25. THE OLD WORLD
âConsumer Software, Services & Devicesâ,
âEntertainment & Devicesâ Division ProďŹt/Loss
Lifetime results for this
division = $7.807B loss
27. THE OLD WORLD
âGamesâ, âNetworked Products & Servicesâ,
âConsumer Products & Servicesâ
Results for this division
since 2000 = ÂĽ252.9B
loss (around $3.1B)
35. THE OLD WORLD IS LARGE BUT
SHRINKING FAST
⢠In summary;
⢠Investors are not showing conďŹdence in the future of large traditional publishers
⢠Sony, Microsoft showing losses for console divisions over the last 10 years
⢠Nintendo in âdisarrayâ
⢠Retail sales dropping year on year since 2009
⢠Major European retailer Game in serious trouble
⢠Casual & kids games on console and handhelds hit by an unseen force
36. THE DEATH OF DEDICATED ELECTRONICS HARDWARE
Down 17% Down 42.5% Down 32.6%
Down 20.5% Down 20.8%
45. THE NEW WORLD IS GROWING VERY
FAST
⢠In summary;
⢠Now 3 out of 5 of the worldâs largest gaming companies distribute digitally, are
freemium focussed
⢠The audience sizes for a hit game has increased 20x on new platforms like FB, iOS
and Android
⢠New Mobile/Social platforms are driven by huge companies
⢠In Japan freemium social mobile has already overtaken the traditional business
46. THE LAST BIG CHANGE
When The Arcades Died, What Came Next?
47. THE LAST BIG CHANGE
Per Capita Spending on Video Games in the United States by Revenue Model (2010
dollars) Copyright Š 2012 SuperData Research
The 1980âs
Traditional Retail revenue hovers between 3% and 35% of
Arcade
48. THE LAST BIG CHANGE
Per Capita Spending on Video Games in the United States by Revenue Model (2010
dollars) Copyright Š 2012 SuperData Research
The 1990âs
Traditional Retail revenue grows steadily
from 38% to 166% of Arcade
49. THE LAST BIG CHANGE
Per Capita Spending on Video Games in the United States by Revenue Model (2010
dollars) Copyright Š 2012 SuperData Research
The 2000âs
Traditional Retail
revenue grows
sharply, ending up
17x the size of
(declining) Arcade
50. THE LAST BIG CHANGE
Per Capita Spending on Video Games in the United States by Revenue Model (2010
dollars) Copyright Š 2012 SuperData Research
What happened
here?
The Tipping Point What killed the
arcade?
51. THE LAST BIG CHANGE
The 1980âs
â˘Arcades dominated
home experience
â˘Better graphics
â˘Bigger screens
â˘Better controllers
52. THE LAST BIG CHANGE
The 1980âs
â˘Arcades dominated
home experience
â˘Better graphics
â˘Bigger screens
â˘Better controllers
53. THE LAST BIG CHANGE
The 1980âs
â˘Arcades dominated
home experience
â˘Better graphics
â˘Bigger screens
â˘Better controllers
54. THE LAST BIG CHANGE
The 1990âs
⢠Arcades start much more powerful
than home consoles
⢠Mid 90âs consoles and PC start
competing with textured 3D arcade
games
⢠Sonyâs entry into the business - a
company 3.7x bigger than Nintendo
⢠1998 Dreamcast launched, same as
Naomi system board, less memory
55. THE LAST BIG CHANGE
The 1990âs
⢠Arcades start much more powerful
than home consoles
⢠Mid 90âs consoles and PC start
competing with textured 3D arcade
games
⢠Sonyâs entry into the business - a
company 3.7x bigger than Nintendo
⢠1998 Dreamcast launched, same as
Naomi system board, less memory
56. THE LAST BIG CHANGE
The 1990âs
⢠Arcades start much more powerful
than home consoles
⢠Mid 90âs consoles and PC start
competing with textured 3D arcade
games
⢠Sonyâs entry into the business - a
company 3.7x bigger than Nintendo
⢠1998 Dreamcast launched, same as
Naomi system board, less memory
57. THE LAST BIG CHANGE
The 2000âs
⢠Home consoles now in parity or
above arcades in power
⢠Arcade still have better
controllers, bigger screens
⢠Microsoftâs entry into the business
- a company 6x Sony, 12.7x
Nintendo
⢠Dead arcades - novelty
controllers/cabinets, 2D ďŹghters
58. THE LAST BIG CHANGE
The 2000âs
⢠Home consoles now in parity or
above arcades in power
⢠Arcade still have better
controllers, bigger screens
⢠Microsoftâs entry into the business
- a company 6x Sony, 12.7x
Nintendo
⢠Dead arcades - novelty
controllers/cabinets, 2D ďŹghters
59. THE LAST BIG CHANGE
The 2000âs
⢠Home consoles now in parity or
above arcades in power
⢠Arcade still have better
controllers, bigger screens
⢠Microsoftâs entry into the business
- a company 6x Sony, 12.7x
Nintendo
⢠Dead arcades - novelty
controllers/cabinets, 2D ďŹghters
60. THE TIPPING POINT
⢠Two big things happened;
1.Bigger companies entered the games business
⢠More marketing clout, grow the overall business
2.Chips got cheap enough and lower power enough
⢠Creating an âarcade experienceâ in the home, that pulled in the arcade gamers
⢠Home consoles had always been cheaper and more convenient, but these advantages now
really mattered
⢠Worth noting arcades still often had bigger screens & always better controllers
61. THE NEXT BIG CHANGE
?
