1. Info for Greg
Prepared by
August 2010, Proprietary and Confidential

2. Global Video Game Market
Market Size and Growth
Key Trends
PwC estimated that the videogame subsection of the global entertainment and media market would be the second fastest growing segment through 2014 (trailing only Internet advertising wired and mobile).
Michael D. Gallagher, president and CEO of the Entertainment Software Association: December (‘09) sales broke all industry records and underscores the incredible value consumers find in computer and video games even in a down economy.
CAGR 10.6%
Global Video Game Market (in billions)
Source: PriceWaterhouseCoopers, June 2010 2

3. Video Game Console Market: Steady Growth Through 2012
Worldwide Console Units Shipped
Key Trends
Market has experienced dramatic growth since 2007
Web-based video game advertising experiencing the most rapid expansion, with a CAGR of 18.5%
E-marketer predicts web-based market size to be $478M by 2012
Source: E-Marketer 2009
CAGR 4.4%
Worldwide Units Shipped (mm)
Annual CAGR 3

4. Video Game Console Market: Steady Growth Through 20124

5. Social Gaming Industry Overview
Market Size and Growth
Key Trends
Rapidly changing competitive environment – 7 of the top 10 Facebook games have been released since Jan
Tim Chang, Norwest Venture Partners: We can utilize game constructs to perhaps revive other industries which no longer monetize as effectively via macro-transaction or advertising.
Market Size in Millions of Dollars 5

6. Facebook Has Experienced Exponential Growth
Market Size and Growth
Key Trends
Every month, more than 70% of the 400 million Facebook users engage with platform applications.
There are more than 100 million active users currently accessing Facebook through their mobile devices.
Facebook is the largest social gaming platform, with such hits as Farmville, Café World and Happy Aquarium. 6

7. Millions Playing Games on Facebook and Other Social Networks
Most used social network by worldwide monthly active users, followed by MySpace.com.
Valued at $10 billion, when Russia-based Digital Sky paid $200m for 1.96% stake.
Mark Zuckerberg, CEO Facebook: Facebook Revenue Estimates Of $1.1 Billion “Not So Far Off.” (6/22/2010) 7 7

8. Virtual Goods Represents a Booming Market
Market Size and Growth
Key Trends
Justin Smith, founder of Inside Network and co-author of the report: 2009 will be remembered as the year when virtual goods in the US took off.
The Asian market for virtual goods, with an estimated value of $7 billion, still dwarfs the US market. Market leaders such as Tencent and Nexon pioneered the virtual goods markets in Asia. 8

9. Portable and Mobile Gaming Industry Overview
Historical Portable Console Sales
Key Trends
Driven by consistent innovation in game design and development, the latest generation portable gaming consoles have sold consistently since their release over 5 years ago.
The stunning success of the iPhone and iPod Touch, and the associated App Store, has created a whole new gaming segment. The App Store currently has over 140,000 apps available for download and games represents the most popular category.
Unit Sales (in millions) 9

10. Mobile/Smart Phone Market Analysis
Mobile Phone/Apps Market Trend
Smartphone continued strong growth at 16% and reached 161 million shipments in 2009
Smartphone market will grow at CAGR of 26% in the next 3-5 years
Technologies will grow in number and capacity and will expand into more verticals such as education and healthcare
Mobile apps revenue will reach $17.5 bn by 2012, from $4.1 bn in 2009 (WSJ, March 2010)
Source: Forward Concepts, 2009, Report No: 9010
Source: Canalys, 2009 10

11. Worldwide Smartphone Growth is Robust Smartphone Units Sold (mm)
Smartphone Adoption
Worldwide Smartphone Growth is Robust
Key Trends
Study by the Audit Bureau of Circulations forecasts that in the next three years, mobile devices will be relied on as the primary information source
In 2010, 250 million of the 1.3 billion mobile phones shipped globally will be smartphones
According to Gartner Research, by 2013, mobile phones will overtake PCs as the most common Web access device worldwide
Smartphone Units Sold (mm)
Source: Global Industry Analysts 11

12. Smartphone Applications
Market Size and Growth
Key Trends
Stephanie Baghdassarian, research director at Gartner: As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads.
Games are the most downloaded applications but mobile shopping, social networking, utilities and productivity tools are gaining strength and attracting more capital.
Mobile Application Store Downloads (millions)
Mobile Application Store Revenue (in $millions)
Source: Gartner, December 2009 12

13. US Consumer PC Sales by Form Factor
Tablet/Netbook Adoption
US Consumer PC Sales by Form Factor
Key Trends
Tablets/Netbooks provide a new information platform to extend the reach of digital businesses
Apple sold 3 million iPads through the first 80 days of US sales – equating to one iPad every 2 seconds
Forrester expects 3.5 million tablets (including the iPad and other tablets) to be sold this year, growing to 20.4 million in 2015
Source: Forester Research 13