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					รายงานการศึกษาอุตสาหกรรม                                   Thai Digital Content White Paper:
                                                                   Animation & Games 2006
แอนิเมชั่นและเกมของไทยป 2549
        
บทสรุปผูบริหาร                                                                   Executive Summary




      สํานักงานสงเสริมอุตสาหกรรมซอฟตแวรแหงชาติ (องคการมหาชน)          บริษัท ศูนยการพัฒนาความรู จํากัด
      Software Industry Promotion Agency                            Knowledge Development Center Co., Ltd.
             Executive Summary


Thai Digital Content White Paper: Animation and Games



                       Present




         Software Industry Promotion Agency



                     Prepared by




              Knowledge Development Center Co., Ltd.



                  28 September 2007
                              Table of Content

                                                        Page


Introduction: Thai Animation and Gaming Industry         3


Policies, Planning and Promotions                        5


Thailand’s Animation Industry: Market and Trend          8


Thailand’s Movie Market and Consumer Behaviors           11


Thailand’s Gaming Industry: Market and Trend             13


Thai Gaming Industry by Game Platform                    15


Thailand’s Game Productions                              18


Thailand’s Game Users                                    19


Thailand’s Competitive Advantage: Animation and Games    24


Glossary of Terms                                        26


Committee and Credits                                    29
Introduction: Thai Animation and Gaming Industry

       In recent years, a wide range of Thai digital content, including animation,
web and graphic design, video games, software and even mobile phone
applications have rapidly grown concurrent with the domestic demand and global
booming digital content business. The global market value is astounding and was
estimated to exceed US$165,500 million in 20051 and is projected to be
US$271,300 million in 2007, of which 30%2 is shared by the Asia-Pacific region
market.

        In an industry mostly dominated by big corporations from western
countries, Thailand's animation and game industries are working in the early
stage to create a position in a global market worth billions. High levels of
creativity, reasonable cost, and overall performance make Thailand very
competitive in the field.


        Thai animation and game are among the most thriving industries in the
Thai digital content arena. Animation and other computer graphic services
including post production are vital parts of the nation’s strong film and advertising
industries. On the demand side, the first Thai 3D animated film scored the
highest box office revenue ever, surpassing those of giant studio productions
from North America. For the gaming industry, Thai game developers are receiving
more contract deals from foreign game producers. The demand for gaming has
also skyrocketed since online games debuted in the market in 2002. While
today’s animation and game industries are led by Japan, Korea, and the U.S.,
Thailand is creating a position in the world market, aided by continuing
government support, increasing university cooperation, and a growing network of
business units in the Thai animation and game value chain.




1
    Kasikorn Thai Research Center
2
    Roncarelli Report on The Computer Animation Industry 2003
Policies, Planning and Promotions
        Unlike other Asian counterparts, Thailand’s digital content industry is
considered part of the nation’s software industry even though some put it within
the cultural and entertainment industry. The Royal Thai Government aims to
promote the digital content industry through the software technology base
provided the software industry environment is ready to support the digital content
at its premature stage.    Thus, in 2003, the Software Industry Promotion Agency
(Public Organization) or SIPA was founded under Thailand's Information and
Communication Technology National Development Plan. Realizing the significance
of the software industry development within which the digital content industry is
included, the government considers the software industry one of the primary
strategies for enhancing the country's industrial capacities. It aims at increasing
the effectiveness in quality services or products manufacturing process, applying
into the workplace, and successfully competing with other countries.

SIPA’s main missions are:

   -   To develop the standard of animation and game human resources and
       organization.
   -   to develop animation and software game products and content up to the
       international standard
   -   to collaborate with international partners and develop a marketing network
       for co-production, joint venture, and knowledge transfer for the Thai
       animation and game industry
   -   to promote the strength and capability of Thai animation and game
       entrepreneurs in the international market arena

        Included in SIPA’s strategic plan for the digital content industry are to
drive the industry to reach 30,000 million Baht by year 2010, and to promote
Thailand as a center for digital content and multimedia education in the Asia-
Pacific Region. The strategic planning is divided into 5 parts as follows:

       1) Digital Content Industry Development Planning

       SIPA set up a committee comprised of professionals from both business
and academic fields to form a Digital Content Committee.          The main
responsibilities of this committee are to advise and cooperate with SIPA in
developing policy and planning for the following areas.

   -   Industry promotional planning and monitoring
   -   Strategic marketing planning for domestic and international markets
   -   Research and technological development for the digital content industry
   -   Skill development and production efficiency improvement

      The Digital Content Committee is working closely with BANGKOK ACM
SIGGRAPH, the Thailand chapter of a special interest group for computer graphic,
in developing a detailed action plan for the National Strategic Planning for
Multimedia and Animation Industry Development.

       2) Skill Development and Human Resource Planning

       The main focus of SIPA in supporting the digital content industry is human
resources development through education, skill training, and competency
enhancement in animation and software game production. The program is to get



                                                             Executive Summary   5
Thai resources well prepared for changes and needs in global production
outsourcing of the digital content industry. The skill development and human
resource planning aim to raise the standard of Thai personnel through three
programs; training for software program skills needed in animation and game
production, training in pre-professional and professional level for higher level of
work force such as art director, creative director and game programmer, and
assisting universities in developing courses in animation and gaming.

