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This presentation covers the size of Japan's social gaming market and 14 reasons why the two big social game companies in Japan, DeNA and GREE, monetize better than Zynga.
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GREE And Mobage operator DeNA: 14 Reasons Why Japan’s Social Gaming Giants Monetize Better Than Zynga
By Serkan Toto, PhD www.serkantoto.com
Imagecredit:DeNA
About Me
• Web, mobile and gaming industry consultant • Advisor for startups in Japan and the US • Japan contributor for TechCrunch.com • Based in Japan since 2004 • http://www.serkantoto.com
Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: serkan AT serkantoto.com
Visit My Website For Free Information On Japan’s Social Game Industry (http://www.serkantoto.com)
Agenda
I:StructureAndSizeOfJapan’sSocialGamingMarketII:Top13ReasonsForSuccessfulMoneDzaDon
I:StructureAndSizeOfJapan’sSocialGamingMarket
Japan‘sSocialGamingMarket:DominantDuopoly
MarketSizeStats:DependOnSources‐>Yano:Japan‘ssocialgamingmarketworthUS$1.4BillionIn2011
SizeOfJapan‘sSocialGamingMarket‐>ProjecDonfromMorganStanley,January2012
SizeOfJapan‘sSocialGamingMarket‐>ProjecDonfromNomuraResearch,January2012
II:Top14ReasonsForSuccessfulMoneDzaDon
Reason1:JapanIsAGamingNaDon
• Taito‘sSpaceInvaderskickedoffthegamingindustryasawholein1978
• Japanhas10%share($6.5billion)inglobalvideogamemarket
• GamesenjoygreaterculturalaaenDoninJapanthanelsewhere
Reason2:JapanIsAMobileNaDon• Socialgames(andthewebatlarge)areconsumedmainlyonmobilephones
• Contentiseasiertosellonmobiledevices
• 99%3GpenetraDoninJapan,crucialforplayingmobilegames
Imagecredit:TheNikkei
Reason3:PopularityOfCardBaaleGames• Cardbaalegameshaveproventobeexcellentmoneymakers
• Upto70%ofthetop20gamesonMobageandGREEaresocialcardbaalegamescurrently
Reason4:RiseOfTheVideoGameMakers• Allmajorvideogamemakersproducesocialgamesnow
• KonamialoneisexpecDngtogenerate$390millioninfiscal2011withsocialgames
• VideogamemakersincreasinglyusepopularIPforsocialgames
Reason5:AcceptanceOfHigherPaywalls• Japaneseusersdon‘treallymindhigherpaymentwallsforprogressinginsocialgames
• Micropaymentstoprogressknownfromarcademachinemarket(*InsertCoin*concept)
Reason6:JapanIsAWealthyCountry• Japanhastheworld‘sNo.3economy(US$5.5trillionin2010)
• GDPpercapitastandsatoverUS$34,000peryear(IMF,2011)
• World‘s2ndhighestonlinespendat$6,688peryear(Visa,2009)
• MorganStanley:10%ofJapan‘ssocialgamerswerepayingin2010(projecDonfor2013:17%)
Reason7:FricDonlessMobilePayment• Iamhearingfromsocialgamemakers80‐90%ofgamerspayviacarrierbilling(monthlyphonebill)
• WiderangeofpayingopDons:carrierbilling,creditcards,e‐money,pre‐paidcards,Paypal
• SubscripDonsforvirtualitemsarepossible
Reason8:AggressiveTVMarkeDng• DeNAAndGREEareinvesDnglargeamountsofmoneyinTVadverDsing
• InNovember2010,bothcompaniesshowedthemostspotsonJapaneseTV
Imagecredit:SocialGameAcademy
Reason9:Zynga’sUserBaseIsWide‐Spread
• ZyngahassignificantlymoreregisteredandacDveusers,buttheyarespreadacrossalargenumberofregionswithsmallereconomiesandweakertechnicalinfrastructures
• Example:IndonesiaisFacebook‘sfourthlargestmarket,butitsGDPpercapitaisonlyabout1/8ofJapan
• DeNAandGREEevolvedintomulD‐billiondollarcompanieswithoutforeigncompeDDon
Reason10:Pre‐InstallaDonOnHandsets
• MobageispartofthehomemenuinNTTDocomo‘sfeaturephones
• Japan‘sNo.2mobilecarrierKDDIisaninvestorandGREEpartner(pre‐installaDondeal)
Reason11:ZyngaIsWeakerWRTMoneDzaDon
• Zynga‘sraDoofpayingusersislowerthanthatofMobageandGREE
• DeNAdirectorKenjiKobayashi:'IThinkThatZyngaHasNotReallyResearchedMoneDzaDon‘(Gamasutra,October3,2011)
Reason12:GachaAsMajorMoneyMaker
• GachamechanismisbiggestmoneymakerinmanyJapanesesocialgames
• EvenBejeweledhasagachafeatureinitsJapaneseversion
Reason13:In‐GameEventsAndCampaigns
• Japan‘ssocialgamemakersarebrilliantinusingDmedeventsandcampaignstoboostrevenue
• Exampleforacampaign:offeranexclusiveitemthatonlyuserswhopre‐registerforagameget
• ExampleforaneventinMobage‘sNinjaRoyale(Englishversion)picturedbelow
Reason14:VirtualSocialGraph
• PlayersuseGREEandMobageanonymously• Virtualsocialgraphmakesmass‐inviDngfriends,showingone‘sgamingaddicDonlessawkward
Thank you for listening! Questions?
Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: serkan AT serkantoto.com