Mobile eports in India

[Music] [Music] hi I'm Scott nice to meet everybody so I was going through last night over a pint and I realized that it doesn't matter if I'm excited about India I need you guys to be excited about India so I threw out my entire deck I rebuilt it all last night so it's gonna be a little basic but I focused on things that are important so I'll go through this I'll leave a lot of time for QA at the end but again it's important that you guys understand the excitement and why I'm excited the widest person in Seattle to go to India for three weeks and learn about this stuff and bring it to you so again I'm Scott I've had a lot of had 15

years in the industry I've had the opportunity to work with some of the best teams in mobile both on the platform development and then aggregation Disney Play phone a gung-ho OpenFeint gree t-mobile basically anybody that's kind of disrupting the industry I've had a chance to really work with been very blessed India why why should you care why should anybody care right now it's you know we look at China we look at the US we look at the UK the monetization numbers aren't there traditionally so people traditionally say yeah there's a lot of people but who cares what's that gonna do for me what's it gonna do for me as a game developer I want to talk to you guys about this because I think it's interesting it's interesting enough that I made the trip down to India spent three weeks there learn the culture and understand why people can't make money in India even though it is possible India is all about growth India's gonna see growth that's been unprecedent last time that you see something similar to this was in 2006

China with PC gaming all of a sudden it'll go here-here-here skyrocket it goes crazy right now there's 1.3 billion people in India the growth rate is 1.17 annually that's that's enormous it's gonna pass China as far as the most populated country by 2024 so combine that with an ecosystem that's almost all mobile consoles PCs very very small maybe 20% and actually shrinking 77% of the people that 1.3 billion people in India 77% have a current mobile subscription that means right today over a billion people have a mobile subscription and they're using it almost exclusively for their access to the Internet for banking and for entertainment entertainments extremely cheap on your mobile if you think about going to a movie almost anywhere you go in the world movie costs the equivalent of six seven dollars you can buy a game that you can play on your smartphone and

play it for hours and hours and hours put hundreds of thousands of hours in and it cost you 99 cents very cheap currently there's over 300 million smartphone owners in India that shipment number grow by 18 percent in 2016 to put this in perspective the global market grew 3% 18 versus three and you've got a billion people that number is expected to jump to over 530 million devices by the end of 2018 which would be second only to China again an explosion of people on mobile and they're all looking for content India also has the largest youth population in the world the median age across India across that 1.3 billion people 27 years old that means half the population of India's under 25 two-thirds is under 35 so extremely

young one out of every 10 people on this planet is an Indian under the age of 25 just kind of put that in perspective one out of every 10 on the planet it's an insane number with that you're seeing a massive massive increase year over year in usage and downloads India right now accounts are about 58 percent of the world's downloads so almost that's a silly number when you start thinking about it in one area that almost everybody ignores right now over half the downloads are occurring app downloads have increased 215 percent in the last two years so you start looking at the acceleration of how quickly mobile is entered into the industry how everything's getting cheaper the youth is very very young they want to engage with the Western culture and Eastern culture they want to engage with all cultures now because it wasn't open to them before so you have this massive user base they're all

becoming mobile very rapidly and they're looking to acquire new content Indians users spent about 50 billion hours in apps last year fifty billion that's a again that's a scale you can't achieve anywhere else in the world because there just isn't a population of that scale and to kind of put the nail in the coffin mobile traffic represents about 80 percent of their web traffic that's second only to Nigeria so all traffic coming that's touching the Internet 80% is coming off a mobile device or a tablet tablets represent a very very small percentage what's driving this growth again use but a massive increase in internet availability so as people you know previously like I said pcs just really didn't didn't exist everybody's getting mobile right now that number two again put it in perspective internet availability is about 30 percent right now that numbers gonna jump to 53 percent by 2021 so again start thinking

about you've got 1.3 billion people another 20% are gonna come online secondly reduction in data costs reliance Gio did us some crazy things in India because they needed they knew they needed to get everybody on board what what cost one gigabyte a year ago now you get 60 gigabytes so users are starting to adopt everything from video streaming to games everything you know it's just going up and up and up there's no question they're estimating about an 8x increase by 2021 so again you imagine you have 1.4 billion people and you're getting an 8x increase in what they're doing crazy massive increase in disposable income and this goes with age if you're 25 years old you getting your first job perhaps you're an IT your disposable income is going up this number is going to go from about 2.2 billion to about 3.7 billion in the

