Win Together in China – The Most Valuable Data for China Gaming Market | Jex Li
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Transcript of Win Together in China – The Most Valuable Data for China Gaming Market | Jex Li
Jex LiRegional BD lead
Tencent
Win Together in China
China’s Internet Market Overview
China Economic Development Snapshots
1975 1985 1995 2015
Chinese Income Distribution
$50 $500 $5,000 $50,000
1975
1985
1995
2005
2015
Source: National Bureau of Economic Research Working Paper
Fast Growing Internet Users
2010 2011 2012 2013 2014 20150
200
400
600
800
1,000
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
457 513
564 618 649 688
34.3%38.3%
42.1%45.8%
47.9%50.3%
Number of Internet UsersInternet Penetration Rate
Unit: Million
Chinese Internet User Base(2010-2015)
Source: CNNIC
Number of Mobile Internet Users
Mobile Internet Users as % of Internet Users
Unit: Million
Chinese Mobile Internet User Base(2010-2015)
2010 2011 2012 2013 2014 20150
200
400
600
800
1,000
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
303 356
420 500 557
620
66.2% 69.3%74.5%
81.0%85.8%
90.1%
Top 20 Smartphone Apps in China(Mar 2016)
Source: Tencent Financial Report, Analysys.cn, excluding game apps
Rank App Name Company MAU Rank App Name Company MAU
1 Wechat Tencent 762.00 11 Youku Youku Tudou 143.01
2 QQ Tencent 658.00 12 UC Browser Alibaba Group 138.61
3 Taobao Alibaba Group 193.91 13 Tencent News Tencent 133.50
4 Baidu Baidu 185.09 14 360 Mobile Security Qihoo 360 132.28
5 Alipay Alibaba Group 170.09 15 QQ Music Tencent 125.97
6 Sogou Pinyin Input Sohu 157.81 16 Tencent Mobile Security Tencent 120.79
7 Tencent Video Tencent 151.20 17 Kugou Music KuGou 116.03
8 iQIYI Baidu 147.61 18 Baidu Map Baidu 109.59
9 QQ Browser Tencent 143.64 19 Baidu Mobile Store KuGou 106.20
10 Sina Weibo Sina 143.33 20 MyApp Tencent 106.02
- Tencent FamilyUnit: Million
Game Center E-commerce Payment O2O
WeChat in China – The New Way to Connect
Voice Message Location Sharing
Mobile App Innovations in China
JD real time tracking DIDI Tencent News Feeds
UI of Chinese Popular Games
The Legend of Mir
Fantasy Westward Journey CF MOBILE
Chinese Online Game Market
Global Game Market Overview
Unit: USD in Million
22,194 26,17312,023 12,272 12,376 12,50623,050 23,820
25,17017,990
18,42019,430
32,77029,87518,047
12,618
25,87024,480
19,95018,910
0
20,000
40,000
60,000
80,000
100,000
120,000
102,658
4,187
2016E
95,682
4,1033,848
2015
88,468
4,022
2014
81,117
2017E 2018E
4,268
108,826
JapanSouth KoreaNorth AmericaEurope
China
Southeast Asia
OthersLatin America
Global Game Market(2014-2018E)
Source: Newzoo, iResearch, Tencent Analysis
Large and Growing Chinese Online Game Market
Unit: USD Million
11,007 12,54017,55615,71714,069
3,6643,490
3,1162,640
2,087
7,2086,613
5,5114,113
2,742
0
5,000
10,000
15,000
20,000
25,000
30,000
2015
19,293
2014
15,836
2018E
22,696
2017E
25,81928,428
2016E
PC BrowserMobile PC Client
CAGR16.1%
15.1%
12.4%
27.3%
Chinese Online Game Market(2014-2018E)
Source: iResearch, Eguan,Newzoo
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1,445 2,497
3,638
6,676
9,722
12,423
Tencent Leads the Market in Key Fronts
