Introduction about Online and Social gaming to INSEAD class of 2012. Online games history, genres and consumer preferences. Value chain, careers in Business Development, Product Development and Post Live

1. ONLINE & SOCIAL GAMING IN ASIA
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INSEAD ROUNDTABLE – 2012
FABIEN SIOUFFI. VP, ONLINE & SOCIAL AT TAKE 2

2. ABOUT ME
 Previous life
• Internet early adopter (Mosaic ? BBS anyone ? )
• Internet and IT business - Microsoft marketing, Sun Microsystems account manager
 Asia !
• 10 years in Asian gaming
• Counter Strike, World of Warcraft asian launches in mid 2000’s
• FIFA Online Korea and South East Asia
• Electronic Arts move to overall online centricity
 Now – Building an Online business for Take 2
• NBA 2K Online with Tencent China. Forecasting 50m active users
• Baseball Online with Nexon. Targeting ARPU of 50$/month
• Civilization Online. Large scale MMORPG going against World of Warcraft
• Social Mobile games in Japan

3. A DECADE OFGAMINGBOOM INASIA
 The problem with packaged games
• Limited market : Piracy
• Limited reach : high specs, fat clients, high purchase price
• Limited appeal : solo experience, static product designs
 Multiplayer PC Games showed the way
• Extended lifecycle : DOTA, Counter Strike enduring craze
• Social gaming : PC Bangs (Internet Gaming Rooms)
• Dilemma for publishers : Huge consumption, no monetization
 Online PC Games
• Huge market : Server only = No piracy
• Massive Reach : Low/adjustable specs, Free to play / pay as go
• Massive Appeal : Continuous refresh of the game content + online events +
community based design

4. THE RISE OF GLOBAL PLAYERS
 1998 – 2004 : Innovation from South Korea
• Lineage by NC Soft (Jake Song) : first MMORPG.
• Ragnarok by Gravity : First Casual MMO
• Kart Rider by Nexon: First Free to Play casual game
 2003 - 2006 : Online gaming boom throughout Asia
• World of Legend in China hits 1 million Peak Concurrent Users (PCU)
• Korea : Lineage has 1m subscribers. Kart Rider hits 200k PCU
• Ragnarok reach 75,000 PCU in both Philippines and Thailand
 2006-2010 : Games for everyone
• Higher end MMOs. World of Warcraft. First 3D game in China, first (and only) western
success in China. 1m PCU
• New genres of MMO.
o MMO-FPS – Sudden Attack kills Counter Strike
o MMO-Sports – FIFA Online hits 200k PCU in Korea
 2010 -? : Games everywhere
• Play on Social Networks
• Build social networks around games. Gree and DeNA in Japan
• Clientless and portable. Near ubiquity

5. ONLINE GAMING INASIA TODAY
 Market value : $17Bn (USA + Europe = $9Bn!)
• 500m online gamers
• 200k Internet Gaming Rooms
 Giant players and innovators
• NHN worth $10Bn , Tencent worth $40Bn, DeNA and GunHo in Jp
• Asia 2 years in advance of the west on Online & Social gaming. Invented social
networks, free to play business model, community design, data driven development
 Asian companies go big, go out
• US and Europe subsidiaries
• Consolidation started, lots of M&A
 Back in Asia, it’s all about the consumer interaction and mobile
• Mobile the new gold rush
• Portal/Platforms dominate
• Increased reach. Female and casual gamers conversions
• Increased monetization. ARPPU rising

6. ASIA CURRENT HOT SPOTS
 Japan Social Mobile
• From 0 t0 $4.5Bn market in 2 years. More than rest of world combined
• 25m mobile social gamers
• Extremely high stickiness and ARPPU
 China – Tencent
• From PC to Mobile centricity
• WeChat incredible success
• Q+ “open” platform.
 Fast growing markets in SEA
• Vinagames and VTC fostering fast growth
• Fast mobile growth in Indonesia

7. Asia Online & Social Game Markets
Thailand
CHINA
Rev : $6.8B
Gamers : 330M JAPAN
INDONESIA
Rev : $54M
Gamers : 14.8M
THAILAND
Rev : $95M
Gamers : 6.4M
VIETNAM
Rev : $170M
Gamers : 12M PHILIPPINES
Rev : $30M
Gamers : 14.5M
MALAYSIA
Rev : $30M
Gamers : 5.7M
SINGAPORE
Rev : $23M
Gamers : 1.3M
Total Asia market – $17Bn
INDIA
Rev : $5M
Gamers : 2M
TAIWAN
Rev : $700M
Gamers : 4.5M
Rev : $4.3B
Gamers : 29M
SOUTH KOREA
Rev : $4.8B
Gamers : 25M
Asia Top 5
1. China
2. Korea
3. Japan
4. Taiwan
5. Vietnam &
SEA
Source : IDC, Pacific Epoch Asia, Niko Partners
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8. HOW ITWORKS
 Acquisition (Come)
• Must
 Retention (Stay)
o Platform traffic
o Targeted Ad buy
o Streamlined first game
experience (download,
log, 1st play)
o In game virality
• Avoid
o Server downtime
o Hacks
• Monitor : CPA, CPI,
Registered Users (RU), D2
retention, effective rate,
PCU
• Must
o Repeatable core
gameplay,
o Operation events
o Community loop
o End game
• Avoid
 Monetization (Pay)
o Undesired features
o Linear game designs
• Monitor : D7/D30
Retention, Average Online
Time, Active Users vs
Registered, DAU/MAU, ACU
vs PCU
• Must
o Real time metrics
analysis. What people
want
o Cash rich time poor vs
time rich cash poor
• Avoid
o Breaking game
balance
• Monitor : ARPPU, LTV

