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Smart and Social The Industry’s Crown Jewel
| Date post: | 05-Jan-2016 |
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Smart and Social
The Industry’s Crown Jewel
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Introduction
• Senior Research Analyst at Robert W. Baird & Co.• Baird is one of the largest private investment banks• Prior experience as software developer, Internet
start-up and Wall Street background at JP Morgan and Lazard
• Covered Internet and Interactive Entertainment for 10 years
• Based in San Francisco
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Overview
• Industry performance• Market forecast• Power of Exponential• Influence of Facebook and shift to Mobile• Conclusions
Global Video Game Market
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Source: RW Baird & Co. estimates
Video Games Fastest Growth Media
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Source: RW Baird & Co. estimates
Games are the most important form of digital media
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Platform Growth Rates
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Source: RW Baird & Co. estimates
E-commerce model to monetize games
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Source: RW Baird & Co. estimates
Beauty of Free-to-Play
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Source: RW Baird & Co. estimates
Forecast for Mobile and Social
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Source: RW Baird & Co. estimates
Significant Opportunity in Mobile Advertising
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Source: RW Baird & Co. estimates
Global Video Game Industry Growth will be driven by Smart Devices
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Smart + Social are exponential
• Rapid increase in smart devices• Social game mechanics now available on Mobile O/S• Virtual goods sales expand monetization• Global opportunities• Competitive platform wars good for developers
– Android– iOS– Windows– Samsung
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Smart + Social are exponential
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Filling the Stadium
1) 45 minutes
2) 3 hours
3) 12 hours
4) 2 days
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Wave of Smart Devices
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M
100 M
200 M
300 M
400 M
500 M
2008 2009 2010 2011
Android iOS
Source: RW Baird & Co. estimates
Game Usage on Smartphones
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Source: RW Baird & Co. estimates
Exponential – GREE mobile users (in M)
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Source: Company Reports
Tablet Sales Growing Faster than Phones
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Source: RW Baird & Co. estimates
Multi-device Lifestyle
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% of Internet Traffic from Smart Devices
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Source: RW Baird & Co. estimates
App Sales are Global
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Source: Flurry
% of Internet Traffic from Smart Devices
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Source: RW Baird & Co. estimates
Facebook Revenues Zynga Growth Rate
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Payments Growth on Facebook is Slowing
Source: RW Baird & Co. estimates
Focus Turning from Facebook to Mobile
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Smart Devices are a disruptive force similar in scope to web browsers
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Platforms are key
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Conclusions
• Huge wave of smart devices• Exponential growth dynamics• Global opportunities• More attractive growth profile vs. Facebook• Efficient distribution – use the tools, play the
platforms
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