Unit: USD in Million
Tencent Game Revenue(2010-2015)
Source: Company Annual Report
20112010
+50%
2015201420132012
Source: Newzoo, and game revenues of Sony, Microsoft, Apple and Google were estimated by quarterly earning reports in which these are not specifically segmented out
Tencent Microsoft Sony Activision Blizzard
Apple EA Google NetEase Warner Bros King0123456789
10
7.2
5 5.14.4
3.54.5
2.41.6 1.6
2.3
8.7
6.85.8
4.7 4.4 4.3
3 2.82.2 2
FY 2014 FY 2015
Top 10 Public Companies by Game Revenues
Unit: USD in billion
+21%
+36%+13% +6% +26% -4%
+25%
+76% +39% -12%
Tencent Leads Game Publishers in the World
Chinese PC Game Market
Chinese PC Game Market Overview
1,518 2,1311,595
1,7331,6711,426
1,3951,395
4,3854,370 4,094
8432,469
1,809
1,334
3,772
0
2,000
4,000
6,000
8,000
10,000
12,000
2014
9,997644
2013
9,123 690 552
583
2016E
10,304
2015
10,380
MusicOthers
RPG
MOBAShootingAction
Unit: USD Million
Source: Industry News, Company Annual Report
Chinese PC Client Game Market(2013-2016E)
CAGR7%
Tencent Leads the Market in Growing Fronts
BrowserRPG SportsRacingMusicPokerMOBAActionSTG
TencentOthers
Tencent Game Market Share by Genres (2015)
Source: Industry News, Company Annual Report
Proven Track Record of Hit Games
Dungeon & FighterDeveloper: NeoplePCU: 3M
Jun 2008 Jul 2008
Cross FireDeveloper: Smile GatePCU: 4M
May 2008
QQ DanceDeveloper: TencentPCU: 2.6M
Jan 2008
QQ SpeedDeveloper: TencentPCU: 3M
Aug 2003
QQ GameDeveloper: TencentPCU: 9M
May 2015
May 2013Sep 2011
League of LegendDeveloper: Riot GamesPCU: 10M
NBA 2K OnlineDeveloper: 2K Sports
Call of Duty OnlineDeveloper: Activision
1H 2016E
Moonlight BladeDeveloper: Tencent
Orcs Must DieDeveloper: Robot
Nov 2013
Blade & SoulDeveloper: NCSoftPCU: 1.7M
Heroes of NewerthDeveloper: S2 Games
Apr 2015
FIFA Online 3Developer: EA
Monster Hunter OnlineDeveloper: CAPCOM
Jul 2015 Dec 2015 1H 2016E
Chinese Mobile Game Market
China Mobile Game Market Outpaces All Other Regions
Mobile Game Market Growth by Regions(2015-2017E)
Source: App Annie, iResearch, PWC
Mobile Game Market Size by Regions(2014-2017E)Unit: USD in Million
7,402 9,6776,488
6,7157,232
7,7296,0166,205
6,6027,015
3,7824,050
4,3824,738
4,9350
10,000
20,000
30,000
40,000
2017E
37,299
11,522
2,021
2016E
33,619
1,874
2015
29,559
1,736
2014
25,968
1,647 South Korea
ChinaJapan
North AmericaEuropeSoutheast AsiaLatin AmericaOthers Area China Japan South
KoreaNorth
America Europe Southeast Asia
Latin America Others
Market Share (2015) 25% 22% 6% 21% 14% 5% 2% 5%
Market Share (2017E) 31% 21% 5% 19% 13% 5% 2% 5%
Growth Rate (2015-2017E) 33% 6% 7% 5% 8% 11% 14% 11%
Tencent DominatesChinese Mobile Game Value Chain
Mobile Game Landscape in China(Mar 2016)
*Revenue allocated along the value chain based on revenue share percentageSource: Company Public Information, Industry News, Company Annual Reports
100%
35%30%25%20%15%10%
5%0%
40%45%
65%70%75%
95%
50%55%
90%
80%85%
60%
Distribution
Tencent Android30%
Tencent iOS13%
Netease iOS9%
App Store
360
BaiduUCMi
Huawei OPPO
Others
Publishing
Tencent36%
Shanda Games LedongLongtu Games Yinhan
Netease22%
Perfect WorldChangyouTianma
