Marketing & Entrepreneurship #2. Meet (some of) your markets Arjan Terpstra

What’s up? Marketing/markets for games/gaming

What’s up? Marketing/markets for games/gaming (sorry, no interaction design)

What’s up? Marketing/markets for games/gaming (sorry, no interaction design) A basic analysis of big games markets (console, PC/Mac, handheld, mobile) and big market trends

What’s up? What we know: (some) games markets in figures What we know: games markets NL Trends in entertainment games Trends in applied games General Trends

1. games markets in figures What do we know about the size of games markets, and how do we know it?

1. games markets in figures What do we know about the size of games markets, and how do we know it? ‘Market research companies’

1. games markets in figures What do we know about the size of the games industry, and how do we know it? ‘Market research companies’

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014)

1. games markets in figures (Gross National product of countries 2011)

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014) Prediction 1 (Gartner): 111 billion USD in 2015, ‘mobile and console sales’ are boosters.

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014) Prediction 1 (Gartner): 111 billion USD in 2015, ‘mobile and console sales’ are boosters. Prediction 2 (DFC Intelligence): 100 billion USD in ‘software sales’ by 2018 (from 64).

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014) Prediction 1 (Gartner): 111 billion USD in 2015, ‘mobile and console sales’ are boosters. Prediction 2 (DFC Intelligence): 100 billion USD in ‘software sales’ by 2018 (from 64). Prediction 3 (DFC Intelligence): PC market 2014 : > 25 billion USD revenu (first time). ‘Core gamers spend more on games than ever before’

1. games markets in figures Prediction 4 (PWC): Mobile market > 15 billion USD in 2018 (from 7 billion in 2013)

1. games markets in figures

Prediction 4 (PWC): Mobile market > 15 billion USD in 2018 (from 7 billion in 2013) Prediction 5 (DFC Intelligence): Mobile market > 29 billion USD in 2018 (from 11 billion in 2013)

1. games markets in figures Prediction 4 (PWC): Mobile market > 15 billion USD in 2018 (from 7 billion in 2013) Prediction 5 (DFC Intelligence): Mobile market > 29 billion USD in 2018 (from 11 billion in 2013) Console industry (Gartner): 44 billion USD (2013) Handheld industry (Gartner): 15 billion USD (2013)

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014)

1. games markets in figures Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014) But….

1. games markets in figures

= 91 billion USD (> Newzoo’s market prediction, 75,5)

1. games markets in figures Worldwide revenue (Newzoo): 75,5 billion USD in 2014 ‘Our’ market forecast: 91 billion USD in 2014 But: Gartners’ forecast: 101,6 billion USD in 2014

1. games markets in figures Gartners’ forecast: 101,6 billion USD in 2014

1. games markets in figures Recap: Figures for the international games industry vary wildly – between 75,5 and 110 billion in gross revenue. The numbers are invariably high – often comparable with figures on the film industry (88 billion USD gross revenue) All market predictions foresee a future growth of 9-11 percent per annum.

2. Games market NL

There’s a lot we DON’T know!

2. Games market NL Question: is there a ‘Dutch games/gaming market?’

2. Games market NL Question: is there a ‘Dutch games/gaming market?’ Yes: in retail, localised App Stores, with Xbox One No: part of ‘Europe’, ‘Western Europe’

2. Games market NL Size? 2012 (PWC): Dutch gaming market = 703 million Euro.

2. Games market NL Size? 2012 (PWC ‘global media outlook’): Dutch gaming market = 703 million Euro. ‘2016: 724 million Euro’

2. Games market NL Size? 2012 (PWC ‘global media outlook’): Dutch gaming market = 703 million Euro. ‘2016: 724 million Euro’ Want to know more?

2. Games market NL Size? 2012 (PWC ‘global media outlook’): Dutch gaming market = 703 million Euro. ‘2016: 724 million Euro’ Want to know more?

2. Games market NL

2. Games industry NL Size of total revenue: (Games monitor 2012): 150 – 225 million Euro. (worldwide: 75,5 billion USD = 58,5 billion Euro)

2. Games industry NL

(Games monitor 2012): 150 – 225 million Euro revenue. Well-connected and informal infrastructure Growing connectivity between schools and working field High quality training Good conditions for startups through networks, incubators, seed funding et cetera. A growing number of funds for games studio’s

2. Games industry NL ‘Approximately half of the revenue comes from applied/serious gaming’. B2B market!!!!

2. Games industry NL Ca. 330 game companies (but: what is a game company?)

2. Games industry NL Ca. 330 game companies (but: what is a game company?)

2. Games industry NL Ca. 330 game companies (but: what is a game company?)

2. Games industry NL Ca. 330 game companies Ca people employed Many small firms (indies or applied) making games ’70% of Dutch firms has a maximum of five people in it’ ’Only ten firms have more than 50 staff’

Trends in entertainment games

Trends? Markets? Two questions: 1. “What are the market trends that are important for your business? ” 2. “What are you going to do with that knowledge?”

Trends in entertainment games Trends: console (Xbox360/One, PS3/4, Wii/Wii U)

Trends in entertainment games Trends: console (Xbox360/One, PS3/4, Wii/Wii U) - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware, software and service sales)

Trends in entertainment games Trends: console (Xbox360/One, PS3/4, Wii/Wii U) - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware, software and service sales) (Console) games are part of a wider ‘entertainment-hub’ strategy.