       Every year SIPA launches projects for animation and game work force
development and encourages students and professionals to participate in these
projects which are

          Animation and Multimedia Contest
          Seminar for Professionals
          Animation Training (Maya Program)
          Pre-professional Training
          TAM Camp which aims to get young students in primary education as
          well as school art teachers for participating in animation and
          multimedia training

       3) Industry Facilitation

   -   North Animation Studio (NAS) is set up in Chiang Mai province of Thailand
       to facilitate the production businesses because of low cost equipment
       rental including motion capture and rendering farm.

   -   Bangkok Digital Content Center (BDCC) is established in Bangkok as a
       facility for motion capture and high technology motion programming for
       animation, game, feature film, and TV commercial. Private companies and
       entrepreneurs can rent the space and machine.

       4) Digital Content Creation Promotion

   -   30% funding support for a digital content entrepreneur as a co-production
       partner. The first project to receive this fund is Khan Kluay, the first Thai
       animation feature film.
   -   Supports for research and technological development and application
   -   Regulates the usage of character and assists in character licensing
   -   Thailand Animation & Multimedia Award which is the annual competition
       for animation development studios to present their work for the prize of 1
       million Baht.
   -   SIPA Pitch Program which is an animation business plan competition opens
       for public to participate. The winner of SIPA Pitch gets the money prize of
       1 million Baht to execute the project proposed.

       5) Domestic and International Market Penetration

        SIPA promotes Thai digital content by funding animation and game
production business so they can attend and participate in the world events to
exhibit Thai production and get the international investors and producers to
acknowledge Thai digital content capacity as well as networking. Besides the
exhibition of work, SIPA also initiates business by matching major investors and
producers of animation and game and facilitating trade negotiation and
collaboration. In addition, SIPA has executed MOU signings with organizations
and government agencies in other countries in collaboration and knowledge



Executive Summary 6
exchange for digital content industry development.          Major events that SIPA
participates in are the following.

   -    CBIT (Capacity Building for Information Technology Integration)
   -    E3, the E3 Media and Business Summit, formerly known as the Electronic
        Entertainment Expo (E3), and commonly known as E3, is an annual trade
        show for the computer and video games industry presented by the
        Entertainment Software Association
   -    GSTAR, Game Show & Trade, All-Round, held annually in Korea
   -    Tokyo International Cartoon & Animation Fair
   -    Hong Kong Film Mart
   -    International Anime Fair
   -    Shanghai Animation Festival
   -    Seoul International Cartoon & Animation Fair
   -    Tokyo Game Show

       Major domestic events, as shown below, are held every year to promote
animation and game markets and stimulate business networking among Thai and
International companies.

   -    Thailand Animation and Game Multimedia (TAM)
   -    Thailand Animation Film Festival (TAFF)

       Furthermore, SIPA has in negotiated with software developers to offer
licensed software at discounted prices in Thailand in an effort to combat piracy
and develop advanced software tools accessible to students and professionals.

       Another government agency that has been working closely with SIPA is
the Office of the Board of Investment of Thailand or the BOI. SIPA is driving the
nation’s efforts to compete in the industry, working in conjunction with the BOI to
promote development in three main areas: enterprise software, digital content,
and embedded software. The digital content that is eligible for the BOI promotion
program includes the following;

   1)  Software
   2)  Computer-generated imagery: includes animation, cartoons, and characters
   3)  Web-based applications
   4)  Interactive applications
   5)  Games: include Windows-based, Mobile Platform, Console, PDA, Online
       Games, Massive Multi-Player Online Games
   6) Wireless location based service content
   7) Visual effects
   8) Multimedia video conferencing applications
   9) E-learning content via broadband and multimedia
   10) Computer-aided instruction

       Proposed projects that meet certain industry criteria and are approved by
SIPA will be eligible for BOI tax incentives and visa facilitation services for foreign
experts. These projects will also be classified as a priority activity and will receive
exemption from machinery import duties and corporate income tax exemption,
without an upper limit, for a period of 8 years.




                                                                Executive Summary    7
Thailand’s Animation Industry: Market and Trend
        Thai animation industry can be divided into 3 main categories according to
the type of production. Long form animation includes feature film and TV series.
Short form animation covers the area of TV commercials, music VDO and
animation clips for presentation. The last group is computer graphic services
including post production, visual effects, and other presentations mostly in
entertainment and architecture businesses.        The following shows animation
categories and sub categories.


     Long Form        Animation for Feature Film
                      Animation for TV Series
                      Animation on VCD, DVD

     Short Form       Animation for TV Commercial
                      Animation for Music VDO

     CG Service       Post Production Services
                      Visual Effects and Presentation
                      Architectural Visualization


        Thai animation industry has grown rapidly in the past four years. The
2006 nation’s market value was estimated at 4,500 million Baht with an average
annual growth rate of 18%. Long form animation captured more than half of the
overall Thai animation market at about 58% with estimated revenue of 2,600
million Baht. Second to the long form group is computer graphic service which
was approximately 40% of the total market at the value of about 1,800 million
Baht. Short form animation had the least popularity among the three categories
with only 2% of the total market value.

      Million Baht
                                                        4,530
        4500

        4000                           3,840
                     3,485
        3500                                                    41%          CG Service
                                               38%                           Short Form
        3000                                                                 Long Form
                             36%
        2500                                                    1%
                                               1%
        2000                 1%
                                                                58%
                             63%               61%
        1500

        1000
                                                                      Year
                      2004             2005             2006
               Figure 1 Thailand’s Animation Market Value by Category


       Looking into the sub categories of Thai animation consumption, the feature
film market showed a solid 150% growth from market revenue of 75 million Baht
in 2005 to 190 million Baht in 2006. Post production services took second in



Executive Summary 8
revenue market share with approximately of 890 million Baht in 2004 to about
1,250 million Baht in 2006, which was a 33% growth over the past year.

