Key facts and insights onCross-Screen Monetization of Gamesin Europe and the US

Featuring market overview of growth markets Poland and Turkey

Nathan Salisbury, Global Market Director Gaming - GlobalCollectPeter Warman, CEO - Newzoo August 2012

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GlobalCollect is the world’s premier Payment Service Provider of card

processing and local e-payment solutions for the online Video Gaming

industry. While most providers limit their services to a technical link with

payment acquirers, GlobalCollect is a full service partner providing

you with advanced back office services as well as online game

monetization market metrics, best practices and benchmarks based on

years of experience with international online gaming leaders. Through

a single-interface platform we offer access to an unrivalled portfolio of

online payment methods in almost 200 countries and 170 currencies,

including all major credit and debit cards, e-wallets, direct debits, real-

time banking, prepaid, cash at outlets, and bank transfers.

GlobalCollect is PSD licensed and is certified as Level 1 PCI Compliant.

Newzoo is an international market research company focused purely

on the games industry. Newzoo provides the best independent

consumer market data across all game platforms and business models.

Newzoo also operates the global B2B portal Gamesindustry.com and

publishes the bi-annual Games Industry Black Book. Our combination of

activities gives us a deep understanding of the global games industry

and ensures we are always ahead of traditional market research

companies. Newzoo’s clients include GREE, Kabam, Blizzard, PopCap,

EA, Gamehouse, Microsoft, SpilGames, GlobalCollect and Wizards of

the Coast.

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WELCOMEThis report, brought to you by GlobalCollect and Newzoo, reflects onour latest take on the main trends, cross screen monetization and key facts of the international games market. In addition to our core Western countries and the US we have included two Emerging Markets, Poland and Turkey.

Exclusive data from the International Gamers Research by Newzooand GlobalCollect’s transaction data are bundled to share a uniqueinsight into the rapidly evolving games industry and cross-screengaming opportunities. Find out more about cross-screen gaming, number of players, payers and paymentization on the next pages.

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GLOBaL OvErvIEW 2012 5 1.1 STaTE OF THE MarKET 5 1.2 CrOSS-SCrEEN MONETIZaTION 7 1.3 MONEy FOLLOWS TIME 8 WHO PLayS WHaT? 9 2.1 MMO GaMErS & CrOSS-PLaTFOrM 9 2.2 CaSUaL / SOCIaL GaMErS & CrOSS-PLaTFOrM 11 2.3 PC GaMErS & CrOSS-PLaTFOrM 13

PayMENT OPTIMIZaTION 14 3.1 TOWarDS PayMENTIZaTION 14 3.2 MOBILE LINK 15 INSIGHTS ON THE EMErGING MarKETS 16 4.1 OvErvIEW TUrKISH GaME MarKET 16 4.2 OvErvIEW POLISH GaME MarKET 17 FrEE WEBINar 18 GaMING PayMENTS INTELLIGENCE 19

TaBLE OF CONTENTS GLOBaL OvErvIEW 2012

Copyright ©2012 Newzoo/GlobalCollect

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STATE Of ThE MARKET

When we take a close look at the state of the gaming market, we can see it is stillexpanding, in terms of spending, number of players and time spent on gaming.In Western countries spending on games has returned to growth following a downfall directly related to the drastic decline in new new boxed sales since 2010. The data shows that the growth for digitally downloaded games, add-on DLC (downloadable content), MMO and mobile gaming has pushed the overall spending on games back up.

The fact that the number of gamers and time spent has leaped significantly year-on year promises a healthy growth in spending for the years to come. Emerging Marketsdrive the current global growth, fueled by the continued expansion of internet

penetration and buying power in combination with the uptake of free-to-Play games catering to any budget. The online connectivity and successful monetization of the free-to-Play games has led to a change of view. Games are now increasingly being seen as services that are continuously being improved and extended. The free-to-Play business model

dominates all screens, except for the ‘TV’ or ‘Entertainment’ screen, but change is on its way, although not as drastic as traditional publishers think. An

impressive80%-90% of the money spent on mobile games is payed in-game. (doubled in

comparison to last year). This example shows how a platform, without a ‘paid boxed’ model as heritage, can shift towards a free-to-Play model when the decision is left to the consumer.

Tablets and smartphones are having an enormous impact on the worldwide gamingspace. Not only as game destination with their own monetization potential, but also asscreen extension or to complete the game experience on other screens. Publishersand developers with popular game IP (PC and console) are now faced with a difficultchoice to either extend the existing game experience on all available screens or, offer a standalone version based on the IP for mobile, Tv and tablet screens.

already 40% of the mobile revenues are generated by games that could be considered ‘mid-core’, combining a more immersive gaming experience with a typicalcasual gameplay. The fast-paced technical evolution of tablets performance will definitely accelerate this development.

