mobile games market outlook webinar

AppLift.com 1

The mobile games market outlook What’s in store for 2014?

AppLift Webinars February 19, 2014

AppLift.com 2 The mobile games market outlook: what‘s in store for 2014?

About AppLift

200+ Game Publishers

The leading mobile games marketing platform

200+ Games 1M+ installs per month

We are a team of 80+ mobile game enthusiasts

We are headquartered in Berlin with offices in San Francisco and Seoul

We come from 25+ countries and speak 20+ languages

We are backed by Prime Ventures and HitFox Group with USD 20M investment

100% mobile games LTV focus All key

markets


Our panelists

Peter Warman (1971) is CEO and Co-founder of Newzoo, the games market research and consulting firm, servicing clients across all game business models and continents, such as Valve, Microsoft, EA, King, Wizards of the Coast, Nvidia, Plantronics and Wargaming. After being responsible for sales and business development at Europe’s largest interactive agency (LBi), he was responsible for internet development at Reed Business and operated as commercial director for a MMO for kids. Peter is a frequent speaker on the business aspects of the games industry. Peter enjoys opera as well as good German techno.

Peter Warman CEO, Newzoo


Our panelists

Jan Miczaika COO, Wooga Jan Miczaika is COO at Wooga, a leading developer of mobile games. With employees from over 40 countries, our international team creates games that excite around 40 million active players every month. Jan is responsible for a number of areas in the company including Marketing, Media Sales, Biz&Corp Dev, Customer Care, Localization, Community Management, Facilities etc. Additionally Jan is a non-executive board member of Hitmeister, an e-commerce marketplace he co-founded in 2004. Previously Jan worked and interned at a number of companies in the startup ecosystem, including startups, venture capitalists and a private equity fund.


Our panelists

Tiuri van Agten Data Analyst, Distimo

Tiuri brings a history of rich knowledge and experience in the mobile industry to his position of Data Analyst at Distimo. He has been an integral part of Distimo’s data team for over three years and devotes his time to studying the rankings of all the major app stores. Tiuri is one of the initial creators of the algorithms behind Distimo’s premium market intelligence product, AppIQ, the most accurate app market intelligence tool that estimates download and revenue volumes for any app, globally. Currently, Tiuri also analyzes global trends across stores and helps developers solve various black holes in their knowledge, when it comes to app store data. Tiuri is incredibly passionate about accurate data and global app trends. He holds two masters degrees, and when he’s not crunching numbers, which he loves, you can find Tiuri on the slopes in Austria, working his magic in the DJ booth or going on cycling tours with Distimo colleagues.


What’s in store for 2014?

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General market trends

Platform trends

Regional trends

General outlook

AppLift.com 7 AppLift.com


Where will the growth be?


Global Mobile Game Revenue Growth | 2012 - 2016

Source: Newzoo Global Games Market Report

Peter Warman (Newzoo) •  Massive growth in the mobile games market in the years to come. •  We now know that there is a mobile game market for both the tablet and the smartphone. •  Double growth: Mobile market share is growing and the overall market for games is growing.


Mobile (Paying) Gamers per Region | 2012 - 2016

Source: Newzoo Global Games Market Report

850M 1,300M +53%

305M Pay 36%

650M Pay 50%

+113%

Peter Warman (Newzoo) •  The growth of Free2Play

games is generating more paying users.

•  In Free2Play games, users can decide their spend themselves.

•  Number of paying users and overall spending is increasing.




Jan Miczaika (Wooga) •  In developed countries, growth will come from the segment of

users switching from 1st generation to 2nd generation smartphones.

•  In emerging countries, growth will come through higher smartphone penetration rates.

•  So far, only a fraction of users make In-App-Purchases (IAP). Challenge is to get a larger percentage of users to spend – this is where the real growth is.

•  Regional differences: Japanese users spend relatively more than other markets.


Platform trends

Can mobile game publishers benefit from a presence on alternative app stores?

How is the app store revenue distribution evolving?

What user acquisition strategies can game publishers resort to on the app stores?

