Korean social game_market_trend_report_(2010 4_q)_eng

Korean Social Game Market

Trend Report

2010 Fourth Quarter (Vol.2)

2

Table of Contents

1. Executive Summary ..................................................................................................................................................... 3

2. Market Overview .......................................................................................................................................................... 4

Accumulated Number of Users ..................................................................................................................................... 4

Number of New Users ...................................................................................................................................................... 4

Total Revenue of Nate AppStore ................................................................................................................................. 4

Gender Ratio …………………………………………………………………………………………………………………………………… 5

Age Group Distribution (Male / Female) ………………………………………………………………..……………………... 5

3. Few Successful Games Lead the Trend ........................................................................................................... 6

DAU of Pet & Management Genre ............................................................................................................................ 6

Revenue of Pet & Management Genre ………………………………........................................................................... 6

DAU of Sports Genre ........................................................................................................................................................ 7

Revenue of Sports Genre ................................................................................................................................................ 7

4. RPG Shows Potential as a Social Game ........................................................................................................... 8

DAU of RPG Genre ............................................................................................................................................................. 8

Revenue of RPG genre …………………………………......................................................................................................... 8

ARPU of All Genres …………………………………………………………………………………….…………………….…………….. 9

ARPPU of All Genres …………………………………………………………..…………………………..……………………………… 10

Gender Ratio of RPG ……………………………………………………………………………………………………….……………… 10

5. Boom of the Business Simulation Games ………………………..…………………………………………………… 10

Accumulated Number of Installs of All Genres …………………………………………………………………………..… 11

DAU of All Genres ……………………………………………….……………………………………………………..…………….……. 11

Revenue of All Genres …………………………………………………………………………………………………………………… 12

Number of Installs of Business Simulation Genre ………….………………………………………..………………..….. 12

6. Simulation Games Still More Profitable …………………………………….……………………….…………...……. 13

Total User Ratio of Simulation and Non-simulation Games ..…..…………………………………………..……… 13

Total Revenue Ratio of Simulation and Non-simulation Games ……..………...……………………….…….…. 13

Revenue of Simulation & Non-simulation Games ……………………………….…………………………………....… 14

DAU of Simulation and Non-simulation Games …………………………………….……………….…………………… 15

ARPPU of Simulation and Non-simulation Games ………………………………………………………………….…… 16

7. Conclusion ………………………………………………………………………………………………..…………….………………... 17

3

Korean SNG Market Trend Report

2010 Fourth Quarter (Vol. 2)

By Sung-Hwan Ahn

Rubicon Games Inc.

Editor’s Note

2010 was indeed a busy year for social game developers in Korea. New social gaming

platforms were launched by major portal sites, many new start-ups as well as online game

developers have entered the market, and success stories from small start-ups were introduced

here and there. With the growing interest from both inside and outside the market, information

about the current trend becomes more pressing. And still, the thought that useful information

must be shared around has unchanged and thanks to Nate AppStore for being on the same side

by sharing precious information with everyone.

* Please note that stats are given in bundles of genres, due to privacy issues. To find out more

about Korean social gaming industry, visit http://blog.playrubi.com or e-mail [email protected] or

[email protected] *

Executive Summary

- Despite the consensus that there are more female users in Nate AppStore, there are actually

more male users (51:49). However, in terms of number of installs, female users outnumber male

users by 45:55. - Few successful games still alters the overall trend of the genre. This is due to the lack of games

in the market and users being concentrated into few successful titles.

- RPG was one of the fastest growing genres in 4th quarter. RPG, especially, shows a high ARPPU

from both male and female users, earning around 14,000 won per user. RPG also showed a

male-biased gender ratio together with Sports and Defense genre.

- Once used to be the most lagging simulation genre, Business Simulation games spurs in 4th

quarter by accumulating over 300,000 users in just one month. Contrastingly, Business

Simulation genre is the most female-biased genre along with Pet & Management.

- Simulation games (Pet & Management, City Building, Farming, Aquarium, Business Simulation)

are still more profitable compared to non-simulation games in the macro-perspective. However,

looking into ARPPU, RPG doubles most of the simulation games.

Market Overview

Nate AppStore has continuously

continuously increasing, exceeding 35 million by mid December

to bounce back since its long stagnant

Revenue curve have also escaped from its stagnant state

(approximately 0.5 million USD)

<Line graph 1: Total Revenue of Nate AppStore>

<Line graph 2: Total Revenue of Nate AppStore>

4

continuously grown throughout 4th quarter 2010

exceeding 35 million by mid December. New user inflow rate

stagnant state in 3rd quarter, attracting average of 7,5

have also escaped from its stagnant state, pulling in over 540 million KRW

(approximately 0.5 million USD) in December.

