The Global Games Market: Trends, Market Data and Opportunities

PeterWarman Peter Warman | CEO & Co-Founder | Newzoo 10 September 2015

PeterWarman Peter Warman | CEO & Co-Founder | Newzoo The Global Games Market: Trends, Market Data and Opportunities

Peter Warman | CEO & Co-Founder | Newzoo What’s Special? What’s Special? $1.2M Per Player is Prize Pool $16M Was Crowd the same as the $18M Funded by $2.50 2014 World Cup of every $10.00 3rd Place Prize donation, making Money. Winning Team Valve $54M $6M

New Direct Esports-Related Revenue Streams NEW CONSUMERS NEW RULES NEW METRICS ARE PRODUCERS FOR SUCCESS NEEDED? TAKE A STEP BACK FROM THE BIG DATA ANALYTICS SOUP NOW AND AGAIN…… NEWWHO?

THESE COMPANIES CURRENTLY SUBSCRIBE TO NEWZOO’S SERVICES Newzoo. The Experts On All Things Games. Newzoo is an innovative global market research firm with a primary focus on games. We provide our clients with a mix of consumer research, transactional data and financial analysis across all continents, screens and business models. We aim to be ahead the curve when it comes to global and local trends and always put hard data into a broader perspective.

MARKET TRENDS | CONSUMER INSIGHTS | DATA MODELING | PREDICTIVE ANALYTICS

SAN FRANCISCO AMSTERDAM SHANGHAI MOBILE MARKET INTELLIGENCE BY NEWZOO & TALKINGDATA

HISTORIC MARKET MARKET CONSUMER PLATFORM GAME/APP PREDICTIVE TRENDING TRENDS SIZING INSIGHTS DATA METRICS ANALYTICS

JOINT AMBITION the full suite, on a global scale MODELING & QUANTIFYING TRENDS

Esports Economy Growth

TAKEN FROM NEWZOO’S 2015 GLOBAL GROWTH OF ESPORTS REPORT ESPORT ECONOMY MATURING

GLOBAL NUMBER OF CONSUMER ENGAGED BY ESPORTS | 2015 & GROWTH TOWARDS 2017

37% GLOBAL 34% $252M +30% YoY NAM APAC $93.2M $85.2M +32% YoY 29% +28% YoY

REVENUES PER ESPORTS FAN COMPARED TO THOSE OF SPORTS SHOWS POTENTIAL

All $3.0Bn Sports Alternative Optimistic TOTAL ESPORTS $56 REVENUES $15 Scenario $1.1Bn Individual Sports $1Bn $7 $5 Report AVERAGE $20 REVENUE PER Scenario ENTHUSIAST $3$3 $1.0Bn Repucom $2

CONFIDENTIAL | LIMELIGHT BREAKFAST AUGUST 6TH 2015 A MACRO VIEW

Monitoring Global Growth

TAKEN FROM NEWZOO’S 2015 GLOBAL GAMES MARKET REPORT CHINA AND THE US NECK-AND-NECK

2015 GAME REVENUES PER REGION 2015 GAME REVENUES PER SCREEN / SEGMENT

Rank Country Revenues 1 China $6,500,940,064 11 Russia $336,402,000 2 Japan $6,183,574,320 12 Brazil $318,936,912 3 USA $6,015,517,552 13 Mexico $298,498,290 4 South Korea $1,849,657,577 14 Italy $298,265,226 5 United Kingdom $1,008,778,581 15 Spain $228,657,173 6 Germany $819,296,319 16 India $227,456,546 7 France $519,746,699 17 Turkey $205,203,435 8 Australia $517,988,650 18 Thailand $172,011,071 9 Canada $507,126,131 19 Indonesia $167,899,403 10 Taiwan $412,829,571 20 Hong Kong $160,117,567

Top 3 Fastest Growing Countries: India Indonesia Philippines

+75% CAGR +72% CAGR +63% CAGR

Source: Newzoo Global Games Market Report 2015 THE STANDARD FOR GAMES MARKET SIZING

Newzoo’s Global Games Market Report SPOTTING THE SPENDERS

Free Riders versus Big Spenders

TAKEN FROM NEWZOO’S 2015 COUNTRY CONSUMER INSIGHTS DOES TIME SPEND DEFINE A POWER USER?

MOBILE GAME SPENDERS AND NON-SPENDERS VS TIME SPEND Time Spend Clearly © 2014 Newzoo | Source: Newzoo Data Explorer Correlates with Share of TIME SPEND All Share That Spenders. Still There Are Mobile Spends Non- Gamers Money Spenders Spenders

ALL 119.9M 43.2% 51.9M 68.0M

< 3HRS / WEEK 76.9M 36.0% 27.7M 49.2M 4.7M

3 – 10 HRS / WEEK 31.4M 54.8% 17.2M 14.2M Free Riders That Play A Lot But Never Spend > 10 HRS / WEEK 11.7M 59.8% 7.0M 4.7M

SINGLE COUNTRY SCOPE: US

4.7M “Free Riders” A Potential Marketing Target Group?

