Talk given in June 2012 at Kontagent's conference in San Francisco. Can you be big in Asia?

1. Game Internationalization:
Where to Start
May
31,
2012
|
Benjamin
Joffe,
CEO,
+8*
|
Jason
Lee,
Sr.
Manager,
Customer
Success
APAC,
Kontagent
Lifetime value starts here. @Kontagent
|
#KK2012

2. CASE
STUDY
–
Becoming
Big
in
Asia
@Kontagent
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2012

3. HI!
Benjamin
Joffe
@benjaminjoffe
@Kontagent
|
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2012

4. 12
YEARS
ABROAD
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5. PLUS
EIGHT
STAR
Research
&
Strategy
ConsulRng
Best
PracRces
&
Market
Entry
China,
Japan
&
South
Korea
@Kontagent
|
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2012

6. CLIENTS
EUROPE
USA
ASIA
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7. STARTUP
MENTOR
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8. 100+
talks,
20
countries
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9. Get
this
talk
at
>
www.slideshare.net/plus8star
AGENDA
• 7
Cases
for
Market
Entry
• Ecosystems
101
• China
• Japan
• Korea
• Case
Study:
Uberstrike
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10. 7
Cases
for
Market
Entry
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11. 7
CASES
FOR
MARKET
ENTRY
Opportunity
1. Surprise
success
2. Copycat
1. OpportunisRc
entrepreneur
2. Hopeful
entrepreneur
3. Independent
inventor
3. Business
contact
4. IdenRfied
opportunity
5. Unclear
opportunity
6. Hope
7. Necessity
DesperaRon
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12. ARE
YOU
THE
ONE?
• Concept
Suitability
• Product
/
Market
Fit
• Cultural
Match
• LocalizaRon
Ability
• Copy
• Graphics
• Layout
/
white
space
WIRED
• Payment
Top
15
Most
Influen/al
Games
of
the
Decade
• Support
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13. Ecosystems
101
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14. DEFINING
ASIA
Asia!
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15. DEFINING
ASIA
@Kontagent
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16. THE
WORLD
AS
CIVILIZATIONS
Western! Chinese! Muslim! Indian!
Orthodox! Japanese! African! Latin American!
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17. “Asia
was
a
concept
of
Western
Civiliza5on.”
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18. ECOSYSTEMS
101
• Macro
• GDP
• GDP/capita
• Demographics
• Culture
• Language(s)
• Religion(s)
• Infra
• Web
&
Mobile
Infrastructures
• Dominant
Players
• Payment
systems
@Kontagent
|
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19. DOUBLING
AUDIENCE
IS
NOT
DOUBLING
REVENUE
“Zynga
Aims
for
400
Million
Tencent
Users
in
China.
Starts
with
CityVille”
BizTechDay,
August
2011
“Just
by
going
to
China,
we
could
double
the
audience,”
Peter
Relan,
CEO,
Crowdstar
May
2012
@Kontagent
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20. @Kontagent
|
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21. Country
PopulaHon
GDP/Capita
(USD)
China
1.3
billion
4,500
Japan
128
million
42,000
South
Korea
49
million
20,000
Taiwan
23
million
20,000
Hong
Kong
7
million
32,000
Singapore
5
million
57,000
Malaysia
28
million
9,500
Indonesia
240
million
3,900
Vietnam
90
million
1,500
Philippines
94
million
2,500
Thailand
65
million
5,800
North
Korea
24
million
1,000
@Kontagent
|
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Not all markets are created equal" Kontagent
Konnect
2012

22. Country
PopulaHon
GDP/Capita
(USD)
China
1.3
billion
4,500
Japan
128
million
42,000
South
Korea
49
million
20,000
Taiwan
23
million
20,000
Hong
Kong
7
million
32,000
Singapore
5
million
57,000
Malaysia
28
million
9,500
Indonesia
240
million
3,900
Vietnam
90
million
1,500
- 1 JPPhilippines
= 10 CN users for monetization
user 94
million
2,500
Thailand
65
million
5,800
- Hong Kong, Taiwan,24
million
North
Korea
Singapore, Malaysia
1,000
medium-sized" @Kontagent
|
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23. Country
PopulaHon
GDP/Capita
(USD)
China
Large user bbases but:
1.3
illion
4,500
Japan
128
million
42,000
South
Korea
49
million
20,000
Taiwan
- few smartphones
23
million
20,000
Hong
Kong
- even fewer PCs
7
million
32,000
Singapore
- hard to million
5
monetize" 57,000
Malaysia
28
million
9,500
Indonesia
240
million
3,900
Vietnam
90
million
1,500
Philippines
94
million
2,500
Thailand
65
million
5,800
North
Korea
24
million
1,000
@Kontagent
|
#KK2012
Pick your markets right!" Kontagent
Konnect
2012

