mobile internet - vietnam - 2014

VIETNAM MOBILE INTERNET 2014 – A focus in smartphone game and comparison to Chinese market (Short Version) Andy Nguyen Talked in Vietnam Mobile Day 2014

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The full version will be available at h3p://mwork.vn/report a:er 9:00 am, 17 July 2014

Vietnam: A Quick Look At End of 2013

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92.5M Population

36.1M Internet Users

20M Active Facebook Users

134M Active Mobile Subscription

Ranked 13 of 228 countries

Penetration rate 39%

Facebook Penetration 21.6%

Mobile Subscription Penetration 145%

18M Smartphone Users

Smartphone Penetration 19.5%

May-2012

May-2014

Number of smartphones 6M 22M

Number of OTT users WeChat + LINE < 1M Zalo, LINE, Viber > 10M

Smartphone games publishers Less than 10 At least 50

Smartphone game market size Less than $1M monthly More than $10M monthly

What Changed In The Last 2 Years

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Within 2 years, the number of devices has grown almost 4 folds. So has grown rapidly OTT applications and smartphone games market.

Vietnam Mobile Game Market

4

1.5 5

8

18

28

32 35

38 233%

60%

125%

56%

14% 9% 9%

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015 2016 2017

Number of smartphone user yoy growth rate

(mil users)

Number of Smartphone User in Vietnam

125% growth, reached 18M at the end of 2013!!! Expected to reach 28M with 56% growth at the end of 2014. The growing speed is likely to slow down in following years as it has

covered most accessible and affordable users.


5

80

209

382 416

466 509

549 592 161%

83%

9% 12% 9% 8% 8%

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 2016 2017

Number of smartphone user Y-‐o-‐y growth rate

(mil users)

(Source: eMarketer 2014)

Similar Pattern With China

The growth of smartphone users in Vietnam is very similar to the pattern of China but only 2 year later!!! Cheap Android devices provided by domestic brands has been the drive-force in

China. The same in Vietnam now.

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3G Mobile Subscriber in Vietnam

38.1%

30.7%

28.5%

2.7%

MobiFone

Vie3el

VinaPhone

VietnamMobile

12.75M 3G mobile subscribers

who actually used bandwidth in July-2013

MobiFone has the biggest share with 38.1%

Source: Vietnam Information and Telecommunication Ministry, July-2013

Country 3G Data Plan Price

Japan 53$US (unlimited packet – So:bank)

China 56$US (9GB packet – China Unicom)

Indonesia 25$US (3GB packet, speed-‐max 1Mbps)

Thailand 52$US (10GB packet, speed-‐max 384Kpbs, TrueMove)

Vietnam 10$US (3GB fast + no extra fee + speed-‐max 8Mbps, Vie3el)

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3G Data Plan Comparison

3G Data Plan in Vietnam is much cheaper than other countries. The speed is 10-20X times higher than neighbor countries like Indonesia and Thailand. A good condition

for mobile internet service to prosper.

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Where are 3G Mobile Internet Users?

Most 3G mobile internet users are concentrated in Ha Noi, Ho Chi Minh. Considerable number of them are in 2-tier cities in Delta-river zone and Mekong-river zones and Da Nang. A small amount of users from small cities and town across the coast.

Source: opensignal.com

15.5M, 70.5%

3.3M, 14.8%

2.1M, 9.5% 1.2M, 5.2%

Android iOS Windows Phone Others

(source: Mwork, May-2014) 9

What Kind Of Smartphone Devices?

70.5% is Android

until May-2014. Android takes the majority for existing active smartphones in Vietnam. Second is iOS and Windows Phone come next. It is not surprise if Android will maintain or increase its share in coming years.

(source: IDC)

$702 $710 $686 $650 $657

$441 $380

$320 $276 $254

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014(e)

iOS Android

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Android Is Cheaper and Cheaper

The average sold price of a new Android device has steadily decreased toward $200-$250 zone while iOS maintain at $650-$700. No wonder why so many Android!!!