Thomas Sommer (AppLift) •  Among game publisher, we see increasing demand for sustained campaigns with focus on

quality, and less focus on burst campaigns.

Jan Miczaika (Wooga) •  Wooga runs global campaigns with Life-Time-Value and CPI optimization. •  Burst campaigns have changed significantly in the last year; it is more complex now. •  To reach top ranks today, one must combine various ad networks and iterate campaigns.


Game Revenues iOS vs GooglePlay | January 2014

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Peter Warman (Newzoo) •  Google Play ramping up in terms of monetization, and is

overtaking the Apple App Store faster than expected. •  iPad overtook iPhone in UK/US in terms of game revenues. •  Tablet spending growing; iPad has more revenue than iPhone. •  Android needs a strong tablet competitor to compete with the

iPad in the tablet market.


How is the app store revenue distribution evolving?

Tiuri van Agten (Distimo) •  In 2017, 94.5% of apps will be free (Gartner). •  We observe the same development on all platforms. •  Regional differences: Asia is already at 90%. •  New Angry Bird Go generated more revenue on Google Play than

on iOS in its first month in Spain.


Is there room for a third dominant app store in Western markets?

Tiuri van Agten (Distimo) •  Alternative app stores

are worth looking into. •  Minicraft generated

14-15% of its revenues on the Amazon app store.

•  Google Play is taking market share from the Apple App Store.


Is there room for a third dominant app store in Western markets?

Tiuri van Agten (Distimo) •  Another example of

high revenue share in the Amazon App Store.

•  However, less significant than Minecraft as it has far less downloads.

Peter Warman (Newzoo) •  Family orientered

games may be the best for the Amazon segment.


Platform trends Can mobile game publishers benefit from a presence on alternative app stores?

Jan Miczaika (Wooga) •  Wooga most recently published Jelly Splash on the Amazon App Store. •  One must keep ind mind that the demographics are different. •  Still mostly US users and tablet only. •  Crucial to analyze whether the game fits the Amazon demographic. •  Relatively low effort as the adaption is easy. •  However, the Minecraft example is an exception.


Regional trends

Which regions are currently underrated for mobile game publishers?

What does it take to make it in Asia?


Which regions are underrated?

Tiuri van Agten (Distimo) •  High growth in Asia,

but also in South American countries.

•  South America is an underrated region.

•  However, still much lower revenues than in Asia.


Choice of mobile game | Drivers differ per country

Ranking & Filesize are key in China Game screenshots & description are key to Russians

Source: Newzoo Data Explorer

Peter Warman (Newzoo) •  Newzoo get many questions on priotization of countries and devices. •  It is crucial to understand the differences between the various markets. •  With the right research and knowledge about the specific markets, its possible to make

genious entry strategy.


Regional trends What does it take to make it in Asia?

Jan Miczaika (Wooga) •  With Jellysplash, Wooga launched it on Kakao and people seemed to like the

game. However, after the feature on Kakao ended, it did not attract enough new users.

•  South Korea is a very specific market in terms of marketing. •  It is wrong to perceive Asia as one market, as the Asian markets differ a lot. •  Japan is technically the easiest market for Western companies, as they use

Facebook and have Google Play and Apple App Store as their main app stores. •  South Korea is harder because it requires Kakao. •  If you have the necessary resources, Asia is a must, as it‘s where the largest

markets are. •  However, Western companies with success in Asia are rather limited, and there

are reasons for that.


Major Android AppStores in China | iOS opportunity

China is a $50M+/month iOS games market Approx. 3X Germany; iOS represents 25%

Source: Newzoo Free Report on China (clients only)

Report: Understanding China Tencent MyApp

Gfan Market

AnZhi Market

Baidu AppStore

Wandoujia

360 Mobile Assistant

Alibaba

iOS25%

Android52%

Others23%

Peter Warman (Newzoo) •  The Chinese market is tough even if you localize: app discovery is

difficult and piracy is still a big problem, so you have multiple challenges stacked together.

