Opportunity for Social Mobile in Japan, China, and Korea Tetsuya Mori Managing Director DeNA Asia Pacific Holding

2 A Few Interesting Factoids about mobage and JP mobile social market

We run Social Game business and own a Professional Baseball Team 3

4 JP Social Mobile Games – Explosive Growth Japan’s mobile social game market –0 → $5B in 3 years –Highest ARPU x20 US Mobile Social Games launch DeNA Net Revenue US$1B US$2B

Over 50% of Mobage Game Revenue Comes from 3 rd Party Developers 5 3 rd Party Games

6 Big Title Revenue Scale Mobage top 20 title aiming at $1M/month Mobage top 5 title double digits millions / month Market Enabling Rev Share Model Gross Rev → Carriers 13%, DeNA 87% Out of 87% → DeNA 30%, Developers 70%

7 Big Traffic and Big Data Mining Big traffic – 20 billions PV / Day 20% of Japan’s mobile data traffic 1.2TB event log data / Day 480 CPU cores and Hadoop for real time processing Internal analytic tools Data miners (business analysts+ engineers)

Mobage Net Effect Start from a single user An invite to 1 core user led to 15,000 user sign ups

DeNA Global Presence – 2012 Q1 Snapshot 9 DeNA China DeNA Seoul Punch Vietnam 91JV GameView Pakistan Rough Cooki e Rough Cooki e DeNA Sweden DeNA Sweden Atakama Chile Atakama Chile DeNA Asia DeNA Asia DeNA Studios Canada ngmoco DeNA ngmoco (Freeverse) ngmoco (Freeverse) GameView Studio

Partnership Model DeNA drives ARPU, Partners drive user reach 10 User Reach ARPU Data Traffic Partners

Partnership Model DeNA drives ARPU, Partners drive user reach 11 User Reach ARPU Data Traffic Partners

4 Mobile Gaming Platforms Go broad and deep 12 Global China Korea Japan

mobage China Timeline –2006: Established DeNA Beijing –2007: Launched SNS services –2009: Investment in –2011: Launched mobage China 2011/4: Web version 2011/7: Android version 2011/11: iOS version Entry Strategy –Organic growth + staged investment Organization –HC 180 (including 5 expats from Tokyo) –Management team – 4 Chinese + 1 Japanese (CFO) 13

mobage Korea Timeline –2011/6: Established DeNA Seuol –2011/11: Strategic partnership with Daum –2012/2: Launched Daum mobage Android version (2012/2) iOS version (coming) Entry Strategy –Organic growth + partnership Organization –Still under development –HC 20 (operation support from Tokyo) 14

China Mobile Social Game Market Mobile infrastructure 3G reasonable speed but not cheap Android+iPhone user reaching 100M in 2012 BillingCarrier billing, Aliyun(Paypal model), pre-paid cards Many iOS Jailbreak, no official Google Play Game usersHuge user base Very low paid user rate 1-2% Small group of strikingly high pay users (guild model) Download many apps at once time Low retention rate Popular game categories Card Battle, SLG, MMORPG, Farm Japanese IPs, US IPs Freemium vs. Paid download Freemium model well established Web vs. AppsApp centric. Big hit titleiOS Top 5 SLG: Gross $ K/months, MAU 200K, ARPU $1.5-2/month 15

Korea Mobile Social Game Market Mobile infrastructure One of the best in the world -3G+4G, WIFI everywhere, very high SP penetration BillingMany options (carrier billing, credit cards, etc.) Game usersAndroid Apps Top download per capita in the world User base – broad and matured Heavy influence from PC Online games Capable of mastering complex game plays Love Person vs. Person battle High retention rate Popular game categories SLG, Sports, Action RPG, Farm Japanese IPs, US IPs, K-POP IPs Freemium vs. Paid download Transitioned from paid download to freemium in 2011 Web vs. AppsApp centric, Webview getting good traction Big hit title‘Rule The Sky’ Gross $2-3M/months, DAU 400K 16

Our Experiences in China and Korea It workedIt did not work We thought it’d work Social Game ops know-how (KPIs, Parameter tuning, in- game events etc.) User reach through partnership Japanese Anime IPs US popular games Some JP game play (e.g. steal from others – Bandit Nation) User segmentation model (e.g. China’s super users) We thought it might work Ninja Royal in China (1 million users, 300K new sign ups per month) We thought it’d not work Card Battle Game Universal virtual item pricing (need to adjust to the local level) 17

New Wining Formula for all regions – Card Battle Games 18 JapanUS China Soon to come Korea iPhone No.1Android No.1 JP market turned completely to CBG

Come to mobage Develop Card Battle Games Go together to the global markets! 19