1. ONLINE GAMING
FABIEN SIOUFFI. VP, ONLINE AT TAKE 2
Online gaming in Asia in 2011. Fabien Siouffi 1

2. ABOUT ME
 Previous life
• Internet early adopter (Mosaic ? BBS anyone ? )
• Microsoftee then Sun Microsystems in Europe
 Asia !
• 10 years in Asian gaming
• Counter Strike, World of Warcraft asian launches in mid 2000’s
• At EA, FIFA Online Korea and South East Asia
• Electronic Arts move to overall online centricity
 Now
• NBA 2K Online with Tencent China. Forecasting 50m active users
• Baseball Online with Nexon. Targeting ARPU of 50$/month
• Civilization Online. Large scale MMORPG going against World of Warcraft
• Social Mobile push in Japan and Social Web in China
Online gaming in Asia in 2011. Fabien Siouffi

3. A DECADE OF GAMING BOOM IN ASIA
 The problem with packaged games
• Limited market : Piracy
• Limited reach : high specs, fat clients
• Limited appeal : solo experience, static product designs
 Multiplayer PC Games showed the way
• Extended lifecycle : DOTA, Counter Strike enduring craze
• Social gaming : PC Bangs (Internet Gaming Rooms)
• Dilemma for publishers : Huge consumption, no monetization
 Online PC Games
• Huge market : Server only = No piracy
• Massive Reach : Low/adjustable specs
• Massive Appeal : Continuous refresh of the game content + online events +
community based design
Online gaming in Asia in 2011. Fabien Siouffi

4. THE RISE OF GLOBAL PLAYERS
 1998 – 2004 : Innovation from South Korea
• Lineage by NC Soft (Jake Song) : first MMORPG.
• Ragnarok by Gravity : First Casual MMO
• Kart Rider by Nexon: First Free to Play casual game
 2003 - 2006 : Online gaming boom throughout Asia
• World of Legend in China hits 1 million Peak Concurrent Users (PCU)
• Korea : Lineage has 1m subscribers. Kart Rider hits 200k PCU
• Ragnarok reach 75,000 PCU in both Philippines and Thailand
 2006-2010 : Games for everyone
• Higher end MMOs. World of Warcraft. First 3D game in China, first (and only) western
success in China. 1m PCU
• New genres of MMO.
o MMO-FPS – Sudden Attack kills Counter Strike
o MMO-Sports – FIFA Online hits 200k PCU in Korea
 2010 -? : Games everywhere
• Play on Social Networks
• Build social networks around games. Gree and DeNA in Japan
• Clientless and portable. Near ubiquity
Online gaming in Asia in 2011. Fabien Siouffi

5. ONLINE GAMING IN ASIA TODAY
 Market value : $13Bn (USA + Europe = $9Bn!)
 415m of online gamers
 200k Internet Gaming Rooms
 Birth of giants : NHN worth $10Bn , Tencent worth $40Bn
 Asia 2 years in advance of the west. Invented social networks, free to play
business model, community design, data driven development
 Asian companies go big, go out
• US and Europe subsidiaries
• Consolidation started, lots of M&A
 Oligopolistic Portal business
• Platforms dominate
• Increased reach. Female and casual gamers conversions
• Increased monetization. ARPPU rising
Online gaming in Asia in 2011. Fabien Siouffi

6. ONLINE GAMES MARKETS 2011
TOTAL MARKET : $12.7B
SOUTH KOREA
Rev : $2,900M
Gamers : 30M
IGR : 19,000
CHINA
Rev : $6,470M
Gamers : 311M
JAPAN
IGR : 125,000
Rev : $2,594M
INDIA Gamers : 10M
Rev : $10M IGR : 1,500
Gamers : 4M
THAILAND TAIWAN
IGR : 1,500
Rev : $65M Rev : $474M
Gamers : 6.7M Gamers : 4M
IGR : 10,000 IGR : 2,000
Thailand
VIETNAM
MALAYSIA Rev : $90M
Rev : $25M Gamers : 6M PHILIPPINES
Gamers : 5M IGR : 15,000 Rev : $30M
IGR : 5,000 Gamers : 4M
IGR : 6,000
SINGAPORE
INDONESIA
Source : IDC 2010, Pacific Epoch Asia, Niko Partners Rev : $15M
Rev : $35M
Gamers : 0.5M
Gamers : 2M
Growth : 100
IGR : 10,000
Key markets : China, Korea, Japan, Taiwan
Emerging Markets : S.E.A.
Online gaming in Asia in 2011. Fabien Siouffi 6

