Five key trends shaping the future of mobile games

so indeed here to talk today a bit about the key trends that are shaping the industry that we're all in today so we'll be talking about about each before in Swiss but also a bit about VR and about global revenues and first to take a bit of a step back if you're not familiar with new zoo yet we are a market research firm and we work with large companies around the world to help them in strategic and marketing and even design decisions to tell them where the opportunities are what the trends are and give them a good advice and we've already claimed a very leading position in games and in eSports and we're building this year we're investing very heavily in some mobile and to expanding our products and our what we can offer to our clients good enough about that

let's dig into the trends and first I want to talk a bit about revenues and see you know what is happening in the market how big is the market now how big is it going to be and as you can see here the skewed news for everyone here consumers will spend thirty seven billion dollars on mobile games this year which is more than a third of all game revenues and this year mobile is the first year to take over PC as the largest segment bigger than PC and bigger than console that's good news and it will be continued to be that in the coming years until 2019 where will be 52 billion dollars spent on mobile games and if you look at it on a regional perspective so we are here at the east meets west track most of that revenue is being generated in asia-pacific and within Asia Pacific most of our revenues have been generated in you know China Japan Korea the very large mobile gaming mobile first countries are also seeing very large revenues in North America and

Europe and Western countries to 13 billion over thirteen billion dollars there and not a huge amount of revenues yet coming from Latin America Middle East but of course there's huge and double-digit growth numbers there so they will catch up eventually and if you look at the extra growth this year so an extra six billion six and half billion dollars in mobile game revenue spend you'll see that a lot of this is directly coming from China almost half of the growth is directly coming from China so that's super huge with 41 percent year-on-year growth a rapidly growing but even for other regions in a pack we see a huge amount of growth Middle East Latin America like I just said whereas you know North America was your we're still seeing very healthy growth rates but they are much more mature and second I'd like to talk a bit about how well companies are doing in monetizing and at different regions

so we did here is look at the public company's performance in 2015 and we looked at all the Asian companies how much of their revenues are being made from Asia themselves and if you look at companies outside of Asia how big are they in Asia so if you look at 18 companies here on the left you'll see that almost all of their revenues 85% are being made within the Asia region whereas only 15% is from the west or at least outside of Asia whereas non Asian companies to supercells machine zones etc they're doing a much better job at monetizing in China Japan etc with up to 30 percent of their revenues being made there and of course this will change as more and more companies realize that every consumer everywhere is a potential player a potential payer of their game and we're seeing this being accelerated by some transatlantic investments including platica but also $0.10 which

had acquired a huge stake in supercell and which offers up very interesting synergy opportunities you know $0.10 has their own store their own platforms they are hugely able to promote supercells Games in Montreal and we take take a look at clash Wales performance as well in China specifically and there we can see that 10 centers had a huge massive boost to cash reals revenues there so in China Android alone last month they made 25 million dollars and as for a large share due to $0.10 boost we also see that the extra revenues and potential in mobile games means that more and more companies are looking to get into mobile so traditional PC console companies are looking into mobile seeing what they can do with their franchises their IPs and what they can earn so for instance EA has been around in mobile space for quite a while but Ernie but making more and more their franchises into a mobile

game some Madden NFL for instance for on mobile the fence that a really interesting year which they did a mobile version of Fallout 4 which is a really a traditional hardcore console game but they built a game from the ground up for mobile and which did really well in terms of revenues really success and you know associated their expectations but also it was released a couple of months ahead of their fallout for lunch it was also able to generate a lot of buzz for the fallout for lunch so super cool M company has been treating more and more franchises into mobile so the last one you see there is even Tekken is on mobile now and even Nintendo you know they haven't I haven't put Pokemon go in here because of course it isn't from Nintendo as some people have realized but they have been investing and experimenting more with mobile Telmo and I think they'll do more in the coming future but if you look at the top

publishers so this is something did four we publish monthly rankings on our website every month every month look at the top apps on iOS stores in China Europe the US and if you look at the global publishers in June of 2016 and look at all the way year back you see that nothing really that much has changed the only new companies have entered our Nettie's which is another traditional PC company and transformed their franchises into mobile and epic war which is basically machine zones on a game what's also interesting there is if you take machines on an epic war together they're actually second on this list and quite close to the supercell in terms of revenues and also like to talk a bit about mobile eSports because there's a lot happening around there and there's a huge potential I think but it still has to pick up so what are we seeing in the last year in terms of mobile eSports and it all started with in Philippines where local organizations

and sponsors made an event Philippine this excited fans eSports event and the interesting thing there is that supercell didn't really know about it and we didn't have anything to do with it but suddenly there was this huge eSports event and people were competing for money in fact Rance and I'm sure supercell looked at that and said okay that's interesting let's do something more of that fing glory you know an excellent potential game for for mobile eSports at 30 2016 Europe invitational of quite a hefty prize pool and class we all work together with Kunlun their Chinese partner to have a Shanghai Invitational game with a huge prize pool of $100,000 supercool and personally I'm still getting used to the idea of people competing on stage with an iPad or a phone in hand in their hand but I'm sure we'll get used to that eventually and this is something we did for when