Table 1 Thailand’s Animation Market Value by Production Category
                                                        2004          2005          2006
       Type              Production Category
                                                    (million Bht) (million Bht) (million Bht)
                   Animation Feature Film                     100            75           190
 Long Form         Animation TV Series                      1,400         1,500         1,600
                   Animation Movie on VCD, DVD                670           770           850
 Total Long Form Market Value                               2,170         2,345         2,640
 Short Form        Animation TV Commercial                     43            47            50
 Total Short Form Market Value                                 43            47            50
                   Post Production                           890          940          1,250
 CG Services       Visual Effects & Presentation              90          180            230
                   Architectural Visualization               290          330            360
 Total CG Services Market Value                            1,270         1,450          1,840
 Total                                                     3,483         3,842          4,530

        The popularity of animated feature film in Thailand was moderate until the
year 2006 when the first Thai animated feature film, Khan Kluay, hit the box
office and generated the highest revenue ever for an animated feature film in
Thailand. With Khan Kluay fever, the market value of the animation film industry
in Thailand jumped from 75 million Baht in 2005 to 190 million in 2006, an
increase of more than 1.5 fold with about half of the total revenue being
generated by Khan Kluay alone.

       Another long form animation that becomes more and more popular in
Thailand are TV series especially cartoon series. The number of Thai animation
TV series has increased over the past four years with more cartoons being
broadcast on Thai public free TV. So far there are 41 Thai animation TV series
broadcast of which 64% are 2D animation series. The total length of Thai
animation TV series produced is about 40,000 minutes per year.

       For the computer graphic services category, post production has the
highest market value at approximately 1,250 million Baht in 2006 increasing from
1,270 in 2004 and 1,450 in 2005. Thailand’s post production studios are among
the most successful of Thailand’s multimedia enterprises. The strength of Thai
post production has been long known among entertainment businesses
domestically and internationally. More outsourcing work from other countries,
especially from the Asian region, have gone to Thai post production studios
thereby expanding the export figure of Thai animation market value.




                                                                     Executive Summary          9
Table 2 Thai Animation Industry Growth
                       Type                                            2005 Growth                2006 Growth
 Long Form Market Growth                                                    8%                        13%
 Short Form Market Growth                                                   9%                        12%
 CG Services & Post Production Market Growth                               14%                        28%
                Estimated Growth                                           10%                        18%

       The growth of the Thai animation industry is continuing in every type of
animation. The trend of overall growth from 2005 to 2006 from 10% to 18%
indicates the success of the industry even when facing the economic and political
downturn in 2006. The opportunities for of the industry are growing continually
mainly because of the cooperation by the key players in the animation industry
and the government agency as they attempt to bring Thailand up to the
international standard and maintain a strong position in quality of work and
service in the world of animation and multimedia. As a result, the co-production
and investments from abroad are helping Thailand’s overall market and it is
expected that Thai animation market will grow at the rate of 18% annually to the
year 2010 with a market value of 8,700 million Baht.

Table 3 Thai Animation Market Value 2006 - 2010
                                              2006              2007            2008          2009         2010
 Animation Market Value (Million
                                              4,530             5,340          6,300         7,400         8,700
 Baht)



               China                                                                             133
               Japan                                                   80.5
                USA                                        60
              France              11.3
                India         8.77
            Thailand        4.53
          Philippines       2.4                                               Market Value (‘000 Million Baht)


                        0          20    40           60          80          100      120        140

    Figure 2 Comparison of Thai Animation Market Value with Other Countries3




3
  Market value of other countries converted to Thai Baht at 37 Baht:1 USD (referred to currency
exchange rate by Bank of Thailand year 2006)



Executive Summary 10
Thailand’s Movie Market and Consumer Behaviors
       According to a study in animation supply side, outsourcing of animation, in
both post-production and full-production, to the Asian region will continually
increase. Recently there has been an increasing number of animation production
houses from North America and Europe moving to China and India as well as
Thailand to set up their business. As a result, they offer the opportunity to the
Thai animation industry to get involved in co-production or co-investment.

        Consumer demand for animation in Thailand grows, especially in
animation feature films. The first Thai animation feature film, namely ‘Kan Kluay’
introduced the potential market in Thailand by holding the 1st rank in box offices
countrywide. The revenue generated by ‘Kan Kluay’ beat all foreign animation
feature films ever shown in Thailand. The underlying reason for its success was
content that was visibly real Thai, showing the cultural and historical story
including a sense of humor and patriotism, unlike foreign animation.

        The Thai animation film industry is recognized as a part of the movie
industry. In order to understanding the industry, it is necessary to understand
the overall picture of the movie industry and its audiences. In 2005 the Thai
action movie ‘Tom Yum Goong’ became a new phenomenal of Thai movie industry
because revenue generated reached 200 million Baht within 2 week after
launching to the domestic market. It can be said that the success of ‘Tom Yum
Goong’ vitalizes both the movie industry and the consumer market. Additionally,
foreign markets recognize Thai movies as a competitive industry which results in
a rise of production to penetrate foreign markets.

