1. THE GREAT ORACLE

3. THE “EXPERTS” ARE SAYING: As part of an interview with Industry Gamers this week, Riccitiello (CEO of EA) said that digital goods market will, in his opinion, surpass the packaged goods business by the end of this year. According to Reuters, 2011 will be the year of the casual, mobile based video game. Video game sales were down four percent from 2009 level, but social, Facebook games and iPhone and iPad titles are expected to make up for the less-than -stellar sales levels in 2011. Digital revenue models are, importantly, helping companies circumvent used game sales, with the "Online Pass" concept pioneered by EA and being explored by numerous other publishers. From Facebook credits to microtransactions-enabled smartphone games, digital's no longer just an option: It's the only way to succeed in an increasingly platform-agnostic gaming world alongside visibly ailing physical retail. eMarketer says that nearly 62 million US internet users, or 27% of the online audience, will play at least one game on a social network monthly this year, up from 53 million in 2010. In the U.S., consumers will spend $653 million on virtual goods in social games in 2011, compared to $510 million spent in 2010. Sales of video game consoles and new games purchased at retail dropped in 2010, but revenue from mobile game "apps" and games on social networks helped make up for the shortfall, say market researchers at NPD Group. Game console sales fell 13 percent to $6.3 billion. Sales of new video games purchased at retail declined 6 percent to $9.4 billion. However, the total amount spent on the games themselves, including online and mobile games, was flat at about $15.5 billion.

4. WHAT I SEE: Greater challenge for consumers $ and eyesGreater challenge for consumers $ and eyes Death at retail PCDeath at retail PC Death of non licensed games at consoleDeath of non licensed games at console A monopoly on Facebook Customers by a few companiesA monopoly on Facebook Customers by a few companies A massive influx of App’s with only a few big winners(8 figures)A massive influx of App’s with only a few big winners(8 figures)

5. PRICE WARS Retail pricing tends to remain constant but the content for the value has multiplied. $ games for the Price of one from 3 years ago.Retail pricing tends to remain constant but the content for the value has multiplied. $ games for the Price of one from 3 years ago. We have already seen online pricing in the Trial business and we hope that is over!We have already seen online pricing in the Trial business and we hope that is over! Its clear people want value so the App store has and continues to consume consumers game and entertainment time with $.99 cent and Free app’sIts clear people want value so the App store has and continues to consume consumers game and entertainment time with $.99 cent and Free app’s Facebook and social network gaming is also taking and fulfilling the entertainment time of consumers which puts more pressure on Casual game developers in the trial business.Facebook and social network gaming is also taking and fulfilling the entertainment time of consumers which puts more pressure on Casual game developers in the trial business.

6. RETAIL PC Retail space has been suffering for the last 24 months due to the success of the alternate online channels.Retail space has been suffering for the last 24 months due to the success of the alternate online channels. Like any industry when there is better, cheaper faster other channels will fall, regardless of their size (Wal-mart)Like any industry when there is better, cheaper faster other channels will fall, regardless of their size (Wal-mart) We at Gogii will see a 2M retail business in 2010 fall to less than $500k in 2011We at Gogii will see a 2M retail business in 2010 fall to less than $500k in 2011 There is less shelf space now: Wal-mart rated Video Games a B from a A level category for the first time in 20 yearsThere is less shelf space now: Wal-mart rated Video Games a B from a A level category for the first time in 20 years

7. RETAIL EVOLUTION

8. NUMBER OF TITLES AT RETAIL BY TERRITORY

9. ONLINE DOWNLOAD BUSINESS (TRIAL/BUY) Over the last few years we have experienced much and have seen Little fish in 2003 become Big Fish in 2010 (*Paid for by )Over the last few years we have experienced much and have seen Little fish in 2003 become Big Fish in 2010 (*Paid for by ) We went from the throwaways developers of retail and big publishers to the huge success stories of VC’s and independent developersWe went from the throwaways developers of retail and big publishers to the huge success stories of VC’s and independent developers Casual games became a household word and one that resonated with the buying customers (moms not 9-13 year olds)Casual games became a household word and one that resonated with the buying customers (moms not 9-13 year olds) Huge growth brought huge success and failures in the distribution, engine licensing, advertising models and micro-transactionsHuge growth brought huge success and failures in the distribution, engine licensing, advertising models and micro-transactions Along comes Apple and Facebook and itAlong comes Apple and Facebook and it changes everything. changes everything.

