USA & China battle for #1 Top Games Market

USA & China Battle for #1 Top Games Market GAMES SEC TOR REPORT 2015

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China Races Ahead as Local Publishers Prevail

US Loses its Crown in 2015 In 2013, China overtook Japan to become the second largest games market in the world behind the US. Just two years later, China will overtake the US and boast almost double the revenues of Japan.

The Top 10 Countries by Game Revenues 2014 vs. 2018

2018

revenues

GAMES BATTLE

Game Revenues 2012-2018 | US vs. China

By 2016, the Chinese market will have already grown to $26.2Bn, far ahead of the $22.6Bn US market. This growth shows no signs of slowing down and will propel the Chinese market to over $30.0Bn by 2018.

US & China will take 50% of the Global Games Market in 2018

2014

THE GLOBAL

revenues

1

US

$21.3Bn

1

China

$32.8Bn

2

China

$18.0Bn

2

US

$24.0Bn

3

Japan

$12.0Bn

3

Japan

$12.6Bn

4

South Korea

$3.8Bn

4

South Korea

$4.3Bn

5

Germany

$3.6Bn

5

Germany

$3.9Bn

6

UK

$3.5Bn

6

UK

7

France

$2.4Bn

7

8

Canada

$1.8Bn

9

Spain

10

Italy

While the Chinese market presents opportunities for Western developers, the current ecosystem ensures the majority of game revenues will continue to come from the local players and native games.

Western developers will share indirectly in the spoils of this growth as Chinese companies such as Tencent look to Western developers for investment opportunities.

Source: Newzoo 2015 Global Games Market Report Premium

Growth KPIS 2015 | US vs. China

China

United States

Population

1,401,587,000

325,128,000

$3.7Bn

Internet Population

740,038,000

283,511,000

France

$2.6Bn

Players

446,284,000

184,896,000

8

Brazil

$2.1Bn

Payers

156,976,000

109,955,000

$1.5Bn

9

Canada

$1.9Bn

Total Revenue

$22,193,562,000

$22,007,854,000

$1.5Bn

10

Mexico

$1.8Bn

GDP Per Capita ($)

$11,587

$57,080

Source: Newzoo 2015 Global Games Market Report Premium

Source: Newzoo 2015 Global Games Market Report Premium T H E G L O B A L G A M E S B AT T L E | CA S UA L G A M E S A S S O C I AT I O N

3

Console Still Dominates in the US

THE GLOBAL

Mobile Drives Growth in China

US Games Market Per Segment & Screen 2015

GAMES BATTLE

China Games Market Per Segment & Screen 2015

Source: Newzoo 2015 Global Games Market Report Premium

In 2015, the US games market is expected to generate revenues of $22.0 billion, representing a year-on-year growth of +3.5%. This will make the US the second largest games market in the world behind China.

The share of digital revenues will reach 72%, or $15.8 billion. The Entertainment Screen (TV/Console, VR) continues to prevail in the US this year, generating $9.9 billion, or 45% of the market.

Despite common misconceptions that the US mobile games market is saturated, mobile segments will continue to see healthy growth; smartphone games and tablet games in will see year-on-year growths of +13.4% and +17.8% respectively to generate a total of $6.0 billion, or 27% of total revenues.

Overall, the US games market will grow with a CAGR (2014-2018) of +3.1% to reach $24.1 billion in 2018.

2018

Snapshot of the Future Key Facts Online Population

Gamers

300.2M 195.4M

Revenues

$24.0Bn

Share Mobile Revenues

31%

Revenues CAGR 2014-2018

+3.1%

Source: Newzoo 2015 Global Games Market Report Premium

In 2015, China will move ahead of the US to become the world’s largest games market with expected revenues of $22.2 billion.

This represents a year-on-year growth of +23.0%. China is expected to reach $21.4 billion in digital sales, or 97% of total revenues. The Chinese games market is dominated by the Computer Screen (PC/MAC), which will generate $15.2 billion this year, or 68% of total revenues.

