the change that is faced with the video game industry and why game developers are shifting to make smart OS games instead of traditional games

1. Presented by : Hazim Banjar
Student
P D 0 9 0 1 0 2
ID
1/22/2012

2.  Video gaming becoming mainstream
 Average age of video gamers in the US: 37
 Gender breakdown: 58 percent men; 42
percent women
 Percentage of US households that play video
games: 72
 global video game industry in 2010 pulled in
$56 billion. number is expected to reach $82
billion a year by 2015,

3.  The traditional (retailed and boxed games)
gaming industry is losing its charm:
1. Large numbers of layoffs and studio closing
2. shrinking (Japan) and non targeted markets
(China – South Korea)
3. Video game Retail sales dropped 8%
4. Middle budget publishers struggles (SEGA, THQ)
5. Cost of game development is extremely high

4.  Lack of innovation
 Majority trapped as work for hire
 Losing IP rights
 Spending too many years on making a game
 the Shigeru Miyamoto’s (worker) mentality
is no longer acceptable

5. Example:
$10 Million video game title budget
Selling 1 Million units for $60
$60 Brake down -:
-$12 for retail
-$12 for hardware console royalties (SONY – Nintendo –
Microsoft)
-$10 for recapture recoupment of reinvestment in R&D
-$9 15% of marketing add spending
= $17 profit for publishers . Development royalties $ ??

6. High Risk High Risk
High
• Console gaming • MMO gaming
C
A
P
I Medium Risk low Risk
T
A • Browser social gaming • OS smart phone and
L tablets Gaming
Low PROBABILITY High

9.  For Consumers  For developers
1. Cultural issues 1. Low cost budget, less time
2. Engaged at very small age 2. 70% profit from the value
3. Digital purchase one time chain
only 3. No need for publishers
4. Free to play or less than 4. Keeping the IP
$10 to buy 5. High volume
5. Easy recovery 6. It’s ok to fail
7. Opportunities to JV with
non gaming related
industry
8. Low piracy rate

10. Strength Weakness
Owning the IP Lack of business mentality
Creativity lack of staff or outsource dependent
No due date pressure
Self-publishing ability
Game development experience
Fast adaption to industry changing
conditions
Opportunities Threats
M&A. Work for higher opportunities Significant competitor presence
Low entry barrier level and Cost corporate publishers. free-price cut
development strategy
Funding access Fragmentation
Lower risk High Freemuim rate
Expanded adaption rate of smart phones Patent lawsuit wars between
in developed countries smartphone companies
Rise of social games and new genres Uncertainty

11. The iOS and Android alone are getting 58% share of
the US portable game software market

12.  Adapt:developers have to adapt using OS
SDK’s to make games. They can start by using
programs that are similar and familiar to the
developer.
 Improve: unlike traditional games. Smart OS
platforms games (if not imported from a
traditional platform) have to be improved and
updated on a constant basis
 Implement: the final phase after a successful
production .

13. • Needs, • price stisfy
games on
the go
Customer Cost
Communic
Convince
ation
• app • facebook, t
store, E- witer etc
portal

14.  Experiment for future opportunities
 Think beyond video games
 Cross platforms
 Make HTML5 games
 The feedback of your games is always true

15.  www.digi-capital.com
 theesa.co
 customfitfocus.com
 Capcom