Anatomy of Japanese Social Game Design and Operation A comparison with SEA developers

1. Anatomy of Japanese Social Game Design and OperationA comparison with SEA developers Toshihiko Suyama Director of Market Development DeNA Asia Pacific Holdings

2. Who am I? • SEA Game Production Alliance Director • Experience in social games and webs • product manager of DeNA’s in-house social game • head of Mobage Japan’s community and User Generated Contents • etc

3. The growth of Japanese social games • Growing rapidly… And will surpass the console market Billion$ 4.1 > Console software * Source: Mitsubishi UFJ Morgan Stanley, US$=80JPY, *2012 is forecast

4. High ARPU • Compared with other country’s successful players,our average revenue per active user (ARPU) is much higher $12.06/month Successful USCompany 18 x $0.66/month *MAU-based ⇒Several games earn over 10M US$ per month

5. Why?

6. Uniqueness of Japan 1. High disposable income 2. High 3G penetration rate 3. Almost all post-paid subscription and easy carrier billing 4. Gacha? 5. Ninja’s secret activity?

7. We are also successful in the U.S. US GooglePlay market Top Grossing 1st No.1 Rage of Bahamut No.10 Tapfish 20th NinjaRoyale No.14 40th 60th 80th 100th 4/10 4/15 4/23

8. What is in-game event? Regular Event

9. In-game event revenue SkyFall (ARPDAU) Ninja Royale (ARPDAU) EventE EventF EventB EventD EventA Event C 15x 5x 3/15 3/24 4/21 3/23 3/30 4/5 4/13 4/27

10. True Story • Success of Japanese social game is driven by in-game events • What is behind the event design and operation? And what can we learn from that? • Even if you do not plan to go to Japan or US market,we can learn something

11. Difference • Monetization design

12. The way of monetization • In the Japanese market, developers can focus only on virtual goods SEA market Japanese market ・Lots of options-Virtual goods-Paid apps-In-game ads-Ads game ・Most of revenue is from virtual goods

13. unmanageable Active Users Active users Potential Paying Users Potential Paying Users Actual Paying Users Actual Paying Users User difference sample • Potential paying user ratio is totally different ■SEA market ■Japanese market Clear Strategy

14. Monetization point • Monetization point in Japan is lean and simple SEA Japan ・Broad variety of virtual goods ・Parameter enhancement item ・Stamina refill Pet’s food Avatars ⇒Easy to manage Buildings Pets

15. How to manage • Divide user segment like below and make the goal and plan for each segment day-to-day Whole Event 1～3days 4～6days ・Motivate competition withsame level users⇒Increase battle against higher ranked users ・Encourage users to keephigh ranks by matchingbalance Payingheavy ・Stimulate desire to beatpaying heavy users ⇒Increase limited time challenges ・Give now-or-neverfeeling during limitedtime challenges Payingnormal ・Make users realize how hard to beat paying users even during limited timechallenges⇒Well balanced matching ・Stimulate user’s desirefor revenge againstpaying users duringlimited time challenges Nonpaying

16. Difference • Monetization design • Lean/simple and easy to manage • Segmentation and day-to-day control • Team Organization

17. Game development team organization • Small team(6-8 people), but 1 person who is in charge of analytics and parameter design Analyst Producers Engineers Artist

18. The detail of analyst’s work Input to game design • Analyst takes care of whole flow of game/event development Parameter design • Advise game/event design from parameter point of view Define KPI and developreporting tool • Design game parameter. For example, how to control the user progress, how to match higher ranked users, etc Analyze and improvetimely • Define KPI which clearly shows if the event is going well or not and develop reporting-tool for sharing the KPI • If user activity is different from estimation, or even worse, analyze game logs and improve the parameter or event/game- design timely

19. Ex) Log of consumption of virtual currency ・Who（User_ID） ・When（date/time） ・Which Device ・What（Item_ID） ・How many (Item_num) ・How much spent coin ・User Level ・Remaining stamina ・Boss encountering ・Limited time challenge encountering ・Ranking etc… ＋ Example of logs • Analysts need to manage user’s logs and analytics • DeNA’s internal team analyzes 1.2TB logs per day

20. Analyst’s professional background • Analysts have no defined professional background • Business Consultant • Marketing Research • Sales • Super Computer Engineer • Of course, if they have data-mining back ground,it is better… ⇒ Assigning one analyst per team is important

21. Role of other team members • It is important that every team member knows about the KPI ⇒ Fast event operation becomes possible

22. Daily activity 7am: Event logs and KPI are sent to team member’s mailbox 9am: Analyst looks at logs and sees users getting bored of the event 10am: Team decides to add a new stage by the end of today 5pm: Launch the new stage of event

23. Difference • Monetization design • Lean/simple and easy to manage • Segmentation and day-to-day control • Team Organization • Analyst takes care of whole game operation • All team members understand KPI for fast operation • Time management

24. Monthly sales trend image • Event schedule is very important because Japanese usersspend lots of money at the beginning of the month • ⇒1day delay, 10% revenue loss average 1st Event 2nd Event 30 st th th th th th th

25. How to keep to the schedule • The way to keep to the schedule uses common methods • Day-to-day schedule • A morning assembly to check ⇒Sometimes only hard work can solve the problem…

26. Difference • Monetization design • Lean/simple and easy to manage • Segmentation and day-to-day control • Team Organization • Analyst takes care of whole game operation • All team members understand KPI for fast operation • Time management • Strictly keep day-to-day schedule • Dare to work hard ⇒Let’s see an actual developer’s result

27. Time management struggle Our partner from SEA region Yes we can! • After launch in Japanese mobage with our support,the ARPU becomes almost 700% in 6 months 695% Improve Parameter design Start running event 100% 1st 2nd 3rd 4th 5th 6th month

28. Mobage platform introduction Korea Japan Global China FP SP PC SP SP SP

29. Mobage platform introduction • Let’s go to the big markets with Mobage platform ⇒We can support with our knowledge and experience • Do not miss the other DeNA’s presentation Tetsuya Mori Managing Director of DeNA Asia Pacific 「Opportunity for Mobile Socialin Japan, China and Korea」 24th 10am at Hall301-302

30. Thanks!! Contact: suyama.toshihiko@dena.jp