AUSTIN AS A DIGITAL MEDIA NEXUS Frank Coppersmith President of CapsonTechnology Capson Technology

Video Game Industry Today Video game

revenues will grow

to $70.4 billion

worldwide this year,

representing a� 6%

year-on-year

increase.

The number of

gamers is expected

to surpass 1.2 billion

by the end of the

year.

Global Games Market

Global Games Market Per Segment

Global Gamers

Austin Game Industry

Austin Game Industry Overview

Austin Companies

Captivate!

Game Industry Upheaval

•  Social Gaming (Facebook) •  Mobile Gaming (Smart Phones) •  Rise of Free to Play & Virtual Goods •  In Game Advertising •  Digital Distribution •  Gaming as a Service •  Data Driven Design •  New Console Generation

Traditional Publishing Flow Game Developers Game Publishers

Game Players

Game Retailers

Social Gaming

New gamers and mechanics

Easy to play * no winner/loser

Viral elements (play with your friends)

Free to play and virtual goods

New game platform

Adoption of Smartphones

Growth of Smartphone Usage

Mobile Gaming Growth

Mobile Games and Purchasers

Free To Play – In App Purchase

Free to Play – Growth of Model

In Game Advertising

Digital Distribution

Gaming as a Service

Device and Platform Agnostic

Increase Engagement and Stickiness

Improve Monetization

EA Origin & Valve’s “STEAM”

MMOs

Downloadable Content

Data Driven Design

New Console Generation

Kickstarter

Pre-sales reduce risk

3/4 of video game Kickstarters fail

Most video game fundraising is in 10s of thousands

Big $$$ for Top Games

Mobile Gaming

Growth

Development Costs

Competition

Over 800,000 Apps in the iOS Store

Opportunity Virtually unopposed growth opportunity

** Big publishers are distracted by new consoles

Plenty of “Blue Water” opportunities

** Opportunity to define a genre

Chance to go global

** China, Japan and Korea - high Android adoption

Unprecedented Margins

** Low headcount - can get to profit quickly

M&A / IPO Markets

** While Zynga has slowed things down, it will be back