Trends in the iPhone games market - a presentation from the Mobile Games Forum 2010 conference in London, Jan-10.

1. 10 Current Trends in iPhone Gaming Stuart Dredge Mobile Entertainment / iPhone Games Bulletin

2. Who Am I? UK journalist covering mobile, games and digital entertainment Mobile Entertainment / Music Ally Also Sunday Times, Recombu, What Mobile And my own things... www.iphonegamesbulletin.com

3. iPhone Games Bulletin Launched in June 2009 Daily free email newsletter offering iPhone games industry news and analysis Sign up at www.iphonegamesbulletin.com Also www.islatepicks.com (tablet tech and apps) www.iphonegamesbulletin.com

4. 1. The iphone games goldrush www.iphonegamesbulletin.com

5. The Big Numbers Addressable base of 50m+ devices 30m iPhones and 20m iPod touches More than 3 billion App Store downloads 7.4m iPhones sold in Q3 2009 17.8% share of smartphone market (Canalys) 2.5% share of ALL global handsets (Strategy Analytics) www.iphonegamesbulletin.com

6. Developers Striking It Rich 10m Paid iPhone games sold by Gameloft since the launch of the App Store $1,687 Revenues per hour of dvpt time forNimbleBit’s Scoops ($269,929 total) 2m Tap Tap Revenge 3 downloads in a week last Christmas after going free 10 days How long it took Playmesh to rack up 1m free downloads of iFarm 13.5m Downloads of Backflip Studios games in seven months ($1.75m of revenue) 79,422 Doodle Jump’s sales on Christmas Day alone www.iphonegamesbulletin.com

7. Analysts’ Big Numbers $2.8 billion iPhone games revenues in 2014 – 24% of handheld market (DFC) 18.7 billion App downloads in 2014 – of which 20% will be from Apple devices (Ovum) 610 million Paid apps in first 2bn iPhone downloads – generating $900m of developer revenues (Pinch Media) 36 million Number of iPhones that Apple will sell in 2010 (Piper Jaffray) www.iphonegamesbulletin.com

8. 2. Heavy usage but ferocious competition www.iphonegamesbulletin.com

9. Heavy Usage 72% of iPhone users have downloaded 10 or more apps (Compete) Average user has downloaded 65 apps for their device, spending $80 in total (AppsFire – Sep 09) 85% of UK iPhone owners pay for games (UK National Gamers Survey – Dec 09) 51% for Samsung, 38% for Sony Ericsson and Nokia www.iphonegamesbulletin.com

10. Ferocious Competition www.iphonegamesbulletin.com

11. Ferocious Competition 4,491 apps released on 18-Dec-09 (AppShopper) 80% of apps are not actively installed (AppsFire) 80,000 out of 100,000 at the time of the survey (Nov-09) Even those that are can be short-lived Flurry data: 72% of games still played after 30 days But only 23% after 60 days, and 16% after 90 days www.iphonegamesbulletin.com

12. 3. Piracy and ip infringement www.iphonegamesbulletin.com

13. Piracy on the App Store $450 million of lost revenues (24/7 Wall St) Based on 75% piracy rate and 1.5bn illegal downloads But also assuming that only 10% of those were ‘lost’ sales Rally Master Pro: 95% first-day piracy rate Tap-Fu: 80% first-week piracy rate Orbital: 80% first-week dropping to 24% later Pirate behaviour and first-day / week spike www.iphonegamesbulletin.com

14. Solutions to Piracy? There is no catch-all solution. Sorry. Turn pirates into paying customers - in-app payments Send takedown requests (i.e. Whack-a-Mole) Ask Apple to do something. But what? Music – part of the solution is providing better-value and more appealing consumer services. With rich games selling for $0.99 on a slick store, though... www.iphonegamesbulletin.com

15. IP infringement Several high-profile examples of IP battles Edge / Edgy / Killer Edge Racing Stoneloops of Jurassica v Luxor MarioTD / Duck Hunt / BreakClassic / Super Pong 2 Apple currently playing judge and jury The more high-profile iPhone gaming is, the more lawsuits we can expect to see www.iphonegamesbulletin.com

16. 4. Pricing evolution www.iphonegamesbulletin.com

17. Prices. How low can they go? 2008-09: Developer complaints about dive to 99c Late 2009: Concerted efforts to buck the trend EA holding onto its premium prices Canabalt establishing $2.99 success for casual game Social games bundling points up to $99.99 Yet price cuts now standard marketing practice ‘Peggling’ down to 99c for limited period Will 2010 break the $9.99 price barrier? Leaked Assassin’s Creed 2 at $11.99... www.iphonegamesbulletin.com

18. Top Paid Games chart Avg Price: $2.34 11 games at 99c www.iphonegamesbulletin.com

20. 2 games at 99c

22. What About Advertising? In-app advertising fuelling big acquisitions Apple/Quattro and Google/AdMob Could developers be caught in the middle of a battle? Exclusive deals – AdMob/Tapulous (Sep-09) Need more success stories from developers Backflip Studios - $125k a month from ads (Nov-09) Separate trend: advergames Reebok iSprint Real Racing GTI Sirocco 24H Challenge Waterslide Extreme www.iphonegamesbulletin.com

