Info for Greg
Prepared by
August 2010, Proprietary and Confidential
Global Video Game Market
Key Trends
Market Size and Growth
Global Video Game Market (in billions)
PwC estimated that the
videogame subsection of the global
entertainment and media market
would be the second fastest growing
segment through 2014 (trailing only
Internet advertising wired and
mobile).
Michael D. Gallagher, president
and CEO of the Entertainment
Software Association: December
(‘09) sales broke all industry records
and underscores the incredible value
consumers find in computer and
video games even in a down
economy.
Source: PriceWaterhouseCoopers, June 2010
2
Video Game Console Market: Steady Growth Through 2012
Key Trends
Worldwide Console Units Shipped
80
68.5
55.3
55.8
57.5
60.9
64.6
6.0%
5.0%
50
4.0%
40
Annual CAGR
Worldwide Units Shipped (mm)
70
60
 Market has experienced dramatic
growth since 2007
7.0%
 Web-based video game
advertising experiencing the most
rapid expansion, with a CAGR of
18.5%
E-marketer predicts web-based
market size to be $478M by 2012
3.0%
30
2.0%
20
1.0%
10
Source: E-Marketer 2009
0
0.0%
2008
2009
2010
2011
2012
2013
3
Video Game Console Market: Steady Growth Through 2012
Worldwide Console Units Shipped (Jan. 1 – Aug. 1)
20.00
60%
18.00
50%
3.74
4.78
14.00
12.00
4.66
30%
2.66
4.03
10.00
8.00
5.61
20%
2.86
10%
6.00
4.00
40%
4.32
10.51
0%
8.19
7.12
8.27
-10%
2.00
-
Source: VGChartz
2007
-20%
2008
Wii
PS3
2009
Xbox 360
4
2010
Y-o-Y Growth
Units Shipped (mm)
16.00
Social Gaming Industry Overview
Key Trends
Market Size and Growth
Market Size in Millions of Dollars
Rapidly changing competitive
environment – 7 of the top 10
Facebook games have been released
since Jan. 1 2009.
Tim Chang, Norwest Venture
Partners: We can utilize game
constructs to perhaps revive other
industries which no longer monetize
as effectively via macro-transaction
or advertising.
5
Facebook Has Experienced Exponential Growth
Key Trends
Market Size and Growth
Every month, more than 70% of
the 400 million Facebook users
engage with platform applications.
There are more than 100 million
active users currently accessing
Facebook through their mobile
devices.
Facebook is the largest social
gaming platform, with such hits as
Farmville, Café World and Happy
Aquarium.
6
Millions Playing Games on Facebook and Other Social Networks
Facebook
Most used social
network by worldwide
monthly active users,
followed by
MySpace.com.
Valued at $10 billion,
when Russia-based
Digital Sky paid $200m
for 1.96% stake.
Mark Zuckerberg, CEO
Facebook: Facebook
Revenue Estimates Of
$1.1 Billion “Not So Far
Off.” (6/22/2010)
7
Virtual Goods Represents a Booming Market
Key Trends
Market Size and Growth
Justin Smith, founder of Inside
Network and co-author of the
report: 2009 will be remembered as
the year when virtual goods in the
US took off.
The Asian market for virtual
goods, with an estimated value of $7
billion, still dwarfs the US market.
Market leaders such as Tencent and
Nexon pioneered the virtual goods
markets in Asia.
8
Portable and Mobile Gaming Industry Overview
Key Trends
Historical Portable Console Sales
Unit Sales (in millions)
Driven by consistent innovation in
game design and development, the
latest generation portable gaming
consoles have sold consistently since
their release over 5 years ago.
The stunning success of the iPhone
and iPod Touch, and the associated
App Store, has created a whole new
gaming segment. The App Store
currently has over 140,000 apps
available for download and games
represents the most popular
category.
9
Mobile/Smart Phone Market Analysis
Mobile Phone/Apps Market Trend
 Smartphone continued strong growth
at 16% and reached 161 million
shipments in 2009
Smartphone market will grow at CAGR
of 26% in the next 3-5 years
Technologies will grow in number and
capacity and will expand into more
verticals such as education and
healthcare
Source: Forward Concepts, 2009, Report No: 9010
Mobile apps revenue will reach $17.5
bn by 2012, from $4.1 bn in 2009 (WSJ,
March 2010)
Source: Canalys, 2009
10
Smartphone Adoption
Key Trends
Worldwide Smartphone Growth is Robust
900
Smartphone Units Sold (mm)
804
800
700
637
Study by the Audit Bureau of
Circulations forecasts that in the
next three years, mobile devices will
be relied on as the primary
information source
600
In 2010, 250 million of the 1.3
billion mobile phones shipped
globally will be smartphones
504
500
399
400
316
300
According to Gartner Research, by
2013, mobile phones will overtake
PCs as the most common Web
access device worldwide
250
200
100
0
2010
2011
2012
2013
2014
2015
Smartphone Units (mm)
Source: Global Industry Analysts
11
Smartphone Applications
Key Trends
Mobile Application Store Downloads (millions)
Mobile Application Store Revenue (in $millions)
Market Size and Growth
Source: Gartner, December 2009
12
Stephanie Baghdassarian, research
director at Gartner: As smartphones
grow in popularity and application
stores become the focus for several
players in the value chain, more
consumers will experiment with
application downloads.
Games are the most downloaded
applications but mobile shopping,
social networking, utilities and
productivity tools are gaining
strength and attracting more capital.
Tablet/Netbook Adoption
Key Trends
US Consumer PC Sales by Form Factor
100%
45%
38%
32%
23%
23%
43%
43%
20%
19%
18%
42%
42%
42%
90%
80%
70%
44%
60%
50%
44%
45%
40%
30%
17%
20%
17%
18%
18%
10%
18%
17%
17%
17%
21%
23%
23%
2013
2014
2015
13%
9%
6%
0%
2008
Tablet PC Sales
2009
2010
2011
Netbook/mini PC Sales
2012
Netbook/Laptop Sales
Desktop Sales
Source: Forester Research
13
Tablets/Netbooks provide a new
information platform to extend the
reach of digital businesses
Apple sold 3 million iPads through
the first 80 days of US sales –
equating to one iPad every 2
seconds
Forrester expects 3.5 million
tablets (including the iPad and other
tablets) to be sold this year, growing
to 20.4 million in 2015