When The Consoles Die, What Comes Next?
62. THE NEXT BIG CHANGE
When The Consoles Die, What Comes Next?
63. THE DEATH OF DEDICATED ELECTRONICS HARDWARE
Down 17% Down 42.5% Down 32.6%
Down 20.5% Down 20.8%
65. ⢠âSustaining Technologiesâ
dominate
⢠Disruptive tech enters the
market
⢠Incumbents donât take it
seriously
⢠It rapidly increases in
performance
⢠Disruptive tech replaces
all usages
66. ⢠âSustaining Technologiesâ
dominate
Large scale businesses
computing ⢠Disruptive tech enters the
ScientiďŹc
market
computing
Personal ⢠Incumbents donât take it
Computer seriously
Small business
computing
⢠It rapidly increases in
performance
Hobby computing
⢠Disruptive tech replaces
all usages
67. ⢠âSustaining Technologiesâ
dominate
AAA
Console Games ⢠Disruptive tech enters the
market
Handheld Games
iOS/Android ⢠Incumbents donât take it
devices seriously
⢠It rapidly increases in
Kids Games performance
Casual Phone
Games ⢠Disruptive tech replaces
all usages
68. We are here ⢠âSustaining Technologiesâ
dominate
AAA
Console Games ⢠Disruptive tech enters the
market
Handheld Games
iOS/Android ⢠Incumbents donât take it
devices seriously
⢠It rapidly increases in
Kids Games performance
Casual Phone
Games ⢠Disruptive tech replaces
all usages
73. WHATâS HAPPENING RIGHT NOW?
⢠Two big things are happening;
1.Bigger companies have entered the games business
⢠More marketing clout grows the overall business
2.Chips are getting cheap enough and lower power enough
⢠Creating a âconsole experienceâ on the move, pulling in the console gamers
⢠Mobile games have always been cheaper and more convenient, but these advantages now
really matter
⢠Worth noting that consoles will still often had bigger screens & always better controllers
78. HIDEO KOJIMA
âGamers should be able to take the
experience with them in their
living rooms, on the go, when
they travel -- wherever they are
and whenever they want to play. It
should be the same software and the
same experience,â
79. GABE NEWELL
âI suspect Apple will launch a living
room product that redeďŹnes people's
expectations really strongly and the
notion of a separate console
platform will disappearâ
80. KOTAKU
âTim Cook holds the future of
gaming in his hands.â
82. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
% of the US population who visited the cinema on a weekly basis (Michelle Pautz, Elon University, 2002)
83. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
Total UK cinema attendance (British Film Institute, Cinema Advertising Association & Rentrack EDI)
84. CONSOLES WONT DIE - CINEMA
WASN'T KILLED BY TV!
UK box ofďŹce cinema revenue as a % of GDP (Bakker 2008 and ONS)
85. CINEMA WAS CRUSHED BY TV
⢠The âplatform holderâ (cinema) didnât do ok - thousands of cinemas closed down
⢠The âcontent peopleâ (movie studios/distributors) did ok
⢠Made movies available on the lower-res âfree to watchâ TV and âfor hireâ VHS
platforms
⢠Games content developers need to do the same - move content to new low-res
platforms - or we will suffer the same fate as the cinema