Mobile segments will continue to grow with huge impact; tablet games will see a year-on-year growth of +39.0%, while smartphone games will jump and astounding +50.0%. Together, they will total $6.5 billion (or 29% of total revenues), making it the number one mobile games market in the world in 2015. Most impressively, local Android app stores in China alone will generate revenues of $3.6 billion in 2015, or 12% of the global mobile games market.

2018

Snapshot of the Future Key Facts Online Population

Gamers

900.2M 597.4M

Revenues

$32.8Bn

Share Mobile Revenues

34%

Revenues CAGR 2014-2018

+16.1%

Source: Newzoo 2015 Global Games Market Report Premium

Source: Newzoo 2015 Global Games Market Report Premium 4

T H E G L O B A L G A M E S B AT T L E | CA S UA L G A M E S A S S O C I AT I O N

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The Gamers Of all American mobile gamers, 4.8% can be classed as big spenders versus 2.6% in China.

Mobile: A Different Battleground Age/Gender of Big Spenders on Mobile Male US

The demographic makeup of this valuable target group is similar across the two countries with China having a slightly higher share of females amongst the big spenders.

Men aged 21-35 make up almost half of the American big spenders on mobile.

Male China

48% 43%

Female US

75%

25%

65%

Female China

35%

22%

5%

12%

10-20

5%

21-35

36-50

by Android Revenues in China

by Android Revenues in China

1. Supercell 2. Mojang 3. Raleigh 4. PopCap 5. Gameloft

1. Tencent 2. NetEase 3. Yinhan Games 4. Happy Elements 5. iDreamsky Share of Top 100 Android Game Revenues in China (May 2015)

48.2%

Source: Newzoo/TalkingData China Mobile Games Market Monitor

9%

10-20

Top 5 Chinese Publishers

11.1%

22% 17%

9%

Top 5 Western Publishers

3%

21-35

5%

36-50

Source: Newzoo Data Explorer 2015

Cross-Platform Big Spending | US & China

Western Games in the Top 100 iOS Games | China Boom Beach #8 Clash of Clans #14 Heartstone #19 Dungeon Hunter 5 #36

Simcity Build It #66 Asphalt 8 #69 Plant vs Zombies 2 #72 Hay Day #75

Hitman: Sniper #97 Iron Force #99 Empires & Allies #100

THE GLOBAL

GAMES BATTLE

Three of the Top 20 iOS games and Top 20 Android games in China are Western: Clash of Clans and Boom Beach feature in both. The Top 20 grossing games take 74.2% of all revenue of the Top 100 games in China and 61.3% in the US. This means China iOS revenues have less of a long tail compared to the US which, in principle, is bad news for developers. Android, because of its diverse ecosystem, has a significantly longer tail in both countries.

Source: Newzoo Monthly iOS Rankings

Top 100 Android Game Revenues Split by Genre

69%

60%

also spends big on console gaming

also spends big on PC gaming

of mobile big spenders

of mobile big spenders

This year in China, The mobile version of Fantasy Westward Journey, one of China’s biggest PC titles published by Netease, entered the grossing ranking at the #1 position.

8% 10%

Of the top 20 grossing iOS games in the US in June, seven were social casino titles with the highest ranking title (Big Fish Casino) at number six.

21%

of revenues of 10% 19% the Top 100 Android games are generated by

12%

RPG Games

20%

Casual Cards Roleplay Action Casual (Parkour)

19%

Strategy Shooting

This means social casino titles account for 25.4% of the revenues of the Top 20 games. This genre does not perform so well in China where most casino style games are banned. The Chinese market is unique in the popularity and success of RPG mobile titles.

Social Casino Games Generate 25% of Top 20 iOS Game Revenues in US Source: Newzoo Monthly iOS Rankings

6

Source: Newzoo Data Explorer 2015

Source: Newzoo/TalkingData China Mobile Games Market Monitor

T H E G L O B A L G A M E S B AT T L E | CA S UA L G A M E S A S S O C I AT I O N

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About Newzoo Newzoo is an innovative global market research and predictive analytics firm with a primary focus on games. Newzoo provides its clients with a mix of market trends, financial analysis, revenue projections, consumer insights, data modelling solutions and predictive analytics services across all continents, screens and business models and works for the majority of top 25 public companies by game revenue.

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