All Minor Average Big Spenders Spenders Spenders Spenders

MONEY SPEND 4.2M ALL 51.9M 31.2M 16.4M 4.2M Big Spenders That Spend < 3HRS / WEEK 27.7M 20.9M 5.6M 1.2M A Lot of Money But Not

3 – 10 HRS / WEEK 17.2M 8.5M 7.8M 0.8M All Spend A Lot Of Time.

> 10 HRS / WEEK 7.0M 1.9M 2.9M 2.2M

SINGLE COUNTRY SCOPE: US

4.2M “Big Spenders” The Prime Sales Target Group?

All Minor Average Big Generated at Least Spenders Spenders Spenders Spenders $1.7Bn in 2014, or MONEY SPEND ALL 51.9M 31.2M 16.4M 4.2M < 3HRS / WEEK 27.7M 20.9M 5.6M 1.2M 33% 3 – 10 HRS / WEEK 17.2M 8.5M 7.8M 0.8M of All Revenues > 10 HRS / WEEK 7.0M 1.9M 2.9M 2.2M

SINGLE COUNTRY SCOPE: US

4.2M “Big Spenders” The Prime Sales Target Group?

TIME VERSUS MONEY SPEND ANALYSIS OF MOBILE GAMERS IN THE US Of US Big Spenders, A © 2014 Newzoo | Source: Newzoo Data Explorer Dominant Free Riders Big Spenders FEMALE MALE FEMALE MALE 65% 35% 38% 62% 30% MALE 21-35 MALE 21-35 12% 30% Is Male Between 21 and 35 4.7M 4.2M (Typical Game Enthusiasts) vs 12% for the Free Riders.

SINGLE COUNTRY SCOPE: US

HOME SITUATION: FREE RIDING VERSUS BIG SPENDING POWER USERS

PARENTS PARENTS 52% 34% 52% 4.7M 4.2M Have Children at Home versus 34% for Free Riders.

SINGLE COUNTRY SCOPE: US

FREE RIDING VERSUS BIG SPENDING POWER USERS

FULLTIME JOB FULLTIME JOB 61% 26% 61% 4.7M 4.2M Have a Full-Time Job versus 26% for Free Riders

SINGLE COUNTRY SCOPE: US

FREE RIDING VERSUS BIG SPENDING POWER USERS

TV (CONSOLE) PC / WEB BIG SPENDER BIG SPENDER 74% 73% 73% Also is a Big Spender on PC Gaming. 74% Also on Consoles. Total Wallet MOBILE BIG SPENDER Could Be $4bn. 4.2M SINGLE COUNTRY SCOPE: US

Monitoring the Diverse Ecosystem

TAKEN FROM NEWZOO’S MONTHLY CHINA MOBILE GAMES MONITOR PLATFORM TRACKING DATA

IOS GAME REVENUES TRACKING OF 10M YOUTUBE & TWITCH IOS & GOOGLEPLAY IN 50 COUNTRIES PC GAMERS VIEWING DATA DOWNLOADS

DATA ON A BILLION+ SMART DEVICES IN CHINA THE CHINESE MOBILE ECOSYTEM Apple Is China’s #1 Technology Brand by 2014 Revenues Historic performance of Western company in China revealed

2014 CALENDAR YEAR REVENUES AND PROFIT IN CHINA FOR KEY TECH BRANDS KEY FACTS

2014 Profit in China +32.3% +54.1% Full Calendar Year for Apple for Apple in China in China

NOTES

All numbers related to calendar year 2014. Revenues and profits of companies with a different fiscal year have been calculated based on quarterly reports to ensure comparability. Apple numbers are based on reporting segment Greater China (incl. HongKong and Taiwan). Samsung numbers are based on reporting on segment “China”. Huawei numbers are based on articles in Forbes on March 31, 2015 and Wall Street Journal on January 13, 2015. Operating profit is assumed to be equal across all regions. Lenovo numbers are based on reporting segment “China”. Tencent numbers are based on reporting segment Mainland China. Operating profit is assumed to be equal across all regions. Xiaomi numbers are based on article in Wall Street Journal on November 5, 2014 and are total company revenues and operating profits (across all regions as segmentation is not public). Baidu numbers are total revenues and operating profits (across all regions as segmentation is not public). Except for Lenovo, USD amounts are calculated using exchange rates as per 31 December 2014.