TaBLE OF CONTENTS GLOBaL OvErvIEW 2012

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GLOBaL OvErvIEW 2012

-26%-21%

-6% -6%

-18%-21%

48%44%45%

39%44%

51%

64%64%

52%55%

44%

66%

63.2

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86.0

m

16.1

m

21.5

m

24.0

m

24.5

m

10.4

m

12.9

m

3.1

m

3.5

m

1.8

m

2.1

m

€15.

5

€13.

5

€20.

2

€15.

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2

Share of total number of players and payers 2011 vs 2012

Share of Payers in 2011

The Impact of Free-to-Play, Social and Mobile Gaming on Spending Behaviour

Share of Payers in 2012 Monthly Spent vs 2011

As a result of the vast changes in the global games industry that occurred the last years we have seen big losses e.g. ‘TakeTwo’, ‘Nintendo’ and ‘Gamestop’ as well as huge gains for e.g.’riotGames, ‘Mojang/MineCraft’ and ‘Wargaming.net’ in terms of revenue and profit. Online and mobile gaming have rapidly become very competitive. The amount of new high quality games is much higher than the healthy double-digit growth of consumer spending, putting pressure on game revenues. Asia’s total games market continues to grow at an enormous pace. Asian companies increasingly seek expansion ‘overseas’ and use their cash to set up offices in the West or acquire companies that will give them the ability to deliver game experiences tailored especially for Western gamers.

Western companies are aggressively targeting Emerging Markets to realize their growth ambitions/potential. This has become a strict necessity for any games company, as growth in the West is limited and the competition is fierce. In addition to the usual suspects such as Brazil, Russia and Poland, the focus is clearly shifting towards Turkey and the Middle East-region.

In the graph below, the result of the uptake of Free-to-Play and mobile gamingis demonstrated: a higher share and absolute number of paying gamers, but a lower average in spending. The overall result in Western markets is a modest rise in total consumer spending on games. The outlook is positive as average spending is expected to rise, especially amongst the many ‘first-time spenders’.

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CrOSS SCrEEN MONETIZaTION

all types of games are moving towards the cloud and/or browser, relying on in-gamessales for revenues, and are increasingly accessible via multiple screens. Current marketsegmentation is based on definitions and terms that are subject to continuous change,which creates an increasing overlap between the traditional market segments.

When it comes to reporting on the past or on a small part of the games business, thesegmentation can still work, but it is not enough to keep track of the bigger picture. This is why taking a screen segmentation approach is complementary to the platform approach and can give additional insight.Newzoo’s Screen Segmentation Model distinguishes four types of screens: the Computer, Entertainment, Personal and floating screen. According to this new model, each of these four screen types plays a different role, yet all are firmly present in the consumer’s life and are therefore continuously used.

For example, 31% of americans now have their Tv connected to the web. as apps enter the TV space, the interactive use of this screen will continue to grow, justifying

the term Entertainment Screen”.already 22% of american and 21% of European gamers uses all four screens to play games. This share rises to 31% when zooming in on the 84 million paying gamers in the US. Europe shows slightly lower shares: 21% of gamers and 27% of paying gamers, still a significant number of consumers. The PC screenattracts the highest share of gamers, 91%, and money spent, 51%. The difference between the

share of gamers and the share of money is the highest with the Personal screen: 59% versus 8%, pointing to growth. This data also indicates that the Tv/Entertainment screen has a big opportunity for growth, but only when the business model catches up with the other screens and the available game genres become more balanced.

GLOBaL OvErvIEW 2012

Real world

The Cloud

Social n

etwork

8

MONEy FOLLOWS TIME

Research on key Western territories indicates that the time spent on games is growing and spending is relatively stable. In the US we see an increase of 1% in spending for 2012 in relation to 26% more time spent playing games. Fueled by the uptake of mobile and social gaming, total time spent on games is up impressively which ensures a healthy outlook when it comes to revenue growth. With relatively flat Western markets, entering Emerging markets, boasting double-digit growth in time as well as money spent, has become a necessity for any international game company.

GLOBaL OvErvIEW 2012 WHO PLayS WHaT?

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MMO GaMErS & CrOSS-PLaTFOrM BEHavIOUr

The percentage of MMO gamers that actually pay to play MMO games is roughlysimilar in the US (46%), Western Europe (48%) and Turkey (49%). Only in Poland thepercentage is lower (39%). Overall, these are very healthy payer-player ratios,indicating that people are willing to pay.

