The Game Changer How will Shinra build the next game industry ecosystem? Oct. 22nd, Yoichi Wada 20 , Pr 14esident Shinra Technologies, Inc.
Characteristics of Content Industries Content is intangible. Value is generated when content becomes product.
Content Industries in the 20th Century Movie Film Industry Literature Book Publishing Industry Music Record Industry Game Game (Console) Industry
Transformation from Content to Product Significant Added Value Retail Publish Distribution Create Manufacture Revenue allocation varies in each industry, however typical y only 5-30% (45% max) is given back to the content creators. As contents get more digital, creators receive higher shares.
Characteristics of Game Industries Computer games are the most complex software applications. A specialized platform is required. The game industry ecosystems were shaped by each specialized platform.
Arcade Games : 1970s onward One Machine, One Game Expensive Hardware Consumer cannot invest in extremely expensive arcade machines. Arcade operators purchase machines and had consumers insert coins to recoup cost. Birth of a new form of entertainment.
Console Games : 1985 - 2000 One Machine, Multiple Games Inexpensive Hardware Game console makers adopted a vertically integrated business model, and the ecosystems were built on the basis of third parties being only on the game development layer. The introduction of this new business model led to substantial growth in the game industry.
Console Games : 2000 onward Non-gaming features (e.g. DVD) added to console hardware The effective investment required on the part of customers to play games was reduced Other forms of entertainment (e.g. movies) became increasingly fused with games
General Purpose Device Games:
2005 onward Smartphones and Laptops Players no longer have to invest money solely for the purpose of playing games Reaches wider target segments and geographical regions • Moms playing Farmville • Emerging markets where game consoles were too expensive
Cloud gaming will change the game industry fundamentally
The Innovator’s Dilemma Qualit y Switch Customer Expectations Time
Until now we have seen only partial alignment with the theory Qualit y Partial Switch Partial Switch General Purpose Device Game Console Game Arcade Game Time
90,000 12 In the game industry thus far, we have 80,000 not seen complete disruption. Rather, 10 70,000 various device markets have piled up 60,000 8 similar to geographical strata. 50,000 6 When there has been a change in 40,000 device, the reason we haven’t seen a 30,000 4 complete shift from one device to 20,000 2 another has been due to the 10,000 “experience” provided by the 0 uniqueness of the device itself.
The Platform will move from Device 90,000 12 to the Cloud 80,000 10 70,000 60,000 8 50,000 The differentiation in colors 6 40,000 will become meaningless. 30,000 4 20,000 2 10,000 0
The situation will change completely Qualit y Switch ! Client Game Cloud Game Time
Two New Value Drivers The New Game Experience The New Ecosystem
Two New Value Drivers The New Game Experience Games have shifted from consoles to general purpose devices. While the market did expand, uniqueness and variety was lost. Cloud gaming is a solution to bring forth new, unique attributes of games similar to special purpose devices.
Two New Value Drivers The New Ecosystem Until now, the industry ecosystem has been built around the device manufacturers (clients). As value shifts from the client to the cloud, the new ecosystem’s leadership will revolve around the cloud operator.
Shinra Technologies, Inc. is pioneering this new era. We anticipate huge opportunities in the game industry’s greatest transformation.
Shinra Enables New Game Experiences New experiences occur on a supercomputer designed for games We free game developers from strangleholds such as: The difficulty of creating online games The need to support multiple devices and OSs The limited processing availability in devices We present players with new ways to interact with games
Shinra Establishes A New Ecosystem Via the cloud, create a world that ties together users, developers and related parties in a way that is both satisfying and economically palatable F2P, crowd funding, crowd sourcing, etc Include all these new trends to create a true “ecosystem”
We are building worlds no one has seen before, and we cannot do it by ourselvesShinra adopts an Emergent Strategy