Mobile Games Market Outlook Webinar

AppLift.com 1
The mobile games market outlook
What’s in store for 2014?
AppLift Webinars
February 19, 2014

AppLift.com 2The mobile games market outlook: what‘s in store for 2014?
About AppLift
200+ Game
Publishers
The leading mobile games marketing platform
200+ Games
1M+ installs per
month
We are a team of 80+ mobile game
enthusiasts
We are headquartered in Berlin with oﬀices
in San Francisco and Seoul
We come from 25+ countries and speak
20+ languages
We are backed by Prime Ventures and
HitFox Group with USD 20M investment
100%
mobile games
LTV focus
All key
markets

Our panelists
Peter Warman (1971) is CEO and Co-founder of Newzoo, the games
market research and consulting firm, servicing clients across all
game business models and continents, such as Valve, Microsoft, EA,
King, Wizards of the Coast, Nvidia, Plantronics and Wargaming.
After being responsible for sales and business development at
Europe’s largest interactive agency (LBi), he was responsible for
internet development at Reed Business and operated as
commercial director for a MMO for kids. Peter is a frequent speaker
on the business aspects of the games industry. Peter enjoys opera
as well as good German techno.
Peter Warman
CEO, Newzoo

Our panelists
Jan Miczaika
COO, Wooga
Jan Miczaika is COO at Wooga, a leading developer of mobile games. With
employees from over 40 countries, our international team creates games
that excite around 40 million active players every month. Jan is
responsible for a number of areas in the company including Marketing,
Media Sales, Biz&Corp Dev, Customer Care, Localization, Community
Management, Facilities etc. Additionally Jan is a non-executive board
member of Hitmeister, an e-commerce marketplace he co-founded in
2004. Previously Jan worked and interned at a number of companies in
the startup ecosystem, including startups, venture capitalists and a private
equity fund.

Our panelists
Tiuri van Agten
Data Analyst, Distimo
Tiuri brings a history of rich knowledge and experience in the mobile
industry to his position of Data Analyst at Distimo. He has been an
integral part of Distimo’s data team for over three years and devotes
his time to studying the rankings of all the major app stores. Tiuri is
one of the initial creators of the algorithms behind Distimo’s premium
market intelligence product, AppIQ, the most accurate app market
intelligence tool that estimates download and revenue volumes for
any app, globally. Currently, Tiuri also analyzes global trends across
stores and helps developers solve various black holes in their
knowledge, when it comes to app store data. Tiuri is incredibly
passionate about accurate data and global app trends. He holds two
masters degrees, and when he’s not crunching numbers, which he
loves, you can find Tiuri on the slopes in Austria, working his magic in
the DJ booth or going on cycling tours with Distimo colleagues.

What’s in store for 2014?
1
2
3
4
General market trends
Platform trends
Regional trends
General outlook

AppLift.com 7AppLift.com
Where will the growth be?

Global Mobile Game Revenue Growth | 2012 - 2016
Source: Newzoo Global Games Market Report
Peter Warman (Newzoo)
•  Massive growth in the mobile games market in the years to come.
•  We now know that there is a mobile game market for both the tablet and the smartphone.
•  Double growth: Mobile market share is growing and the overall market for games is growing.

Mobile (Paying) Gamers per Region | 2012 - 2016
Source: Newzoo Global Games Market Report
850M 1,300M
+53%
305M Pay
36%
650M Pay
50%
+113%
•  The growth of Free2Play
games is generating more
paying users.
•  In Free2Play games, users
can decide their spend
themselves.
•  Number of paying users and
overall spending is
increasing.

Jan Miczaika (Wooga)
•  In developed countries, growth will come from the segment of
users switching from 1st generation to 2nd generation
smartphones.
•  In emerging countries, growth will come through higher
smartphone penetration rates.
•  So far, only a fraction of users make In-App-Purchases (IAP).
Challenge is to get a larger percentage of users to spend – this is
where the real growth is.
•  Regional diﬀerences: Japanese users spend relatively more
than other markets.