9. BUTWHY PEOPLE PAY ?
 Play better.
• Progress faster. Skip time, remove the grind
 Look good.
• Show off achievement. Epic mounts only
accessible to level 70 players
 Have fun.
• More of that kind of fun. ManU vs Liverpool
FIFA matches
 Socialize and meet people
• Gift item to that special one
• Join clans & guilds
 Make money.
• Buy because you know you can sell at higher
price
• Game farming / Secondary market

10. BUILDING ANONLINEGAMING BUSINESS
 Business Development : Turn Idea into Projects – Go to Greenlight - PIRP
 Pre Live : Turn Projects into Products - Development to first CB - LIVE
 Post Live : Turn Products into Services - Acquire, retain and monetize users
BDBusiness
. Identify opportunity
. Build product case
. Build business case
. Source partner
. Deal making
Studio
. Tech assessment
. Talent sourcing
. Project validation
Pre Live
Business
. Operating partner Account
management
. Financial/Legal
Studio
. Talent/Studio build up
. Development to CB
. Development Partner
management
Post Live
Business
. Product Licensing
. Product Monetization
. Publishing Partner Account
Management
. Financial/Legal
Studio
. Live Development
. Live Operations
. Tech optimization
. PR/Marketing
Greenlight LIVE

11. ONLINEGAMINGCAREERS –BUSINESSDEVELOPMENT
Business
Development
From Idea to Project
Tasks
. Identify and analyze priority
markets
. Identify priority IP and market
opportunity
. Establish partnerships with
market leaders
. Matchmake IP, Dev team,
Publishing team, deal
. Drive greenlight process
Careers
. Business Development Manager
. Area Manager
. New business Manager
Outcomes
. Market entry strategy
. Build product case : feature set, competitiveness, platform, audience,
development options
. Associate with market leaders, work with best in class
. Deliver a strong business case with minimum risk and maximum
opportunity
.Sign agreement/Start game development

12. ONLINEGAMINGCAREERS – PRODUCTDEVELOPMENT
Pre Live
From Project to
Product
Tasks
. Set up development studio and
start development
. Project management
. Set up knowledge bases
. Handle financial and legal
matters
. Liaise with business people
Careers
. Studio Manager
. Games Producer
Outcomes
. Attract best talent
. Project budget and planning
. Manage cross cultural teams
. Ensure completion of development on time and budget
. Ensure highest possible creative and product values
. Ensure transfer of knowledge under the co-development model
. Tools and Engine Licenses
. Deal addendums
. Resourcing and timeline adjustments based on project status
and market updates

13. ONLINEGAMINGCAREERS – POST LIVE
Post Live
From Product to
Service
Tasks
. Account-manage partners to
secure commitment on people and
$ investment
. Maximize monetization
. Launch game in multiple
countries/platforms
. Ensure acquisition of online
expertise translate into
development, operation and
marketing efficiencies
Careers
. Revenue Manager / Data Analyst
. Product Manager
. Marketing Manager
Outcomes
. Work with class leader, get internal mindshare and resources
. Ensure revenue growth month on month
. Sign agreement with portals/platforms, localizae and integration into new
API, drive launch marketing and post live service activities
. Move up the value chain, build a platform and become self publisher

14. ONLINE& SOCIALGAMESGENRES INASIA
Product
Case
Genre : RPG
Game Features : 3D persistent
Open World
Daily Usage : 1 log in, 3 to 5 hours
long
KSF: Gameplay both accessible
and deep, game balance, visual
quality, repeatable end game,
hardcore/guild appeal
Format : PC Client/Server
Genre : Sports, FPS, RTS
Game Features : 3D Instances
Daily Usage : 2 log in, 1 to 2
hours long
KSF: "easy to play, hard to
master“ core game, reactivity in
operations, eSports, wide appeal
(age groups, genres)
Format : PC Client/Server
Genre : TCG, Sim, Puzzle
Game Features : 2D Instances,
turn based
Daily Usage : 5 log in, 5 to 10mn
KSF: Social features, smooth
leveling up experience, rewarding
gameplay, monetization designs,
branding power
Format : PC and Mobile Cloud
MMO
Advanced
Casual
Games
Mobile
Social
& Web
Genre Leaders
Yakuza Wars
Puzzle & Dragons
FIFA Superstars

15. TAKE 2 ONLINE& SOCIAL PORTFOLIO
T2
Strategy
IP : Civilization
Game Features : 3D “Scenario”
Key Features : user created
content in a persistent world, end
game oriented design, hardcore
gamers as game co creators for
casual players, civilization/history
deep backstory.
IP : NBA2K, MLB2K, Borderlands,
XCom
Game Features : 3D Instances
Key Features : superior realism
from our codes /engines, fully
licensed content, innovative and
deep gameplay.
IP : NBA2K, Pirates, Civilization, GTA,
MCLA, NBA2K Manager (Web)
Game Features : 2D Instances
Key Features : licensed content,
smartphone gameplay, tested
gameplays and monetization designs
MMO
Advanced
Casual
Games
Mobile
Social
& Web
T2
products

16. SOME OF MY FAVORITEVIDEOGAMES THAT YOU HAVE NEVER HEARD OF
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