Perfect WorldLilith GameTianxiang Supercell JurenBlue HarborSnail Digital
Others
Tencent Published (Others)17%
YinhanLedong
Tencent24%
Development
Others
Digital SnailBlue Harbor YouzuJuren
Tianxiang
Shanda Games
Netease17%
Tencent Published~11%
Tencent Mobile Game Performance
No.1 on Free Download Chart No.1 on both Free Download and Grossing Chart
45 Games 13 Games
Source: App Annie (As of Mar 2016)
Tencent Games
iOS Top Grossing Games Ranking in China
Source: App Annie
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16
1 Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
Fantasy Westward Journey
2 We Fire We Fire We Fire We Fire The Legend of Mir 2 The Legend of Mir 2 Westward Journey Online
Westward Journey Online
Westward Journey Online
Westward Journey Online The Legend of Mir 2 Westward Journey
Online
3 Shenwu2 Shenwu2 MU Miracle The Journey of Flower The King of Fighters’98 Westward Journey Online The Legend of Mir 2 The Legend of Mir 2 The Legend of Mir 2 The Legend of Mir 2 Westward Journey
Online Clash Royale
4 MU Miracle We Fly We Fly MU Miracle We Fly We Fly The King of Fighters’98 Loong Craft The King of Fighters’98 Hero Moba Hero Moba Hero Moba
5 We Fly MU Miracle Shenwu2 Shenwu2 We Fire The King of Fighters’98 We Fly We Fly Loong Craft Naruto Mobile We Fly Cross Fire
6 Dota Arena Dota Arena Dota Arena Happy Elements Happy Elements We Fire We Fire The King of Fighters’98 Hero Moba Cross Fire Cross Fire Naruto Mobile
7 Blade of Three Kingdoms Boom Beach Happy Elements We Fly 9LZ WeChat Dash Clash of Kings Hero Moba Clash of Kings The King of Fighters’98 Naruto Mobile We Fly
8 West Arena Happy Elements Boom Beach Craz3 Match The Journey of Flower Clash of Kings Clash of Clans Clash of Kings We Fly Loong Craft The Legend of Zu The Legend of Mir 2
9 Craz3 Match Landlord Poker Clash of Clans Dota Arena MU Miracle Happy Elements CangQiongBian We Fire We Fire We Fly The King of Fighters’98 The King of Fighters’98
10 Boom Beach Blade of Three Kingdoms I am MT2 The King of Fighters’98 Shenwu2 We MOBA Happy Elements Clash of Clans Clash of Clans Shenwu2 Clash of Kings Legend of the Qing Qiu
Fox
Hit Titles
Tencent Leads the Market in Key Genres
Tencent Mobile Game Market Share by Genres(2015)
RPGRacingStrategyTower Defense
SimulationCasual & Puzzle
MOBABoard Game
MusicFlight Combat
Action
Source: App Annie, Industry News, Company Annual Report
TencentOthers
Opportunities in Chinese Mobile Game Market
Chinese Mobile Game Market Has Huge Potentials
254367
452
118
135
145
0
200
400
600
800
2013
390
+24%
2015
603
2014
510
AndroidiOSOthers
User Base(2013-2015)
Source: CNNIC, Trendforce
Unit:Million
Daily Playing Times
42% 47%
37% 25%
21% 29%
0%
25%
50%
75%
100%
2014
< 30 min
30 min - 1 hour
> 1 hour
2015
Monthly Pay Rate(2014-2015)
+9%
2015H22015H12014H22014H1
New Opportunities of Different Genresto Be Explored
Players’ Preference by Genres(2015)
16%
RPG 33%
Music
67%
40%
Flight Combat 46%
Tower Defense 52%
Casual & Puzzle 58%
RAC 64%
Poker & Chess
SPT
Source: App Annie, Industry News, Company Public Information, Company Annual Report
Turn-based
ARPG MMO Cards
FPS/TPSMOB
APoker
& Chess
Match 3
