1. Live case – Social network games STEEP analysis and network analysis Group 7a February 7 - 2011

2. Executive summary This presentation focuses on the turkish market of social network games. It provides a STEEP and network analysis, to better understand the current situation and possible future development. Litterature studies show a tremendous growth in Turkey’s internet usage creating potential players. ”Offensive” content is a delicate matter, but future membership of the European union may ease social and political issues over time.

4. No victory conditions – the game never ends

5. Virtual currency often usedExamples include ”Farmville”, ”Mafia Wars”, ”Stardoll” and ”Cityville”. Source: Malin Ströman, former VP Stardoll

7. STEEP analysis, social network gaming in the Turkish market Social – 99% muslim population (1). Conservative values can resist some ”offensive” content (2). Turkish language important. Dislikes paying upfront (3) Technology – Internet user growth 2009 to 2010 from 30% to 41.6% of population (4). 25M Turkish users on facebook, 4th largest in the world (5). Download limits on many broadband connections (6). The online games market is the fastest growing component with a projected annual growth rate of nearly 40 percent (7).Control /adapt content to users (local preferences), use microtransaction payment model. Trend indicating rapid progress in technological infrastructure and usage. Huge cluster of new internet users makes Turkey rich in social network game potential. Avoid large data transfers.

8. STEEP analysis, social network gaming in the Turkish market Economy - Stable economy (8). Less money to spend on games compared to e.g Sweden and Poland. GDP per capita in US dollars, current prices and PPPs (10). Big Mac index, illustrating price levels. Price in US dollars. (9). Take price levels and purchasing power into account when setting prices

9. STEEP analysis, social network gaming in the Turkish market Environmental – ”Significally aware of the environmental pollution”. (11). Political –Striving for EU membership, earliest 2013. Adopting EU regulations. (12). EU membership resulting in greater stability. Political actions against ”offensive material” (13). Environmentally aware citizens requires sustainable environmental policies throughout the business. Future EU membership will facilitate trade and labor agreements.

10. Network analysis Feedback. Attempt to release games directly to customers Inter. Dev. Users Users use FB to socialize and play games. User activity provides ad revenues for FB Some games use advertisement business models. International portals (Facebook) Dom. portals Advertisers Dom. dev Informal relation Formal relation

11. Examples of prominent actors Céidot Game Studios Dom. dev Zynga, Crowdstar, Stardoll Inter. Dev. Dom. portals Ekolay.net, Mynet.com Facebook International portals

12. Network analysisMost important relationships Users <-> Portal Games made by the developer are played on the portal. User activity is essential for portal profitability. Developers (Domestic/International)<-> Portal (Facebook) Developers such as ”Zynga” create games for Facebook. The relationship between facebook and the developers is under a lot of tension since facebook requires payments to be made by their own virtual currency, taking 30% of the transaction value (14). Developers (Domestic/International) <-> Users Because of the 70/30 model of Facebook developers are now looking into ways of distributing their content directly to the user. User may provide feedback for future improvements. But so far developers such as Zynga needs facebook more than facebook needs them. Facebook entangles users in the social web, leaving them obliged to help their friends (15).

13. Threats to Facebook and iTunes dominance Popularity of products are distributed according to power law distribution. Few titles become very popular, the ”hits”. The long tail refers to the niche content where lots of products can cluster and become profitable together. FB and iTunes control of content could make longtail business models lucrative as competition when users are looking for niche games. Source: Enders et al, 2008. The long tail of social networking: Revenue models for social networking sites

14. Conclusion Tremendous trend in growth of internet usage in Turkish homes Adapt business to local preferences Consider Buyer power Monitor the development of Turkish EU-membership FB reaches a majority of Turkish internet users. But don’t forget local networks/portals if adapting to local content!

15. Bibliography 1) http://www.oxfordreference.com.ez.hhs.se/views/ENTRY.html?entry=t142.e11843&srn=2&ssid=58762027#FIRSTHIT 2) http://www.hurriyetdailynews.com/n.php?n=turkish-parents-fear-children-at-risk-using-internet-2010-02-21 3) http://www.activegamingmedia.com/media-center/turkey-rising-%E2%80%93-an-interview-with-erkan-bayol-executive-producer-at-ceidot-game-studios 4) http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=6308 5) http://www.socialgamesobserver.com/facebook-newsflash-new-alcohol-ad-guidelines-local-patents-and-problems-in-turkey-2367 6) http://www.activegamingmedia.com/media-center/turkey-rising-%E2%80%93-an-interview-with-erkan-bayol-executive-producer-at-ceidot-game-studios 7) http://www.hurriyetdailynews.com/n.php?n=turkey-grows-rapidly-in-online-gaming-2010-09-14 8) http://www.istockanalyst.com/article/viewiStockNews/articleid/3770668 9) www.bigmacindex.org 10) http://www.oecd.org/document/35/0,3746,en_2649_201185_46547235_1_1_1_1,00.html#gdp 11) Awareness to Environmental Pollution in Turkey, 2008. Murat Cankur 12) http://euobserver.com/9/23813 13) http://www.socialgamesobserver.com/facebook-newsflash-new-alcohol-ad-guidelines-local-patents-and-problems-in-turkey-2367 14) http://www.tbiresearch.com/facebook-payments-could-boost-revenue-by-200-to-400-million-per-year-2010-2 15) http://www.pcworld.com/article/196010/sorry_zynga_farmville_needs_facebook.html 16) Enders et al, 2008. The long tail of social networking: Revenue models for social networking sites Interview with Malin Ströman, conducted 27 January 2011