       With regard to the success of the movie industry in Thailand, core content
of each movie still plays an important role. Actors, market strategies, capital,
and economic circumstances are also included as key success factors.
Nevertheless, these factors are sensitive and sometimes uncontrollable, which
producers and investors must risk.

        Thailand’s movie industry has had a growing tendency for 3 years. As a
result, other related businesses e.g. movie theaters, computer games, and
merchandising have been growing highly competitive.

      The table below summarizes the analysis of Thailand’s current movie
consumers’ behaviors and trends:




                                                            Executive Summary 11
Table 4 Characteristics of the Movie Market (Consumers) in Thailand

       Factors                      Trend                            Analysis
Audience                  - Teenagers and students        - Teenagers and students are
                          - People of working age           major group of the movie
                                                            market.
                                                          - Their consumer behaviors
                                                            change rapidly.

Content/Genre             - Comedy and horror             - Comedy and horror movies
                          - Blockbuster movies and          are profitable and often
                            imported movies                 become blockbusters.
                          - Attractive screenplays
                          - Historical content




Quality and Standard      - High quality and standard     - High competition results in
                                                            improvement of quality and
                                                            standard.
                                                          - Competent production
                                                            houses tend to focus on
                                                            international markets.
Marketing                - Attractive movie trailer and   - Budget used in marketing
                           movie poster                     increases dramatically,
                         - Showing highlight and            probably accounted for 50% of
                           content in movies                overall cost.
                                                          - Despite large investment in
                                                            marketing, the content met
                                                            audience’s requirement still
                                                            plays the most important role.

Competitor                - Home entertainment            - DVD and VCD players sell at
                            business                        very low price. Many
                                                            audiences therefore orientate
                                                            themselves to home
                                                            entertainment.
                                                          - Duration for distributing movies
                                                            in form of DVDs or VCDs to be
                                                            sold becomes shorter,
                                                            especially for Thai movies.
                                                          - Movies broadcasted via cable
                                                            TV consider as a new
                                                            alternative to audiences.




Executive Summary 12
Thailand’s Gaming Industry: Market and Trend
        In 2006, the world game markets was estimated to be 9.3 trillion4 Baht of
which the United States took the highest market value of 333 billion Baht
followed by Japanese game market with the value of 187.8 billion Baht, and
Korean game market with the value of 102 billion Baht. Thailand, in its infancy
stage of the game industry, has 5.7 billion Baht game market value which is
about 0.61% of the world market. Thai game market is dominated by imported
games, mostly from Japan, US, UK, and South Korea, which takes about 90% of
overall Thai game market.


           US                                                                     333
        Japan                                      187.8
        Korea                          102
           UK                         95.2
      Germany                    83.2
       France                    80
        China               42
      Thailand       5.7*
         India       1.76                                                 Market Value (‘000 Million Baht)


                 0          50    100        150   200       250       300          350            400
                       Figure 3 Game Industry Markets 2006 (Selected Countries)5

        Thai gaming industry can be divided into 6 platforms which are online
game, mobile game, console game, handheld game, PC Offline game and arcade
game. The domestic game market of Thailand has grown rapidly since 2003 due
to the larger number of gamers entering the market and the emergence of online
games for the Thai gaming industry.

        The market value of the Thai gaming industry in 2003 amounted to 3,235
million Baht of which arcade games took the highest share at 37% of total market
value followed by online games with 30% of market value. The 2004 market
value of 4,090 million Baht showed the significant growth of online games that
took 38% of the total gaming market share and has exceeded the arcade game
market value since. In 2005, the gaming industry raised the market value to
4,708 million Baht with similar ranking in shares. The Thai gaming industry
market value in 2006 amounted to 5,680 million Baht showing the continued
growth of the Thai gaming industry and the promising increase of the online
game market which amounted to 2,370 million Baht and 42% of the market
share. Other game platforms retained the consistent market share across 4
years; mobile games had about 3%, console software games had about 15%,
handheld software game had about 5%, and PC offline had about 8% share.


4
  Information from NASSCOMM Report 2006 with trillion equals to the third power of a thousand (one
thousand billion, 1 followed by 12 zeroes)
5
  Market value of the selected countries converted to Thai Baht at 37 Baht:1 USD (referred to
currency exchange rate by Bank of Thailand year 2006)



                                                                         Executive Summary 13
Table 5 Thai Gaming Market Value by Game Platform

                                2003                        2004                       2005                       2006
  Game Platform
                        (mil. Bht)         %       (mil. Bht)      %            (mil. Bht)       %          (mil. Bht)   %
Online Game                 970            30         1,540        38             1,800          38           2,370      42
Mobile Game                 115             4             130       3              148            3            170        3
Console Game
                            490            15             590      14              700           15            850       15
(software)
Handheld Game
                            160             5             180       5              250            6            300        5
(Software)
PC Offline Game             300             9          330           8             360            8            390         7
Arcade Game                1,200           37         1,320         32            1,450          31           1,600       28
  Total (mil. Bht)         3,235           100        4,090        100            4,708         100           5,680      100



                                                                                              5,682
           5,000                                                        4,708
                                                                                                      28%
                                                  4,090
           4,000                                                                 31%                  7%
                            3,235                           32%                                       5%
           3,000                                                                7%                    15%
                                    37%                    8%                    5%
                                                           4%                                         3%
                                                                                15%
           2,000                    10%                    15%                  3%
                                     5%                    3%
                                    15%                                                               42%
           1,000                     3%                                          39%
                                                           38%
                                    30%
               0
                                                                                                        Year
                            2546                  2547              2548                      2549
                     Online Game                 Mobile Game                Console Game (Software)
                     Handheld (Software)         PC Game                    Arcade Game

                     Figure 4 Game Market Share by Game Platforms




Executive Summary 14
Thai Gaming Industry by Game Platform

                                         Online Game

       The first online game was published in Thailand in 2001. There have been
about 55 online games published of which 16 games are no longer in service and
the other 39 are still commercially available.

