Smart and Social The Industry’s Crown Jewel

2 Introduction Senior Research Analyst at Robert W. Baird & Co. Baird is one of the largest private investment banks Prior experience as software developer, Internet start-up and Wall Street background at JP Morgan and Lazard Covered Internet and Interactive Entertainment for 10 years Based in San Francisco

3 Overview Industry performance Market forecast Power of Exponential Influence of Facebook and shift to Mobile Conclusions

Global Video Game Market 4 Source: RW Baird & Co. estimates

Video Games Fastest Growth Media 5 Source: RW Baird & Co. estimates

Games are the most important form of digital media 6

Platform Growth Rates 7 Source: RW Baird & Co. estimates

E-commerce model to monetize games 8 Source: RW Baird & Co. estimates

Beauty of Free-to-Play 9 Source: RW Baird & Co. estimates

Forecast for Mobile and Social 10 Source: RW Baird & Co. estimates

Significant Opportunity in Mobile Advertising 11 Source: RW Baird & Co. estimates

Global Video Game Industry Growth will be driven by Smart Devices 12

Smart + Social are exponential Rapid increase in smart devices Social game mechanics now available on Mobile O/S Virtual goods sales expand monetization Global opportunities Competitive platform wars good for developers –Android –iOS –Windows –Samsung 13

Smart + Social are exponential 14

Filling the Stadium 1)45 minutes 2)3 hours 3)12 hours 4)2 days 15

Wave of Smart Devices 16 Source: RW Baird & Co. estimates

Game Usage on Smartphones 17 Source: RW Baird & Co. estimates

Exponential – GREE mobile users (in M) 18 Source: Company Reports

Tablet Sales Growing Faster than Phones 19 Source: RW Baird & Co. estimates

Multi-device Lifestyle 20

% of Internet Traffic from Smart Devices 21 Source: RW Baird & Co. estimates

App Sales are Global 22 Source: Flurry

% of Internet Traffic from Smart Devices 23 Source: RW Baird & Co. estimates

Facebook RevenuesZynga Growth Rate 24 Payments Growth on Facebook is Slowing Source: RW Baird & Co. estimates

Focus Turning from Facebook to Mobile 25

Smart Devices are a disruptive force similar in scope to web browsers 26

Platforms are key 27

Conclusions Huge wave of smart devices Exponential growth dynamics Global opportunities More attractive growth profile vs. Facebook Efficient distribution – use the tools, play the platforms 28

29 Questions/Discussion