Trends

Marketing &

Entrepreneurship

#2. Meet (some of) your markets

Arjan Terpstra

What’s up?

• Marketing/markets for games/gaming

What’s up?


• (sorry, no interaction design)

What’s up?


• (sorry, no interaction design)

• A basic analysis of big games markets

(console, PC/Mac, handheld, mobile) and big market trends

What’s up?

• What we know: (some) games markets in figures

• What we know: games markets NL

• Trends in entertainment games

• Trends in applied games

• General Trends

1. games markets in figures

• What do we know about the size of games markets, and how do we know it?


• What do we know about the size of games markets, and how do we know it?

• ‘Market research companies’


• What do we know about the size of the games industry, and how do we know it?

• ‘Market research companies’


• Worldwide revenue of total games industry

(Newzoo): 75,5 billion USD (2014)


(Gross National product of countries 2011)


• Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014)

• Prediction 1 (Gartner): 111 billion USD in 2015, ‘mobile and console sales’ are boosters.


• Worldwide revenue of total games industry (Newzoo): 75,5 billion USD (2014)


• Prediction 2 (DFC Intelligence): 100 billion USD in ‘software sales’ by 2018 (from 64).


• Worldwide revenue of total games industry (Newzoo): 75,5 billion USD

(2014)


• Prediction 2 (DFC Intelligence): 100 billion USD in ‘software sales’ by 2018

(from 64).

• Prediction 3 (DFC Intelligence): PC market 2014 : > 25 billion USD revenu

(first time). ‘Core gamers spend more on games than ever before’


• Prediction 4 (PWC): Mobile market > 15 billion USD in 2018

(from 7 billion in 2013)



• Prediction 4 (PWC): Mobile market > 15 billion USD in 2018

(from 7 billion in 2013)

• Prediction 5 (DFC Intelligence): Mobile market > 29 billion

USD in 2018 (from 11 billion in 2013)


• Prediction 4 (PWC): Mobile market > 15 billion USD in 2018 (from 7 billion in 2013)

• Prediction 5 (DFC Intelligence): Mobile market > 29 billion USD in

2018 (from 11 billion in 2013)

• Console industry (Gartner): 44 billion USD (2013)

• Handheld industry (Gartner): 15 billion USD (2013)


• Worldwide revenue of total games industry

(Newzoo): 75,5 billion USD (2014)


• Worldwide revenue of total games industry

(Newzoo): 75,5 billion USD (2014)

• But….



= 91 billion USD (> Newzoo’s market prediction, 75,5)


• Worldwide revenue (Newzoo): 75,5 billion

USD in 2014

• ‘Our’ market forecast: 91 billion USD in 2014

• But: Gartners’ forecast: 101,6 billion USD in

2014


• Gartners’ forecast: 101,6 billion USD in 2014


• Recap:

• Figures for the international games industry vary wildly – between 75,5 and 110 billion in gross revenue.

• The numbers are invariably high – often comparable with figures on the film industry (88 billion USD gross revenue)

• All market predictions foresee a future growth of 9-11 percent per annum.

2. Games market NL

2. Games market NL

• There’s a lot we DON’T know!

2. Games market NL

• Question: is there a ‘Dutch games/gaming market?’

2. Games market NL

• Question: is there a ‘Dutch games/gaming market?’

• Yes: in retail, localised App Stores, with Xbox

One

• No: part of ‘Europe’, ‘Western Europe’

2. Games market NL

• Size?

• 2012 (PWC): Dutch gaming market = 703 million Euro.

2. Games market NL

• Size?

• 2012 (PWC ‘global media outlook’): Dutch gaming market = 703 million Euro. ‘2016: 724 million Euro’

2. Games market NL

• Size?


• Want to know more?

2. Games market NL

• Size?


• Want to know more?

2. Games market NL

• …so let’s talk a bit about the Dutch gaming

….

2. Games industry NL

• Size of total revenue: (Games monitor 2012):

150 – 225 million Euro .

•

• (worldwide: 75,5 billion USD = 58,5 billion

Euro)



• (Games monitor 2012): 150 – 225 million Euro revenue.

• Well-connected and informal infrastructure

• Growing connectivity between schools and working field

• High quality training

• Good conditions for startups through networks, incubators, seed funding et cetera.