In 2011 an average of three Emerging Markets (Brazil, Mexico and russia), showed similar results: 46% are paying gamers. Compared to 2011, the payer to player ratio inthe US is somewhat lower in 2012, most likely as a result of the growing uptake of the f2Pmodel.

Analysis of MMO gamers shows that they play f2P MMOs, P2P MMOs or both. The results show the strength of the F2P model, with over 90% of all MMO gamers playing F2P. In 2011 this percentage was 81% (US) and 85% (Europe), illustrating the continued growth in the uptake of the f2P model.The share of P2P players amongst all MMO gamers ranges between 27% and 31%.Typical for an Emerging Market, Poland has a relatively low share of P2P players with16%. Surprisingly, Turkey ranges amongst main European countries when it comes to P2Ppopularity.

GLOBaL OvErvIEW 2012 WHO PLayS WHaT?

76%

8%

6%4%

5%

Credit Card

e-Wallet

Real-time banking

Direct Debit

Prepaid

Payment methods used:Massively Multiplayer Online

Payment Methods

10

MMO Gamers | 2012 | USShare of paying gamers & Cross-platform spending

49.7M

23.03M

MMOPlayers

MMOPayingPlayers

PC/MacDownload

12.7M 13.9M 14.9M 18.6M

Casual & Social MobileDevices

Console(inc. handheld)

Players

Payers

55%60% 65%

81%

46%pays

Spendings on other market segments

from a consumers perspective, MMO gamers are very dedicated gamers. This is alsoreflected in their cross-platform or cross-screen game behavior. Illustrated by thegraph below, the majority of paying MMO gamers also spend money on other typesof games. In the US, the overlap is strongest with spending on console games: 81% ofMMO spenders also spend money on console games (18.6 million americans). Theshare of 65% that also spend money on tablet or smartphone (mobile) is even moreremarkable. EU figures are aggregates of five countries: GEr, UK, Fr, NL, BE.

MMO| EUShare of paying gamers & Cross-platform spending

35.1M

17.0M

MMOPlayers

MMOPayingPlayers

PC/MacDownload

8.0M 10.7M 10.7M 12.8M

Casual & Social MobileDevices

Console(inc. handheld)

Players

Payers

47%

63% 63%

75%

48%pays

Spendings on other market segments

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CaSUaL / SOCIaL GaMErS & CrOSS-PLaTFOrM BEHavIOUr

The initial buzz around gaming on social networks has gone, having a direct impact on the share prices of Zynga and Facebook. Online casual game destinations attract an enormous and diverse audience and therefore can play a key role as a marketing channel for any type of game. The casual game sites have evolved from a purely advertisment-driven business to serious consumer monetization destinations, driven by the uptake of free-to-Play business models.

Social networks connect games and gamers, and are therefore part of almost every games company’s marketing strategy. The total number of social network gamers will continue to grow but the share of paying gamers is in decline as well as the average spending. The situation is different in a number of Emerging Markets, particulary Turkey and Brazil, where the rising internet population use their social networks as their primary access

point to the web.

WHO PLayS WHaT?

Casual & Social | EUShare of paying gamers & Cross-platform spending

82.1M

20.8M

Casual & SocialPlayers

Casual & SocialPayingPlayers PC/Mac

Download

8.2M 10.7M 11.8M 13.9M

MMO MobileDevices

Console(inc. handheld)

Players

Payers

39%

51%57%

67%

25%pays

Spendings on other market segments

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Casual & Social | USShare of paying gamers & Cross-platform spending

129.8M

29.7M

PC/MacDownload

13.9M 13.9M 18.0M 19.9M

MMO MobileDevices

Console(inc. handheld)

Players

Payers

47% 47%

61%67%

23%pays

Spendings on other market segments

Casual & SocialPlayers

Casual & SocialPayingPlayers

80%

14%

4%2%

Credit Card Online

e-Wallet

Bank

Direct Debit

Prepaid

90%

2%4%

4%

Social and

Casual

FrequencyAmount

Social and CasualMoney distribution and payment methods usedOnline casual/social and

mobile gaming takes 49% of time spent and 27% of money. free-to-Play business models are closing this gap. Although the casual market has stabilized, it still is the biggest market in terms of player numbers, this is similar for the US, UK and Germany.When we look at the amount of players that are in fact also payers we see only a small group actually pay for casual & social games: US this 21%, UK 29% and Germany 33%. However when we compare these numbers to the amount of players that pay in the MMO segment we see a completely different picture. In the US 46% of the MMO players, are paying customers, for the UK this is even higher at 52% and with 54% Germany is the highest.

