Gamerista 2015 Scenarios for the Future of Gaming r4.0

gameristaTM 2015 SCENARIOS FOR THE FUTURE OF DIGITAL GAMES

#2015gamescenarios

gamerista (TM) (c) 2015 www.gamerista.net

gamerista TM

VIDEO GAME R & D

gamerista TM

DIGITAL VIDEO GAMES STRATEGY

USER AND AUDIENCE EXPERIENCE TESTING & RESEARCH

ADVANCED VIDEO GAME DEVELOPMENT

DIGITAL VIDEO GAMES INDUSTRY ECOSYSTEMS MARKET RESEARCH

gamerista TM STUDIO LAB AUSTIN STUDIOS RED BUILDING, #400 1901 E. 52nd. STREET AUSTIN, TEXAS 78723

+1.512.825.6866 - Direct +1.512.897.7100 - Main [email protected]

www.gamerista.net @thegamerista facebook.com/gamerista

[email protected]

mailto:[email protected]

THE DIGITAL GAME ECOSYSTEM

CONTEXT/VENUE CONTENT APPLICATIONS

PLATFORMSSERVICES INFRASTRUCTURE

gamerista (TM) (c) 2015 www.gamerista.net #2015gamescenarios

gameristaTM THEME 1: OLD WINE, NEW BOTTLES

#2015gamescenarios

$100 BILLION

IT’S A BIG GAME

THE 2015 GLOBAL DIGITAL GAMES INDUSTRY


NEW CONSOLES DRIVE THE MARKET

Video game consoles will innovate with new features on just-released “next gen” platforms as killer hit titles appear.

New raw processing power and hyper-real capabilities will enable new capabilities such a motion, virtual reality and immersive play.

This, coupled with their online stores with digital distribution capabilities, will increase their market share over the next 2-3 years, contrary to market projections on the demise of the console market. Despite some outlooks, Nintendo’s franchise will remain stable.


MMOs & CONSOLES RULE

gamerista (TM) (c) 2015 www.gamerista.net Source: Newzoo December, 2015#2015gamescenarios

THE LONG TAIL = NO SALE

Blockbuster titles and genres will move fluidly and pervasively across all platforms to both “upsize” and “downsize” by category and title.

Key titles and genres will be candidates for porting from/to console and mobile platforms, based on audience, brand, gameplay experience and appeal.

Despite a thousand flowers blooming, in the last 5 years, 70% - 80% of digital game industry revenue will come from less than 1% of all digital game titles.


gameristaTM THEME 2: FANS RULE

#2015gamescenariosgamerista (TM) (c) 2015 www.gamerista.net

WOMEN LEAN IN MORE

Women represent 50% of the world’s population. They also make up the fastest growing segment of digital game players around the world.

Data varies widely on women gaming by game category, platform and geography. But women represent the single largest audience opportunity in the history of digital games. Ironically, they have been hidden-in-plain sight and systematically overlooked by the digital games industry.

~45%OVERALL

GAME PLAYER POPULATION

USA

CASUAL/SOCIAL/MOBILE GAME PLAYER POPULATION

USA

CORE AAA GAME PLAYER POPULATION

USA

~55%

~30-40% ~60-70%

~60-75% ~25-40%

gamerista (TM) (c) 2015 www.gamerista.net Image: Trey Ratcliff, (c) Lost in Customes, Burning Man#2015gamescenarios

PC/MMOs F2P EXPLODING


0

0.25

0.5

0.75

1

2013 2014 2015 2016 2017

25%28%30%33%36%

75%72%70%67%64%

PC/MMOs will account for more than 30% of global gaming revenues. Although the ‘Pay-To-Play’ (P2P) segment of PC/MMOs growth is flat, the ‘Free-To-Play’ (F2P) segment is growing at over 12% CAGR.

Growth is heaviest in Latin America, Eastern Europe, China, Asia, India and the Middle East and will account for 95% of the growth. 10 blockbuster titles dominate this space.