• A growing number of funds for games studio’s


• ‘Approximately half of the revenue comes from applied/serious gaming’.

• B2B market!!!!


• Ca. 330 game companies (but: what is a game company?)






• Ca. 330 game companies

• Ca. 3000 people employed

• Many small firms (indies or applied) making games

• ’70% of Dutch firms has a maximum of five people in it’

• ’Only ten firms have more than 50 staff’

Trends in entertainment games


• Trends? Markets?

• Two questions:

• 1. “What are the market trends that are important for your business? ”

• 2. “What are you going to do with that knowledge?”


• Trends: console (Xbox360/One, PS3/4, Wii/Wii U)



• - Next gen consoles need to prove themselves in their second and third years. (in terms of hardware, software and service sales)




• (Console) games are part of a wider ‘entertainment-hub’ strategy.





• Growing interconnectivity with devices other than console

(‘second screen gaming’) (PS Mobile, MS Smart Glass)





• Growing interconnectivity with devices other than console

(‘second screen gaming’) (PS Mobile, MS Smart Glass)

• Constant reflex to integrate promising or succesful technologies. (PS Move, Amiibo, Project Morpheus)



• Trends: PC/Mac gaming


• Trends: PC/Mac gaming

• - Firm comeback through digital distribution




• - Dutch game industry gains momentum through Steam.




• - Dutch game industry gains momentum through Steam.

• - Steam is finding its way to TV (2015)



• - BUT: Steam publishes more and more games….



• Trends: Mobile



• - Stellar rise of a new gaming segment



• - Stellar rise of a new gaming segment

• Digital distribution (first App Store july 2008)

• The rise and rise of free2play

• Touch interface well suited for gaming


• (2013) Apple App Store holds 800.000 active apps, counts 40 billion app downloads (game and non-game apps)



• Opportunities? Yes, but there are (A) problems with player demography: who is your gamer? (marketing)



• Opportunities? Yes, but there are (A) problems with player demography: who is your gamer? (marketing)

• And (B) who is your competition?



• (2014): 1,75 Billion smartphones worldwide, 195 million tablets

• Android expands through ‘micro consoles’ (Ouya,

GameStick, GamePro) -> TV!!


• Trends: Handheld (Nintendo DSi, 3DS, PS Vita, PSP)


• Trends: Handheld (Ninendo DS, 3DS, PS Vita, PSP)

• Surprisingly stable market (vs mobile)




• PSVita (2014) 8 million units worldwide, 43,3 million Nintendo

3DS, 154 million units Nintendo DS/Dsii, DS Lite.






• PS Vita used as ‘second screen’ with PS4, games are more

‘platform agnostic’ – migrate from one device to the next.






• PS Vita used as ‘second screen’ with PS4, games are more

‘platform agnostic’ – migrate from one device to the next.


• Trends: general

• ‘cloud gaming’ will be a thingy…



• ‘cloud gaming’ will be a thingy…

• The ‘democratisation of game design’ gives us new perspectives on games and game design



• ‘cloud gaming’ will be a thing…

• The ‘democratisation of game design’ gives us new perspectives on games and game design.

• ‘Game analytics’ will continue to influence both game design and games marketing






• ‘Free2play’-models are on the rise – not only in mobile!






• ‘Free2play’-models are on the rise – not only in mobile!

• High expectations for Virtual Reality technology (Oculus Rift), but no proven market yet.

Trends in applied games


• Ongoing definition debate: Applied games/serious games/persuasive games/engagement design/gamification?


• Definition debate: Applied games/serious games/persuasive games/engagement design/gamification?

• Anyhow:

• - 2010: 1,5 billion Euro revenue worldwide

• - 2015: 10,2 billion Euro expected


• Centre for Applied Games (Amsterdam):

• “44% of Dutch games companies is exclusively building applied games” (highest percentage worldwide)


• Strong presence in market segments:

• - maritime

• - security services

• - health care

• - education

• - business


• High expectations:

• ‘By 2015, more than 50 % of organisations that manage innovation processes will gamify those processes.’ (Gartner)

• ‘40 percent of all Global Top 1000 companies will utilize some form of gaming in transformational processes.’ (KPMG)


• Low production capacity!!! => there’s room for you there….

• (there’s a lot more for next time…)

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Marketing &

Entrepreneurship

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