       The online game market in Thailand has risen since 2003 starting from the
market value of 970 million Baht to 1,540 million Baht in 2004, 1,800 million
Baht in 2005 and to 2,370 million Baht in 2006. The online game market has
grown almost three fold since the first commercially published online game in
Thailand four years ago. The market reached its highest growth of 60% in 2005
when the market value of online games totaled 1,540 million Baht. The average
growth rate6 of the Thai online game market is about 25% across four years of
progressive increase.


Table 6 Online Game Market in Thailand 2003 – 2006
                                            2003          2004           2005           2006
    Online Game Market (mil. Baht)          970           1,540          1,800          2,370



                                         Mobile Game

        The number of people using mobile phone in Thailand has gone up every
year. In 2006 the number of people using mobile phones was approximately 37
million which is about 57% of the total population of 65 million people. The
number is expected to increase another 14% to 42 million people which is about
65% of the total population in 2007.7

       The mobile game market in Thailand has a steady growth averaging 15%
annually since 2003. Mobile games in Thailand these days still share a small
market value among value added services (VAS) of digital content provided on
mobile phones. The mobile game revenue is about 10% of the total revenue
from total digital content service revenue. However, the growing number of
mobile phone users each year will help boost the revenue of mobile games and
other voice and non-voice digital content services.

        The market value of mobile games in Thailand in 2006 amounted to 170
million Baht. The market value has increased at the rate of approximately 3%
annually.

Table 7 Mobile Game Market in Thailand 2003 – 2006
                                            2003           2004           2005           2006
    Mobile Game Market (mil. Baht)           115            130            148            170



6
    Estimated growth rate using CAGR: Compound Average Growth Rate
7
    Information courtesy by Wireless Service Business, Advanced Info Service Public Company Limited



                                                                           Executive Summary 15
                           Console Game (Software)

       The Thai console game market value mainly focuses on the console
software games. There are four types of console game machines that are still
available in the Thai console game market. They are PlayStation 2, PlayStation 3,
Xbox360 and Nintendo Wii.

       The market survey of console game software in Thailand indicates that
there is approximately 6 million console game software sold annually with the
total market value of about 850 million Baht. The average growth of the overall
console game software market is estimated to be 20% per year.

Table 8 Console Software Game Market in Thailand 2003 – 2006
                                       2003    2004       2005        2006
 Console Game Market (mil. Baht)
                                       490      590        700         850
 (Software game only)


                        Handheld Game (Software)

        Handheld game machines that are still popular in Thailand are Nintendo
DS Lite and PlayStation Portable (PSP). Currently, licensed software games are
distributed by Electronic Art World Thailand (EA Thailand) and are sold at
reasonable market price.

The market of handheld game software in Thailand was quite stable during 2003
– 2004. The mid of 2005 was a turning point for the handheld game market due
to the debut of PSP and the Nintendo DS game machine which helped boost the
market to 40% that year

Table 9 Handheld Software Game Market in Thailand 2003 – 2006
                                       2003    2004       2005        2006
 Handheld Game Market (mil. Baht)
                                       160      180        250         300
 (Software game only)

                                   PC Offline Game

        Many of the PC Offline games developed based on renowned film stories
such as Harry Potter, Shrek, and Spider-Man. In Thailand, the first Thai PC
Offline game developed from film story is Tom-Yum-Kung following the popularity
of the Thai movie, Tom-Yum-Kung. It was first launched on August 11, 2005
with about 30,000 sold.

       Another type of PC Offline game that is popular in Thailand is the
education games whose main target consumers are elementary and junior high
school students. Some of the games in this category are so popular that new
editions are launched every year.

        Even though newer versions of PC Offline games are well designed and
developed using 3D animation technique and special affects to make the game
closer to reality with more complex game levels to attract gamers, the popularity
of PC Offline games has declined because of the higher specifications of required




Executive Summary 16
       PC systems to support such complex games and the share of online games
that become more and more popular throughout the different ages and levels of
gamers.

        The market value of PC Offline games in Thailand was 392 million Baht in
2006 which had increased from 360 million Baht in 2005. The average growth of
PC Offline game in Thailand is quite constant at the rate of 10% per year.

Table 10 PC Offline Market in Thailand 2003 – 2006
                                          2003           2004           2005           2006
 PC Offline Game Market (mil. Baht)       300            330            360            392


                                      Arcade Game

       Arcade games are one of the most popular game platforms in Thailand.
Arcade games that are in service in Thailand can be divided into 2 types as
followed;

        1. Arcade game machines with an electronic system base which mostly
           are imported such as SEGA8 and NAMCO9 arcade machines from Japan.

        2. Arcade game machines with a PC system base mostly used for casual
           game with touch screen features.

       Arcade games took a major market share among all platforms with the
market value of about 1,200 million Baht in 2003, 1,320 million Baht in 2004,
1,450 million Baht in 2005, and 1,600 million Baht in 2006. However, the market
share of arcade games has declined from 30% in 2003 to 28% in 2006 due to the
online game market expansion.