: Total Revenue of Nate AppStore>

: Total Revenue of Nate AppStore>

quarter 2010. Users are

. New user inflow rate managed

arter, attracting average of 7,500 users daily.

, pulling in over 540 million KRW

5

Unlike the consensus that majority of the users are female, there are actually more male

users (51:49) in Nate AppStore. However, in terms of accumulated number of installs, there are

more female users (45:55) than male users. It can be interpreted that there are less contents for

male users to consume, thus current game trend leans towards female users.

Looking at the age distribution, 19-24 year old college students were the majority group,

occupying 35% of the total user. Then followed 16-18 year old high school students (19%),

followed by 25-29 year olds (17%), 13-15 year old middle school students (13%), 7-12 year old

elementary students (5%) and 30-34 year olds (5%). The same pattern applies to both gender’s

demography.

<Pie graph 1: Gender Ratio (2010. Dec) <Pie graph 2: Age Group Distribution>

<Pie graph 3: Male User Age Group> <Pie graph 4: Female User Age Group>

Few Successful Games

As I’ve mentioned in the previous report (Korean Social Game Market Trend Report 2010

3Q), Korean social gaming market is

new developers have entered

apps in Nate AppStore. Even among the 1

The effect of few successful games on the whole

revenue and DAU curve of each genre.

a drastic fall in both revenue and DAU

has quickly faded since August

came to an end in October and q

management game Girls Life and

100,000 users, turning back the trend to a positive state.

<Line graph 3: DAU of Pet & Management

<Line graph 4: Revenue of Pet & Management genre

6

Lead the Trend

ve mentioned in the previous report (Korean Social Game Market Trend Report 2010

Korean social gaming market is yet heavily dependent on few successful games.

the market, still there are less than 70 developers with

s in Nate AppStore. Even among the 127 apps, only 107 of them are games

The effect of few successful games on the whole market could be observed in the

revenue and DAU curve of each genre. Pet & Management genre, for example, have experienced

a drastic fall in both revenue and DAU in 3rd quarter. The positive momentum led by

faded since August until October. The downtrend in revenue and DAU has finally

came to an end in October and quickly bounced back in November with the release of two new

and Star Project Online. Both games have quickly accumulated over

, turning back the trend to a positive state.

of Pet & Management genre>

of Pet & Management genre>

ve mentioned in the previous report (Korean Social Game Market Trend Report 2010

heavily dependent on few successful games. Although

developers with only 127

games.

could be observed in the

genre, for example, have experienced

. The positive momentum led by Happy Idol

. The downtrend in revenue and DAU has finally

uickly bounced back in November with the release of two new

. Both games have quickly accumulated over

On the contrast, genres without successful games or even lack of new games can

seriously fall in the mire stagnation. Sports genre, for example, were once introduced as a

profitable male-oriented genre in third quarter.

an outstanding performance in terms of revenue and DAU. However, life span of th

games didn’t’ last too long. Beginning September, revenue and DAU drastically depreciated

throughout 4th quarter due to lack of new games.

<Line graph 5: DAU of Pet & Sports

<Line graph 6: Revenue of Sports genre

The situation, however, is not so much different in Facebook. Among 500,000

applications, only about 250 of them (0.05%) have more than 1 million MAU and in terms of ratio,

and majority of the users are concentrated on fewer applications than Nate. Consi

that Nate is pretty much in the early phase of market maturity, first mover advantage still seems

valid. Moreover, only 14% of Cyworld users have experience using Nate AppStore

Facebook, which 70% of the users are monthly

big pool of Blue Ocean for developers to penetrate into

7


fall in the mire stagnation. Sports genre, for example, were once introduced as a

oriented genre in third quarter. Home Run King and Baseball Wars

an outstanding performance in terms of revenue and DAU. However, life span of th

last too long. Beginning September, revenue and DAU drastically depreciated

quarter due to lack of new games.

Sports genre>

<Line graph 6: Revenue of Sports genre>



majority of the users are concentrated on fewer applications than Nate. Consi


only 14% of Cyworld users have experience using Nate AppStore

Facebook, which 70% of the users are monthly active users of platform applicatio

for developers to penetrate into.


fall in the mire stagnation. Sports genre, for example, were once introduced as a

Baseball Wars have shown

an outstanding performance in terms of revenue and DAU. However, life span of these sports

last too long. Beginning September, revenue and DAU drastically depreciated



majority of the users are concentrated on fewer applications than Nate. Considering the fact


only 14% of Cyworld users have experience using Nate AppStore. Compared to

ive users of platform applications, there is yet a

RPG Shows Potential as a

There is no doubt about RPG

wasn’t really clear whether it could output the same result as a social game

simulation games are outperforming rest of the genres, RPG

back its footsteps, however, RPG proves that it could perform

in the online game market.