Platform trends
Can mobile game publishers benefit from a presence
on alternative app stores?
How is the app store revenue distribution
evolving?
What user acquisition strategies can game
publishers resort to on the app stores?
Thomas Sommer (AppLift)
•  Among game publisher, we see increasing demand for sustained campaigns with focus on
quality, and less focus on burst campaigns.
•  Wooga runs global campaigns with Life-Time-Value and CPI optimization.
•  Burst campaigns have changed significantly in the last year; it is more complex now.
•  To reach top ranks today, one must combine various ad networks and iterate campaigns.

Game Revenues iOS vs GooglePlay | January 2014
Source:Newzoo/DistimoMonthlyGlobalAppStoreReport
•  Google Play ramping up in terms of monetization, and is
overtaking the Apple App Store faster than expected.
•  iPad overtook iPhone in UK/US in terms of game revenues.
•  Tablet spending growing; iPad has more revenue than iPhone.
•  Android needs a strong tablet competitor to compete with the
iPad in the tablet market.

How is the app store revenue distribution
evolving?
Tiuri van Agten (Distimo)
•  In 2017, 94.5% of apps will be free (Gartner).
•  We observe the same development on all platforms.
•  Regional diﬀerences: Asia is already at 90%.
•  New Angry Bird Go generated more revenue on Google Play than
on iOS in its first month in Spain.

Is there room for a third dominant app store in
Western markets?
•  Alternative app stores
are worth looking into.
•  Minicraft generated
14-15% of its revenues on
the Amazon app store.
•  Google Play is taking
market share from the
Apple App Store.

Is there room for a third dominant app store in
Western markets?
•  Another example of
high revenue share in
the Amazon App Store.
•  However, less
significant than
Minecraft as it has far
less downloads.
•  Family orientered
games may be the best
for the Amazon
segment.

Platform trends
Can mobile game publishers benefit from a presence
on alternative app stores?
•  Wooga most recently published Jelly Splash on the Amazon App Store.
•  One must keep ind mind that the demographics are diﬀerent.
•  Still mostly US users and tablet only.
•  Crucial to analyze whether the game fits the Amazon demographic.
•  Relatively low eﬀort as the adaption is easy.
•  However, the Minecraft example is an exception.

Regional trends
Which regions are currently underrated for mobile
game publishers?
What does it take to make it in Asia?

Which regions are underrated?
Tiuri van Agten
(Distimo)
•  High growth in Asia,
but also in South
American countries.
•  South America is an
underrated region.
•  However, still much
lower revenues
than in Asia.

Choice of mobile game | Drivers diﬀer per country
Ranking & Filesize are key in China
Game screenshots & description are key
to Russians
Source:NewzooDataExplorer
•  Newzoo get many questions on priotization of countries and devices.
•  It is crucial to understand the diﬀerences between the various markets.
•  With the right research and knowledge about the specific markets, its possible to make
genious entry strategy.

Regional trends
What does it take to make it in Asia?
•  With Jellysplash, Wooga launched it on Kakao and people seemed to like the
game. However, after the feature on Kakao ended, it did not attract enough new
users.
•  South Korea is a very specific market in terms of marketing.
•  It is wrong to perceive Asia as one market, as the Asian markets diﬀer a lot.
•  Japan is technically the easiest market for Western companies, as they use
Facebook and have Google Play and Apple App Store as their main app stores.
•  South Korea is harder because it requires Kakao.
•  If you have the necessary resources, Asia is a must, as it‘s where the largest
markets are.
•  However, Western companies with success in Asia are rather limited, and there
are reasons for that.

