video gaming in china and south east asia
DESCRIPTION
Overview of the video gaming market in China and Southeast Asia. Includes background, forecasts, and key trends for online PC and mobile games.TRANSCRIPT
© 2012 Nikopartners
Forecast of the Future of Games in China & Southeast Asia
Kevin Hause Niko Partners November 5, 2013
© 2012 Nikopartners
About Niko Partners • We are a niche market intelligence firm with a strong
reputaBon for our experBse on the games markets in mainland China and Southeast Asia. – Syndicated Research – Custom Studies – Consumer surveys of 10,000+ per year in China, 25,000+ in Southeast Asia – Tracking data of 15,000+ iCafe systems
• Founded in 2002, – SEA coverage began in 2010
• Offices in Shanghai and Silicon Valley.
© 2012 Nikopartners
Agenda
• Market overview • Key trends in China
– Mobile – Home – PlaSorms
• Southeast Asia
© 2012 Nikopartners
-‐
50.0
100.0
150.0
200.0
250.0
300.0
350.0
$0
$5,000
$10,000
$15,000
$20,000
$25,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Online Revenues
Online Gamers
Gaming in China
© 2012 Nikopartners
Gaming in China
0 200 400 600 800 1000 1200
Karaoke
Go shopping
Watch Movie in Cenima
SporBng and Fitness
Reading
Play with children or parents
Watch TV
Chat with friend Online
Online shopping
Online Video
Play Games
Top Ranked Leisure Time Ac;vity
1st
2nd
N=2000, Tiers 1-‐4
© 2012 Nikopartners
Chinese Gamers • Gaming is Pervasive
– 215 m Gamers in 2013 – 16% of Total PopulaBon – 35% of All Internet Users
• 64% of Chinese Gamers Play at least 7 Hours per Week
Occasional 36%
Semi-‐AcBve 27%
AcBve 22%
Hardcore 8%
Super Hardcore
7%
China Gamers by Type
© 2012 Nikopartners
Gaming in China • MMORPG Rules
– Webgames showing growth
– Casual games had big growth
MMOGs 74%
webgames 16%
sns + casual + weibo 10%
Source: Niko Partners, 2013
• Mobile Growing Fast – Now up to 9% of all game
revenues – Not enBrely incremental,
with Casual games impact
MMOGs 67%
webgames 15%
sns + casual + weibo 9% Mobile
9%
2013 Gaming Revenues by Category
© 2012 Nikopartners
Revenues by Game Type
$15,146 18%
$5,417 33%
$1,105 -‐ 3%
$4,275 42%
$-‐
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2011 2012 2013 2014 2015 2016 2017
Millions of U
S$
MMOGs
webgames
sns + casual + weibo
Mobile
© 2012 Nikopartners
What Makes China Different?
• Consoles – Banned Since 2000 – Grey Market Exists
• But, only 27% ownership among gamers
• Even more limited game revenue
– Recent Changes could affect market
© 2012 Nikopartners
What Makes China Different?
• Business Models – Time-‐based Play – Free to Play
• Virtual Items • In Game Purchases
– Not… • $60 retail • Paid Downloads
0 25%
1-‐10 RMB 18% 11-‐100 RMB
36%
101-‐200 RMB 13%
201+ RMB 8%
Spending per Month on Virtual Items
in Online Games
Source: Niko Partners, 2013
© 2012 Nikopartners
What Makes China Different?
