1 Game Monetization Trend In Southeast Asia - Casual Connect Asia

Southeast Asia market summary. Expanding gamers demographic. Shift in value chain in online game business. Challenges in building global online game business Q & A. Presentation Summary

Southeast Asia Market Summary

Countries Summary INDONESIA Population:245 million Internet Users: 55 million (22.4% penetration) Facebook Users:43.5 million (4 th largest in the world) Majority of users access the Internet through mobile. Blackberry is No 1 smart phone in the country. Growing numbers of China SDK & low end Android Phone. Online FPS game Point Blank is still highly popular. Top 3 local publishers: Lyto, Kreon & Megaxus.

Countries Summary PHILIPPINES Population:101.8 million Internet Users: 29.7 million (29.2% penetration) Facebook Users:27.7 million (8 th largest in the world) 80% of household are unbanked. Low ARPU and users dependent on school allowance. iCafe centric distribution channels. Growing trend in peer to peer distribution channel. English speaking gamers.

Countries Summary THAILAND Population:66.7 million Internet Users: 18.3 million (27.4% penetration) Facebook Users:14.2 million The most mature game market in Southeast Asia. Thai language localization is absolute necessary. Majority of users are now play from home VS iCafe. Growing trend in the popularity of localize Facebook games. Top 3 local publishers: Asiasoft, True Digital & Ini 3.

Countries Summary MALAYSIA Population:28.7 million Internet Users: 17.7 million (61.7% penetration) Facebook Users:12.3 million The market is split into English & Chinese games. Better monetization from Chinese gamers VS English gamers. 7 Eleven as the number one channel for game top-up. Some of China game publishers has direct present in Malaysia. Top local publishers: Asiasoft – CIB, MyCNX, Cubinet, Koram.

Countries Summary SINGAPORE Population:4.7 million Internet Users: 3.7 million (77.2% penetration) Facebook Users:2.6 million Premium MMORPG titles are highly popular to Singapore gamers. Regional base for many global & regional game companies. Good infrastructure & government incentives. Good ARPU but small population. 7 Eleven is highly popular as game top-up channel.

Countries Summary INDIA Population:1.19 Billion Internet Users: 121 million (10.2% penetration) Facebook Users:45 million (3 rd largest in the world) Online card games (rummy & poker) are highly popular. MMO games having tough time gaining popularity. Facebook games (Zynga) are highly popular. Internet banking & Cybercafe are preferred channels. Feature phone mobile games are highly popular in the market. Smartphone & Tablet (android) are gaining popularity.

Expanding Gamers Demographic

From MMO Gamers MMO Gamers Profile: Tend to be younger, age between early teens to early twenties. Dependent on their allowance from parents. Price sensitive. Game retailers & 7 Eleven are popular place for them to buy their game top-up. Play their games at iCafe & home. Playing game as serious fun and as their main form of entertainment.

To Social Gamers Social Gamers Profile: Tend to be older, age between late teens to early forties. Convenient factors are priority. They don’t mind spending slightly more as long as it is more convenient for them. Credit card, Internet banking & mobile top-up are their favorite payment mode. Play their games on their laptop everywhere, at home, office, Starbucks, airport, etc. Playing game to pass time & relaxation. Tend to be first time gamers.

Positive associations towards online gaming POSITIVE ASSOCIATIONS NEGATIVE ASSOCIATIONS GAMES SELF Various games Time consuming LevelingGood visuals Addictive Networking Effort Release stress Kill time Trendy Full concentration Require expertise & intelligence Emotional benefits Rational benefits Internet disconnect Spend money Happy Source : Focus Group Study Done By Synovate, commissioned by MOL

Negative associations towards convenience of online game points POSITIVE ASSOCIATIONS NEGATIVE ASSOCIATIONS STRONG ASSOCIATIONS WEAK ASSOCIATIONS Free to play Must buy elsewhere Inconvenient Monthly charges Buy in- game items In game money Waste of money MOLPoints Expensive Source : Focus Group Study Done By Synovate, commissioned by MOL

17 Popularity of game top-up channels in SE Asia & India Majority of mobile channels are from Mobile Operator prepaid cards & postpaid billing.

Shift in Value Chain in Online Game Business Shift in Value Chain in Online Game Business

Territory / Country Base Publishing Value Chain Model

Territory / Country Base Publishing Challenges Local publisher bear the main risk if the game they are signing will not be popular in their territory. Game developers has to support many different versions of the games stretching their development team. Compartmentalizing the game territory coverage diminish the longtail effect of the game monetization. Difficult to forecast the growth of the game within particular country, making the whole investment for servers, bandwidth and man power very risky. Intrusion of same game from other publisher in different country.

Global Publishing Platform Value Chain Model

Challenges in Building Global Online Game Business Challenges in Building Global Online Game Business

23 Which Platform To Choose iOS - iTunes AppStore Great game monetization with iPad emerging as popular mobile game platform 30% rev share cut for Apple, payment mainly through credit card & iTunes card Apple start looking to distribute iTunes card in Asia, beginning with Korea. iTunes app store is also very crowded place (data from 148apps.biz)

24 Which Platform To Choose Android AppStores Open app stores concept, but it is highly fragmented. eCommerce site, handset maker, and telco operator all are building their own Android app stores. Mixture of payment service. It does not monetize as well as iOS AppStore (only 7% of iOS revenue)

25 Which Platform To Choose Facebook Apps Games are the killer apps on Facebook & it has created mega company like Zynga. Consolidation of monetization using Facebook Credits as default top-up. Tricky to manage fraud as game owners are responsible to look after the fraud themselves. Very crowded market place and dominated by big boys: Zynga, EA/Playfish, Disney/Playdom. Fragmented payment options with big gap in pricing.

26 Which Platform To Choose Self Publish Web Platform & Other Regional Platforms Total control and ownership of the site. Total control on payment flow and better revenue share. Required substantial marketing dollar to grow the users. To leverage on Facebook Connect. Use mixture of self publish web platform, regional & global platform.

27 Pricing Parity Issue More relevant to games with virtual items monetization and less relevant to mobile game apps. Prioritize your target gamers: - Gamers from developed country with high ARPU but lower number of players, or - Gamers from developing country with lower ARPU but higher number of players. Games with high virtual items pricing but popular with gamers from developing countries, tend to attract local game clones. Publish your games in multiple platforms & apply pricing parity in different platforms to target different market with different buying power. The Economist’ Big Mac index provide good pricing parity index.

28 Content & Marketing Localization Use crowdsourcing to localize your game language & work with your local gamers community to coordinate the localization. Work with local & regional payment channels to promote your games to local gamers. Run special promotion targeting at local gamers.

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