10. THE POND EFFECT Over the last 10 years Europe trends about 1-2 years behind NA in retail We expect and already see Compilations being the winners in the UK and Germany and expect the same for France in 2011 Look at the ChartTrack Top 20 Games:

11. CONSOLE Console has been an enigma with the casual space with only a few success’. There are games that work on NDS and even PSP that were great for casual but those days are behind us and with so much cheap product placement is very difficult and there is very little Net $. The success of Iphones/Itouchs and now Ipads have changed the way kids and parents play and that is narrowing the market potential to brands/license IP and fewer customers at retail Limited (dare say) no revenue success with XBLA, or Wii-ware This is because of the wrong demographic focus as well as the mentality of the games and their presentation.

12. CONSOLE CHART

13. US GAMERS, BY PLATFORM, JUNE 2010

14. FACEBOOK/ONLINE MICRO PAYMENTS The US virtual goods market for social games will reach $2.1 billion overall in 2011

15. FACEBOOK/ONLINE MICRO PAYMENTS Last year, social gaming revenues were $856 million. It will top $1.3 billion by 2012. In terms of the shifting share, virtual goods will barely move, retaining a nearly 60 percent share of the social gaming revenue pie with $792 million next year. Advertising will grow from a 14.1 percent share of the market with $120 million spent in 2010, to 20.5 percent share with $271 million in 2012.

16. SOCIAL GAME REVENUES WORLDWIDE, 2008-2014

17. U.S. SOCIAL GAMING STATS FOR 2010-2012

18. APPLE EFFECT PROS: Huge “opportunity” for small independents to succeed Great revenue share 70% With the influx of new Tablets and app stores there is growth opportunities there for the taking Trial/up sell, straight purchase, micro transactions, ad based revenue models, there is an endless amount of revenue models waiting you in this environment CONS: Reality will be Big companies will get the promotion 1/1000 will see any major promotion There will be compilation packs and a value war that will not be healthy for the business as whole Whenever there is big money and growth there will be big companies get involved and screw up a good thing (EA buying Chillango) They are teaching our buying customers that we had just gotten from 1% to 8% conversion rates to think that they don’t have to buy because their entertainment need can be satisfied because there are 2-10 new games a day they can try and play for free The Free entertainment is not a teaser anymore but it has even spun new models like Smurfs into opportunities for developers IF they can afford to fund and cash flow out that far.

19. APPLE FACTS 15M IPads sold in 2010 160 Million IOS devices Available in 46 Countries

20. APPLE’S IPAD REVOLUTION

21. GARTNER FORECASTS MOBILE APP STORE REVENUES WILL HIT $15 BILLION IN 2011

22. SURVEY

23. SUMMARY: WHAT SHOULD WE DO NEXT? Get out of gaming and build Fart Apps for Rim!Get out of gaming and build Fart Apps for Rim! Give away content and live on Ad revenue on Torrent sites!Give away content and live on Ad revenue on Torrent sites! Build Inline Email games for Spam companies!Build Inline Email games for Spam companies! Let Gogii publish all your games so you make more $!Let Gogii publish all your games so you make more $!

24. WHAT YOU SHOULD REALLY DO: Freemium Games are a real business but without the right promotion partner/License it will be lost or buried amongst others. Trial Games are still healthy but make sure your Top 3. The real $ is there and if your spending more than 100-250k it will be difficult to be profitable short term App’s are a great business and something that I believe indie and small developers will be able to build a very healthy business in. Never lose site of your target customer. If they are over 45-50 women then design for them, but do not expect it will appeal to every demographic like >> If your want to be indie that’s fine but the commercial success will depend more and more on the right partners. If it is a publisher, with connections to retail or Apple, or Facebook. Their % (if negotiated right) is and will always be worth much more than you can bring on your own.