• Internet Cafés – Once “THE” gaming locaBon
– Declining in usage, now 17% of total gameplay
– SBll important: • Social aspects (65%)* • Tournaments (14%)* • Faster Internet (15%)*
* 3Q 2013 Gamer Survey; n=2000
© 2012 Nikopartners
Genres • MMO
– MMORPG sBll the king – MMO non-‐RPG growing fast – Key Btles are played for years
• Webgames – Browser-‐based – Not necessarily easy – Faster development
• Casual/SNS/Weibo – Hot category in recent years – But falling off 0
1
2
3
4
5
6
MMORPG Casual Browser-‐based Webgames
MMO Non-‐RPG
Hours p
er W
eek
Hours per Week Playing Games By Game Type
© 2012 Nikopartners
Key Games Top 20 MMORPG by Total Number of Hours Played
Rank Game Name (CN) Game Name (English) Play time (Hours) Game Operator 1 梦幻西游2 Fantasy Westward journey2 4,467 Netease 2 问道 Asktao 2,550 Guangyu youxi 3 魔兽世界 World of Warcraft (CN) 2,426 Netease 4 天龙八部3 Dragon Oath III 2,202 Changyou 5 御龙在天 YuLongZaiTian 1,251 Tencent
Other 11,746 Total 24,642
Top 20 MMO-‐Non RPG by Total Number of Hours Played
Rank Game Name (CN) Game Name (English) Play time (Hours) Game Operator 1 英雄联盟 League of Legends 41,467 Tencent 2 穿越火线 Cross Fire 29,290 Tencent 3 地下城与勇士 Dungeon-Fighter 16,878 Tencent 4 梦三国 Dream of the Three Kingdoms 9,241 Electric Soul 5 QQ飞车 QQ speed 6,069 Tencent
Other 15,599 Total 118,543
Source: Niko Partners iCafe Tracker, Sept 2013 Sample: 400 iCafe locaBons, 44,166 acBve PCs, 305,033 Gamers
© 2012 Nikopartners
Trends: Mobile
• 42% CAGR through 2017 for revenues • Significant impact on casual game market
-‐
100
200
300
400
500
600
700
800
$-‐
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2011 2012 2013 2014 2015 2016 2017
Millions of M
obile Gam
ers
Millions of U
S$
Mobile Games Revenues (US$ m)
Mobile Gamers (m)
$4.3 B 680 M
© 2012 Nikopartners
Mobile Gaming in China
• Fragmented game access – 73% of games downloaded from 3rd party app store
• Expensive handsets – Not subsidized – Creates demand for lower cost devices, local players
• Mostly casual gmes – 42% casual – 22% acBon/arcade
© 2012 Nikopartners
Trends: Home Play
• Ship from i-‐Café to Home – From ~80% to 17% of gaming
hours – Due to berer broadband,
greater income/ lower PC costs
• OpportuniBes: – Ship in game choices – Hardware growth
Friends are playing it 13%
Doesn’t require high spending
6%
Best game of its genre 52%
I will be able to spend lots of Bme on it
14%
It only will take a few minutes per
day to play 8%
It plays well on the PC or device
I use 7%
Primary Reason in Picking New Game to Play
© 2012 Nikopartners
Trends: Wechat • Tencent CommunicaBons
PlaSorm – Messaging, Plus – Username based
• Games Introduced – Controlled by Tencent – Example: Rhythm Master – 4th WeChat game
• OpportuniBes – Seeing separaBon from QQ
Chat
© 2012 Nikopartners
Trends: Consoles and OTT • Ban Liped in September 2013
– 14 year old ban liped – Shanghai FTZ
• Immediate AcBon – BesTV and MSFT JV
• Internet-‐ready TVs – BesTV, LeTV, Xiaomi, iQiyi, Hisense,
Lenovo
• OpportuniBes – Limited for now – Business model challenges
© 2012 Nikopartners
Trends: Tablets • Growing PenetraBon
– 54% of Gamers own a Tablet – 33% Own 2 or More – Dominant Brands:
• Apple and Samsung = 90%
• Tablet Usage – Mostly Not Shared – 80%
claim personal use only – Same Game Choices as
Mobile, for now
0
200
400
600
800
1000
1200
None PSP DS GBA Tablet Other
Num
ber o
f Respo
nden
ts
Handheld Gaming Device Ownership
© 2012 Nikopartners
Southeast Asia
• Niko acBvely tracks: – Thailand – Philippines – Vietnam – Singapore – Malaysia – Indonesia
© 2012 Nikopartners
SEA compared to China
• China: – Total PopulaBon: 1.3 billion – 2001 Total Games Market: $10
million – 2013 Total Games Market: $11.9
billion (plus $1.2 billion mobile)
• Southeast Asia: – Total PopulaBon (6 countries): 545
million – 2013 Total Games Market: $662
million – Projected 5 year CAGR: 17.4%
© 2012 Nikopartners
SEA Gamers • Mobile games are hot • PC online games are sBll
important • Only Singapore has a true
console market • Vietnam, Indonesia and
Thailand have very intriguing games markets
• Vietnam games market most similar
– Regulatory – Game Type – Café usage
$-‐
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
2011 2012 2013 2014 2015 2016
Vietnam Thailand Singapore Philippines Malaysia Indonesia
© 2012 Nikopartners
PC Online Games Revenue by Country
Country 2012 2013e 2014e
Indonesia $88.1 million $110.1 million $136.5 million
Malaysia $44.1 million $54.1 million $66.5 million