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PC GAMERS (DOWNLOaDS) & CrOSS-PLaTFOrM BEHavIOUr

As games move towards the cloud, game platforms and hardware becomes less important. for that reason we can say that today it is about providing access to games through one or more screens surrounding a consumer, regardless of the technology.

Cloud gaming sounds new but in fact it’s only newin the traditional console and TV gaming space.Cloud gaming has long before been pioneered byPC MMO games that have gradually been movingmore and more power to the cloud. The immersive MMO experience of triple games are now increasingly being brought to consumers via the browser, lowering the entry barrier. Another example is the new cloud-based gaming services such as Big fish Unlimited allowing players to participate in games across tablets, PC’s, TV’s and smart phones.

This market consists of very different genres appealing to different target groups. On the one hand there are the core PC games priced at $60, while on the other hand $5 casual games have flooded the retail market over recent years.

WHO PLayS WHaT?

PC/Mac Download Gamers | EUShare of paying gamers & Cross-platform spending

41.5M

17.6M

Casual & Social

8.2M 8.0M 8.3M 12.0M

MMO MobileDevices

Console(inc. handheld)

Players

Payers

46% 45%47%

68%

42%pays

Spendings on other market segments

PC/MACDownload

Players

PC/MACDownload

PayingPlayers

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TOWarDS PayMENTIZaTION

If you consider the wider gaming market revenues generated in the second half of 2011 compared to the first half of 2012, F2P monetization model revenues have exceeded subscription payment model revenues for the first time in history. The quickly evolving online gaming market demands diverse monetization practices. As this diversity increases, it is important to separate the broadly used concept of ‘monetization’ fromrevenue generating payment optimization. GlobalCollect has defined the term paymentization as the process of optimizing payment transaction practices to increase conversion rates and ultimately revenues. These optimization processes are completely separate to business model development or game play mechanics, however paymentization should be considered as an important element in forming a sound monetization strategy.

Paymentization practices involve advanced data driven business intelligence and benchmarking of card processing success rates, global card acquirer optimization, alternative payment method utilization and fraud management. Payments departments of leading gaming providers have recognized these best practices and rely on GlobalCollect to provide the gaming payments benchmarks to measure their success against the wider market.

PayMENT OPTIMIZaTION

76%

11%

5%4%

4%

Credit Card

e-Wallet

Real-time banking

Direct Debit

Prepaid

FrequencyAmount

All platforms* combinedMoney distribution and payment methods used

* Casual, Download, F2P, F2PSub, MMORPG, Social,

77%

9%

6%5%

3%

All platforms

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PayMENT OPTIMIZaTION

MOBILE LINK

The emergence of free to play, casual and mobile gaming has increased the necessity for robust payment and checkout solutions for mobile and other ‘floating screen’ gamers. GlobalCollect released ‘Mobile Link’ in early 2012, a fully hosted, device optimized payment page for credit card payments and various alternative payment methods. Clients of GlobalCollect can utilize this PCI compliant solution to improve the checkout process and conversion rates for mobile and other floating screen users.

The ability to collect payments from gamers in emerging markets can be difficult. Mobile operator billing payments provide an expensive but commercially viable option for gaming companies with low-cost digital delivery. GlobalCollect have integrated BOKU as a payment method to complement our existing payment method portfolio to provide operator billing in 65 countries for gamers. Improved payout timelines, harmonised reporting and remittance and VAT optimization are part of the GlobalCollect integration.

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OvErvIEW TUrKISH GaMES MarKET

The following findings are based on an analysis of 30 million Turkish active internet usersaged between 16 and 50. The analysis contained over 200 topics across all game business models and platforms: The majority of these consumers, 72% or 21.8 million, play games.

This share is higher than in Western countries. At the same time, the share of gamers that spend money on games stands at 52%, slightly lower than in Europe or the US. More than one in six dollars spent on games in Turkey goes to MMOs. This share of 21% is higher than in any Western or Emerging country analyzed.

The average age of the 9.8 million Turkish MMO gamers is slightly younger than in the West, obviously related to the relatively young internet population: 80% is under 35. The share of paying MMO gamers is 49%, comparable to other countries, but average monthly spending is several times lower than in the US.96% of MMO gamers play free to play and 27% plays subscription based MMO games.

