1. Anatomy of Japanese Social Game Design and Operation A comparison with SEA developers Toshihiko Suyama Director of Market Development DeNA Asia Pacific Holdings

2. 2 Who am I? SEA Game Production Alliance Director Experience in social games and webs –product manager of DeNA’s in-house social game –head of Mobage Japan’s community and User Generated Contents –etc

3. 3 The growth of Japanese social games Growing rapidly… > 4.1 Source: Mitsubishi UFJ Morgan Stanley, US$=80JPY, *2012 is forecast And will surpass the console market Billion$ Console software *

4. 4 High ARPU Compared with other country’s successful players, our average revenue per active user (ARPU) is much higher *MAU-based $12.06/month $0.66/month 18 x Successful US Company ⇒ Several games earn over 10M US$ per month

5. 5 Why?

6. 6 Uniqueness of Japan 1. High disposable income 2. High 3G penetration rate 3. Almost all post-paid subscription and easy carrier billing 4. Gacha? 5. Ninja’s secret activity?

7. 7 We are also successful in the U.S. US GooglePlay market Top Grossing Rage of Bahamut No.1 Tapfish No.10 Ninja Royale No.14 4/104/234/15 1st 20th 40th 60th 80th 100th

8. 8 What is in-game event? RegularEvent

9. 9 In-game event revenue Ninja Royale (ARPDAU) Event A 15x Event B Event C Event D 3/153/244/21 SkyFall (ARPDAU) 5x Event E Event F 3/234/273/304/54/13

10. 10 True Story Success of Japanese social game is driven by in-game events What is behind the event design and operation? And what can we learn from that? –Even if you do not plan to go to Japan or US market, we can learn something

11. 11 Difference 1.Monetization design

12. 12 The way of monetization Japanese marketSEA market ・ Most of revenue is from virtual goods ・ Lots of options -Virtual goods -Paid apps -In-game ads -Ads game In the Japanese market, developers can focus only on virtual goods

13. 13 Active Users Potential Paying Users Actual Paying Users User difference sample Active users Actual Paying Users Potential Paying Users Potential paying user ratio is totally different Clear Strategy ■ SEA market ■ Japanese market unmanageable

14. 14 Monetization point Monetization point in Japan is lean and simple Japan ・ Parameter enhancement item ・ Stamina refill SEA Pet’s food Avatars Buildings Pets ⇒ Easy to manage ・ Broad variety of virtual goods

15. 15 How to manage Whole Event 1 ～ 3days Paying heavy Paying normal Non paying ・ Motivate competition with same level users ⇒ Increase battle against higher ranked users 4 ～ 6days ・ Encourage users to keep high ranks by matching balance ・ Stimulate desire to beat paying heavy users ⇒ Increase limited time challenges ・ Make users realize how hard to beat paying users even during limited time challenges ⇒ Well balanced matching Divide user segment like below and make the goal and plan for each segment day-to-day ・ Give now-or-never feeling during limited time challenges ・ Stimulate user’s desire for revenge against paying users during limited time challenges

16. 16 Difference 1.Monetization design Lean/simple and easy to manage Segmentation and day-to-day control 2.Team Organization

17. 17 Game development team organization Small team(6-8 people), but 1 person who is in charge of analytics and parameter design ProducersEngineersArtist Analyst

18. 18 The detail of analyst’s work Define KPI which clearly shows if the event is going well or not and develop reporting-tool for sharing the KPI Design game parameter. For example, how to control the user progress, how to match higher ranked users, etc If user activity is different from estimation, or even worse, analyze game logs and improve the parameter or event/game- design timely Advise game/event design from parameter point of view Input to game design Parameter design Define KPI and develop reporting tool Analyze and improve timely Analyst takes care of whole flow of game/event development

19. 19 Example of logs Analysts need to manage user’s logs and analytics –DeNA’s internal team analyzes 1.2TB logs per day ・Who（User_ID） ・When（date/time） ・Which Device ・What（Item_ID） ・How many (Item_num) ・How much spent coin ・Who（User_ID） ・When（date/time） ・Which Device ・What（Item_ID） ・How many (Item_num) ・How much spent coin ・User Level ・Remaining stamina ・Boss encountering ・Limited time challenge encountering ・Ranking etc… ・User Level ・Remaining stamina ・Boss encountering ・Limited time challenge encountering ・Ranking etc… ＋ Ex) Log of consumption of virtual currency

20. 20 Analyst’s professional background Analysts have no defined professional background –Business Consultant –Marketing Research –Sales –Super Computer Engineer Of course, if they have data-mining back ground, it is better… ⇒ Assigning one analyst per team is important

21. 21 Role of other team members It is important that every team member knows about the KPI ⇒ Fast event operation becomes possible

22. 22 Daily activity 9am: Analyst looks at logs and sees users getting bored of the event 10am: Team decides to add a new stage by the end of today 7am: Event logs and KPI are sent to team member’s mailbox 5pm: Launch the new stage of event

23. 23 Difference 1.Monetization design Lean/simple and easy to manage Segmentation and day-to-day control 2.Team Organization Analyst takes care of whole game operation All team members understand KPI for fast operation 3.Time management

24. 24 Monthly sales trend image Event schedule is very important because Japanese users spend lots of money at the beginning of the month 1 st Event2 nd Event 30 ⇒ 1day delay, 10% revenue loss average stth

25. 25 How to keep to the schedule The way to keep to the schedule uses common methods –Day-to-day schedule –A morning assembly to check ⇒ Sometimes only hard work can solve the problem…

26. 26 Difference 1.Monetization design Lean/simple and easy to manage Segmentation and day-to-day control 2.Team Organization Analyst takes care of whole game operation All team members understand KPI for fast operation 3.Time management Strictly keep day-to-day schedule Dare to work hard ⇒ Let’s see an actual developer’s result

27. 27 Our partner from SEA region After launch in Japanese mobage with our support, the ARPU becomes almost 700% in 6 months 100% 695% 1 st 2 nd 3 rd 4 th 5 th 6 th Yes we can! month Start running event Improve Parameter design Time management struggle

28. 28 Mobage platform introduction JapanGlobalChina Korea FP SP PC SP

29. 29 Let’s go to the big markets with Mobage platform 「 Opportunity for Mobile Social in Japan, China and Korea 」 Tetsuya Mori Managing Director of DeNA Asia Pacific Mobage platform introduction Do not miss the other DeNA’s presentation 24 th 10am at Hall301-302 ⇒ We can support with our knowledge and experience

30. 30 Thanks!! Contact: suyama.toshihiko@dena.jp