Source: Newzoo’s Global Games Market Report Premium & Free China Report Update | April 2015 www.newzoo.com ANDROID STORE PERFORMANCE

REACH OF ANDROID STORES IN CHINA | JUNE 2015

App Store App Store Installs MAU MAU Ranking Change # of Installs (M) Activity Index (English) (Chinese) (Growth) (M) (Growth) 1 +1 360 Mobile Assistant 360手机助手 142.0 2.1% 112.1 3.4% 79% 2 -1 Myapp (Tencent) 腾讯应用宝 138.1 -1.8% 101.0 -3.6% 73% 3 +1 MIUI app store (Xiaomi) 小米应用商店 4 -1 Baidu Mobile Assistant 百度手机助手 CONFIDENTIAL 5 +2 Huawei App Store 华为应用市场 This data is part of the Newzoo/TalkingData monthly China Mobile Games Monitor. More info: 6 -1 HiMarket 安卓市场 www.newzoo.com/chinamobile 7 +3 Vivo 步步高应用商店 8 - Google Play 谷歌 9 +2 Oppo Store 可可软件商店 10 -4 Wandoujia 豌豆荚 11 -2 Anzhi Market 安智市场 12 +3 Meizu 魅族应用商店 13 -1 91 Mobile Assistant 91助手 14 - China Unicom WoStore 中国联通沃商店 15 +1 Lenovo Store 联想乐商店 16 +1 Coolpad Store 宇龙酷派应用商店 17 +1 Sogou Mobile Assistant 搜狗手机助手 18 +4 Zhuoyi Market 卓易市场 19 +4 Gionee Anzhuoapk 金立应用商店 20 -1 China Telecom Tianyi Store 中国电信天翼空间

By Revenues powered by By Downloads powered by

RANK GAME TITLE PUBLISHER CHANGE RANK GAME TITLE PUBLISHER CHANGE

花千骨正版手游 1 梦幻西游-2015国民手游人人都玩不玩才怪 Netease - 1 Xia Zhang new (Fantasy Westward Journey) (The Journey of Flower) has 2 titles in the 全民突击全球第一真人实时对战枪战手 2 - FPS Tencent - 2 开心消消乐 Happy Elements 3 游 (Anipop) Top 10 (WeFire) Happy Elements 3 植物大战僵尸2 3 3 (Plants vs. Zombies 2: It’s About Time) PopCap 4 games by revenues 开心消消乐 (Anipop) 欢乐斗地主(QQ游戏官方版) 1 4 Hero Network 4 (Happy Lord QQ Official) Tencent 神武 - (Shen Wu) 拳皇98终极之战OL 5 Tencent 3 5 (The King of Fighters 98) 天天爱消除 Tencent new (Craz3 Match) 狂野飙车8：极速凌云 Tencent 2 6 6 全民飞机大战 (Asphalt 8: Airborne) Gameloft 7 (WeFly) 九龙战-腾讯第一动作竞技手游 7 Supercell 6 部落冲突 7 (Kowloon War) Tencent new The Journey of (Clash of Clans) 猫和老鼠官方手游开放新关卡，登录送火腿 Flower debuts as 8 Tencent 1 - 7 欢乐斗地主(QQ游戏官方版) 8 (Tom and Jerry) Netease (Happy Lord QQ Official) 全民突击-全球第一真人实时对战FPS枪战手 9 Youzu new 游 #1 少年三国志（7天送赵云，两周送红将！） 9 Tencent 7 (WeFire) (Junior Three Kingdoms) downloaded game 10 Supercell - 漫威 : 未来之战海岛奇兵 10 (MARVEL Future Fight) Netmarble 1 （Boom Beach）

Find the Top 20 iOS Games every month at: http://www.newzoo.com/free/rankings/iOSrankings www.newzoo.com GAME METRICS

Finding An Alliance of Partners & Clients

WILLING AND ABLE TO SHARE DATA AND DEVELOP NEW METRICS GAME METRICS & PARTNERS

PAYMENT (CONVERSION) RATE PER GENRE FOR IOS AND ANDROID GAMES IN CHINA | JUNE 2015

Casual Puzzle Role play Action Strategy Simulation Casino Cards Android 休闲游戏智力游戏角色扮演动作游戏策略游戏模拟类棋牌游戏卡牌游戏

Payment Rate 2.7% 1.9% CONFIDENTIAL This data is part of the Newzoo/TalkingData monthly China Average sessions per user 3.53 4.22 Mobile Games Monitor. More info: www.newzoo.com/chinamobile

Casual Puzzle Role play Action Strategy Simulation Casino Cards iOS 休闲游戏智力游戏角色扮演动作游戏策略游戏模拟类棋牌游戏卡牌游戏

Payment Rate 3.2% 3.2%

Average sessions per user 3.73 3.79

EXAMPLES HOW GAME METRIC ANALYSIS IMPROVE MONETIZATION | AMAZON ANALYSIS OF GOOD & LESS {ERFORMING GAMES

Not too much variety in price Ease of purchase at time of need Help people to spend credits

Games that providing a post- purchasing tutorial generated 65% more repeat orders than the market average.

source: Amazon keynote at Casual Connect SF TAKE A STEP BACK FROM THE BIG DATA ANALYTICS SOUP NOW AND AGAIN…… MOBILE MARKET INTELLIGENCE BY NEWZOO & TALKINGDATA

HISTORIC MARKET MARKET CONSUMER PLATFORM GAME/APP PREDICTIVE TRENDING TRENDS SIZING INSIGHTS DATA METRICS ANALYTICS

JOINT AMBITION the full suite, on a global scale The Global Games Market: Trends, Market Data and Opportunities

PeterWarman Peter Warman | CEO & Co-Founder | Newzoo