Opportunity for Social Mobile in Japan, China, and Korea

Tetsuya MoriManaging Director

DeNA Asia Pacific Holding

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A Few Interesting Factoidsabout mobage

and JP mobile social market

We run Social Game business and own a Professional Baseball Team

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JP Social Mobile Games – Explosive Growth

• Japan’s mobile social game market– 0→$5B in 3 years– Highest ARPU x20 US

Mobile Social Games launch

DeNA Net Revenue

US$1B

US$2B

Over 50% of Mobage Game Revenue Comes from 3rd Party Developers

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3rd Party Games

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Big Title Revenue Scale

Mobage top 20 title aiming at $1M/month

Mobage top 5 title double digits millions / month

Market Enabling Rev Share Model Gross Rev → Carriers 13%, DeNA 87%

Out of 87% → DeNA 30%, Developers 70%

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Big Traffic and Big Data Mining

Big traffic – 20 billions PV / Day 20% of Japan’s mobile data traffic 1.2TB event log data / Day 480 CPU cores and Hadoop for real time

processing Internal analytic tools Data miners (business analysts+ engineers)

Mobage Net Effect

Start from a single user

An invite to 1 core user led to 15,000 user sign ups

DeNA Global Presence – 2012 Q1 Snapshot

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DeNA ChinaDeNA China

DeNA SeoulDeNA Seoul

Punch VietnamPunch Vietnam

91JV91JVGameView PakistanGameView Pakistan

RoughCookie

RoughCookie

DeNASwedenDeNASweden

AtakamaChileAtakamaChile

DeNAAsiaDeNAAsia

DeNA Studios Canada

DeNA Studios Canada

ngmocongmoco

DeNADeNA ngmoco(Freeverse)ngmoco(Freeverse)

GameView StudioGameView Studio

Partnership Model DeNA drives ARPU, Partners drive user reach

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User Reach

ARPUData Traffic

Partners

Partnership Model DeNA drives ARPU, Partners drive user reach

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User Reach

ARPUData Traffic

Partners

4 Mobile Gaming PlatformsGo broad and deep

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GlobalChina KoreaJapan

mobage China

• Timeline– 2006: Established DeNA Beijing– 2007: Launched SNS services– 2009: Investment in– 2011: Launched mobage China

• 2011/4: Web version• 2011/7: Android version • 2011/11: iOS version

• Entry Strategy– Organic growth + staged investment

• Organization– HC 180 (including 5 expats from Tokyo)– Management team – 4 Chinese + 1 Japanese (CFO)

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mobage Korea

• Timeline– 2011/6: Established DeNA Seuol– 2011/11: Strategic partnership with Daum – 2012/2: Launched Daum mobage

• Android version (2012/2)• iOS version (coming)

• Entry Strategy– Organic growth + partnership

• Organization – Still under development– HC 20 (operation support from Tokyo)

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China Mobile Social Game Market

Mobile infrastructure

3G reasonable speed but not cheapAndroid+iPhone user reaching 100M in 2012

Billing Carrier billing, Aliyun(Paypal model), pre-paid cardsMany iOS Jailbreak, no official Google Play

Game users Huge user baseVery low paid user rate 1-2%Small group of strikingly high pay users (guild model)Download many apps at once timeLow retention rate

Popular game categories

Card Battle, SLG, MMORPG, Farm Japanese IPs, US IPs

Freemium vs. Paid download

Freemium model well established

Web vs. Apps App centric.

Big hit title iOS Top 5 SLG: Gross $200-250K/months, MAU 200K, ARPU $1.5-2/month

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Korea Mobile Social Game Market

Mobile infrastructure

One of the best in the world-3G+4G, WIFI everywhere, very high SP penetration

Billing Many options (carrier billing, credit cards, etc.)

Game users Android Apps Top download per capita in the worldUser base – broad and maturedHeavy influence from PC Online gamesCapable of mastering complex game playsLove Person vs. Person battleHigh retention rate

Popular game categories

SLG, Sports, Action RPG, FarmJapanese IPs, US IPs, K-POP IPs

Freemium vs. Paid download

Transitioned from paid download to freemium in 2011

Web vs. Apps App centric, Webview getting good traction

Big hit title ‘Rule The Sky’ Gross $2-3M/months, DAU 400K

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Our Experiences in China and Korea

It worked It did not work

We thought it’d work

• Social Game ops know-how (KPIs, Parameter tuning, in-game events etc.)

• User reach through partnership

• Japanese Anime IPs• US popular games

• Some JP game play (e.g. steal from others – Bandit Nation)

• User segmentation model (e.g. China’s super users)

We thought it might work

• Ninja Royal in China (1 million users, 300K new sign ups per month)

We thought it’d not work

• Card Battle Game • Universal virtual item pricing (need to adjust to the local level)

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New Wining Formula for all regions– Card Battle Games

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Japan US China

Soon to come

Korea

iPhone No.1Android No.1JP market turned completely to CBG

Come to mobageDevelop Card Battle Games

Go together to the global markets!

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