<Line graph 7: DAU of RPG genre>

<Line graph 8: Revenue of RPG genre>

Revenue of RPG games are quickly growing as new games are released.

to rise with the release of Friends Fighters

Wars in mid December. In fact,

impact it had on the entire genre is simply overwhelming; doubling the revenue of the previous

month.

8

as a Social Game

There is no doubt about RPG’s success in the online gaming industry

whether it could output the same result as a social game.

simulation games are outperforming rest of the genres, RPG was still an uneasy choice

however, RPG proves that it could perform well as a social game

RPG genre>

RPG genre>

Revenue of RPG games are quickly growing as new games are released.

Friends Fighters in late September and it soars after the release of

in mid December. In fact, God Wars has only put up its payment on 20th


s success in the online gaming industry in Korea but it

. In a market where

n uneasy choice. Tracing

well as a social game just as it did

Revenue of RPG games are quickly growing as new games are released. Revenue starts

and it soars after the release of God th December but the


RPG’s remarkable growth is clearly visible regarding the

RPG quickly rose along with the release of

to pick up its revenue since September and finally marks the highest ARPU by the

(*Please note that ARPU was calculated by

stats. Thus the ARPU listed on the graph is smaller than the actual value*)

Regarding the ARPPU, RPG stood high above the others. In December, RPG

twice bigger than Farming games, which marked the second highest ARP

conversion rate of purchase of RPG is only 0.2%, it could be interpreted that one time purchase of

virtual items are much higher than

gender ratio of 77:23. (See pie graph 5). As

again show a strong purchasing power

quarter.

Overall, regarding the RPG genre, Nate AppStore may be following the footsteps of the

online game market. As online game

games and later on dominated by RPG, social gaming trend is

pattern.

<Line graph 9: ARPU of all genres

9

s remarkable growth is clearly visible regarding the ARPU and the ARPPU. AR

along with the release of new games. Started off low, however, RPG managed

since September and finally marks the highest ARPU by the

(*Please note that ARPU was calculated by “Revenue/Accumulated Installs” due to the lack of UV

stats. Thus the ARPU listed on the graph is smaller than the actual value*)

Regarding the ARPPU, RPG stood high above the others. In December, RPG

twice bigger than Farming games, which marked the second highest ARP


virtual items are much higher than the others. In fact, the RPG is male dominant game with a

gender ratio of 77:23. (See pie graph 5). As mentioned in the previous report (3Q),

a strong purchasing power in terms of ARPPU as they did in Sports genre in 3

rding the RPG genre, Nate AppStore may be following the footsteps of the

online game market. As online game trend began with casual mini-games

later on dominated by RPG, social gaming trend is somewhat

genres>

ARPU and the ARPPU. ARPU of

games. Started off low, however, RPG managed

since September and finally marks the highest ARPU by the end of 4Q.

due to the lack of UV

Regarding the ARPPU, RPG stood high above the others. In December, RPG’s ARPPU is

twice bigger than Farming games, which marked the second highest ARPPU. Since the


In fact, the RPG is male dominant game with a

in the previous report (3Q), male users

as they did in Sports genre in 3rd

rding the RPG genre, Nate AppStore may be following the footsteps of the

games then to simulation

somewhat showing a similar

<Line graph 10: ARPPU of all genres

<Pie graph 5: Gender ratio of RPG>

Boom of the Business

Nate AppStore’s fastest growing genre

Once used to be the most lagging genre, business games

successful genres in Nate. At the center of its success is

over 300,000 users in just one month. Thanks to t

soared at the start of November, as

10

genres>

<Pie graph 5: Gender ratio of RPG>

Boom of the Business Simulation Games

s fastest growing genre in 4th quarter is indeed business

Once used to be the most lagging genre, business games are now considered one of the most

At the center of its success is Fashion City, which managed to attract

300,000 users in just one month. Thanks to the rapid growth, Business genre

ovember, as Fashion City began selling cash items.

quarter is indeed business simulation.

now considered one of the most

, which managed to attract

h, Business genre’s revenue

<Line graph 11: Accumulated number of installs of all genres

<Line graph 12: DAU of all genres

11

Accumulated number of installs of all genres>

: DAU of all genres>

<Line graph 13: Revenue of installs of all

Fashion games have been around for a long

was not until recently that it was published as a social game.