League of Legends World of Tanks Minecraft World of Warcraft Counter-Strike - Global Offensive Guild wars 2 Archeage Dota 2 Arma 3 Diablo III

$22.6 B

F2P

P2P

$24.4 B $26.3 B $28.4 B $30.7 B

Source: Newzoo December, 2015

FAN-BASED ITERATIVE MMOs


Startup PC/MMOs are using a new business model which includes staged, iterative delivery through crowd-funding, on-going fan-driven community-based development with an integrated video channel for fans and subscribers. In-game purchases augment monthly subscriptions.

NEW CONTENT, NEW AUDIENCES

gamerista (TM) (c) 2015 www.gamerista.net #2015gamescenariosgamerista (TM) (c) 2015 www.gamerista.net

gameristaTM THEME 3: MOBILE MOVES AWAY


EPIC WIN FOR GLOBAL MOBILE

The United States lags the world in top-grossing mobile digital game revenue on both iOS and Android platforms. This gap will continue to grow.

Last year, the U.S. only had 3 out of the top 10 grossing mobile titles worldwide. This year, that number dropped to only 1 in 10.

Killer blockbuster titles from major publishers worldwide will dominate in 2015, with the U.S. falling further behind due to blockbuster franchise content, platforms, global demographics and relative publisher strength.

TOP 10 GAME PUBLISHER CATEGORY HEADQUARTERS

1 Clash of Clans Supercell Strategy, Action Finland

2 Puzzle & Dragons GungHo Online Arcade, Puzzle Japan

3 Monster Strike Tencent Arcade, Puzzle China

4 Candy Crush Saga King Puzzle, Arcade U.K./Tencent

5 Game of Fire Machine Zone Role Play, Strategy United States

6 Candy Crush Soda King Puzzle, Arcade United Kingdom

7 Hay Day Supercell Arcade Finland

8 Disney Tsum Tsum Line Arcade, Family Japan

9 Boom Beach Supercell Strategy, Action Finland

10 Farm Heros Saga King Arcade, Family United Kingdom

Source: “Top Game Apps by Monthly Revenue”, App Annie, December, 2014

TOP 10 GAME PUBLISHER CATEGORY HEADQUARTERS

1 Clash of Clans Supercell Strategy, Action Finland

2 Puzzle & Dragons GungHo Online Arcade, Puzzle Japan

3 Monster Strike Tencent Arcade, Puzzle China

4 Disney Tsum Tsum Line Arcade, Family Japan

5 Candy Crush Saga King Puzzle, Arcade U.K./Tencent

6 Game of Fire Machine Zone Role Play, Strategy United States

7 Candy Crush Soda King Puzzle, Arcade United Kingdom

8 Everybody’s Marble Netmarble, Tencent, Line Casual China, Japan, Korea

9 Seven Knights Tencent/Netmarble Role Play, Strategy China, Japan, Korea10 The White Cat Project COLOPL Casual Japan


The first boom in mobile game development and distribution is now over.

A mobile video game, unless highly compelling and promoted for hundreds of thousands or millions of dollars, now has an infinitesimally small chance of becoming a hit and monetizing its own development costs. The market is changing as quickly as it started less than 5 years ago.

Barriers to market entry are now almost non-existent. But barriers to monetization are increasingly daunting and will require major resources.

0.000004=

ODDS OF A MOBILE HIT


1 0.000003=319,325

2014

2015

1250,325

#2015gamescenarios

MARKETING MONEY TALKS, D.I.Y. WALKS

Like any other industry, hits and “discovery” in the digital games industry will increasingly be driven by the amount of marketing spend behind the game.

The naive notion that by putting free- to-play (FTP) “awesome” games into the ecosystem which will “get lucky and go viral” is over. FTP was down 17% for 2013.

Even though game publishers of blockbuster titles have known this for years, mobile, indie/mid-core game studios/publishers will require major capital to promote their titles.

