1. 1 Casual Games Industry Progress, Opportunities & Players

2. 2 Casual Games Association Three main areas of focus Connecting the Industry Action Groups Industry Education

3. 3 Casual Games Association - Connect: Everyone Developers Publishers Distributors Portals Tools Industry Organizations PC Mobile Consoles EVERYONE

4. 4 Casual Games Association -Connect: In All Ways Connecting the Casual Games Industry CGA Conferences: Kyiv, Amsterdam & Seattle Minna Mingle networking socials Action Group Meetings Industry Magazine

5. 5 Casual Games Industry Progress –Why are we Here? Opportunities –Current stable growth direction & revenues Players & Their Business Models

6. 6 Casual Games – Why Are We Here? Casual games are a big business—bigger, perhaps, than many people realize. Online download, subscription & advertising revenues reached –$713 million (USD) in 2005 and are estimated to grow to –$1.56 billion (USD) in 2008. The casual games industry is maturing –Bigger budgets –DS, PSP, XBLA, Retail –Alternative revenue models

7. 7 Just the online casual space is…. Bigger than EU & US MMO space Bigger than Retail PC space About the same as: –The online US newspaper industry –1 Month of US film box office sales –2005 Music download sales –½ of the 2006 Music download sales (10% of total music market) –1/15 of the US Fitness industry

8. 8 Casual Games – Hit Driven Market Sales distribution of downloadable games. Percentage of Units Sold –Top 5 Games35% –Top 10 Games60% –Top 20 Games75% This shouldn’t be scary, but you must make high quality content to succeed High quality content is the KEY to a successful industry

9. 9 Source: Compiled RealNetworks top-10 listings www.game-sales-charts.com (by James Gwertzman) Number of “Top 10” games released on RealNetworks (by quarter) Casual Games – Getting Crowded

10. 10 Casual Games - Shorter shelf life… Bejeweled Ricochet Xtreme Zuma Super Collapse II Gutterball 3D Bejeweled II Bookworm Puzzle Inlay Feeding Frenzy Diner Dash Cake Mania Source: Compiled RealNetworks top-10 listings www.game-sales-charts.com (by James Gwertzman)

11. 11 Money Facts – what you can you do 80-100 Million USD in 2006 for Israeli casual games companies PopCap Games’ 2006 consumer spend was approx 80 Million USD RealNetworks’ Q4 2006 revenue was 24 Million USD. 2006 revenue was 86 Million USD, a 53% increase over 2005. A “hit” downloadable game will sell approx 400K copies, 4-10 USD a copy = 1.6 – 4.0 Million in revenue.

12. 12 Casual Games & YOU! Which brings us to… YOU contributing to creating high quality content is very important to the casual games industry’s (and your) success. Don’t assume that you can enter the market without hard work. The industry's growth hasn’t gone un-noticed.

13. 13 Casual Games Industry Progress –Why are we Here? Opportunities –Current stable growth direction (what is working now) Players & Their Business Models

14. 14 Content is Queen The most successful and stable companies own IP –They are taking in less money – and have more employees (and larger houses)

15. 15 Content Pipeline – how are they doing it? Create a number of prototypes (10-20) Develop a downloadable casual game Launch the casual game on their website –Iterate as necessary Broad portal launch DS, PSP, XBLA, Retail, Mobile –Puzzle Quest & Cake Mania are in the top 10 retail DS games (after 1 st party games) –PopCap Games is the #1 developer of XBLA games –Casual game shelf space is increasing at Retail –Bejeweled constituted 15% of Jamdat’s revenues before their sale to EA

16. 16 Customer Interaction Being the go-to place is nice –But it is hard to compete with portal destinations

17. 17 Customer facing – how they are doing it Custom store/user interface –User generated merchandizing –Traditional merchandizing Customer Acquisition –Purchase traffic –Internet Marketing –Build off of IP No one has made a successful “YouTube of games” Success: Pogo, Shockwave, Big Fish, PopCap

18. 18 A note about chasing YouTube … Think about how you listen to music – Think about how you watch to movies – Think about how you consume books – Think about how you play video games – Clubs – Theatre – Living Room/Den/Office MTV – E Entertainment - G4 Amazon (30% of market)

19. 19 B2B - Technology Easier to enter Easier to flip Good place to enter market But is harder to maintain placement Most of Israel’s companies are here

20. 20 Opportunities Should you enter the market? Should you bank on growing the market? Should you expand? Should you try something new?

21. 21 Casual Games Industry Progress –Why are we Here? Opportunities –Current stable growth direction & revenues Players & Their Business Models

22. 22 Consumer Facing Non-portals –RealNetworks –Big Fish Games –Shockwave/Atom/MTV –MiniClip (webgames) –Pogo (subscription) Portals –Yahoo –Microsoft

23. 23 Content Big Fish Games Sandlot Games PopCap MumboJumbo Pogo Reflexive RealNetworks MTV