24. Mobile
Users
China
Japan
Korea
Mobile
users
1.02
billion
127
million
50
million
Android
?
15
million
17
million
(esRmates)
iPhone
<20
million
<10
million
3
million
(esRmates)
3G
Users
10%
100%
70%
- China, Japan, Korea embracing Android"
- iPhones for the 1% in China"
- Few reliable numbers available" @Kontagent
|
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2012

25. Online
Game
Companies
Market
Cap
China
$bln
Japan
$bln
Korea
$bln
Tencent
57.5
GREE
6.3
Nexon
8
Netease
7.8
DeNA
4.6
NHN
(Hangame)
10.5
Renren
2.6
Mixi
<1
NCso`
5.3
Shanda
2.2
Shanda
Games
1.4
as
of
June
2012
Giant
1.2
Changyou
1.2
Facebook
(75)
NetDragon
(91)
<1
AcRvision
Blizzard
13.8
Perfect
World
<1
Zynga
6.1
The9
<1
Electronic
Aarts
5.0
Gaming giants dominate in each country." @Kontagent
|
#KK2012
Very few foreign players do well." Kontagent
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2012

26. China
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27. CHINA’S
GAMING
MARKET
• 1Q2012
$1.78B
• 2012
(E)
$8B+
(=
2
x
Facebook
2011)
>
80%
Source: Analysys International" @Kontagent
|
#KK2012
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2012

