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
gameristaTM
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
info@gamerista.net
www.gamerista.net
@thegamerista
facebook.com/gamerista
bhollyman@gamerista.net

THE DIGITAL GAME ECOSYSTEM
CONTEXT/VENUE CONTENT APPLICATIONS
PLATFORMSSERVICES INFRASTRUCTURE
gamerista (TM)
(c) 2015 www.gamerista.net #2015gamescenarios

gameristaTM
THEME 1:
OLD WINE, NEWBOTTLES
#2015gamescenarios

$100 BILLION
IT’S A BIG GAME
THE 2015 GLOBAL DIGITAL GAMES INDUSTRY
gamerista (TM)

NEWCONSOLES DRIVETHE 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.
gamerista (TM)

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

THE LONGTAIL = 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.
gamerista (TM)

gameristaTM
THEME 2:
FANS RULE
#2015gamescenariosgamerista (TM)

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
gamerista (TM)
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
gamerista (TM)
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.

NEWCONTENT, NEWAUDIENCES
gamerista (TM)
(c) 2015 www.gamerista.net #2015gamescenariosgamerista (TM)

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
gamerista (TM)

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
gamerista (TM)
1 0.000003=319,325
2014
2015
1
250,325
#2015gamescenarios

MARKETING MONEYTALKS, 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)

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.
gamerista (TM)
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
#2015gamescenarios
gamerista (TM)
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)

HUNGER for e-SPORTS GAMES
4.5 - 5.5 Billion viewer hours
Source: IHS Technology, 2015gamerista (TM)

gameristaTM
THEME 4:
TRANS-PLATFORM,TRANS-MEDIA
gamerista (TM)

CONSOLES GO FULLTRANS-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.
gamerista (TM)

SOURCES: WORLDPAY, gamerista
THETRANS-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
gamerista (TM)

SOURCES: WORLDPAY, gamerista
GLOBAL GAME PLATFORMS
gamerista (TM)

STEAM BUILDS QUICKLY
Valve’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.
gamerista (TM)

ANDROID COMESTOGETHER
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.
gamerista (TM)
Lillipop KitKat
Jelly Bean Icecream Sandwich
Gingerbread

gameristaTM
THEME 5:
PARADOX OF INDUSTRY

THE SMALLESTBIG INDUSTRY
STUDIO SIZE
INDEPENDENT 2 - 5 6 - 10 10 - 30 31 - 50 51 - 80
81 - 100 101 - 150 151 - 200 201 - 300 301 +
SOURCE: GDC STUDY, 2014gamerista (TM)

UNITY & UNREAL : RENTTHETOOLS
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.
gamerista (TM)

IT’S CHEAPER OVERTHERE
$ US HOURLY RATES
ARTIST $61 $68 $31 $37 $18 $15
LEAD ARTIST $75 $83 $38 $45 $23 $19
ARTDIRECTOR $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 GAMETESTER $42 $46 $21 $25 $13 $10
LEAD VIDEO GAME QA $63 $69 $31 $38 $19 $16
SOURCE: gamerista Analysis, 2014
gamerista (TM)

gameristaTM
THEME 6:
MAD SCIENCE EXPERIMENTS
gamerista (TM)

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)

SEGWAY FOR THE EYES
gamerista (TM)
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 OUTON 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.
gamerista (TM)
Oculus Rift
Oculus Gear
Google Cardboard
“Hi fi”
“Low fi”
Short Form Long Form
AAA Console
Mobile
#2015gamescenarios

AUGMENTED REALITY EXPANDS
gamerista (TM)
Microsoft Project Hololens
#2015gamescenarios

GOGGLETAKES A MAGIC LEAP OVER GLASS
gamerista (TM)

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
info@gamerista.net
www.gamerista.net
@thegamerista
facebook.com/gamerista
bhollyman@gamerista.net
gamerista (TM)

Gamerista 2015 Scenarios for the Future of Gaming r4.0

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