Table 11 Arcade Game Market in Thailand 2003 – 2006
                                          2003           2004           2005          2006
 Arcade Game Market (mil. Baht)           1,200          1,320          1,450         1,600




8
  SEGA (Service Games of Japan) is multinational Japanese video game software and hardware
development company, and a former home computer and console manufacturer.
9
  NAMCO is an amusement company based in Japan, best known overseas for video games
development.



                                                                       Executive Summary 17
Thailand’s Game Productions
        The production of software games and game machines in Thailand started
to expand in 2006 when the manufacturing value amounted to 412 million Baht.
In this year the value of the arcade game production reached 205 million Baht,
accounted for 50% of total game production value across all platforms in
Thailand. The PC offline game production accounted for 25% or 105 million Baht,
followed by the online game production at 60 million Baht which is 15% of the
industry. The mobile and handheld game productions were accounted to 30
million Baht and 12 million Baht or 7% and 3% of total production value,
respectively. The console game production is under negotiation with major
console game companies in North America and in Japan.


Table 12 Production Market Value of Thailand’s Gaming Industry

     Game              2003             2004               2005            2006
   Platform     mil. Baht %       mil. Baht    %     mil. Baht %     mil. Baht %
Online Game          -       0        4        2        45      13      60      15
Mobile Game         1       0.7       5        3        18      5       30      7
Handheld
                  0.5       0.3      5         3        8       3      12       3
Game
PC Offline         20       13       60        30      75       22     105      25
Game
Arcade Game       130       86      120        62      190      57     205      50
     Total
                 151.5     100      194        100     336     100     412     100
  (mil. Baht)




Executive Summary 18
Thailand’s Game Users
       SIPA’s White Paper for Animation and Games Project had conducted a
survey to study the basic characteristics and commonalities of Thai game users.
The survey, which covered respondents in major cities throughout the country,
found that the majority of game users in Thailand live in and around Bangkok.
However, there were an increasing number of game users in all regions of
Thailand. The survey was mainly based on a questionnaire with a total of 1,224
respondents who ranged in age from 9-45.

      60.4% of the game users answering the questionnaire were male and
39.6% were female. Most of them were 15-19 years old (42.6%) followed by 20-
24 years old (38.6%) and 9-14 years old (12.1%).



         600
                42.6%
         500             38.6%


         400

         300

         200                       12.1%

         100                               4.5%
                                                   1.6%    0.3%     0.2%
           0
               15-19     20-24     9-14    25-29   30-34   35-39   Over 45


                                 Age Group

                        Figure 5 Age Group of Game Users




                                                           Executive Summary 19
         700
                 48.2%
         600

         500

         400

         300                 21.1%
                                            14.1%           12.5%
         200

         100                                                              3.4%
                                                                                      0.6%         0.1%
           0
                Bachelor   High School Vacational Junior High            Primary      Master    Post Master
                                         School     School               School       Degree      Degree


                                               Education


                         Figure 6 Educational Levels of Game Users

        590 out of 1,224 game users (48.2%) were undergraduate students, while
258 of those (21.1%) were in high schools. Students in vocational schools were in
third place with a total number of 173 (14.1%).




        800      67%

        700
        600
        500
        400
                           26.3%
        300
        200
        100                            2%            1.7%       1.7%         0.7%       0.5%
          0
               Less than 5,001-      40,001-        20,001-    15,001-      30,001-     Over
                5,000    15,000      50,000         30,000     20,000       40,000     50,000


                                     Income (Baht)

                         Figure 7 Average Incomes of Game Users


       According to the survey, most of the game users have an average income
less than 5,000 Baht per month, accounting for 67% of the respondents, while
26.3% of those have an average income ranging from 5,001 to 15,000 Baht.




Executive Summary 20
      400       30.5%
      350
      300                       21.7%
                                         19.2%
      250
      200
                                                   11.5%
      150
      100                                                     6.6%
                                                                         4.3%           4.3%
        50                                                                                        1.9%
         0
                  30     1-2             2-3        3-4        4-5       More        5-6           6-7
               Minutes- Hours           Hours      Hours      Hours     than 7      Hours         Hours
                1Hour                                                   Hours


                                           Time Spending

                         Figure 8 Average Time Spent in Playing Games



       When questioned about the time spent on playing games, 30.5% of the
game users responded that they spent 30 minutes to 1 hour playing games. The
percentage of the game users spending 1-2 hours playing games accounted for
21.7% of all respondents.



         900         64.1%
         800
         700
         600
         500
                                        27.8%
         400
         300
         200
                                                       3.8%             1.9%               1.6%           0.8%
         100
           0
                   on




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                                                 Preferred Places

                                   Figure 9 Preferred Places for Playing Games


     When asked of gaming places, 781 out of the respondents or 30.6%
selected homes/accommodation as favorite gaming places where 339 of the game
users chose to play games in Internet Cafés/Game Rooms which was 27.8% of all
respondents.



                                                                                               Executive Summary 21
         900    30.6%
         800
         700
         600
         500              19.7%

         400
                                    11.8%      6%
         300
         200                                             5.5%     5.2%

         100
           0
                Online    Mobile   Console   Handheld   Arcade   Offline
                Game      Game      Game      Game      Game     Game

                         Preferred Game Platforms

                            Figure 10 Preferred Game Platforms



        On the question of preferred game platforms, 30.6% (the highest) enjoyed
online games, 19.7% preferred playing mobile games, and 11.8% chose to play
console games. For handheld games, the game users playing this type of game
accounted for 6% while 5.5% enjoyed playing arcade games. PC offline games were
the least favorite game played by the game users resulting in only 5.2% out of 1,224
respondents.