The Philippines $43.9 million $53.3 million $64.0 million
Singapore $31.0 million $34.0 million $37.0 million
Thailand $133.0 million $158.1 million $183.0 million
Vietnam $219.6 million $253.0 million $291.0 million
TOTAL $559.6 million $662.5 million $778.0 million
Source: Niko Partners, November 2012
© 2012 Nikopartners
PC online gamers per country Country 2012 2013e 2014e
Indonesia 19.63 million 22.75 million 26.00 million
Malaysia 7.62 million 8.70 million 9.90 million
The Philippines 21.00 million 24.96 million 28.72 million
Singapore 1.53 million 1.66 million 1.80 million
Thailand 8.12 million 9.04 million 9.97 million
Vietnam 15.65 million 17.25 million 19.00 million
TOTAL 73.7 million 84.4 million 95.4 million
Source: Niko Partners, November 2012
© 2012 Nikopartners
Country informaBon: special notes • Ranking of leading online game operators changes annually because more
and more hit licensed games enter the market, and some mergers have occurred too. – NOTE: Niko’s 2012 data is disclosed here but the market share and rankings
will likely change in our 2013 report
• Niko’s 2013 report includes more info on mobile games, but our 2012 report focused on PC online games so our data in this presentaBon reflects that.
© 2012 Nikopartners
Indonesia • Largest economy in SEA and
largest archipelago with 6,000+ islands
• 70% of gamers live on Java island
• Mobile very important • 10,000+ I-‐cafés for gaming • 6% paying gamers, ARPPU
$6-‐8/month
Key online operators and top game in 2012
Est. 2012 market share
Lyto (Cross Fire) 25-‐30%
Megaxus (CS Online) 20-‐25%
Kreon (Point Blank) 20-‐25%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Indonesia
• 19.6 million gamers in 2012 • $88.1 million in 2012 online games revenues
– 25.8% growth over 2011
0%
5%
10%
15%
20%
25%
30%
35%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Hours per Week Playing Games, excluding Mobile
Survey Sample Size for Indonesia:
447 Gamers
© 2012 Nikopartners
Malaysia • Strong Chinese populaBon,
especially among gaming populaBon
• Malaysia & Singapore open lumped together, share servers
• MOL is regional online payments plaSorm leader and HQ in Malaysia
• 800 I-‐cafés for gaming • 10% paying gamers, ARPPU $4-‐5/
month
Key online operators and top game in 2012
Est. 2012 market share
AsiaSop (Sudden Arack)
30-‐35%
Garena (LOL, HON) 25-‐30%
Cubinet (Perf. World) 25-‐30%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Malaysia
• 7.6 million gamers in 2012 • $44.1 million in 2012 online games revenues
– 22.5% growth over 2011 Hours per Week Playing Games, excluding Mobile
0%
5%
10%
15%
20%
25%
30%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Survey Sample Size for Malaysia:
2,708 Gamers
© 2012 Nikopartners
The Philippines • Mostly English speaking • Gaming is very popular, but very
low spending • 20,000+ I-‐cafés for gaming and
home PC and BB penetraBon is very weak
• Facebook gaming very popular • 4% paying gamers (lowest in the
region), ARPPU $4-‐5/month
Key online operators and top game in 2012
Est. 2012 market share
Level Up! (RO, Crazy Kart
40-‐50%
Garena (LOL, HON) 20-‐25%
Cubinet (Special Force, CF, DOTA)
20-‐25%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Philippines
• 21.0 million gamers in 2012 • $43.9 million in 2012 online games revenues
– 21.8% growth over 2011 Hours per Week Playing Games, excluding Mobile
0%
5%
10%
15%
20%
25%
30%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Survey Sample Size for Philippines: 878 Gamers
© 2012 Nikopartners
Singapore • CommunicaBons hub of SEA • Vibrant and legiBmate market for
consoles and PC offline games, plus online games and mobile
• Regional HQ for many game companies
• Internet penetraBon high at 75%+ • Smallest market in absolute value and
growth potenBal • 17% paying gamers (highest in the
region), ARPPU $8-‐10/month
Key online operators and top game in 2012
Est. 2012 market share
AsiaSop (Sudden Arack, AudiBon, WoW)
30-‐35%
Garena (LOL, HON) 20-‐25%
Cubinet (SUN, CubiGames)
20-‐25%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Singapore
• 1.53 million gamers in 2012 • $31.0 million in 2012 online games revenues
– 14.0% growth over 2011 Hours per Week Playing Games, excluding Mobile
0%
5%
10%
15%
20%
25%
30%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Survey Sample Size for Singapore:
1,197 Gamers
© 2012 Nikopartners
Thailand • MMORPGs very popular • Infrastructure beyond major
ciBes is weak, so I-‐cafés are popular (20,000 esBmated).