next couple of years a 1.6 increase in available disposable income and you're getting a bunch more people online where do you think they're gonna spend their money with what you guys are making the next one is this is a natural maturation of talent almost everybody in if you think about India previously everybody thought oh you can do QA services you can do localization services it was a service driven industry those people are now maturing starting to make their own studios at Jet synthesis one things that we run is an accelerator so we teach people how to make their own companies how to do everything end-to-end from concept through distribution that hasn't been done before but now the talent is maturing to the point where it makes sense and with that comes the desire to make content that makes sense for them you the example I like to use is if you're a Western developer you wouldn't expect to drop your game purely into China and have it work exactly like it does in the US it's the same with India used to take content that works for

Indians and put it into India or take your Western content and twist it adjust it make it work for Indians the next one is massive increase in smartphone penetration so about 2015 was when the shift occurred when people went from buying feature phones to bind smart phones so right now there's about three tiers of smart phones in India the first one is under $100 it's about a hundred and it's ten thousand INR so maybe 130 bucks depending on what the exchange rate is currently but that for that you'll get a smartphone with two sims nice big screen enough memory to run games right now the number of smartphones in market is 290 million that number is expected to grow to 470 million in the next year that's a 1.6 growth again you're not gonna see that anywhere else there was a event that I'll tell you about really briefly it's called D

monetization maybe you heard about it one of the craziest things I've ever heard basically in one day they came in and said 500 and 1000 rupee dollar bills no longer valid so we had people that I knew that we're on an airplane they'll and they can't pay the cab fare because the cash they have in their pocket doesn't work anymore it's not real so they had people burning cash in the streets because it didn't have any other value again insanity to think about but what that did and it forced the country was digital wallets they group the digital wallet group so you pay TM things of that nature over a hundred and fifty million users in one year almost purely because of this D monetization event that number is expected to continue growing 2020 they expect to have over 300 million people on digital wallets so it was a crazy move I don't know if it was a good idea but it worked okay what about gaming you guys are all

gamers or game developers what is why do you care about this right now 250 million self-identified gamers so that goes across PC mobile tablets consoles that number is growing at about an average about 56% annually so every year you're getting for every one user now you got to Indians spend about 15 percent of their time on their device on just entertainment be it video streaming via gaming gaming is a massive massive amount of that they spend their time it's a time sink of unearthed proportions and this number is additive it's not taking away from something else so it's not taking away from going to the movies not buying entertainment whatever it is gaming is additive it's only bringing the level up right now the estimated market is about 290 million that number seems small when you compare it to China or the u.s. that number by 21 20 21 is expected to jump to over a

billion so in the next three years they're expecting to almost 3x their market so again keep that in mind when you're looking for growth a billion people and it's gonna go 3x as far as what they spend in the next three years continued evolution or distribution this is a big one again what works for the US doesn't necessarily work for India so things like google play one of the ways they're finding success is instead of doing credit cards they're doing prepaid cards they're lowering the price floor and so instead of it being $0.99 it'd be the equivalent of 10 cents so they're doing everything they can to encourage users to learn to spend the easiest way to think about this is if you you didn't everything was free before all of a sudden now you need to teach this user that you're getting value and I'll speak this a little bit later with some some numbers around free-to-play and premium but the short version is don't go premium in India it doesn't work it will

never work the last one is the evolution of the mindset and I spoke just a little bit earlier with kind of the use maturing this is the only entertainment they know they didn't really didn't ever bought consoles they never bought PCs there's a very very small number of PC players but the majority are on mobile but again value and kind of spokes premium versus free prey 81% of non players right now the reason that they say they don't pay for a game is because they can either get a free substitute they think that the price is too high because it's they're trying to do price matching against the rest of the world or they just feel like it doesn't have any value and they just feel like they're not getting their money's worth the breakdown between free-to-play free-to-play represents about 392 million downloads in about nineteen point six million premium represents two hundred and thirty one thousand downloads so almost 400 million or two