        When asked about games developed by Thai developers, approximately
42% of the respondents experienced Thai-made games, while 58% never played
Thai games. Nevertheless, there is a growing tendency toward playing Thai
games especially in online games. According to the survey, the number of gamers
experienced Thai-made games accounted for 50% of those who played all kinds
of online games; although they were recently introduced to the market.




Executive Summary 22
    90
         18.7%
    80
    70           15.8%
                           14.6%
    60                             13.1%
                                           11.4%
    50                                             9.7%
    40                                                    7.1%
    30
    20                                                           3.4%   2.7%      2.4%
    10                                                                                      2.3%
     0




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                             Reasons for Playing Thai Games

                         Figure 11 Reasons for Playing Thai Games

        On the extended question of Thai games, 37.6% of the game users
expected to see more online games developed by Thai developers, followed by
22.2% of PC offline games. When asked of reasons to play Thai games, 18.7% of
the game users chose to play Thai games because of the recommendation from
their friends while 15.8% played them for the purpose of supporting Thai game
industry.




                                                                        Executive Summary 23
Thailand’s Competitive Advantage: Animation and Games

        The animation and gaming industry are heavily influenced and dominated
by international key players from North America, Europe, Japan and Korea.
Thailand’s exposure to foreign production, training abroad, and foreign assistance
were important factors behind the emergence of animation and gaming industry
in Thailand. The mature animation production countries in Asia which are Japan
and South Korea are main business partners of Thai production companies both in
animation and games. As animation and game production is a very lucrative and
labor-intensive business, Asian countries such as India, China, Vietnam, Malaysia
and Thailand have cost advantage for the production and have started their own
industries.

        Thailand’s animation studios are among the most successful of Thailand’s
multimedia enterprises. Major studios have garnered international accolades for
international standard of 2D, 3D and other animation work, including winning
prizes in international competitions. The making of Thailand’s first 3D animated
feature film, Khan Kluay, is the nation’s big step in making the statement that
Thailand is ready for the world of animation and multimedia.

       The gaming industry in Thailand, even though in its early stage, has
rapidly grown within the past few years. The ongoing expansion of Thai gaming
industry is attested by the increase in market value for demand perspective.
Besides the making of first Thai online commercial game, ProjectOne, the rising of
number of contracted game software development with international clients
shows the momentous pace for Thai game software manufacturing perspective.
Game development studios in Thailand have formed a significant group that helps
Thai game software development industry especially in business deals and
negotiations.

       Thailand has the advantage of being a country of rich culture and artistry.
Thai animators are regarded for their highly artistry skills and sophisticated work.
Such skills and the responsibility of staff are an important fundamental of
exquisite production for quality animation. Thailand’s competitive advantage can
be defined into five elements.

Geographic Advantage

       o   Thailand is located near the major consumption markets of India and
           China, and is within a one hour flight to Singapore, the center for
           agent and trade.
       o   Thailand is a transportation hub for the Southeast Asian region
       o   Thailand has the unique identity and culture
       o   The size of Thailand is small enough for clustering within provincial
           regions.
       o   Thailand is a gateway to neighboring countries with low labor costs.

Human Resource Advantage

       o   Thai staff are highly skilled in art and creativity
       o   Thai staff have opportunities to work with international experts and
           professionals through co-production and investment of foreign
           companies
       o   The development of the Thai animation industry in the past four years
           has enhanced Thai workers by advancing the working standards.


Executive Summary 24
Fundamental System Advantage

       o   The continuing development of infrastructure related to animation and
           game industry such as expansion of broadband internet network
       o   High standard of communication and transportation system
       o   Good educational system
       o   The curriculum of digital content has rapidly developed among
           competitive higher levels of education
       o   Entrepreneurs have easy access to software and equipment necessary
           for animation and game production
       o   Better quality human resources due to the continuing development of
           the academic curriculum for animation and game

Governmental Advantage

       o   Thai staffs are highly skilled in art and creativity.
       o   Thai staffs have opportunities to work with international experts and
           professionals through co-production and investment of foreign companies.
       o   Networking among government units committed to animation and
           game industry support shows the development of cooperation.
       o   More government funding for training and international road shows are provided.
       o   Government investment in expensive equipment and small rental fee
           to assist Thai entrepreneurs in animation and game production.

Business Environment Advantage

       o   The competitiveness of animation and game’s supporting industry,
           Thailand’s film and advertising industry, is well recognized internationally.
       o   Thai animation and game studios have a strong desire to push their
           work to be known abroad.
       o   Thai entrepreneurs have strong cooperation and have developed
           business clusters for the best interest of the industry and for
           bargaining power in international negotiation.
       o   The emergence of the variety of work creates a chance for Thai
           animation and game studios to be part of the global industry.
       o   The clustering among education and entertainment businesses creates
           a new supporting industry, the edutainment industry.

       Another advantage is that Thailand has a major event to promote animation
and game industry. An annual event that articulates Thailand’s readiness for high
standard of animation, game and multimedia is Thailand Animation and Multimedia
(TAM), which was first organized in January 2004 by SIPA. The main purpose of
TAM is to emphasize and encourage involvement of all sectors in animation, game
and multimedia, from designers, developers, and manufacturers, to domestic and
international businessmen, students, youth and public. Small to large animation
and game production studios and other digital content related enterprises including
academic circles participate in this event to demonstrate their keen interest in and
readiness for promoting animation and multimedia business in Thailand.

