Future of Video Games
September 2008
Shana Fisher sf@iac.com
Senior Vice President, Mergers & Acquisitions, Strategy IAC/InterActiveCorp
The Online Video Gaming Market
• InstantAction is defining the $2B online core games market
– InstantAction is completely focused on moving video games to the Web – Online core games is a sub-segment of the $34B video game market
Global Online Core Games Revenues
$6 $5 $4
Global Video Games Revenues
$60 $50 $40
$ in billion
$ in billion
$3 $2 $1 $0 2006 2007 2008 2009 2010 2011 2012
$30 $20 $10 $0 2006 2007 2008 2009 2010 2011
Source: Note:
“Online Game Market”, DFC June 2007 Projection adjusted for IAC estimate of MMOG and casual revenue
Source: “Video Game Advertising”, eMarketer April 2007
Confidential – For Discussion Purposes Only
3
Customer Cost of Ownership
Online $50 / year Software $60 / game Hardware $400 Market Size Market Size Market Size Market Size Competitors Competitors Competitors Distribution Distribution Distribution Distribution
$11B $200M $4B $7B Competitors
Market Size
$3B
Competitors
Distribution
Online $150 / year Software $60 / game
Console
PC
Confidential – For Discussion Purposes Only
Traditional Games are Costly and Slow to Develop Only 8% of console
Freight: $1.50 Trade Marketing: $2.00 COGS: $3.50 Royalty: $7.00 $3M Mrkting $31 var. cost / unit
titles reached 650k units (breakeven on Gamers pay $31 per game to get avg their games from distributors investment)
650k units to breakeven Non-Hits
2-3 Years of Dev Time
Retail: $17.00 $15M Dev
Confidential – For Discussion Purposes Only
5
New Gaming Category
Traditional Video Games Costly and slow to develop
Off-line distribution
Expensive for users High engagement
Low cost and rapid development
Entirely online distribution
Free for basic access
High engagement
Confidential – For Discussion Purposes Only
6
Introducing InstantAction
• The first web-based video game platform • Funding and developing original IP • Multi-player games • Console-quality delivered in the browser & full-screen • Built for global audience
Confidential – For Discussion Purposes Only
Beta Launched Late Spring ‘08
Site Traction
70 Total Game Time Total Gamers 60 350 400
Over 127 Countries
Total Gamers (000s)
300 Total Game Time (000 hrs) 50 250 40 200 30 150
20 100
10
Current user stats : 6 months since open beta began • ~ 700k registered users • ~30 minutes average time on site
Target demographic: • Global audience of hardcore gamers • Age range: 13-34
Confidential – For Discussion Purposes Only
50
0 May June July August
0
Legions Trailer & Site Demo
http://www.instantaction.com
Confidential – For Discussion Purposes Only