Trends in entertainment games Trends: console (Xbox360/One, PS3/4, Wii/Wii U) - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware, software and service sales) (Console) games are part of a wider ‘entertainment-hub’ strategy. Growing interconnectivity with devices other than console (‘second screen gaming’) (PS Mobile, MS Smart Glass)

Trends in entertainment games Trends: console (Xbox360/One, PS3/4, Wii/Wii U) - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware, software and service sales) (Console) games are part of a wider ‘entertainment-hub’ strategy. Growing interconnectivity with devices other than console (‘second screen gaming’) (PS Mobile, MS Smart Glass) Constant reflex to integrate promising or succesful technologies. (PS Move, Amiibo, Project Morpheus)

Trends in entertainment games

Trends: PC/Mac gaming

Trends in entertainment games Trends: PC/Mac gaming - Firm comeback through digital distribution

Trends in entertainment games Trends: PC/Mac gaming - Firm comeback through digital distribution - Dutch game industry gains momentum through Steam.

Trends in entertainment games Trends: PC/Mac gaming - Firm comeback through digital distribution - Dutch game industry gains momentum through Steam. - Steam is finding its way to TV (2015)

Trends in entertainment games

- BUT: Steam publishes more and more games….

Trends in entertainment games

Trends: Mobile

Trends in entertainment games Trends: Mobile - Stellar rise of a new gaming segment

Trends in entertainment games Trends: Mobile - Stellar rise of a new gaming segment Digital distribution (first App Store july 2008) The rise and rise of free2play Touch interface well suited for gaming

Trends in entertainment games (2013) Apple App Store holds active apps, counts 40 billion app downloads (game and non-game apps)

Trends in entertainment games (2013) Apple App Store holds active apps, counts 40 billion app downloads (game and non-game apps) Opportunities? Yes, but there are (A) problems with player demography: who is your gamer? (marketing)

Trends in entertainment games (2013) Apple App Store holds active apps, counts 40 billion app downloads (game and non-game apps) Opportunities? Yes, but there are (A) problems with player demography: who is your gamer? (marketing) And (B) who is your competition?

Trends in entertainment games

(2014): 1,75 Billion smartphones worldwide, 195 million tablets Android expands through ‘micro consoles’ (Ouya, GameStick, GamePro) -> TV!!

Trends in entertainment games Trends: Handheld (Nintendo DSi, 3DS, PS Vita, PSP)

Trends in entertainment games Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP) Surprisingly stable market (vs mobile)

Trends in entertainment games Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP) Surprisingly stable market (vs mobile) PSVita (2014) 8 million units worldwide, 43,3 million Nintendo 3DS, 154 million units Nintendo DS/Dsii, DS Lite.

Trends in entertainment games Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP) Surprisingly stable market (vs mobile) PSVita (2014) 8 million units worldwide, 43,3 million Nintendo 3DS, 154 million units Nintendo DS/Dsii, DS Lite. PS Vita used as ‘second screen’ with PS4, games are more ‘platform agnostic’ – migrate from one device to the next.

Trends in entertainment games Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP) Surprisingly stable market (vs mobile) PSVita (2014) 8 million units worldwide, 43,3 million Nintendo 3DS, 154 million units Nintendo DS/Dsii, DS Lite. PS Vita used as ‘second screen’ with PS4, games are more ‘platform agnostic’ – migrate from one device to the next.

Trends in entertainment games Trends: general ‘cloud gaming’ will be a thingy…

Trends in entertainment games Trends: general ‘cloud gaming’ will be a thingy… The ‘democratisation of game design’ gives us new perspectives on games and game design

Trends in entertainment games Trends: general ‘cloud gaming’ will be a thing… The ‘democratisation of game design’ gives us new perspectives on games and game design. ‘Game analytics’ will continue to influence both game design and games marketing

Trends in entertainment games Trends: general ‘cloud gaming’ will be a thing… The ‘democratisation of game design’ gives us new perspectives on games and game design. ‘Game analytics’ will continue to influence both game design and games marketing ‘Free2play’-models are on the rise – not only in mobile!

Trends in entertainment games Trends: general ‘cloud gaming’ will be a thing… The ‘democratisation of game design’ gives us new perspectives on games and game design. ‘Game analytics’ will continue to influence both game design and games marketing ‘Free2play’-models are on the rise – not only in mobile! High expectations for Virtual Reality technology (Oculus Rift), but no proven market yet.

Trends in applied games

Ongoing definition debate: Applied games/serious games/persuasive games/engagement design/gamification?

Trends in applied games Definition debate: Applied games/serious games/persuasive games/engagement design/gamification? Anyhow: : 1,5 billion Euro revenue worldwide : 10,2 billion Euro expected

Trends in applied games Centre for Applied Games (Amsterdam): “44% of Dutch games companies is exclusively building applied games” (highest percentage worldwide)

Trends in applied games Strong presence in market segments: - maritime - security services - health care - education - business

Trends in applied games High expectations: ‘By 2015, more than 50 % of organisations that manage innovation processes will gamify those processes.’ (Gartner) ‘40 percent of all Global Top 1000 companies will utilize some form of gaming in transformational processes.’ (KPMG)

Trends in applied games Low production capacity!!! => there’s room for you there…. (there’s a lot more for next time…)