the asian games market: sizing up opportunities

C A S U A L G A M E S S E C T O R R E P O R T 2 0 1 6

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THE ASIAN GAMES MARKET SIZING UP OPPORTUNITIES

Source: Newzoo Global Games Market Report Premium

East Meets West: In a rapidly globalizing games market, what are the opportunities for non-Asian companies in Asia and vice versa?

The Trade Balance of Public Companies

In 2015, $69.6 billion of the $91.8 billion dollar global games market was generated by almost 70 public companies worldwide. Asian public companies generated $36.2 billion, of which 32%, or $11.4 billion, was generated outside of Asia. Sony and Nintendo contributed almost half of this, illustrated by the dominance of the console segment. Vice versa, 16% of the $33.4 billion generated by non-Asian public companies was generated in Asia: $5.3 billion. More than half of this, $3.0 billion, is from Google and Apple taking home 30% of app store revenues.

PC Games Console Games Mobile Games

Game revenues generated by Asian public companies outside of Asia

Game revenues generated by non-Asian public companies in Asia

69%

21%

10%17%

19%64%

$11.4BN32%

OF TOTAL

$5.3BN16%

OF TOTAL

SIZING UP ASIAN OPPORTUNITY | CASUAL GAMES ASSOCIATION 3

6%

35%

36%

10%

11% 2%

In 2016, Japan, Korea, China & Greater SEA Will Total $45Bn Game Revenues

Global Games Market Revenues Per Sub Region | 2016e $99.6BnGlobal game revenues in 2016

45%Of the global games market revenues come from key Asian Markets

2016e Game Revenues by Segment | Japan, Korea, China & Greater SEA

Smartphone takes the highest share of revenues in the key Asian markets in 2016 with 36%, or $16.0 billion. This is just ahead of PC/MMO games, which will generate $15.4 billion this year. The individual markets vary wildly when it comes to the most lucrative segments. In Japan for example, over 50% of revenues come from console games. Combined with the other key markets, the share taken by console games drops to below 15%. In SEA, more than half of all revenues come from mobile gaming.

TOTAL REVENUES $45BN

Casual Webgames

PC/MMO

Smartphone

Tablet

TV/Console

Handheld Console



NAM$25.4Bn+4.1%

W-EU$17.3Bn+4.4%

LATAM$4.1Bn+20.1%

E-EU$3.0Bn+7.3%

CHINA$24.4BN+15.1%

MEA$3.2Bn

+26.2%

REST Apac

$0.8Bn+53.5% SEA

$3.7BN+26.4%

SOUTH KOREA$4.0Bn+2.3%

JAPAN$12.4Bn+1.2%

OCEANIA$1.3Bn+2.1%

4

This Year, 11 Asian Countries Generate 55% of Global Mobile Game Revenues Key KPIs | Global vs. China, Japan, Korea & Greater SEA | 2016e

CHINA, JAPAN, KOREA & GREATER SEA

POPULATION

ONLINE POPULATION

1.2 Bn

2.2 Bn

GAMERS

0.9 Bn

GAMES REVENUES

$44.6 Bn

MOBILE GAME REVENUES

$20.4 Bn

POPULATION

ONLINE POPULATION

3.4 Bn

7.4 Bn

GAMERS

2.1 Bn

GAMES REVENUES

$99.6 Bn

MOBILE GAME REVENUES

$36.9 Bn

Globally, the key Asian markets will account for an impressive 55% of all mobile game revenues in 2016. The rest of APAC will generate 3% of global revenues, the majority of which will come from India. The remaining regions will take 42% of all revenues or $15.3 billion. The US alone will generate $6.7 billion this year and is the largest Western market.

55%

3%

42%

2016e Global Mobile Game Revenues

Key Asian Markets Rest of APAC Rest of APAC

TOTAL REVENUES

$36.9Bn

29%

35%

40%

45%

55%

VS



THE WORLD AS A WHOLE IN 2016


39%

6%

55%


China & Japan: A Snapshot ASIAN OPPORTUNITY

China 2015

This Year, 11 Asian Countries Generate 55% of Global Mobile Game Revenues

Mobile Revenues

$7.1 BnEstimate 2015 “Western” Revenues(of revenues of top 100 iOS games)

Share:

5.7% ($400M)

Comparable to all games revenues in:

Poland

Italy

China 2016e

Game Revenues15%YoY Growth Share Mobile Games

41% Mobile Revenues $10.0Bn $24.4 Bn

Japan 2015

Mobile Revenues

$6.2 Bn Estimate 2015 “Western” Revenues (of revenues of top 100 iOS games)

Share:

4.9% ($300M)

Comparable to mobile game revenues in:

Game Revenues1.2% YoY Growth Share Mobile Games

52%Mobile Revenues $6.5Bn $12.4Bn

Japan 2016e

Google Play iOSOther

2015App Store Share

2015App Store Share


2015App Store Share

52%41%

7%

6

South Korea 2015

South Korea & Greater SEA: A Snapshot


Mobile Revenues

$1.8 BnEstimate 2015 “Western” Revenues(of revenues of top 100 iOS games)

Share:

14.2%($260M)


Brazil Google Play iOSOther

Canada

South Korea 2016e

Game Revenues2.3% YoY Growth Share Mobile Games

48%Mobile Revenues $1.9Bn$4.0Bn

Greater Southeast Asia 2015

Mobile Revenues

$1.4 BnEstimate 2015 “Western” Revenues (of revenues of top 100 iOS games)

Share:

~33% ($470M)


Share Mobile Games 56%

Mobile Revenues $2.1Bn26.4%

YoY GrowthGame Revenues$3.7Bn


79%

16%

2015App Store Share

2015App Store Share


Greater Southeast Asia 2016e

16%

79%

5%

25%

54%

21%


Asian Companies Continue Impressive Growth

ASIANOPPORTUNITY

Top 10 Public Asian Companies by Game Revenue | 2014 vs. 2015

21% YoY Growth for Tencent

$4.7BnYoY growth for the top 10 companies

Rising Asian Stars

FY 2015 Revenue FY 2014 Revenues

NetEase owns the number one and two mobile titles in China with Fantasy Westward Journey and Fantasy Westward Journey 2. Its growth is mainly driven by the success of its mobile segment. In 2015, mobile revenues accounted for 45% of NetEase’s $2.8 billion game revenues. This was only about 10% of the $1.6 billion generated in 2014. NetEase plans to launch Fantasy Westward Journey: Warriors, Raven, and a series of new game titles based on the best-selling novels by Mr. Gu Long in the coming months.

Mixi was the fastest growing public game company in 2015. It achieved 187% growth YoY, growing to $1.5 billion game revenue in 2015. This growth is mainly due to Mixi’s popular mobile game Monster Strike, which has now been downloaded more than 30 million times. The popular game has expanded to anime, the Nintendo 3DS, and esports with the Monster Strike Grand Prix 2016. Its success on mobile gaming has led Mixi to recently publish two new mobile titles: Black Knight Rises and Marvel Tsum Tsum.

Garena established itself in 2010 with the launch of Garena+, an online platform where people can meet, chat and play games. Since then, it has been one of the fastest growing internet companies in Southeast Asia, growing from four to 4500 employees and earning more than $300 million in annual revenues. Garena exclusively distributes games like League of Legends, Heroes of Newerth, FIFA Online 3, Point Blank and AVA in Southeast Asia, while also owning mobile hit Thunderstrike. Garena is also well known for its esports activities.


FY 2015 Revenues FY 2014 Revenues

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the asian games market: sizing up opportunities

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