INSIGHTS ON TWO EMErGING MarKETS

Casual & Social | TRShare of paying gamers & Cross-platform spending

20.2M

5.5M

PC/MacDownload

2.5M 3.1M 3.4M 3.3M

MMO MobileDevices

Console(inc. handheld)

Players

Payers

45%56%

62% 60%

27%pays

Spendings on other market segments

Casual & SocialPlayers

Casual & SocialPayingPlayers

MMO | TRShare of paying gamers & Cross-platform spending

9.8M

4.8M

MMOPlayers

MMOPayingPlayers

PC/MacDownload

2.6M 3.1M 3.2M 3.6M

Casual & Social MobileDevices

Console(inc. handheld)

Players

Payers

54%

64%66%

74%

49%pays

Spendings on other market segments

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INSIGHTS ON TWO EMErGING MarKETS

OvErvIEW POLISH GaMES MarKET

research indicates that Polish consumer spending on games will be more than 350million US dollars in 2012. The research in Poland zoomed in on the 18.1 million active internet users aged between 10 and 65. The analysis contained over 200 topics across all game business models and platforms.

The majority of these consumers, 65% or 11.8 million, play games. Women represent 44% of all gamers. The share of gamers that spend money on games stands at 53%, this is slightly lower than in Europe and the US.

roughly 43% of the Polish gamers plays console games. This puts it in last place in terms of popularity when compared to the online, mobile and PC gaming segments. Still this segment grosses a relative large share of money spent, 25%, when DLC, import and second-hand trade is taken into account.

MMO | PLShare of paying gamers & Cross-platform spending

5.5M

2.1M

MMOPlayers

MMOPayingPlayers

PC/MacDownload

0.90M 1.31M 1.23M 1.31M

Casual & Social MobileDevices

Console(inc. handheld)

Players

Payers

42%

61%57%

61%

38%pays

Spendings on other market segments

Casual & Social | PLShare of paying gamers & Cross-platform spending

10.4M

2.9M

PC/MacDownload

0.83M 1.31M 1.34M 1.35M

MMO MobileDevices

Console(inc. handheld)

Players

Payers

29%

46% 47% 47%

28%pays

Spendings on other market segments

Casual & SocialPlayers

Casual & SocialPayingPlayers

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GaMING PayMENTS INTELLIGENCEWEBINar: KEy FaCTS aND INSIGHTS ON CrOSS-SCrEEN MONETIZaTION OF GaMES IN EUrOPE aND THE US.

Payment Service Provider GlobalCollect teams up with games market research company Newzoo to highlight similarities and differences between Europe and the US - when it comes to - MMO, Casual/Social and PC games market

Unprecedented results from our latest research and online payment processing will be shared in this exclusive webinar, giving insights into opportunities as well as tripwires to do business in these highly competitive growth markets.

Main topics that will be covered:

Cross-screen gaming and the cloud

Opportunities and pitfalls of the Free-to-Play business models

Differences between Western and Emerging Markets

Featuring market overview of growth markets Poland and Turkey

REGISTER hEREhttp://info.globalcollect.com/monetization-of-games-webinar/

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GaMING PayMENTS INTELLIGENCE

In July 2012 GlobalCollect processed over 15M gaming transactionsglobally.

Gaming payments data and benchmarks are available to clients basedon gaming platform, game type, monetization model and genre.

Payment specific data includes global payment method popularity,average transaction values, fraud benchmarks, currency volume,transaction volume figures etc.

GlobalCollect provides advice on paymentization practices includingmulti-acquirer management, automated re-routing capabilities andbenchmarking for credit card processing to increase revenues.

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www.globalcollect.com

GLOBaLCOLLECT vIDEO GaMING TEaM:

Nathan SalisburyGlobal Market Director - Gaming

Nathan.salisbury@globalcollect.com

Mobile: +31 (0)6 2506 1803

Bob VoermansSr. Business Development Manager - EMEA

bob.voermans@globalcollect.com

Mobile: +31 (0)6 5060 2050

Andrew MonroeKey Account Manager – EMEA

andrew.monroe@globalcollect.com

Mobile: +31 (0)6 3016 3437

Pierre ThiercelinOnline Payment Solutions Consultant – EMEA

pierre.thiercelin@globalcollect.com

Mobile: +31(0) 6 3016 1928

Matías FainbrumBusiness Development Manager - Latin america

matias.fainbrum@globalcollectlatam.com

Mobile: +54 (9)11 4083 3730

José NuñoBuisness Development Manager – North America

jose.nuno@globalcollectusa.com

Mobile: +1 (415) 265 7929

Gary DykstraKey Account Manager – North America

gary.dykstra@globalcollectusa.com

Mobile: +1 (310) 321 2477

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jay-o.hyon@globalcollectapac.com

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