we're talking about clash Royale recently they launched a new function in their game to make it more rewarding to play competitively and to to do cool stuff in the game where you everyone could pay to host tournaments and people could come in they could play other games and if there would be one of the top ranking players David basically win a lot of cards and what they did in their first week of launching that feature of super cool they work with all the major youtubers and Twitter's to give them basically the in-app gems they needed to host the biggest tournaments hosting up to ten thousand players and streaming alive on their channels and what you see here is the week in the middle is determine week and it's all indexed on the week two weeks before that we see huge spike in twits fewer ships so that's the blue one especially on the first day we're really the biggest tournaments was and everyone should check it out we also see quite a large spike in revenues on first couple of days which is also due to the fact

that that's going on for July is a free day and there were new cards everyone just wants to buy them to get the new cards but especially if you look at downloads you'll see that there's been quite well quite well growth performance in that week of the tournament week and the week after so we do think that all this buzz around the game hosting a lot to reach our skin on YouTube has led to extra downloads of at least a million new players and just to give you a bit of an idea about how much overlap there is between eSports and mobile if you look at the US this is all for the US there's 140 million mobile players and around 9 million of those are big spenders they spent at least 25 dollars each month on mobile games and if you look at eSports enthusiasts around 20 million of those but of the 9 million big spenders 40% of them also watch eSports at least once a month so of the really core mobile big spenders group there's quite a large interest for eSports so it's good news

for the super evil Megacorp among us and finally like to talk to you a bit about VR and AR about our thoughts and it's still a bit of a work in progress it also might get a little bit philosophical but bear with me here because if you look at video on our yard it's important to recognize that they are conceptually different they do different things virtual reality is about taking you outside if you're a leti taking you outside of year and bringing you into space your limb pigs whatever they are is about looking at your neighborhood looking at you our living room and enhancing it making it cooler and for both of these we are now experimenting with first games and applications and for a are of course a huge commercial breakthrough in that respect this Pokemon go where they took augmented reality and they took also location based gaming and made it into something that everyone wanted to try out and it was super successful we

haven't really seen anything like that for VR yes and it might be for instance spending five dollars to watch an NBA game final for instance if something that kicks off it costs five dollars and 100,000 people do it and of course there's massive revenues involved but it will get there eventually it will reach a mass audience eventually so where is it going to go so for augmented reality that's really about enhancing the reality around you so we think that that's more going to be focused on location-based ads services so improving things like theme parks improving having marketing things around it and one of the first you know first precursors to a huge adoption of AR right now is the people that are doing stuff with snapchat so adding all kinds of filters to your to your face

basically never seeing this as a precursor to you know we're using AR in your daily life if you look at virtual reality that's really about content that's really about watching something being somewhere so we think that the business model there is really going to be in live video streaming and bringing your content that your consumers will love so that's really about business to consumers and we're seeing that right now with you know 360 videos already and we think this is going to be a precursor of much much more and it's interesting to think of this and also see check it out a bit in the news you'll see that VR and AR have different audiences and different media blogs that cover it so if you look at VR this is you know to not not game-related blogs and and experiences this is Turner magazine talking about the engi MBA if you look at AR it's about Pokemon go and it's about Google

and it's you know there with the familiar faces so it's important to recognize that they are conceptually different and that in order to reach a math skill they will need to branch out outside of games and into new things and we think that VR is much more focused on consumers whereas AR so much more focus on a b2b business model and that was it thank you for your time lots of insight there do you have any questions for yo is to finish the finish crowd it's alright that we need beer don't yes what is I know when the beer flows the questions flow afterwards maybe we need to mix things up a little bit umm I guess I was really interested in this just ask your own questions it's nice basket true so it was interesting you were talking about the the global forecast for 2019 and how Asia's a pack such a big market obviously didn't break

it down there but what we're hearing from China a lot is China's obviously the biggest single market but it's kind of topping at the moment like it's the people there thinking it's too much competition yeah so within Asia is it what is where is the growth is it Southeast Asia or India where are you seeing who was it still China still its driving it well it's important to realize that like you said China is massive it'll be the biggest mobile country in terms of mobile game revenues this year bringing in the u.s. so and I think it's one of those countries is it incredibly hard to get into and to to get revenues from yeah so I think for the moment people will be more focused upon how to get into China and actually monetizing there but of course we're seeing huge growth in Southeast Asia and Philippines etc but I think for the coming years people will be more focused on China getting in there and getting and wasn't that 1% of their revenues there sure fair enough okay thanks very much thanks