Online Gaming Industry

Jason McdanielAlvin ArreolaTakao tanakaDanny QuachJames Mills

Goal

• What are the different types of platforms?• How do these platforms generate revenue?

ModemWired Router or GatewayWireless Router

Online Gaming and Entertainment

Silver Level (Free to Join) HD Movies and TV Shows Game Demos Downloadable Arcade

Games Game Add-Ons Avatars and Fashion Voice and Text Chat

Gold Membership Upgrade All of Silver plus: Photo Sharing Online Gaming with Friends Netflix Streaming Video Chat Facebook and Twitter Early access to demos Exclusive Discounts

How XBox Live Generates Revenue

Accessories to enhance experienceSubscriptionsDownloads – Using Microsoft Points

GamesAdd-OnsAvatar AccessoriesMovies, TV Shows

Online Advertising

Yearly Revenue

Entertainment & Devices Division$7.75 Billion

Game Downloads Revenue$100 million

Subscriptions20 Million active members

$1 billion in 5 years

Expected to reach $1B annually by 2013

• Launched November 2006• Free service that can be accessed by Playstation 3 and

Playstation portable devices• More than 40 million registered users• Over $500 million in revenue in 2009

Playstation Store

• Interactive media and entertainment source

• Download games, movies, TV shows, and add-ons

• High Definition content• New content added weekly

How PSN Generates Revenue

• PSN cards and wallet• PSN Spring 2010 sale• Qore online magazine subscription• Movies -rentals start at $2.99 and purchases start at

$9.99• Games start at $9.99• Advertising

PS3 Firmware 3.30 Update

• 3D support for console• 3D Games releasing in June 2010• Requires 3D capable TV• Sony hopes 3D technology will promote all aspects of

their products including PSN

Sony Online Service

• Built on the existing Playstation Network• Will link Sony’s Bravia TVs, smart phones, and gaming

devices• Promotes the relationship of Sony’s hardware and

software development teams

Nintendo Wii

• $49.99 is the average Wii game price• Almost all Wii game has on-line system

Popular Game of WiiWeekly Ranking of Wii Game

1. Monster Hunter Tri, Hunting Action Game 2. New Super Mario Bros. Wii Action game3. Super Smash Bros. Brawl, Action game4. Red Steel 2, Action RPG5. Call of Duty: Modern Warfare, Shooter video game6. Fragile Dreams: Farewell Ruins of the Moon RPG7. Mario Kart Wii, Racing game8. Endless Ocean: Blue World, Nintendo Scuba diver

game9. Super Mario Galaxy, 3D Action game10. The Legend of Zelda: Twilight Princess, Action Adventure

Name Genre

What can players do on-line??

• Doing missions to clear the stage with on-line members– e.g. Monster hunter

• Fighting with on-line members– e.g. Super Smash Bros. Brawl, Call of Duty

• Racing or competing against the time or the score with on-line members– e.g. Mario Kart Wii

• Trading items with on-line member– e.g. Pokémon Battle Revolution

How Nintendo makes money with using online contents

• Wii points– Electronic money of Nintendo

Wii– You can purchase Wii Points

through the Wii Shop Channel– 100points = $1.00– Wii (Nintendo) Points are used

to purchase a software on the Wii Shop Channel

– You can download game by using Wii points

How Nintendo makes money with using online contents

• Company can charge money for game items– e.g. Monster hunter

1. User can trade items with on-line player 2. Some items are free but some items are not

PC Gaming

• Acer• AMD• Antec• Bigfoot • Capcom• Alienware

• Epic• Gamestop• Gametap• Gas Powered• Intel• Logitech

• Microsoft• Nvidia• Razer• Sony• WildTangent• And more…

• The PC Gaming Alliance (PCGA) is a nonprofit corporation whose mission is to promote PC gaming worldwide

• Initial Release September 12, 2003• Currently over 1100 games available• Surpassed 25 million active user accounts• Leader in digitally distributed games

• EA• Activision• Ubisoft• THQ

• Sega• Codemasters• LucasArts• Capcom

• Bethesda• 2KGames• And many

more…

Steam Features

• Free client • Instant purchase of games• Access games from any computer with internet• Automatic games updates • Chat with friends

• Allows you to view which games your friends are currently playing and join them

Steam Revenue • Steamworks

• Sale of Digitally distributed games• In game advertising • Steam apparel

Blizzard Entertainment

• Software developer and publisher founded in 1991 as Silicon & Synapse

• Headquarters located in Irvine, CA• Subsidiary of Activision Blizzard, the 3rd top

video game developer• Most well known for WarCraft and StarCraft

series• Breakthrough hit was original WarCraft title,

WarCraft: Orcs and Humans

Activision Blizzard Income

• 2009 net revenue was $4.28 billion• 2007 net revenue of $1.1 billion and $517

million of operating income (as Blizzard)

World of Warcraft

• A Massively Multiplayer Online Role Playing Game (MMORPG) released in 2004

• #1 global subscription based game• Over 11 million subscribers• Subscription cost of $14.99/month• One time cost of game software and

expansions

StarCraft

• Over 11 million copies sold worldwide• One time cost of game software and

expansion StarCraft: Brood War• Free use of online multiplayer game play

through Battle.net• Still very popular in South Korea, where

professional teams compete in tournaments

Future Games

• StarCraft II: Wings of Liberty• Diablo III

Concluding Research

• Online gaming market is currently worth over $15 billion• There are over 100 million people who play video games

online in which half play PC games• Xbox Live holds the largest share of the console online

gaming market, while PS3 and Wii share the remainder• The online gaming industry is expected to grow to about

$24.9 billion by 2013

Questions?