GRAND THEFT AUTO V MARKETING BUDGET: $265 MILLION

CPI* RATES DOUBLING FOR MOBILE WAS $2/CPI; $5 - $8/CPI IN DECEMBER

CPI RATES DRIVE ARPU*** BREAK-EVEN 2.5 X HIGHER NEED TO HIT 2.5 X ARPU+ IN SMALL TIME WINDOW

* CPI = COST PER INSTALL ***ARPU = AVERAGE REVENUE PER USER

LOW CONVERSION RATES FOR FTP**: < 5%

** FTP = FREE TO PLAYgamerista (TM) (c) 2015 www.gamerista.net

MOBILE ADVERTISING WILL EXPLODE

Although in-game and outright purchase will continue to be popular in worldwide markets, 68% to 34% of all mobile revenue will come from ads (in India, U.S., U.K., Germany, Canada, and France), with in-game and “adjacent” ads.


Ad Networks

Mediation Platforms

Direct to Advertisers

Agencies

Real Time Bidding

0 20 40 60 80% % % % %

#2015gamescenarios

0% to 1%

2% to 5%

6% to 10%

11% to 20%

21 to 100%

0 10 20 30 40% % % % %

% of MAUs Making 1+ In App Purchase

% of Respondents

Types of Ad Buying

Source: App Annie, December, 2014

gameristaTM THEME 3: VIDEO GAME VIDEO VOYEURISM


YOUTUBE OR SOMEBODY ELSE WILL

Source: Newzoo 2015


Tie-ins to YouTube channels created for games will be the major way a game will be able to generate an audience.

That said, “Blockbuster Discovery Rules” apply with regard to massive marketing campaigns.

TWITCH

Source: Twitch, 2015gamerista (TM) (c) 2015 www.gamerista.net

HUNGER for e-SPORTS GAMES

4.5 - 5.5 Billion viewer hours

Source: IHS Technology, 2015gamerista (TM) (c) 2015 www.gamerista.net

gameristaTM THEME 4: TRANS-PLATFORM, TRANS-MEDIA


CONSOLES GO FULL TRANS-MEDIA

Console game will open their stores to more independent titles and stream them to multiple devices.

Digital game console manufacturers will race against each other, as well as new players such as amazon and Google, to open their platforms not only to curated content, but on multiple platforms along with other media such as movies, tv and music to increase their value proposition.

Increasingly console players will mimic amazon’s overall current transmedia content, apps, services and platforms business model.


SOURCES: WORLDPAY, gamerista

THE TRANS-MEDIA CHALLENGE

I think that all digital content I buy should be

accessible on all devices that I own:

I wish that purchasing a video game on one

device gave me access to the versions of that

game for all devices:

81% TOTAL 84% TOTAL


SOURCES: WORLDPAY, gamerista

GLOBAL GAME PLATFORMS


STEAM BUILDS QUICKLYValve’s Steam will grow its base of 100 million users online, with 3,700 games, with 5 million online DAU, to become a digital game distribution leader for core gamers.

STEAM represents a potentially major disruptive force in the digital games distribution ecosystem. Like other app stores, it allows developers to retain 70% of revenues.

Steam drives the streaming game and digital download market with a few blockbuster titles and many more indie titles with a PC/Mac strategy.


ANDROID COMES TOGETHER

As predicted last year, the Android OS will continue to conslidate operating system versions.

Frustrated with supporting 3 major release versions of Android, digital game studios and general app publishers are pushing both carriers and hardware vendors to standardize new versions of their Android releases.

Apple will continue to enjoy its competitive advantage over Android by having always having 2/3rds. of it user base operating on its then-current version of iOS.


Lillipop KitKatJelly Bean Icecream SandwichGingerbread

gameristaTM THEME 5: PARADOX OF INDUSTRY


THE SMALLEST BIG INDUSTRY

STUDIO SIZE

INDEPENDENT 2 - 5 6 - 10 10 - 30 31 - 50 51 - 8081 - 100 101 - 150 151 - 200 201 - 300 301 +

SOURCE: GDC STUDY, 2014gamerista (TM) (c) 2015 www.gamerista.net

UNITY & UNREAL : RENT THE TOOLS

Both Unity and Unreal have moved to a subscription model for their all-purpose universal game development engines.