2.6X Android is cheaper

than iPhone

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Number of New Sold Devices

in Aug-2013. Among them, 65.7% of that are Android. Windows Phone comes second with 19.5%. ASHA of NOKIA stills has its share but declining softly.

Source: gfk 2013

586K new sold

(source: Appota) 12

Waves of Cheap Android Smartphone

Since Feb-2014, Nokia started to sell Nokia X of Android OS at superbly affordable price in Vietnam. Very well sold. Samsung, LG, Asus, HTC … also have new Android models with the price lower than $130.

120$

LG Opdmus L1 II Samsung Galaxy Y Asus ZenFone 4 HTC Desire 200 Samsung Galaxy Trend Lite Mobel S58

Popular cheap Androids

61.2%

4.6%

13.5%

5.2%

15.5%

Jelly Bean

KitKat

Ice Scream Sandwitch

GingerBread

Others

(source: Appota, Dec-‐2013) 13

Android Devices by OS Version

61.2% of existing Android devices

are Jelly Bean until Dec-2013

(source: Appota)

7.7%

32.3%

5.5% 11.7%

29.4%

13.4%

iOS 7.1

iOS 7.0.4

iOS 6.0.X

iOS 5.1.X

iOS 6.1.X

Others

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iPhone Devices by OS Version

32.3% of existing iOS devices

are iOS 7.0.4 until Dec-2013

Mobile Game Market

15


16

(mil USD)


20

60

120

210

310

360

410

50%

100%

75%

48%

16% 14%

0%

20%

40%

60%

80%

100%

120%

-‐

50

100

150

200

250

300

350

400

450

2011 2012 2013 2014(e) 2015(e) 2016(e) 2017(e)

Market Size yoy growth rate

Vietnam Mobile Game Market will reach $210M at the end of 2014, grow 75% comparing to previous year. The growing speed will decrease in following years and reach $410M in 2017. $210M

in 2014

(source: Mwork)


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(mil USD)


3%

17%

61%

79%

90% 96% 98%

0%

20%

40%

60%

80%

100%

120%

0

50

100

150

200

250

300

350

400

450

2011 2012 2013 2014(e) 2015(e) 2016(e) 2017(e)

Feature Phone Smartphone Smartphone Percentage

The main drive-force of the expansion of mobile game market is smartphone game. In 2014, 79% of the market share is forecast to come from smartphone. From 2015, feature phone will account for less than 10%.

79% are from

smartphone game in 2014

(source: Mwork)

220

253

291

60

120

210

0 100 200 300 400 500 600

2012

2013

2014 (e)

PC Mobile

(mil USD)

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PC vs Mobile Games Market

Thank to its rapid growing, mobile games market in 2014 will almost equal to PC-based game market in term of market size in 2012.

(source: Mwork, Casual Connect Asia 2014)

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785 946 721 497 304 160 80

128 321

1,474 2,869

4,263 5,160

5,801 39%

73%

53%

36%

16% 11%

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2011 2012 2013 2014(e) 2015(e) 2016(e) 2017(e)

Feature phone game revenue Smartphone game revenue yoy growth rate

(mil USD)

Mobile Game Market: the case of China

The same story happens in China. In 2014, it is forecasted that more than 85% of mobile game revenue are from smartphone games. The growth rate peaked itself in 2013 with 73% growth rate and gradually decrease toward 11% per year in 2017.

(source: iResearch 2013)


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4 10

50 60

15 30

150

250

0

50

100

150

200

250

300

2011 2012 2013 2014 (e)

Number of local game publishers Number of new game d3les

(source: Mwork)

Game Publishers and New Tittles

The market is growing but so the number of tittles. Not easy game for all but the winners are promised to get big enough rewards. The number of local game publishers does not increases much, instead there will be the joining of foreign company who directly publish to Vietnam market from overseas.