Flight Comba
tParkou
r COC PuzzleTower Defenc
eWar
Strategy
1615
161516
15
16
15
16
1516
15
16
15
16
15
16
15
16
15
1615161516151615
Others Tencent
Market Size by Genres(2015-2016)
Challenges in Chinese Mobile Game Market
Different Taste in Mobile Games
Cobweb of Distribution
ChannelsUnsuitable Business Model Unsuitable
Gameplay
Language Barrier
Cumbersome Payment
Network EnvironmentUnsuitable Art
Style
Hardware Performance and Fragmentation
Under Marketing /Promotion
Missing Localization or Live Op Team
Insufficient Onboard Tutorial
Unappealing Theme
Challenges for Overseas Publishers in China
Subgenres China Japan South Korea US
RPG
ARPG 7% 1% 45% 7%MMO 24% 1% 13% 19%
Card RPG 9% 18% 26% 12%Mixed Card RPG* 4% 76% 14% 62%
Turn-based 56% 5% 2% 1%
Genres China Japan South Korea US
RPG 70% 74% 61% 5%Casual & Puzzle 6% 10% 9% 16%
Action 7% 6% 7% 10%Strategy 15% 10% 12% 47%
Poker & Chess 2% 1% 11% 23%
A Different Taste in Mobile Games
Comparison of Top 50 Mobile Games by Genre(2015)
Source: App Annie, Tencent Analysis
* Mixed Card RPG : Puzzle & Dragons etc.
Low-end, Domestic PhonesLead to Device Fragmentations
Smartphone Installed Base Share by Brand(2016Q1)
0%
20%
40%
60%
80%
100%
Apple; 0.2346
Samsung; 0.1426
Xiaomi; 0.102Huawei; 0.0794
Bubugao; 0.0462
OPPO; 0.0453
Lenovo; 0.0293Coolpad; 0.0228
Meizu; 0.0219
Others; 0.2759
Price Range of Domestic Mobile Phones(2016Q1)
Unit: USD
23%
28%
39%
10%
Above $480$320-$480$160-$320Below $160
Android Game Device by Resolution(2016Q1)
0%
20%
40%
60%
80%
100%
1920*1080, 16%
1280*720, 26%
960*540, 8%
854*480, 13%
800*480, 10%
1080*1776, 5%
Others, 21%
Source: ZDC, Talking Data
Convoluted Distribution Channels
APP Stores
Pre-installation
Mobile Ads
Portal & Community
Lack of One-Stop Payment Gateway
SMSVirtual cur-rency
Pre-paid cards
E-Banking
Win with Tencent
Key Capabilities in Mobile Game Publishing
Tailored Operation Strategy
Coverage of Vast User
Base
Multidimensional, Social Graph
Based Marketing
Social Graph Improves Game Performances
Mobile Game Platform with Vast User Base
Premier Platform• Mainstream premier games
for the general public
MyApp Platform• Rich game portfolio for all
types of mobile users
MAU: 658 Million MAU: 762 Million(2016Q1)
Peak Daily Distribution: 145 Million
Multidimensional, Social Graph BasedMarketing/Promotions
Promotions Based on Social Graphs
Tencent SocialNetwork Users
Social Promotions
SNS/ Ranking
Invitations/ Forwards C to C Sharing
Game Center
Enter the Game
Marketing and Promotions
Celebrity Tie-ins
Theme Songs (MV)
Transmedia Promotions
Official Website
WeChat/ Mobile QQ
Official Accounts
Tencent Games Arena
Tailored Operation Strategy
Casual Games with High DAU
Blockbuster
Release
High DAU
Casual
Game
Midcore Mobile Games: Controlled Release
Player Portrai
t
Player Pre-
registration
Core Players
Periphera
l Players
General Players
8 weeks before OBT
Steady operations
4 weeks before OBT
OBT 1 week after OBT
3 weeks after OBT
Future Strategy
Next Steps for PC Games
• Maintain leading position in each genre
• License games from all over the world
• Explore innovative gameplays
Together, We Can Make Wonders!
Thank You