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DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Date post: 15-May-2015
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This is an edited version of a presentation on Japan's social games market I gave a few weeks ago.
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DeNA, GREE: Demystifying Japan’s Social Gaming Market By Serkan Toto, PhD Twitter: @serkantoto Image credit: GREE International
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Page 1: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

DeNA, GREE: Demystifying Japan’s Social Gaming Market

By Serkan Toto, PhD Twitter: @serkantoto

Image credit: GREE International

Page 2: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

About Me

•  Tokyo-based web, mobile and gaming industry consultant •  Advisor for startups in Japan, Asia and the US •  Japan contributor for TechCrunch.com •  Personal website: www.serkantoto.com

Page 3: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Contact Information

Twitter: http://twitter.com/serkantoto

LinkedIn: http://linkedin.com/in/serkantoto

Email: totoserkan AT gmail.com

Page 4: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Visit My Website For Free Information On Japan’s Social Game Industry (http://www.serkantoto.com)

Page 5: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Agenda

I: Structure Of The Domestic Market II: Japan’s Social Games Vs. The World III: Future Trends In Japan’s Social Gaming

Industry

Page 6: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

I: Structure Of The Domestic Market

Page 7: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Japan‘s Unique Social Networking Landscape •  Basic structure: real social graph vs.

virtual social graph •  3 homegrown social networks with roughly

25 million users each: – Mixi (real/80% mobile social networking) – GREE (virtual/mobile social gaming) – Mobage (virtual/mobile social gaming)

Page 8: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Fragmented Industry Structure • Hundreds of social application providers •  2 dominant companies double as platform

and game providers: GREE and DeNA (“Facebook+Zynga in 1“)

• Mixi as latecomer • Rekoo only really successful foreign player

Page 9: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Dominant Duopoly

Page 10: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Size Of Japan‘s Social Gaming Market •  Annual sales of DeNA and GREE

combined reach over $2 billion • Different sources offer different numbers:

– Video game magazine publisher Enterbrain: $0.3 billion in 2009, $1.45 billion in 2010

– Market research firm Seed Planning: $1.46 billion in 2010

Page 11: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

II: Japan’s Social Games Vs. The World

Page 12: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Gaming Nation Japan •  Taito‘s Space Invaders kicked off the gaming

industry as a whole in 1978 • Nintendo‘s Famicom revitalized industry after

the big crash 1983 •  Japan has 10% share ($6.5 billion) in global

video game market • Games enjoy greater cultural attention in

Japan than elsewhere •  higher payment walls for progressing in social

games are accepted

Page 13: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Mobile •  Social games (and the web at large) are consumed

mainly on mobile phones •  Yahoo Mobage only PC-based social gaming

platform worth noting •  virtual item payment via carrier billing as catalyst •  GREE/Mobage pre-installed on handsets

Image credit: KDDI au

Page 14: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

•  Active Facebook members (potential social gamers) in Japan in September 2011: 5 million

•  ⁓5% of web population (in the US: ⁓68%)

Source: Socialbakers

Key Peculiarity: Facebook Japan

Page 15: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Some social gaming genres are as popular in

Japan as elsewhere, i.e. – farming – pet-breeding – city-building – restaurant management etc.

•  But some are especially popular over here

Page 16: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Example 1: Manga-based social games •  Gundam Royale racked up 1 million players in 6 days

Page 17: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Example 2: Social RPGs •  Square Enix‘ Gleipnora is exclusively

available on Mobage

Page 18: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Example 3: Social dating and love simulations •  Renai games are especially popular among female

users •  Andamul‘s Delicious Kiss is popular on GREE

(below)

Page 19: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Example 4: Social idol-raising games •  Goal: Train and guide girls on their way to become

an idol (star) •  Love Kyun! Idol Battle was launched on GREE in

May 2011

Page 20: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Key Peculiarity: Special Genres •  Example 5: Social collectible card games •  Konami‘s Dragon Collection has been #1 on

GREE for over a year straight

Page 21: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

III: Future Trends In Japan’s Social Gaming Industry

Page 22: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Growth Is Expected To Continue •  Growth in the domestic social gaming market

has slowed down, but still ongoing •  Projection by Mitsubishi UFJ Morgan Stanley

Securities: US$5.2 billion in 2013

Page 23: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

•  Yano Research: $406 million in 2009, $900 million in 2010, $1.4 billion in 2011:

Growth Is Expected To Continue

Page 24: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Japan‘s Mobile Future Is All Smartphones

Source: The Nikkei / MM Research Institute

•  GREE CEO Yoshikazu Tanaka: “By 2015, feature phones in Japan will vanish.“

•  iPhone and Android set to dominate in the future

Page 25: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Video Game Makers Going Social •  Many Japanese video game makers starting

to produce social games •  Konami alone expecting to generate $390

million in fiscal 2011 with social games •  A lot of high-quality IP still untapped

Page 26: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

GREE: Internationalization •  More cautious approach •  US office in January 2011 •  Offices in Seoul, Dubai, London, Singapore... •  Focus on partnerships:

– South East Asia: mig33 – China: Tencent

•  Only one sizeable acquisition abroad so far (Openfeint for $104 million)

Page 27: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

DeNA: Internationalization •  DeNA‘s 3-market approach with Mobage for

Smartphone: – Japan – China – Rest of the world

•  Aggressive M&A: – Ngmoco $403 million – Gameview Studios, Rough Cookie, etc.

•  DeNA failed twice on a global level: – MiniNation (WAP) – Mobamingle (iOS)

Page 28: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Future International Positioning For GREE And DeNA

•  Tens of thousands of free/cheap games in the App Store and Android Market

•  Promising social layer services for smartphones already available: – Apple‘s Gamecenter – Scoreloop – Gamewave

•  Facebook‘s Project Spartan just launched •  Indifference from users abroad?

Page 29: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Thank you for listening!

Page 30: DeNA, Mobage, GREE: Demystifying Japan’s Social Gaming Market

Contact Information

Twitter: http://twitter.com/serkantoto

LinkedIn: http://linkedin.com/in/serkantoto

Email: totoserkan AT gmail.com


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