        In an industry mostly dominated by big corporations from other countries,
Thailand's animation and game industries are working up in a global market worth
billions.  High level of creativity, reasonable costs, welcoming business
environment, and fine overall performance make Thailand very competitive in the
field and, thus, a preferable destination for animation and game production and
investment.




                                                               Executive Summary 25
                             Glossary of Terms

Anime
The Japanese word for animation. In English, used to describe Japanese-style or
Japanese-origin animation properties.

Arcade game
Large, standalone, video-style games played in a retail location. Creating
animation for arcade games is a work-for-hire opportunity for animation studios.

Computer-Aided Instruction
(CAI, or "assisted", "learning", CAL) The use of (personal) computers for
education and training.

Computer-generated imagery or CGI
A description commonly used for visual effects and other animation productions.

Console game
Interactive titles meant for use on a dedicated gaming machine rather than a
computer.

Digital
A description of data which is stored or transmitted as a sequence of discrete
symbols from a finite set, most commonly this means binary data represented
using electronic or electromagnetic signals.

Digital Content
Products available in digital form. It typically refers to music, information and
images that are available for download or distribution on electronic media.

E-learning (Electronic learning)
Term covering a wide set of applications and processes, such as Web-based
learning, computer-based learning, virtual classrooms, and digital collaboration, It
includes the delivery of content via Internet, intranet/extranet (LAN/WAN), audio
and videotape, satellite broadcast, interactive TV, CD-ROM, and more.

Feature film
A full-length production of about 90 minutes, usually intended for theatrical
distribution but sometimes for television or home video/DVD.

Handheld game also called “Handheld Video Game” or “Handheld
Electronic Game”
Video game played on a portable, electronic device (Examples: Game Boy,
Nintendo).

Hardware
The computers and other machinery needed to produce an animated project.

Internet
A computer network consisting of a worldwide network of computer networks that
use the TCP/IP network protocols to facilitate data transmission and exchange.

Massive Multi-Player Online Games (MMOG)
A game on the computer played by many people. Also call “Massively Multi-user
Online Game”, An MMOG differs from a regular multiplayer game because its
environment is perpetual. People log on, join the action and leave whenever they



Executive Summary 26
wish, but the game continues like new soldiers replenishing fatigued troops on
the battlefield.

Mobile game
A game played on mobile phones or portable.

Online game
A game that connects many players together an a server that can be accessed
over the Internet by individual PC terminals.

Outsourcing
The act of sending all part of a production to another studio on a subcontract
basis.

PC offline game
A game installed on a PC through a CD-ROM.

Penetration
The percentage of households in an area that possess a certain technology, such
as cable or home computer.

Post production
The last phase of the production process. Includes music editing, picture editing,
compositing, color correction, and other tasks. Usually outsourced to a
postproduction facility. In live-action production animated special effects are
added during post production.

Rendering
The process of generating the final image in the computer. Rendering takes the
modeling, lighting, texture, and color data, and decide what color each pixel
should be for each frame.

SIGGRAPH
Short for Special Interest Group, Graphics, of the Association for Computing
Machinery. The largest organization devoted to computer graphics and animation.

Software
The instructions executed by a computer, as opposed to the physical device on
which they run.

Value Chain
A model that helps to analyze specific activities through which firms can create
value and competitive advantage.

VAS
Value Added Service (VAS) which is voice and non voice services besides regular
mobile phone service. VAS generally includes music, ringtone, games, movies,
email and other digital content services

Video game
An interactive entertainment title played on a dedicated console made by
companies including Nintendo, Microsoft, and Sony.

Visual effects
A technique used in a live-action film to create a scene that cannot be filmed
cost-effectively or safely. Matting a scene into a background is one type of visual
effect.



                                                             Executive Summary 27
                        Committee and Credits

Steering Committee

     Dr. Surapong Lertsithichai       Committee


     Mr. Jaras Tanopajaisit           Committee

     Mr. Pongrapee Thongsrinoon       Committee

     Mr. Sumate      Rodkao           Committee

     Ms. Charutat Chandrasurin        Secretary to Committee



Advisors

     Thai Animation and Computer Graphics Association (TACGA)

     Thailand Software Game Association (TGA)

     Bangkok ACM Siggraph



White Paper Working Group

     Dr. Kamon Jirapong               Project Leader

     Dr. Chaipong Pongpanich          Project Consultant

     Dr. Monrudee Tadaaumnuaychai     Head of Researcher

     Ms. Dawadee Charnpanichkarn      Project Manager

     Mr. Mawin Dankul                 Researcher

     Mr. Monchai Tadaaumnuaychai      Researcher

     Mr. Ratthapol Piriyathanarak     Researcher

     Ms. Sasiprapa Lavitrungsima      Research Assistant

     Ms. Chatchadaporn Akka           Research Assistant

     Ms. Sasinun Sasiwattana          Research Assistant
 Knowledge Development Center Co., Ltd.




 This document is developed for Thai Digital Content White Paper: Animation & Games Project by Knowledge Development Company Limited,
(KDC), under the supervision of the project owner, Software Industry Promotion Agency (SIPA). Duplication, photocopy, distribution or broadcast
                 in any form, partial or whole, of this document is prohibited without official permission from the project’s owner.

				
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