7. HOW IT WORKS
 Acquisition. Registered Users (RU), Installs, PCU
• Must
o Trigger virality
• Avoid
o Server downtime
o Hacks
 Retention. Active Users, ACU
• Must
o Repeatable core gameplay,
o Operation events
o Community loop
• Avoid
o Undesired features
o Linear game designs
 Monetization. ARPPU, LTV
• Must
o Metrics analysis. What the whales want
o Cash rich time poor vs time rich cash poor
• Avoid
o Breaking game balance
Online gaming in Asia in 2011. Fabien Siouffi

8. TIPS FOR MAKING IT WORK
 Acquisition
• Virality – Refer a friend program
• Accessibility –
o Light client = Keep it under 500Mb, refresh often
o Quick rewards
 Retention.
• Design stickiness. Show the end game at the beginning
• Community rules. Attract guilds, opinion leaders
• Events. Valentine’s day, CNY
 Monetization.
• Everything for the status conscious -> Purple items
• Pay for not losing face -> Erase stats of poor performance
• Bring luck into play -> Win a chance to win big
• Eliminate friction -> Buy at the moment of win or loss.
Online gaming in Asia in 2011. Fabien Siouffi

9. PLAYER BEHAVIORS ?
 Play out of home
• Simple to control, no sound, Boss button !
• Always on, running in the background
 Impulse buy
• Shopping is part of the gameplay experience
• Low denominated items
• Appeal to completist
 Repetitive play
• just one more go at it !
• Average online time : 5 hours/day in most serious MMOs
 Meet people online
• everyday : clan, guilds, party for a raid
• one time only : matchmake, date
• Date : Marriage feature in most of MMO
Online gaming in Asia in 2011. Fabien Siouffi

10. BUT WHY PEOPLE PAY ?
 Look good.
• Show off achievement. Epic mounts only accessible to level 70 players
 Play better.
• Progress faster. Skip time, remove the grind
 Have fun.
• More of that kind of fun. ManU vs Liverpool FIFA matches
 Meet girls.
• Gift item to that special one
 Make money.
• Buy because you know you can sell at higher price
• Game farming / Secondary market
Online gaming in Asia in 2011. Fabien Siouffi

11. IDENTIFYING GREATNESS IN ONLINE GAMES
 Do first, perfect later.
• Shorten dev loops, get the core gameplay right
o FIFA Online session match.
• Go public halfway through your development cycle.
o NBA 2K Social first beta after 4 months
• Get the community to tell you what they would like to see
o Street Mode or NBA Mode ?
 Immerse yourself in stats, and code accordingly
• Cap the free stuff : FIFA quick match mode
• Address balance issues. Dark Elves race in WoW
 Managing the lifecyle.
• Acquisition first, then retention then monetization. Don’t rush
• Usage, usage, usage
 Small Agile teams, with access to large pools of resources
• It all starts with one creative and one business guy. Keep the dynamic alive,
even if conflictual
Online gaming in Asia in 2011. Fabien Siouffi

12. ASIA HOT SPOTS
 Japan – Gree and DeNA
• 25m each of mobile social gamers
• Extremely high stickiness and ARPPU
• Each of them makes more revenue than Zynga with a tenth of the users
 China – Tencent
• Q + “open” platform.
• Going aggressively into mobile social games
 Vietnam
• Vinagames and VTC fostering fast growth
 Philippines and Indonesia
• Asia has more people on Facebook than in the US
• Indonesia, India and Philippines each more than 25m users
Online gaming in Asia in 2011. Fabien Siouffi