Casual Games
Industry
Progress, Opportunities & Players
1
Casual Games Association
Three main areas of focus
• Connecting the Industry
• Action Groups
• Industry Education
2
Casual Games Association
- Connect: Everyone
Developers
Publishers
Distributors
Portals
Tools
Industry Organizations
PC
Mobile
Consoles
EVERYONE
3
Casual Games Association
-Connect: In All Ways
Connecting the Casual Games Industry
• CGA Conferences: Kyiv, Amsterdam & Seattle
• Minna Mingle networking socials
• Action Group Meetings
• Industry Magazine
4
Casual Games Industry
• Progress
– Why are we Here?
• Opportunities
– Current stable growth direction & revenues
• Players & Their Business Models
5
Casual Games – Why Are We Here?
• Casual games are a big business—bigger,
perhaps, than many people realize.
• Online download, subscription & advertising
revenues reached
– $713 million (USD) in 2005 and are estimated to
grow to
– $1.56 billion (USD) in 2008.
• The casual games industry is maturing
– Bigger budgets
– DS, PSP, XBLA, Retail
– Alternative revenue models
6
Just the online casual space is….
• Bigger than EU & US MMO space
• Bigger than Retail PC space
• About the same as:
–
–
–
–
The online US newspaper industry
1 Month of US film box office sales
2005 Music download sales
½ of the 2006 Music download sales
• (10% of total music market)
– 1/15 of the US Fitness industry
7
Casual Games – Hit Driven Market
• Sales distribution of downloadable games.
Percentage of Units Sold
– Top 5 Games
– Top 10 Games
– Top 20 Games
35%
60%
75%
• This shouldn’t be scary, but you must make high
quality content to succeed
• High quality content is the KEY to a successful
industry
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Source: Compiled RealNetworks top-10 listings
www.game-sales-charts.com (by James Gwertzman)
Casual Games – Getting Crowded
70
Number of “Top 10” games released on RealNetworks (by quarter)
60
Number of Games
50
40
30
20
10
0
Qtr2
Qtr3
2003
Qtr4
Qtr1
Qtr2
Qtr3
2004
Qtr4
Qtr1
Qtr2
Qtr3
2005
Qtr4
Qtr1
Qtr2
Qtr3
2006
9
Source: Compiled RealNetworks top-10 listings
www.game-sales-charts.com (by James Gwertzman)
Casual Games - Shorter shelf life…
80
Ricochet Xtreme
70
60
Bejeweled
Zuma
Super Collapse II
Gutterball 3D
Bejeweled II
50
40
Puzzle Inlay
Bookworm
Feeding Frenzy
Diner Dash
30
Cake Mania
20
10
0
10
Money Facts – what you can you do
• 80-100 Million USD in 2006 for Israeli casual
games companies
• PopCap Games’ 2006 consumer spend was
approx 80 Million USD
• RealNetworks’ Q4 2006 revenue was 24 Million
USD. 2006 revenue was 86 Million USD, a 53%
increase over 2005.
• A “hit” downloadable game will sell approx
400K copies, 4-10 USD a copy = 1.6 – 4.0
Million in revenue.
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Casual Games & YOU!
Which brings us to…
• YOU contributing to creating high quality
content is very important to the casual games
industry’s (and your) success.
• Don’t assume that you can enter the market
without hard work. The industry's growth hasn’t
gone un-noticed.
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Casual Games Industry
• Progress
– Why are we Here?
• Opportunities
– Current stable growth direction (what is
working now)
• Players & Their Business Models
13
Content is Queen
• The most successful and stable companies own IP
– They are taking in less money – and have more
employees (and larger houses)
14
Content Pipeline – how are they doing it?
• Create a number of prototypes (10-20)
• Develop a downloadable casual game
• Launch the casual game on their website
– Iterate as necessary
• Broad portal launch
• DS, PSP, XBLA, Retail, Mobile
– Puzzle Quest & Cake Mania are in the top 10 retail DS
games (after 1st party games)
– PopCap Games is the #1 developer of XBLA games
– Casual game shelf space is increasing at Retail
– Bejeweled constituted 15% of Jamdat’s revenues before
their sale to EA
15
Customer Interaction
• Being the go-to place is nice
– But it is hard to compete with portal destinations
16
Customer facing – how they are doing it
• Custom store/user interface
– User generated merchandizing
– Traditional merchandizing
• Customer Acquisition
– Purchase traffic
– Internet Marketing
– Build off of IP
• No one has made a successful “YouTube of games”
• Success: Pogo, Shockwave, Big Fish, PopCap
17
A note about chasing YouTube …
• Think about how you listen to music –
• Think about how you watch to movies –
• Think about how you consume books –
• Think about how you play video games –
• Clubs – Theatre – Living Room/Den/Office
• MTV – E Entertainment - G4
• Amazon (30% of market)
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B2B - Technology
• Easier to enter
• Easier to flip
• Good place to enter market
• But is harder to maintain placement
• Most of Israel’s companies are here
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Opportunities
• Should you enter the market?
• Should you bank on growing the market?
• Should you expand?
• Should you try something new?
20
Casual Games Industry
• Progress
– Why are we Here?
• Opportunities
– Current stable growth direction & revenues
• Players & Their Business Models
21
Consumer Facing
• Non-portals
–
–
–
–
–
RealNetworks
Big Fish Games
Shockwave/Atom/MTV
MiniClip (webgames)
Pogo (subscription)
• Portals
– Yahoo
– Microsoft
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Content
•
•
•
•
•
•
•
•
Big Fish Games
Sandlot Games
PopCap
MumboJumbo
Pogo
Reflexive
RealNetworks
MTV
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