The Cyworld AppStore saw continued growth in the first quarter of 2011, with nearly 800,000 new users, total revenue reaching $7 million USD, and 30 new games launched. Simulation and RPG games performed well, driving user traffic and revenue. While male users were still the majority, female players accounted for more app installations. Foreign game development increased compared to prior periods. The report concluded further growth is expected in simulation games and with the launch of new platforms and genres diversification.

1. Korea Social Game Market
Trend Report
2011 First Quarter (Vol. 3)

2. Table of Contents
Market Overview .......................................................................................................................................... 3
Accumulated AppStore Users .................................................................................................................... 3
Total Revenue of Cyworld AppStore.......................................................................................................... 4
Gender Ratio and Age Distribution ........................................................................................................... 5
Age Distribution by Gender ....................................................................................................................... 6
RPG Genre continues to show potential....................................................................................................... 7
DAU for RPG Genre ................................................................................................................................... 7
Revenue for RPG Genre ............................................................................................................................. 8
ARPPU for RPG Genre ............................................................................................................................... 8
Gender Ratio for RPG Genre ..................................................................................................................... 9
Simulation Games Going Strong ................................................................................................................. 10
Total Install Ratio and Total Revenue Ratio ............................................................................................ 10
Revenue of Simulation Genre .................................................................................................................. 11
ARPPU of Simulation Genre by Gender ................................................................................................... 12
Number of Installs – Business Management........................................................................................... 12
A Look At Entire Cyworld AppStore ............................................................................................................ 13
ARPU of All Genres .................................................................................................................................. 13
ARPPU of All Genres ................................................................................................................................ 14
Accumlated Number of Installs by Genre................................................................................................ 15
DAU of All Genre ..................................................................................................................................... 16
Revenue of All Genre ............................................................................................................................... 17
Developers at a Glance ............................................................................................................................... 18
App Installs Ratio .................................................................................................................................... 18
Increase of Foreign Developed Games ....................................................................................................... 18
Total number of Apps in Cyworld AppStore ............................................................................................ 19
Conclusion ................................................................................................................................................... 20
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3. Market Overview
Cyworld AppStore, after having a positive fourth quarter in 2010, has continued to grow across
the board in the 1st quarter of 2011. Users, developers, games and revenue saw an increase at
the start of the new year.
The Cyworld AppStore attracted close to a 800,000 new users in the 1st quarter or roughly
about 260,000 new users each month, increasing the overall the total users from 3.6M users to
4.5M users at the end March 2011.
5,000,000 25,000
all users
4,500,000
new users
4,000,000 20,000
3,500,000
3,000,000 15,000
2,500,000
2,000,000 10,000
1,500,000
1,000,000 5,000
500,000
0 0
9/30
10/31
11/30
12/31
1/31
2/28
3/31
4/30
5/31
6/30
7/31
8/31
9/30
10/31
11/30
12/31
1/31
2/28
<Line graph 1: Accumulated AppStore Users>
The overall increase in users also had a positive impact on the total revenue for the Cyworld
AppStore. While the total revenue ending December 2010 was slightly over $5M USD, the
overall revenue at the end of March 2011 was at $7M USD.
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4. Total Revenue of CyworldAppStore (Mar 2011)
₩900,000,000
₩800,000,000
₩700,000,000
₩600,000,000
₩500,000,000
₩400,000,000
₩300,000,000
₩200,000,000
₩100,000,000
₩0
<Line graph 2: Total Revenue of Cyworld AppStore (Mar 2011)>
Games and the number of developers also increased. There were a total of 30 games launched
in the first quarter from both local and foreign developers. As mentioned in the previous report,
2010 was a good year for local developers, but expect 2011 to be a better year for foreign
developers as well.
Demographics for the Cyworld AppStore remain very much the same as the previous
quarters. In terms of overall gender ratio for AppStore users, there continues to be slightly
more male users than female users (51:49) and remained unchanged from the end of the
previous quarter. Again, while there are more male users visiting the AppStore, it is the female
users that are installing apps, more than the male users (56:44).
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5. <Pie graph 1: Gender Ratio> <Pie graph 1: Age Distribution>
The overall AppStore age distribution also showed little change from the previous
quarter. Majority of the users who are using the AppStore are university students between 19-
24 years old (32%). They are then followed by high school students between 16-18 years old
(19%) while young professionals between 25-29 years of age and teenagers between 13-15 year
old (both at 15%) round out the majority age groups in the AppStore.
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6. <Pie graph 3: Age Distribution by Gender>
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7. RPG Genre continues to show potential
Mentioned in the fourth quarter report last year, RPG genre was said to have potential based
on the early numbers of new games that were introduced towards the end of the fourth
quarter. The genre had a strong growth from last year with the increasing traffic, but had
difficulties at the start of the 1st quarter. With one new RPG game introduced at the end of the
1st quarter, the DAU for the genre took a slight dip in March. Overall, the genre continues to be
driven by two popular games, Friends Fighters and God Wars. We’ll see how the new entrants
will perform in the next quarter.
<Line graph 3: DAU for RPG>
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8. <Line graph 4: Revenue of RPG Genre>
The revenue for the genre has also gone up with the increased traffic. As seen in the graph,
RPG genre has been overall positive despite the dip in revenue during the month of February.
The same can be said for the Average Revenue per Paying User (ARPPU) for the RPG genere.
<Line graph 5: ARPPU for RPG Genre>
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9. As with past quarter, the RPG genre is still a male dominated genre with its current game lineup.
Whether we’ll see a RPG game targeted towards the large female user base remains to be seen,
but clearly, there is an opportunity there.
<Pie graph 4: Gender Ratio for RPG>
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10. Simulation Games Going Strong
While RPG genre continues to have good results, the games that draw much of the users to the
AppStore are simulation games. Combining business simulations, farm and aqua management
and city building games into a general simulation genre, these games continued to drive much
of the revenue in the 1st quarter.
<Pie graph5: Install and Revenue Ratio for Simulation Genre>
Leading the simulation genre are games Aqua Story, Every Town and Fashion City, each fall
under a different category within the simulation genre. They have continually held their spot in
our daily Top 10 ranking in the AppStore. Fashion City which saw a tremendous growth in the
past year, is likely to hit 1M installs the second quarter and will become only the third game to
have over a million installs. We’ll continue to see a positive outlook for games in this genre for
the near future. Meanwhile, Every Town saw a tremendous growth in revenue after it
launched their payment in December driving the entire Farming genre up.
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11. <Line graph 6: Revenue of Simulation Games>
Farming, Aquarium, Business Simulation and RPG games are driving most of the traffic and
revenue. The business simulation genre, especially, continues to see a steady increase in users
from both male and female audiences, but it continues to be very popular with the female user
base. With no new games introduced to the genre during the 1st quarter, the traffic increase
was from the solely from the existing games. Café Storia, a coffee shop management game,
continued to attract old and new users.
While female users tend to install more simulation games, the ARPPU for male users in the
Business Simulation genre increased from 4th quarter last year and were actually spending as
much as if not more than their female users in the 1st quarter.
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12. <Line graph 7:Number of Installs – Business Simulation Genre >
<Bar graph 2: ARPPU of Simulation Genre by gender>
12