With almost zero barriers to entry, “makers” with high-end tool skills will begin to move into the high-end console space with games which look like traditional “hi fi” AAA core.

At the same time, high end block-buster AAA IP will be ported to mobile platforms, creating an over-supply of high quality content.


IT’S CHEAPER OVER THERE

$ US HOURLY RATES

ARTIST $61 $68 $31 $37 $18 $15

LEAD ARTIST $75 $83 $38 $45 $23 $19

ART DIRECTOR $88 $96 $44 $53 $26 $22

GAME DESIGNER $52 $57 $26 $31 $16 $13

PRODUCER $65 $71 $32 $39 $19 $16

TECHNICAL DIRECTOR $94 $103 $47 $56 $28 $23

LEAD PROGRAMMER $94 $103 $47 $56 $28 $23

PROGRAMMER $83 $92 $42 $50 $25 $21

AUDIO DESIGNER $69 $76 $34 $41 $21 $21

MUSIC /COMPOSER $65 $71 $32 $39 $19 $16

VIDEO GAME TESTER $42 $46 $21 $25 $13 $10

LEAD VIDEO GAME QA $63 $69 $31 $38 $19 $16

SOURCE: gamerista Analysis, 2014


gameristaTM THEME 6: MAD SCIENCE EXPERIMENTS


HYPER-REALITY GETS REALLY REAL

The multi-pronged push to increase ultra high definition digital games will occur on 4 new fronts: 4K screens, “next gen” game platform processors, “next gen” ultra-high rez games and 4K video.

Game developers will catch up with the technology platforms now available to them and start developing extremely immersive high resolution games. Console titles like “Two Souls”, “Assassin’s Creed” are moving in this direction as are mobile games such as “Infinity Blade III” on iOS.

Image: Wall Street Journal, Jan. 8, 2014gamerista (TM) (c) 2015 www.gamerista.net #2015gamescenarios

SEGWAY FOR THE EYES


Consumer virtual reality products reached the top of the “hype curve” last year but complete, whole product solutions have not yet successfully hit the market yet…

No killer apps exist. It takes a complete ecosystem with a unified and compelling marketing, sales, and distribution”offer” to create an audience. To date, no major player has created one…

#2015gamescenarios

JURY IS STILL OUT ON VR EXPERIENCES

Most all of the experiences being made for VR are short-form immersive explorations.

None have any substantive user interaction capabilities or affordable cross-game devices. The VR “platform” will require a killer app experiences with an integrated application and platform solution made commercially available at a reasonable price.


Oculus Rift

Oculus GearGoogle Cardboard

“Hi fi”

“Low fi”

Short Form Long Form

AAA Console

Mobile

#2015gamescenarios

AUGMENTED REALITY EXPANDS


Microsoft Project Hololens

#2015gamescenarios

GOGGLE TAKES A MAGIC LEAP OVER GLASS


gamerista TM

VIDEO GAME R & D

DIGITAL VIDEO GAMES STRATEGY

USER AND AUDIENCE EXPERIENCE TESTING & RESEARCH

ADVANCED VIDEO GAME DEVELOPMENT

DIGITAL VIDEO GAMES INDUSTRY ECOSYSTEMS MARKET RESEARCH

FOR FURTHER INFORMATION

gamerista TM STUDIO LAB AUSTIN STUDIOS RED BUILDING, #400 1901 E. 52nd. STREET AUSTIN, TEXAS 78723

+1.512.825.6866 - Direct +1.512.897.7100 - Main [email protected]

www.gamerista.net @thegamerista facebook.com/gamerista

[email protected]


mailto:[email protected]

Gamerista 2015 Scenarios for the Future of Gaming r4.0

Marketing

Transcript of Gamerista 2015 Scenarios for the Future of Gaming r4.0