• High piracy for packaged games • Local companies are strong • 15% paying gamers, ARPPU
$8-‐10/month
Key online operators and top game in 2012
Est. 2012 market share
AsiaSop (Point Blank, Dragon Nest)
35-‐40%
TRUE (Special Force, FIFA Online 2)
25-‐30%
Ini3 (FlyFF, BOOMz) 5-‐10%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Thailand
• 8.1 million gamers in 2012 • $133.0 million in 2012 online games revenues
– 15.7% growth over 2011 Hours per Week Playing Games, excluding Mobile
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Survey Sample Size for Thailand:
4,054 Gamers
© 2012 Nikopartners
Vietnam • Vibrant gaming culture • 3-‐year ban on new game licenses
was overturned in September 2013
• Facebook parBally blocked but sBll popular
• Web-‐browser games are popular • 15% paying gamers, ARPPU $7-‐9/
month
Key online operators and top game in 2012
Est. 2012 market share
VNG (Swordsman 2, ZT Online, BOOMz)
50-‐55%
VTC (CF, AudiBon, FIFA Online 2)
20-‐25%
FPT Online (Special Force, Dragon Oath, TLBB)
10-‐15%
Garena (via partner) (LOL, HON)
10-‐15%
Source: Niko Partners, November 2012
© 2012 Nikopartners
Vietnam
• 15.7 million gamers in 2012 • $219.6 million in 2012 online games revenues
– 15.6% growth over 2011 Hours per Week Playing Games, excluding Mobile
0%
5%
10%
15%
20%
25%
30%
0/mobile only 1 -‐ 7 8 -‐ 14 15 -‐ 21 22 -‐ 29 Over 30
Percen
t of G
amers
Hours per WeekSource: Niko Partners, 2012
Survey Sample Size for Vietnam:
3,848 Gamers
© 2012 Nikopartners
Key Trends in SEA
• Most InteresBng Markets: – Growth: Indonesia, Thailand, Vietnam – Gaming Interest: Philippines – Strategic: Malaysia, Singapore
• Mobile is taking share from PC casual games and will also command share from hard-‐core gamers, so we will watch this and compare to the trends in China.
• Chinese games are very popular in SEA – Niko started coverage of the region specifically because of the similariBes in trends and growth potenBal – there are many similariBes to be found.
© 2012 Nikopartners
Final Thoughts • China is huge and conBnues to grow
– $21 Billion by 2017 • But shiping market
– Mobile driving market, with 42% growth forward • Taking share from Casual, Weibo • Tablets will be interesBng watch
– Ship from iCafe to home – But MMO sBll rules
• Southeast Asia is very interesBng for future – Large, growing market – Similar in key ways to China – But will develop quickly – Must be approached on market-‐by-‐market basis
© 2012 Nikopartners
Thank you!
• Contact: – [email protected]
• Shameless Plug: – Updated Southeast Asia Report available Dec 1
• Forecasts, 25k user survey, interviews, and more