Why Mobile Social Games Need a Platform Now More than Ever Ethan Fassett SVP of Product

Founded Founder & CEO January 2011 Naoki Aoyagi Tokyo San Francisco Founded December 2004 Yoshikazu Tanaka CEO International GREE Overview Japan’s Leading Mobile Social Gaming Platform

OpenFeint Overview Leading Mobile Social Gaming Ecosystem Mobile social gaming standard with millions of users globally Cross platform ecosystem: iOS + Android Open source & customizable UI Founded in April 2009 in Burlingame, California Acquired by GREE in April 2011

Net Sales & Operating Profit* USD Net Sales3.8M34.6M164.1M414.5M750M O. Profit △ 1.2M 12.3M98.4M230.3M370M USD (Millions) * Fiscal year-end, June GREE Financial Overview $5 Billion market cap Fastest Growing Tech Company in Japan* with 2,636% revenue growth over three years Net sales and operating profit grew 36% and 35% respectively over Q1 to Q2, FY2012 * Deloitte Technology Fast 50 Japan 2010

GREE’s Global Reach San Francisco London Tokyo Beijing Singapore Amsterdam São Paulo Seoul Dubai

Live Games Live Games Growing User and Game Network 190+ MM Unique User Accounts Players (Millions) 2012

MOBILE SOCIAL DESIGN A Platform Symbiosis

Growth in Free-to-Play Games Game Design Shifting to Freemium with IAP Premium games monetize users once F2P games monetize users many times Virtual goods market was $7.3B in 2010; will double by 2014 Premium Game Free-to-play with IAP Longer play = more $$$$ Download App Time game played $ Paid User Revenue Source: Zynga SEC filing, via In-Stat market intelligence firm.

Free-to-Play Games Monetize 16 of Top 25 Grossing Games are Free Source: iTunes store January 18, 2012

Free Apps Increasingly Generate Revenue Source: Distimo Report, 2011 (* Top 200 grossing iPhone apps in the US per month) % of 2011 Apple App Store Revenue from Free Apps

Goal of Freemium Games = Lifetime Value (LTV) Revenue Per User X Player Engagement Cost Per Acquisition (CPA) Increase Player Lifetime Value (LTV)

Goal of Freemium Games = Cost Per Acquisition (CPA) Ad Campaign Costs + Marketing Campaign Costs Users Acquired through Campaigns Minimize Cost Per Acquisition (CPA)

SNS or social platform Game Economics Social Games are Special = Lifetime Value (LTV) Revenue Per User X Player Engagement Cost Per Acquisition (CPA) Social is a unique variant of “freemium”, that uses social network effects to increase LTV and lower CPI/A Network effects Notifications from friends Requests from friends

Social Gaming Ecosystem Social Games are More Efficient on Platforms Facebook: Users Start with SNS, then Discover and Play Games Mobile: Users Start with Games, then Tap into SNS

Benefits of Social Games Ecosystem App portal optimizes distribution Cross promotion builds user base Social & communication tools engage users Games and platform engage users Viral effect cross games Standard virtual currency across all games on platform increases ARPU Optimizes Acquisition, Retention, Monetization SNS Acquisition Retention Monetization SNS

Why Fragmentation is Inefficient Multiple campaigns Avg optimization “Loose coupling” of users , SMS, notifications Dependent on retention Univ. currency, VG tools High cost Lesser results Low retention Difficult to increase ARPU Inhibits Acquisition, Retention, Monetization Acquisition Retention Monetization Ad Networks Native Services & Weak Channels Limited Economic Scale

MARKET COMPARISON Platform Examples: JP & US

GREE Japan Platform Grew as a Game Platform on a Carrier Platform Users (Millions) GREE Japanese Mobile Carriers 1 st mobile social game launches GREE goes public

Launched in Successful for over 4 years. Goals are to fish, buy special tools, participate in events, and show off skills. Why so popular? Popular hobby Simple rules The more you play, the more you discover – simple but involved game play World’s First Mobile Social Game GREE’s Tsuri Star Shows Early Design

Facebook & Zynga Users Zynga DAU Grew on Facebook Platform Sources: Zynga SEC Filing and Facebook SEC Filing. Daily Active Users (Millions)

Zynga Revenue Growth CityVille Farmville Café World Daily Active Users (Millions) Revenue (Millions) Facebook DAU Zynga DAU Zynga Annual Revenue * Note: FY 2011 Zynga revenue is speculated based on the assumption that Q4 revenue will be the same as Q3 revenue.

Case Study: Zynga Acquired 400K new users Acquired 1M new users Sources: rner&utm_medium=feed&utm_campaign=Feed%3A+fingergaming+%28FingerGaming%29 Lost $150 Per New Paying Customer Earned $30 Per New Paying Customer Each new user spends $150 AB Zynga Spent $120M on Marketing (Jan-Sep 2011)

CURRENT GLOBAL MARKET Emerging Mobile Social Platforms

High-DAU vs. High-ARPU CityVille 10MM+ DAU Highest MAU FB game Lions share of FB users Leverage DAU to cross promote other games Strategies Differ with Platform Conditions Kingdoms of Camelot 210K DAU High % paying users Maximize LTV Competitive strategy in consolidated market

NimbleBit: Tiny Tower Social games can be successful without platforms and viral friending loops Apple named Tiny Tower the 2011 iPhone Game of the Year Boasts 1 million DAU Zynga recently announced similar title on mobile called Dream Heights Mobile Social Game Without a Platform Sources:

Global Mobile Market Challenges High CPA App-store trickery Limited cross-promotion Ad networks dominate Weak Viral Engagement No clear social graph Diffused viral channels App-store hides conversion tracking … but several platforms are emerging

Potential Platform Landscape SNS Focus Game Focus Social Platforms Meta-Platforms Studio PlatformsOS Platforms

Business Field SNSPlatfor m ✔ ✔ - - GameMobile ✔✔✔✔ ✔ Device Global Unified ID ✔✔✔✔ - ✔ ✔ ✔ ✔ ✔ Business Strength ✔ GREE Integrates User IDs, SNS, Games, Platform Game Center Google+ ✔✔✔ ✔✔✔ ✔✔ - ✔

GREE GLOBAL PLATFORM GREE Platform: Addressing a Global Mobile Audience

Social Games 7,000+ Games Current GREE Japan Platform Current OpenFeint Platform New Global GREE Platform 140MM users 12,000+ developers 27MM High-ARPU users, plus social know-how GREE + OpenFeint A New Global Platform for Developers and Gamers

Enables developers to publish games globally and access the world’s largest mobile social gaming user base Provides the best in-class APIs for acquisition, engagement, monetization, and virality Cross platform with customizable APIs GREE Platform Strategy Global Social Open Offer developers the most robust toolset to take advantage of the global mobile gaming market

Comprehensive Offering Distribution Analytics 150 MM Users Unified global platform Key regional distribution partners Localization services Cross promotions through developer announcements Promotional programs Wall posting Gifting Social sharing Push Notifications Universal billing International currency management Friend invites Incentivized invites Social sharing Gifting Dashboard access to game analytics Game, player, and monetization data Acquisition Engagement Virality Monetization

33 We’re Hiring! Apply Now -Art & UX -Business Analysis -Biz Dev & Operations -Engineering -Legal -Marketing & PR -Operations -Product -Sales San Francisco office apply at GREEjobs.com London, Beijing, Singapore, and Seoul offices apply at corp.gree.net/uk/en/

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