Major Android AppStores in China | iOS opportunity
China is a $50M+/month iOS games market
Approx. 3X Germany; iOS represents 25%
Source: Newzoo Free Report on China
(clients only)
Report: Understanding China
Tencent MyApp
Gfan Market
AnZhi Market
Baidu AppStore
Wandoujia
360 Mobile Assistant
Alibaba
iOS
25%
Android
52%
Others
23%
•  The Chinese market is tough even if you localize: app discovery is
diﬀicult and piracy is still a big problem, so you have multiple
challenges stacked together.
•  However, the non-jailbroken iOS market in China is still 3x Germany.
•  Countries such as Taiwan, Hong Kong, Singapore are in the top 20 in
terms of revenues on iOS, and are much more westernized.
•  For smaller developers it might make more sense focusing on other,
perhaps easier, Asian markets rather than China.

What matters in Asia?
•  Localization in Asia is crucial –
maybe even key.
•  Icons great example of the need
for localization.
•  All icons in the top 10 are
“typical“ Asian-style icons.
•  Big game publishers realize this;
e.g. King published Candy Crush
in Korean on Kakao.

What matters in Asia?
•  Example of how localization (17th June) helped Clash of Clans get success.
•  Don‘t oversimplify the market - success requires more than new icons and language.
•  Not a single western game publisher in the top 10 in the Japanese market.
•  Challenges not just in the market, but also on the game side.

Which game genres work better in Asia?
•  Example of the diﬀerentiated preferences of game genres across
regions.

Which game genres work better in Asia?
•  Less interesting on Google Play, as there are only 6 game categories.
•  However, Asia is still diﬀerent than the two other regions for the third genre.

General outlook for 2014
What are the main opportunities and challenges for
mobile game publishers in 2014?
•  Not much movement in the top 10 games in 2013 – expect big changes in
2014 as every game has a lifecycle.
•  Predict more game launches and more marketing spend in 2014.
•  2014 will be year of change, thus full of oppertunities and challenges.
•  Not entirely true that all the revenue goes to few big game developers.
Altough 50% of revenue is split between 25 publishers, the US alone has
240 developers/publishers earning more than a $1 million a month.
•  Although it is getting harder, with time, creativity or money one ca still
reach the top rankings.
•  2014 tip: Localize your game first and then roll out the game – respect the
gamers and their preferences.

Opportunities and challenges
•  During 2013 it became much harder to get in top rankings - in 2014 the competition
will be even more fierce.
•  Expect more cross-promotion partnerships like that of SuperCell and GungHo.
•  However, there is still money for small developers in the “long tail”.
•  Flappy Bird showed us that it is still possible to reach top rankings with few
resources.

AppLift.com 30AppLift.com Berlin | Seoul | San Francisco
Questions?
Question: “What about the Windows App Store?”
Tiuri van Agten (Distimo):
•  Work must be done by Microsoft for it to become a real success, but there is
growth and definitely money to be made money in the Windows App Store.
•  Windows Phone is doing really well: rather extreme growth figures.
•  As long as Apple does not make a new “big thing” this year, there is a window of
opportunity for Microsoft. However, it must happen this year.
Question: “Must one go through Over-the-Top messaging apps in Asia?”
•  In Korea, 8 of the top 10 apps are on Kakao, so a clear yes to messaging aps in
Korea.
•  In Japan it is more debatable, but Line is still very strong.
•  However, it can be diﬀicult to get in, as Line does not take in as many games
•  In general, distributing your game in Asia is diﬀicult without integrating local
messaging apps.

Contact
Thomas Sommer
Content Marketing
tso@applift.com
Peter Warman
CEO
peter@newzoo.com
Jan Miczaika
COO
jan.miczaika@wooga.net
Tiuri van Agten
Data Analyst
tiuri@distimo.com

Thanks for attending!
Stay posted for our upcoming webinar
on Customer Lifetime Value
Download this presentation, our
infographic… on:
www.applift.com/INSIGHTS.html
For more tips on global user acquisition,
global expansion etc. get in touch!
info@applift.com

Thank you!

Mobile Games Market Outlook Webinar

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