mid-core gamingimmersive experience and casual gameplay

compromise or best of both worlds?

2012

Peter WarmanCEO Newzoo

peter@newzoo.com

mid-core gamingimmersive experience

mid-core gamingcasual gameplay

Golf VIVolkswagen

BejeweledPopCap

CygnetAston Martin

PanameraPorsche

EnzoFerrari

Army AttackDigital Chocolate

EVE onlineCCP

League of LegendsRiot Games

mid-core gamingimmersive experience and casual gameplay

Golf VIVolkswagen

BejeweledPopCap

CygnetAston Martin

PanameraPorsche

EnzoFerrari

Army AttackDigital Chocolate

EVE onlineCCP

League of LegendsRiot Games

mid-core gamingimmersive experience and casual gameplay

Technically, League of Legends is a “mid-core” MMO, meaning you don’t have to play for 40 hours a week to enjoy it. The market for mid-core MMOs is vast—much larger than for hard-core MMOs such as World of Warcraft--in that the unique immersive aspects of MMO play are available to a much larger,

casual gaming audience.

edgeworld

key trends shaping the mid-core market1. Old love never dies

The love for an immersive game experience does not go away as people grow older. It is just that the entry barrier and gameplay is not adapted to their “new life”. Their love remains largely answered in the current market. Mid-core

games could be the answer, activating gamers that have stopped playing core-games.

2. More gamers to comeOver the past ten years, games have become an integral part of every youngsters life. Mid-core games can ensure that

these young core gamers keep playing immersive games as they grow older.

3. Time is Money As youngsters start a working and family life leisure time becomes scarce. At the same time they have more money to spend. To get the most out of leisure time, they are prepared to spend more money to enjoy. Mid-core games cater to

this. Free-to-play is the only way to let people feel the casual gameplay.

4. New interfaces. EverywhereIntuitive interfaces (e.g. on tablet and phones) have forced core genre games to offer easier controls and adapted

interfaces. Still these are very successful. Consumers are getting used to this type of interactivity increasing the appeal towards core gamers as well as increasing the potential player base. In addition, these interfaces allow gaming in new places and social settings. And, do not forget the growing number of girls that are going for the core stuff. Still hugely

underestimated.

sizing the mid-core marketwhere to start? ask Newzoo with their mid-core client base

new in 2012

US UK Germany France Spain Netherlands BelgiumItaly Brazil Mexico Russia China Korea

US Europe* Emerging* Asia*

$21.5bn2011E

215mhrs/day

Money

Time

€16.5bn2011E

175mhrs/day

$4.5bn2011E

155mhrs/day

$13.5bn2011E

165mhrs/day

sizing the mid-core marketwhere to start? market size per segment/platform?

Global

Money Time

$60-70bn2011E

900m-1bn2011E

27%of money

49%of time

GrowthPotential?

Casual, Social, Mobile Casual, Social, Mobile

“core” segments/platforms take more money than time“casual” segments/platforms take more time than money

This gap is closing fast in the WestThe gap is a lot smaller in Emerging markets that have no legacy, especially Brazil

F2P, Mid-core and Cross-platform gaming will accelerate this trend

sizing the mid-core marketwhere to start? money versus time spend?

US Europe*

$21.5bn2011E

€16.5bn2011E

Mid-core market

$1.2bn €1.1bn

Total Market

21.6M 24.0M

13.1M 15.7M

Mid-core opportunity

$280M €260M

13.3M 10.2M

3.2M 3.6M

Spend

Players

Spenders

Spend

Players

Spenders

5.5% of market

23% growth

6.7% of market24% growth

sizing the mid-core marketFirst: our conclusion

sizing the mid-core marketWhat did we analyze?

10-30

30-50

Age

Age

Midcore_Cliffhanger (n=85719278)

Filter: Age=10-15,16-20,21-25,26-30United Kingdom, Germany, France, Spain, Italy, Netherlands, Belgium

0

20

40

60

80

100

%

All Gam

ers

All Pay

ers

Casua

l Gam

ers

Casua

l Pay

ers

Core A

ND Cas

ual G

amer

s

Core A

ND Cas

ual P

ayer

s

Core

Gamer

s

Core

Payer

s

77

41

70

17

52

32

58

34

66.0M

35.1M

60.0M

14.6M

44.6M

27.4M

49.7M

29.1M

53% 24% 62% 59%

X% share of paying players

All gamers Social/Casual Both Core

91% of gamers plays online or mobile casual/social games

sizing the mid-core marketWhat did we analyze?

30-50Age

Midcore_Cliffhanger (n=92336437)

Filter: Age=31-35,36-40,41-45,46-50United Kingdom, Germany, France, Spain, Italy, Netherlands, Belgium

0

20

40

60

80

100

%

All Gam

ers

All Pay

ers

Casua

l Gam

ers

Casua

l Pay

ers

Core A

ND Cas

ual G

amer

s

Core A

ND Cas

ual P

ayer

s

Core

Gamer

s

Core

Payer

s

56

29

47

11

26

17

31

20

51.7M

26.8M

43.3M

10.2M24.0M

15.7M28.6M

18.5M

52% 24% 66% 65%

X% share of paying players

All gamers Social/Casual Both Core

84% of gamers plays online or mobile casual/social games

sizing the mid-core marketWhat did we analyze?