13. A Look at the Entire Cyworld AppStore
In addition to the Simulation and RPG genre, we cannot forget about the games in other genres.
Let see how these genres are performing in terms of their Average Revenue per User (ARPU)
and Average Revenue per Paying User (ARPPU). (Note that the ARPU was calculated with
Revenue/Accumulated Installs due to the lack of UV stats. Therefore, the ARPU listed on the
graph is smaller than the actual value).
<Line graph 8: ARPU of All Genres >
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14. <Line graph 9:ARPPU of All Genres >
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15. The install numbers for all genres continued to grow steadily throughout the 1st quarter.
Puzzle and Casual games continue to attract installs, and lead all the other genres however, as
seen in the previous graphs, these types of games does not monetize as well as compared to
other genres.
<Line graph 10: Accumulated Number of Installs by Genre>
15

16. Looking at the DAU graph below, readers of our past reports will notice the DAU graph for this
report differs from previous ones. Due to a change in gathering statistics, we have updated the
graph accordingly. Games in the Aquarium and Farming genre continue to attract more daily
users than other genres. With the exception of the Business Simulation and RPG genre, much
of the other genres remained flat in the 1st quarter.
<Line graph 11: DAU of All Genres >
16

17. While revenue for each genre had its ups and downs for the 1 st quarter, there was one genre
which had a great 1st quarter. Farming genre saw unbelieveable spike in their revenue, making
close to four times the revenue in December 2010 in three months time.
<Line graph 12: Revenue All Genres>
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18. Developers at a Glance
As mentioned in previous reports, the AppStore has been driven by a few successful games.
This remains true for the 1st quarter with only 3% of the apps having over 500,000 installs. On
the other end, 60% of the apps in the AppStore have fewer than 50,000 installs.
<Pie graph 6: Apps Install Ratio>
Increase of Foreign Developed Games
In 2010, the platform saw an increase of games from local developers and they were the driving
force for the platform during that time. In the 1st quarter, a total of 33 apps were launched in
the AppStore. It’s interesting to note that six of those games were developed by foreign
developers. Although considered a small number, to put it into perspective, Cyworld AppStore
launched with eight foreign developed apps/games in 2009. In 2010, fewer foreign developed
apps were launched, seven in total. Having already launched six foreign developed games in
the first quarter, we’re likely going to see more foreign games published for the remainder of
the year, adding variety to the AppStore.
18

19. <Bar graph 1: Number of Apps in AppStore>
Since the launch of AppStore, foreign developers who wanted to publish in this platform
entered the market by themselves. Although entering a new market has its challenges, we are
now seeing local companies set up as a publisher to ease the entry barriers for foreign
developers and help bring their games into the Korean market. These local publishers mainly
focus on localization, payment integration, local support and marketing.
While there was a mix of casual and simulation games launched by a small number foreign
developers in the 1st quarter, one of the larger sized game was Wild Age, also known as Happy
Tribe on Facebook. While Happy Tribe’s performance on Facebook was below average, their
localized entry into the Korean market through a local publisher could prove differently.
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20. Conclusion
The start of 2011 has been a good one for Cyworld AppStore. Continuing from last year,
Cyworld AppStore has overall continued to experience a solid growth in the 1st quarter of 2011.
After a transition period in the past two quarters, the AppStore has taken off and experienced a
fast growth through the 1st quarter of 2011, a positive growth in all areas as well.
This is the first time the AppStore has seen growth in foreign games since launching the service
back in September 2009. With new local publishers establishing themselves in the marketplace,
we’re likely to see more foreign games in the next quarter as well as for the remainder of the
year. In the 1st quarter, most of the foreign titles were developed by Chinese developers.
And what is trending in the AppStore? Simulation is a very good genre to be developing for.
We’ll continue to see games be published in the simulation genre and see success in RPG game
as well. Given how male audience has dominated the RPG, female focused RPG game could
likely see a positive result as well. Mobile platform is also an area we see will improve as it’s
slated to launch in 2nd quarter in 2011.
And as we see more local and foreign developers enter this market, we’ll likely see new games
targeting the popular genres but the AppStore should also benefit from the variety of games
added to other existing genres.
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