23. 5. Promotion & discovery www.iphonegamesbulletin.com

24. Promotion 2009: Pubs and devs got savvy about marketing More use of social media in particular Developer-led efforts to collaborate on marketing Appvent Calendar: 100k downloads of Navy Patrol FreeAppaDay just launched with same idea APPvertisemARTs from ustwo Cross-promotion also becoming more important Can tie in with in-app payments (ngmoco / Eliminate) www.iphonegamesbulletin.com

25. Discovery Developers have focused on App Store charts Marketing strategies based on ‘get into the top 100’ Apple’s Genius has been low-profile since launch Third-party services filling the gap Chorus / Chomp / Appolicious / Apptizr Mplayit / AppClassics / AppStoreHQ www.iphonegamesbulletin.com

26. 6. Social and connectivity www.iphonegamesbulletin.com

27. Social Games Platforms Fierce competition: OpenFeint, Scoreloop, Plus+, Crystal, AGON Online, GameSpy... Difference emerging: white-label v brand Own-brand iPhone apps for OpenFeint and rivals This space is seeing investment Aug: $2.8m funding for Scoreloop Oct: DeNa invested in Aurora Feint Emerging value as promotional platforms OpenFeint Gold scheme / AGON consumer site www.iphonegamesbulletin.com

28. iPhone + Facebook So far, Facebook/iPhone links have been limited Facebook Connect used mainly for viral buzz Playfish/ Zynga / Playdom not taking App Store by storm Cross-Platform games: Anytime Pool, Who Has The Biggest Brain, Bumper Stars BUT: big iPhone/mobile firms investing in Facebook Glu built a social gaming team in 2009 Ngmoco recruited ex MySpace SVP Digital Chocolate’s NanoStars concept www.iphonegamesbulletin.com

29. 7. Publishing shake-up www.iphonegamesbulletin.com

30. New Publishers Coming In Console firms now interested in mobile GTA: Chinatown Wars out this week Activision released Call of Duty: World At War: Zombies Ubisoft self-publishing, rather than licensing to Gameloft Codemasters back in after exiting J2ME market But iPhone isn’t just about the console publishers Developers seeing opportunity to self-publish Social games firms may ramp up in 2010 Casual publishers like PopCap already punching their weight Web Flash studios, iTV gaming firms... iPhone is a battleground more than DS and PSP www.iphonegamesbulletin.com

31. iPhone Firms Going Out Games can build buzz on iPhone then extend Fieldrunners went to PSP Minis, then mobile WiiWare, Xbox Live Arcade, Facebook, PC... Other smartphone platforms courting iPhone developers Multiple platforms will be increasingly important Make more money if prices are higher Make more money if competition is less intense Make more money if iPhone game tanks In 2010, we’ll be talking more about cross-platform developers/publishers for whom iPhone is a base www.iphonegamesbulletin.com

32. iPhone v PSP Minis Pricing www.iphonegamesbulletin.com

33. Developers Skilling Up Developers have been self-publishing since the early days of the App Store BUT now they’re becoming publishers too TAG Games and B-Boy Brawl Bulkypix publishing several games 2009 – became clear there IS a role for publishers Less about the mechanics of publishing, and more about the marketing www.iphonegamesbulletin.com

34. Who’s Making Money? Source: Top 20 App Store charts, 13-Jan-09 www.iphonegamesbulletin.com

35. 8. Apple as platform owner www.iphonegamesbulletin.com

36. App Store Improvements Top Grossing chart to highlight biggest earners Genius for Apps to help discovery Redesigned App Store pages in iTunes More priority to screenshots Only first paragraph of description is shown Harder to find genres? Halved the price of iPod touch software update More transparency in approvals (but enough?) www.iphonegamesbulletin.com

37. But what next? Will Apple publish more first-party games? Recruiting Video Game Artist for ‘interactive multimedia’ Previously hired Xbox senior director of strategy Will Apple launch its own social games service? M&A expert on board – could it buy a social platform? Will Apple take more control of in-app ads? $275m Quattro Wireless deal announced in January What now for developers using AdMob units? What will the iSlate mean for gaming? www.iphonegamesbulletin.com

38. 9. Ipod touch’s importance www.iphonegamesbulletin.com

40. iTouch Christmas www.iphonegamesbulletin.com

41. 10. Rise of the not-quite-game www.iphonegamesbulletin.com

42. Not Quite Games, But... Foursquare / Gowalla / MyTown / Rummble Turning real-world social lives into virtual games Attracting significant investment from VCs Foursquare one check-in a second / 450k MyTown users Augmented Reality Layar, Junaio, Sekai Camera, Wikitude What games are possible – and how niche are they? Juniper: $732m by 2014 with games leading the way Multiplayer competitive fitness iSpeedRunner – train but also compare times www.iphonegamesbulletin.com

43. CHEERS! This presentation will be available on www.iphonegamesbulletin.com Contact me: sdredge@gmail.com www.iphonegamesbulletin.com