30-50Age

Midcore_Cliffhanger (n=92336437)

Filter: Age=31-35,36-40,41-45,46-50United Kingdom, Germany, France, Spain, Italy, Netherlands, Belgium

0

20

40

60

80

100

%

All Gam

ers

All Pay

ers

Casua

l Gam

ers

Casua

l Pay

ers

Core A

ND Cas

ual G

amer

s

Core A

ND Cas

ual P

ayer

s

Core

Gamer

s

Core

Payer

s

56

29

47

11

26

17

31

20

51.7M

26.8M

43.3M

10.2M24.0M

15.7M28.6M

18.5M

52% 24% 66% 65%

X% share of paying players

All gamers Social/Casual Both Core

14.3M 8.3M 16.7M 4.4M 20.6M 11.7M 21.1M 10.6M-22% -24%

abs% -28% -30% -46% -43% -43% -37%

Drop

sizing the mid-core marketMid-core market

30-50Age

Midcore_Cliffhanger (n=92336437)

Filter: Age=31-35,36-40,41-45,46-50United Kingdom, Germany, France, Spain, Italy, Netherlands, Belgium

0

20

40

60

80

100

%

All Gam

ers

All Pay

ers

Casua

l Gam

ers

Casua

l Pay

ers

Core A

ND Cas

ual G

amer

s

Core A

ND Cas

ual P

ayer

s

Core

Gamer

s

Core

Payer

s

56

29

47

11

26

17

31

20

51.7M

26.8M

43.3M

10.2M24.0M

15.7M28.6M

18.5M

52% 24% 66% 65%

X% share of paying players

All gamers Social/Casual Both Core

14.3M 8.3M 16.7M 4.4M 20.6M 11.7M 21.1M 10.6M-22% -24%

abs% -28% -30% -46% -43% -43% -37%

Drop

€1,1bn / year24.0M players15.7M payers

22% plays F2P MMOs

43% in the US

sizing the mid-core marketMid-core opportunity > smaller drop in core/casual players and payers

30-50Age

Midcore_Cliffhanger (n=92336437)

Filter: Age=31-35,36-40,41-45,46-50United Kingdom, Germany, France, Spain, Italy, Netherlands, Belgium

0

20

40

60

80

100

%

All Gam

ers

All Pay

ers

Casua

l Gam

ers

Casua

l Pay

ers

Core A

ND Cas

ual G

amer

s

Core A

ND Cas

ual P

ayer

s

Core

Gamer

s

Core

Payer

s

56

29

47

11

26

17

31

20

51.7M

26.8M

43.3M

10.2M24.0M

15.7M28.6M

18.5M

52% 24% 66% 65%

X% share of paying players

All gamers Social/Casual Both Core

14.3M 8.3M 16.7M 4.4M 20.6M 11.7M 21.1M 10.6M-22% -24%

abs% -28% -30% -46% -43% -43% -37%

Drop

€1,1bn / year24.0M players15.7M payers

€260M / year10.2M players3.6M payers

Age 10 to 25 26 to 40 ChangeCasual 4,92€ 7,40€ 50%Social 5,25€ 5,77€ 10%Mobile 3,58€ 5,40€ 51%MMO 6,16€ 6,79€ 10%Console 9,74€ 9,45€ -3%PC Mac Boxed 7,12€ 7,23€ 1%PC Mac Download 6,65€ 6,36€ -4%

Age 10 to 30 31 to 50 ChangeCasual 6,63€ 5,12€ -23%Social 5,70€ 4,84€ -15%Mobile 4,40€ 3,88€ -12%MMO 6,51€ 6,02€ -7%Console 9,98€ 9,16€ -8%PC Mac Boxed 7,23€ 7,09€ -2%PC Mac Download 6,88€ 5,15€ -25%

Age 10 to 30 31 to 50 ChangeCasual 7,86€ 5,69€ -28%Social 5,50€ 7,52€ 37%Mobile 4,56€ 5,16€ 13%MMO 7,16€ 7,39€ 3%Console 11,36€ 11,68€ 3%PC Mac Boxed 8,04€ 8,40€ 4%PC Mac Download 6,55€ 7,19€ 10%

In the US, average spending goes up in all segments except online casual, explained by the move of casual budgets to mobile and social networks. This is not the case in the EU. We expect the EU to follow the trend in the US as seen with many other trends.

This is backed up by the increase in spending if we make the brackets slighty younger: 10-25 and 26-40.

profiling the mid-core marketdo typical mid-core gamers spend more? comparing age groups.

+6% -13%

+16%

Remember: there are more drivers than age!shaping the mid-core market

1. Old love never dies

2. More gamers to come

3. Time is money

4. New interfaces. Everywhere

Western mid-core market potential >$2bn

profiling the mid-core marketdo not focus on one screen!

mid-core gamingimmersive experience and casual gameplay

Western mid-core market potential >$2bn

mid-core gamingimmersive experience and casual gameplay

compromise or best of both worlds?

2012

Peter WarmanCEO Newzoo

peter@newzoo.com

mid-core gamingimmersive experience and casual gameplay

compromise or best of both worlds?

2012

Peter WarmanCEO Newzoo

peter@newzoo.com