28. REALITY
OF
CHINA
• Local
partners
are
prevy
much
mandatory
for
foreigners
to
get
any
distribuRon
and
operate.
• Successes
are
rare,
generally
accidental,
and
mostly
by
dominant
players
• Mobile
Angry
Birds,
Fruit
Ninja,
Nubee
(JP),
etc.
• Online
Games
Koreans,
Blizzard
(licensing),
Riot
Games
• Social
Games
Avempts
(PopCap,
Zynga)
@Kontagent
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29. SOCIAL
NETWORKS
IN
CHINA
• Social
networks
are…
TENCENT
• Livle
money
on
RenRen
• No
Facebook
• Online
Game
Giants
• Developing
their
own
games
• Licensing
from
Korea
• Rarely
from
other
places
(WoW)
• ExcepRon:
League
of
Legends
(but
bought
by
Tencent)
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30. TENCENT
• Revenue
US$4.5
billion
o Mostly
gaming!
o Mobile
10%
o AdverRsing
7%
• Net
Profit
US$1.6
billion
(35%)
• Services
o Qzone
552
million
MAU
o Pengyou
202
million
MAU
o Open
plaxorm
40,000
apps
– Revenue
share
improved
from
90/10
to
70/30
(though
variable)
– A
dozen
have
10m+
MAU
– BUT
ARPPU
=
1/10th
USA
(var.)
– QQ
Farm
=
$10m
/
month?
(2011
rumor)
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31. RENREN
• Revenue
US$118.0
million
• ~50%
from
adverRsing
• Net
Loss
US$5
million
• Net
loss
does
not
count
sale
of
eLong
for
US$50
million
• PromoRng
its
Groupon
clone
Nuomi
(spending
US$30
million)
• Plaxorm
• Average
50/50
revenue
share
• Curb
your
enthusiasm!
@Kontagent
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32. MOBILE
IN
CHINA
• iPhone
is
for
the
1%
• Android
stores
are
fragmented
• Over
a
dozen
app
stores
• Lots
of
copies
• Payment
systems
not
sorted
out
• AdverRsing
don’t
make
much
money
• New
smartphones
by
the
day!
Aliababa’s
Aliyun
• Xiaomi
Custom
Linux
mobile
OS
• Alibaba
Runs
Android
apps!
Yours
for
<
$250!
• Baidu
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33. IOS
IN
CHINA
• Click
to
add
text
• Click
to
add
text
o Click
to
add
text
Source: AppAnnie.com"
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|
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34. ANDROID
IN
CHINA
• Click
to
add
text
• Click
to
add
text
o Click
to
add
text
Source: AppAnnie.com"
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35. Japan
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36. REALITY
OF
JAPAN
• GREE
• Revenue
1Q2012
$575
million
• Acquired
OpenFeint
($104m)
• Acquired
Funzio
($210m)
• DeNA
• Revenue
1Q2012
$526
billion
• Acquired
Ngmoco
($400m)
• (Konami)
• $360
million
from
social
games
in
2011
@Kontagent
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37. FOREIGN
SUCCESSES
IN
JAPAN?
• Koreans,
Chinese,
Western
• Online
games
o Hangame
(Korean
online
&
casual
games
by
NHN)
o NCso}
(Korean
MMOs)
o Nexon
(Korean
MMOs)
o Perfect
World
(Chinese
MMO)
• Social
games
o Zynga,
Crowdstar,
Playfish
-­‐>
?
o Rakoo,
Rekoo
(China)
• Mobile
apps
o Many
non-­‐Japanese
o LINE
(mobile
IM
by
NHN)
• Web:
Twiver,
Facebook,
Evernote,
Tumblr
@Kontagent
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38. SMARTPHONE
GAMING
OPPORTUNITY
Core Gamers
2011
2014
PC
More than $1.2 billion
Overall
Console market size
Game About $3.6 billion
growing
software
Smartphone
games
Official sites, $1 billion
Mobile
Social games over $1.8 billion
Casual Gamers
Arcade games, Card games, Edutainment
@Kontagent
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39. “IT’S
PERFECT”
• What
is
quality?
• USA
“It
works”
• Japan
“It’s
perfect”
• Korea
“It’s
new”
• China
“It
gives
me
status”
• Consequently
• Requirements
in
Japan
exceed
your
imaginaRon
• Copy
=
strong
indicator
• On
the
upside:
People
pay
for
quality
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40. Korea
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41. GAMING
MARKET
US$
million
US$
million
7.1
863
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42. KOREA
• Outliers
• Blizzard
(local
operaRon)
• EA/FIFA
(partnership)
• League
of
Legends
(hired
Blizzard
staff)
• Mobile
• iOS
• Several
Android
app
stores
(Google,
SKT,
KTF,
LGT,
Samsung)
• Regulatory
limitaRons
• Game
RaRng
Board
(GBR)
• Local
partner
necessary
for
smaller
companies
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43. “Rest
of
Asia”
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44. “REST
OF
ASIA”
• Rich
&
English-­‐friendly
• Singapore
(English)
• Hong
Kong
(Cantonese,
Mandarin,
English)
• Somewhat
wealthy
&
somewhat
English-­‐friendly
• Malaysia
(some
–
most
revenue
from
Chinese
populaRon)
• Taiwan
(Taiwanese)
• Not
there
yet
• Vietnam
• Indonesia
• Philippines
• Thailand…
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45. COMING
SOON:
$50
ANDROID
PHONES
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46. UBERSTRIKE
CASE
STUDY
• Social
FPS
• First-­‐Person
Shooter
• Free-­‐to-­‐play
• 4
Channels
• #1
on
Facebook
• #1
on
Mac
App
Store
• Uberstrike.com
• Kongregate
• Upcoming:
iOS
&
Android
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47. @Kontagent
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48. GEOGRAPHY
OF
WEALTH:
FACEBOOK
• Users
• Only
need
a
PC
in
Internet
café
• Many
users
from
emerging
markets
• Revenue
• Kids
in
Internet
café
in
emerging
markets
do
not
spend
• Best
revenue
from
large
first
world
countries
• USA
• Germany,
France,
UK,
Australia,
Canada,
etc.
• Singapore,
HK,
Taiwan,
Malaysia
• Others.
@Kontagent
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49. GEOGRAPHY
OF
WEALTH:
MAC
OS
&
IOS
• Users
• Hardware
cost
$500
to
$2,000
• Only
“rich”
people
can
really
afford!
• Revenue
• Anyone
with
such
device
has
money
• USA,
China,
Russia
• Germany,
France,
UK
• Etc.
@Kontagent
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50. GEOGRAPHY
OF
WEALTH:
ANDROID
• Users
• Hardware
cost:
from
$100
• Revenue
• Lots
of
free
apps
• Fragmented
app
stores
• MarkeRng
is
hard
• It’s
like
the
old
days
of
Java!
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51. Conclusions
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52. CONCLUSION:
SMARTPHONES!
• “Big
in
Asia”
=
Pick
your
country!
• Japan
=
Smartphones
&
Mobile
Plaxorms
• Korea
=
Smartphones
&
MMOs
• China
=
Smartphones
• Singapore
+
HK
+
Malaysia
+
Taiwan
• Rest
of
the
world:
check
ecosystems!
@Kontagent
|
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2012

53. GOOD
LUCK!
www.slideshare.net/plus8star
benjamin@plus8star.com
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2012