September to Fashion City in early October, many developers have

“fashion mall” games in Nate.

business simulation genre continues to be

The second most female-biased genre

contents upside-down, what would happen if there

for male users as well? Indeed t

<Line graph 14: Number of installs of business simulation

12

: Revenue of installs of all genres>

Fashion games have been around for a long time in Korean online game industry

was not until recently that it was published as a social game. Beginning with

in early October, many developers have begun to release their

. Moreover, since fashion is a captivating content

continues to be the most female-biased (26:74) genre in the market.

biased genre is Pet & Management with ratio of 29:71

, what would happen if there’s an attractive business game (or Pet game)

Indeed there is a big niche market for developers to penetrate into.

Number of installs of business simulation>

in Korean online game industry but it

Beginning with My Style in mid

begun to release their own

content to female users,

genre in the market.

:71. By shaking the

s an attractive business game (or Pet game)

for developers to penetrate into.

13

Simulation Games Still More Profitable

Simulation games (Farming, Aquarium, City Building, Business, Pet & Management) still

holds most of the market share throughout fourth quarter. With relatively smaller pool of users,

simulation games’ revenue far exceeded non-simulation games; almost 90% of the total revenue

still comes from simulation games.

<Pie graph 6: Total User ratio & Total Revenue ratio of Simulation and Non-simulation Games>

Among the simulation games, revenue of Business Simulation and Pet & Management

genre soared. Five new business games were released just in 4th quarter and among them, the

success of Fashion City made it possible for business to achieve quantitative and qualitative

growth; number of installs, DAU, and revenue greatly rose during the period. Pet & Management

genre also managed to recover from its long recession since 3rd quarter. With two new titles, Pet

& Management genre entered an uptrend phase in November and surged in December.

<Line graph 15: Revenue of Simulation Games>

<Line graph 16: Revenue of Non

14

<Line graph 15: Revenue of Simulation Games>

Non-simulation Games>

<Line graph 17: DAU of Simulation Games>

<Line graph 18: DAU of Non-simulation Games>

Compared to simulation games, most of the non

still having a tough time attracting active users and increasing sales. Sports genre, which was

once successful in 3rd quarter, also experienced a downtrend in both DAU and revenue since

September.

15

imulation Games>

imulation Games>

Compared to simulation games, most of the non-simulation games (excluding RPG) are


quarter, also experienced a downtrend in both DAU and revenue since

simulation games (excluding RPG) are


quarter, also experienced a downtrend in both DAU and revenue since

Although non-simulation games might be lagging behind

macro -perspective, some of them are actually performing better and more efficient. Comparing

the ARPPU, RPG and Sports genre actually shows better performance than most of the simulation

games. RPG especially, earned twice as

simulation games.

<Bar graph 1: ARPPU of Simulation Games

<Bar graph 2: ARPPU of Non-simulation Games>

16

simulation games might be lagging behind the simulation games in the

perspective, some of them are actually performing better and more efficient. Comparing


games. RPG especially, earned twice as more from individual paying users

: ARPPU of Simulation Games>

simulation Games>

the simulation games in the

perspective, some of them are actually performing better and more efficient. Comparing


from individual paying users than most of the

17

Conclusion

2010 was a year of growth for Nate AppStore. Although it took off years behind others,

it has significantly grown within a short period of time. As more and more developers have set

their foot in the market, including some big online game companies, the perception of social

games have started to change. Compared to the past when online game giants didn’t accept

social games as “real games”, the situation has now improved; G-Star 2010 recognized social

games as one of its fastest growing branch and even hosted major foreign developers such as

Zynga, Playdom, Playfish, RockYou Asia, Kabam, 6 Waves, Second Wave and so on. Moreover, big

enterprises have announced their future plans to invest in the social gaming business: Microsoft

supporting free cloud servers, CJ Internet and SK Telecom/Nate investing 10 million USD in social

gaming businesses. All these transitions prove that social games are no longer in the outskirts of

the gaming industry.

The 4th quarter of 2010 was another period of transition: RPG showed its boundless

possibilities as a social game, catching both DAU and revenue. Pet & Management genre

managed to escape from its long recession. Business simulation games have finally joined the

mainstream along with other simulation genres. Aqua Story and Ani Sachunsung have

accumulated over 1 million users as a single title. Moreover, Nate AppStore has finally launched

its mobile AppStore service on mid December and plans to open its new mobile web service in

April 2011, opening new channels for social games to penetrate a fast growing consumer base.

Overall, the future Korean social gaming industry looks bright. As social games are

being described in Korea as the next blue ocean within the IT industry, more and more developers

are joining the general trend. According to a survey by Nate, at least 80 new applications are

under development for release in 2011. And not only developers are improving but platforms

are also striving to create a better ecosystem for both platform and developers as well. But

above all, what is most important are the users. Attracting new users as well as sustaining them

is the next key problem that platform and game developers must solve.

Documents

Korean social game_market_trend_report_(2010 4_q)_eng