3D TV—49% of all 3D TV intenders rated gaming as very important in their consideration of a 3DTV. Gamers not only enjoy the enhanced experience rendered by stereoscopic 3D games, but also believe that 3D might give them a competitive edge. Naturally, FPS and other core games are the most preferred genres for 3D gaming. However, the Nintendo 3DS could be a big X-factor. With its auto-stereoscopic feature (glasses-free), mass-market price point, large library of 3D games at launch, and support of 3D video playback, the 3DS is very likely to become the first mass-market device to offer consumers a 3D entertainment experience outside of movie theaters.

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I own the devices required to see this

3D technology

I have seen/experienced this technology in

person before

I already knew about this technology, but

have never experienced it

I was aware, but didn’t know the details until now

Not aware

3% 8%26% 24%

39%

4% 12%

35%24% 25%

53% 27%13% 7%

59%25%

10% 4%

3D Entertainment Exposure and Awareness

S9/S10. Please read the following list of technologies, and for each, please indicate your level of awareness and/or knowledge.

3D Theatrical

3D Blu-ray

3D Television

3D Gaming

3% 7%

29% 26%35%

4%13%

38%24% 21%

3% 9%

36%28% 24%

4%14%

44%25%

13%

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Base: 18+ and do not own 3DTV 1079

Definitely Will Buy

Probably Will Buy

May or May Not Buy

Probably Will Not Buy

Definitely Will Not Buy

3D Television Purchase Interest

5%

8%

28%

29%

30%

7%

14%

32%

27%

20%

Likelihood to purchase a 3DTV in the next 12 months

H6a. How likely are you to buy a 3D TV in your household in the next 12 months?

Q1Q3

H6a. How likely are you to buy a 3D TV in your household in the next 12 months?B10. How likely are you to purchase the following consumer technologies in the next 12 months: (A new TV)

Base: 18+, non owner of 3DTV, and new TV intender) Q1- 321 / Q3 - 410

Definitely Will Buy

Probably Will Buy

May or May Not Buy

Probably Will Not Buy

Definitely Will Not Buy

13%

22%

35%

20%

10%

Likelihood to purchase a 3DTV Among new TV intenders

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3D Television: Reasons for Interest

Base: 3D TV Intenders 208

I think watching movies on a 3D TV will make it feel like a movie theater experience

I like how realistic 3D content looks

I like the idea of seeing 3D movies at home that look like they do in a theater

I like how immersive watching 3D content is

I like owning new and interesting technology

I’m in the market for a new TV, and I might as well have 3D capability just in case it takes off

68%

67%

65%

55%

54%

39%

Reasons for Interest in 3DTV

H7c. What makes you interested in buying a 3D TV in the next 12 months?

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3D Television: Reasons for Disinterest

Base: Non-Intenders 668

It’s too expensive

I don’t want to wear the 3D glasses

The technology is too nascent, I want them to iron out any bugs

I find watching 3D content to be disorienting

I don’t want to get 3D glasses for everyone in my family

There aren’t enough 3D TV shows

It’s a gimmick

74%

43%

30%

21%

21%

20%

18%

69%

46%

30%

22%

25%

16%

17%

Reasons for Not Wanting to Purchase 3DTV

H8. What makes you not interested in buying a 3D TV in the next 12 months?

Q1Q3

90% of those who bought a TV in the last 12 months

paid less than $2K, with an average of around $900

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Base: 1458

With firmware upgrade, a PlayStation 3 console can play 3D games

Most 3D glasses will work with 3D TVs made by different manufacturers

If a cable or satellite provider launches 3D channels, I can still see it on my 2D TV with special glasses. I do not have to

upgrade to a 3D TV.

With special glasses, a 2D TV can show 3D images in full color and high resolution

3D visual effects cannot be seen on a 2D TV, even with special glasses

Currently, all 3D technology requires wearing special glasses to see the special effects of both videos and games

77%

62%

60%

56%

53%

45%

68%

55%

56%

49%

45%

36%

B11. Following are some statements about 3D technology. Based upon what you know, please tell us whether they are true or false.