•  However, the non-jailbroken iOS market in China is still 3x Germany. •  Countries such as Taiwan, Hong Kong, Singapore are in the top 20 in

terms of revenues on iOS, and are much more westernized. •  For smaller developers it might make more sense focusing on other,

perhaps easier, Asian markets rather than China.


What matters in Asia?

Tiuri van Agten (Distimo) •  Localization in Asia is crucial –

maybe even key. •  Icons great example of the need

for localization. •  All icons in the top 10 are

“typical“ Asian-style icons. •  Big game publishers realize this;

e.g. King published Candy Crush in Korean on Kakao.


What matters in Asia?

Tiuri van Agten (Distimo) •  Example of how localization (17th June) helped Clash of Clans get success. Jan Miczaika (Wooga) •  Don‘t oversimplify the market - success requires more than new icons and language. •  Not a single western game publisher in the top 10 in the Japanese market. •  Challenges not just in the market, but also on the game side.


Which game genres work better in Asia?

Tiuri van Agten (Distimo) •  Example of the differentiated preferences of game genres across

regions.


Which game genres work better in Asia?

Tiuri van Agten (Distimo) •  Less interesting on Google Play, as there are only 6 game categories. •  However, Asia is still different than the two other regions for the third genre.


General outlook for 2014 What are the main opportunities and challenges for mobile game publishers in 2014?

Jan Miczaika (Wooga) •  Not much movement in the top 10 games in 2013 – expect big changes in

2014 as every game has a lifecycle. •  Predict more game launches and more marketing spend in 2014. •  2014 will be year of change, thus full of oppertunities and challenges.

Peter Warman (Newzoo) •  Not entirely true that all the revenue goes to few big game developers.

Altough 50% of revenue is split between 25 publishers, the US alone has 240 developers/publishers earning more than a $1 million a month.

•  Although it is getting harder, with time, creativity or money one ca still reach the top rankings.

•  2014 tip: Localize your game first and then roll out the game – respect the gamers and their preferences.


Opportunities and challenges

Tiuri van Agten (Distimo) •  During 2013 it became much harder to get in top rankings - in 2014 the competition

will be even more fierce. •  Expect more cross-promotion partnerships like that of SuperCell and GungHo. •  However, there is still money for small developers in the “long tail”. •  Flappy Bird showed us that it is still possible to reach top rankings with few

resources.

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Questions? This is the default closing slide.

You are encouraged to close your presentation with your own personal note. Contact details are not obligatory.

Question: “What about the Windows App Store?”

Tiuri van Agten (Distimo): •  Work must be done by Microsoft for it to become a real success, but there is

growth and definitely money to be made money in the Windows App Store.

Peter Warman (Newzoo) •  Windows Phone is doing really well: rather extreme growth figures. •  As long as Apple does not make a new “big thing” this year, there is a window of

opportunity for Microsoft. However, it must happen this year. Question: “Must one go through Over-the-Top messaging apps in Asia?”

Jan Miczaika (Wooga) •  In Korea, 8 of the top 10 apps are on Kakao, so a clear yes to messaging aps in

Korea. •  In Japan it is more debatable, but Line is still very strong. •  However, it can be difficult to get in, as Line does not take in as many games •  In general, distributing your game in Asia is difficult without integrating local

messaging apps.


Contact

Thomas Sommer Content Marketing

[email protected]

Peter Warman CEO

[email protected]

Jan Miczaika COO

[email protected]

Tiuri van Agten Data Analyst

[email protected]


Thanks for attending!

Stay posted for our upcoming webinar on Customer Lifetime Value

In the meantime, don’t hesitate to read our blog:

www.applift.com/blog

Download this presentation, our infographic… on:

www.applift.com/INSIGHTS.html

For more tips on global user acquisition, global expansion etc. get in touch!

[email protected]


Thank you!

This is the default closing slide.

You are encouraged to close your presentation with your own personal note. Contact details are not obligatory.

mobile games market outlook webinar

Technology

mobile game market

games market research

mobile games ltv

mobile market share

games industry

overall market

growth of free2play

mobile industry