hundred and thirty thousand so again if you're a premium developer I strongly suggest you figure out a free-to-play mechanic I'll try before you buy mechanic something of that nature you need to communicate value early on and very often the top 100 freemium games represents 22x the revenue that the top 100 premium games represent so again if you're a premium developer might be a good idea to start looking at some free-to-play mechanics esports there's three hard rules so at Genesis we work very well we're an investor in a company called nod win which runs ESL for india i sat down with their founder i said tell me about esports in india he said there's three basic rules to esports and that applies everywhere one it has to be audience to find a developer can't say I'm making an eSport game because the community will almost as a whole reject it it's you can't tell gamers what they like number two it has to be fair and balanced so

almost immediately almost all mobile first content is right up the window there's no pay to win you can't have that it'll be again rejected by the community the last one is has to be eligible for the 10,000 hour theory if you're not familiar with the $10 an hour theory it's basically if you've practiced something for 10,000 hours you should be considered an expert or at least approaching an expert on mobile on most console that's why you're not gonna see an eSport game like Ana Madden because Madden gets replaced every year and FIFA gets replaced every year you're never gonna get 10,000 hours unless you're really really hardcore into something and even then why would you put 10,000 hours into something if you know it's gonna be replaced every 12 months this is where we come to what we call em sports so it's eSports was an India twist so we I just came back I spent three weeks in India we were in the India gaming show we we rolled out this concept and the concept is we in our game we have a cricket game we made

it so users had to pay to enter a tournament and then based on if you won in that tournament you're eligible for semifinals and finals at the physical event we saw over 20 thousand Indians paid to enter the tournament to be eligible to come to the India gaming show and compete for cash and prizes they did everybody came we had a massive booth we had a massive number of people we had a we opened up the number of registrations we said this is the number of registrations we can take in a day we'd fill those up in an hour for a full 12 hours we'd have enough people come to want to play these games that we would fill up in an hour it was one of the craziest things I've ever seen it was III at its peak but delivered in an hour crazy what we've discovered is the ecosystem that we have created in in India gives national recognition to players and that drives so much with Indians and the next slide you'll see one of the big things that drives acquisition is not digital marketing but it's word of mouth very

very social my whatsapp goes crazy every single night just the way it is the lead-up to this event as we announced it we said here's the tournament it's gonna be available we saw a massive increase in both downloads monetization and engagement and when I say a massive our download ranking went up by 20% our grossing ranking went up by 30% and all we did was open this tournament and he was even a paid tournament the point I'm making with this is you can monetize India it's just a matter of doing it right and most people don't know how to do it right but it is possible and it's going to be more possible as time progresses that being said I strongly suggest that you look at your strategy for India or even look do you have users that are currently in India and start to look at that because at some point you won't be able to ignore it why does this work social is huge in India file

sharing people you know showing the games each other sending the games to each other Nielsen reports that 47% of gamers the way that they acquire their content is through either direct or indirect word-of-mouth from their friends again half of your acquisition budget could be free in a country with 1.3 billion people there's a massive difference in the perception of value between single-player and multiplayer and thus the willingness to spend in multiplayer goes up 81 percent of players in India right now report a willingness to monetize in a multiplayer game versus 66 percent in a single-player game and that's the best single player games and when I say multiplayer it doesn't necessarily have to be real-time it can be turn-based it can be a sink but the idea of multiplayer is a value-add second one as I spoke earlier

it's incredibly inexpensive users right now spent over 30 minutes a day playing games that's on average and that includes the real hardcore guys all the way to the very very casual guys but a 30 minute average is a pretty good engagement time per day last one easy availability mass availability consoles PCs insane expensive Apple has I think a 15% premium on almost everything in India so if something costs $1,000 here more expensive in India I found that out the hard way with my charging cable broke and they wanted $80 to replace it last one shameless self-promotion if you have content you have users in India that you're not engaging with or your MOPP monetizing please come talk to me this is one thing that we do very very well most of developers that I talk to they say we've got a lot of users in India

but frankly our fill rates are very very low that's money left on the table for you and as that number grows getting your strategy locked in first before it hits 1.4 billion people it's probably a good idea so again shuffle is same promotion please come talk to me I'd look forward to talking with you [Applause] what can I tell you about India who has a question hello do you have any insight into the platform breakdown very top line Android Google Google Play all over its if I had to put a number on I'd say upper 90s okay it's Apple Apple just doesn't exist and I think they if you asked me I think Apple it will probably pull out at the market within five years if they can't adjust their strategy because right now

they they just don't exist [Music] [Music]