3D True or False: Consumer Perceptions

Q3, Don’t KnowQ1, Don’t Know

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Base: 1394

Currently, all 3D technology requires wearing special glasses to see the special effects of both videos and games

3D visual effects cannot be seen on a 2D TV, even with special glasses

Most 3D glasses will work with 3D TVs made by different manufacturers

With firmware upgrade, a PlayStation 3 console can play 3D games

With special glasses, a 2D TV can show 3D images in full color and high resolution

If a cable or satellite provider launches 3D channels, I can still see it on my 2D TV with special glasses. I do not have to

upgrade to a 3D TV.

B11. Following are some statements about 3D technology. Based upon what you know, please tell us whether they are true or false.

3D True or False: Consumer Perceptions

89%

70%

26%

70%

66%

73%

83%

71%

28%

70%

63%

67%

Correct

Q1Q3

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Base: All Respondents

Films in a Theater

Video Games

Movies at Home

Sports

TV Shows

57%

45%

40%

32%

23%

61%

50%

44%

36%

24%

Percentage of Respondents Preferring Content Type in 3D over 2D

Q1 (N=1394) Q3 (N=1458)

Content Types: 3D vs. 2D

B14. For each of the following viewing situations below, which would you prefer: 2D or 3D?

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10%22% 29% 24%

23%

29%29% 35%

67%49% 42% 41%

3D Movies 3D Games 3D Sports / Sporting Events 3D Television

Importance of 3D Content in Driving 3D TV Interest

Among Those who “Definitely” or “Probably” will buy a 3D TV: 208

H7. Of the following types of 3D content, which have the biggest positive impact on your interest in buying a 3D TV?

Content Drivers for 3DTV Interest

Very Important

Somewhat Important

Bottom-3 Box(Neither important nor

unimportant, Somewhat, and Very Unimportant

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3D Gaming Likes

Base: Those who have played 3D games: 234

Playing games in 3D seems cool and futuristic

The 3D effect made the game seem more realistic

The 3D effect made the game more immersive ('feel like I’m there')

Playing the game in 3D made it more fun and entertaining

The 3D effect made the game look better than the same game in 2D.

The gameplay was improved by the 3D effect (easier to see enemies,

gauge distances, aim, etc.)

I think that the 3D effect might give me an edge in multiplayer matches

I didn’t like playing games in 3D at all

46%

44%

43%

42%

37%

32%

26%

8%

Likes and Dislikes of 3D Gaming

3D Gaming Dislikes

Base: Those who have played 3D games: 234

Having to wear the glasses

I didn’t dislike anything

I get a headache after a while

Watching 3D strains my eyes

The 3D effect detracted from the gameplay (harder to see, control

the player, aim, etc.)

I get disoriented or feel dizzy when watching 3D

Didn’t really look any better than the same content in 2D

40%

28%

25%

23%

16%

14%

11%

G6. What did you like and enjoy about your experience playing 3D games on a console or PC?G7. What did you dislike about your experience playing 3D games on a console or PC?

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Percentage Selecting Genre as Rank 1 or 2 Among GamersBase: 1120

First-Person Shooters

Action-Adventure Games

Racing Games

Role-Playing Games

Traditional Sports Games

Fighting Games

Casual Games

26%

18%

17%

16%

13%

12%

8%

Preferred Genres for 3D Gaming

G4. Rank the top 3 genres you have enjoyed or would most enjoy playing in 3D.

First-Person Shooter and Action-Adventure games are the genres respondents indicate that they would most like to play in 3D.

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X Factor: Nintendo 3DS Handheld

Base: All Gamers

865 1120

Percentage Aware of Device

Q1 Q3

16%

27%

Awareness of Nintendo 3DS Handheld

Base: All Gamers

Definitely

Probably

Maybe

Probably not

Definitely Not

8%

16%

36%

21%

19%

13%

22%

33%

18%

14%

Q1

Q3

G9. Nintendo has recently announced that it plans to release a new DS handheld gaming device that will display 3D images without the need for special 3D glasses. Prior to this survey, were you aware of this news?G10. Nintendo says this device will be available for sale within a year and plans to showcase it at the coming E3 gaming conference. Knowing this, how likely are you to purchase this Nintendo 3D DS gaming device when it comes out?

Purchase Interest in Nintendo 3DS Handheld

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Contact Information

Yuanzhe (Michael) CaiVP of ResearchInterpret, LLC

201 Santa Monica Blvd Suite 400Santa Monica, CA 90401

[email protected]: 310.255.0590 x343

F: 310.255.0591www.interpretllc.com