250 new game tittles will be published

in 2014

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Major Mobile Gaming Companies

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Market Share by Genre

3.8%

31.2%

11.3%

17.3%

23.4%

4.3%

8.7%

23.6%

6.1%

15.4% 17.8%

6.6%

24.3%

6.3%

0%

5%

10%

15%

20%

25%

30%

35%

Casual Card Ba3le SLG MMORPG Turn based RPG Card & Board Others

China Vietnam

It may amaze you but until May-2014, 23.6% of mobile games revenue, including both feature phone and smartphone tittles, is for casual games. As characteristic of casual games, even though ARPU is lower, it can reach to a larger set of player. Avatar, Mobi Army, Audition Mobile, Ten Ten and iGa contribute almost 70% of the sector. Card & Board games hold the second big part with 24.3%. Card battles games are promising to increase its share in 2014.

23.6% for casual games

4. Au Mobile - VTC

3. Au Mobile – VTC Mobile

Avatar HD – TeaMobi

3. goPET – MECorp

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Top 5 Casual Games By Revenue By Peak Monthly Revenue

2. Mobi Army - TeaMobi

1. Avatar - TeaMobi

5. Teen Teen – VTC

4. Tinh Binh – MC Corp

3. Hán Mạt 2. Kiếm Hiệp – VTC

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Top 5 SLG By Peak Monthly Revenue

1. Mộng Hiệp Khách

5. Tam Quốc Chibi

4. Ngọc Rồng Online - SSGroup

Đại Minh Chủ -‐ Emobi

2. Mãnh Tướng - CMN 3. Liên Minh Anh Hùng- VNG

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Top 5 Card Battle By Peak Monthly Revenue

1. Đại Minh Chủ - EMobi

5. Dota Card - SGen

3. Liên Minh Tiền Sử - Savi Game

4. Kết Giới - SGen

2. Vua Hải Tặc

5. Anh Hùng Xạ Điêu – SSGroup

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Top 5 Turn-based RPG By Peak Monthly Revenue

1. Phong Vân Truyền Kỳ - CMN

4. Ải Mỹ Nhân - Mobvista

3. Mãnh Thú – ME Corp 2. Thiên Thần Truyện – ME Corp

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Top 5 MMORPG By Peak Monthly Revenue

1. Ngộ Không Truyền Kỳ – SohaGame

5. Thiên Địa Quyết – CMN & Wasabi

BigKool

ZingPlay

iWin

Trà Chanh Quán - VMG

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Hit Tittles: Board/Card Games Trà Chanh Quán

Beme

•  Background in IT •  Studied and lived in Japan before coming

back to Vietnam in 2010 •  Worked as Venture Capitalist in CyberAgent

Ventures in Hanoi •  Currently, working in Mwork •  Love SNS, mobile games (Elves Realm,

Mãnh Tướng, Flappy Bird.. Like), dog

Andy Nguyen Mwork Corp Co-‐founder, VP of Investment [email protected]

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A little bit about me

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Disclosure

This presentation relies on data and insight from a wide range of sources including public and private companies, announced news, market research firms and government agencies. We cite specific sources where data are public. The presentation also use non-public information and insight gained from external and internal experts of mWork. We publish the report on an annual basis, but on occasion will release updated report to highlight new trends. We would like to express my appreciation to Dung Tran, Marty Nguyen and Hoan Do, my colleagues in mWork by giving advices, providing data or helping to prepare the material. mWork, founded in 2012, is currently the hottest growing start-up in Vietnam, is currently a leading mobile internet group based in Vietnam, having many subsidiaries which are actively playing and leading in mobile internet related sector including mobile affiliate network (mwork.vn), mobile online payment (1pay.vn), game publishing (Wasabi JSC), game development (Tofu Studio), offline mobile shop synchronization platform (AppSync.vn), reward platform (gimi.vn).