1. Time to Bet The World again ?
Andrew Burnett
Barcelona October 2012
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2. PAY2PLAY DIGITAL ENTERTAINMENT
“New technology, new business models and new
regulation will power a new entertainment industry for
all of us. We call it Pay2Play”
Sir David Michels
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3. OUR THESIS
• 41% of internet user play games at least once a week
• Millions of players; a small minority that monetises big.
• Monetise, retain, re-energise, build LTV
• Acquire and build ROI.
• Invest wisely and exit efficiently.
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4. WHAT IS PAY2PLAY ENTERTAINMENT ?
Payment Game Play Reward
• Social Gaming : games that connect directly with social network profiles and largely depend on
social platforms for distribution.
• Mobile Gaming : mostly, though not exclusively, casual games (simple gameplay that can be learnt in
minutes) for smartphones, tablets, handheld game consoles and other mobile internet devices.
• Cash Gaming : Paid participation games with an element of luck in the gameplay and cash prizes
frequently greater the cash amount paid to participate.
• Pay 2 Play Entertainment : Includes casual games, online games, skill games, bingo, sports betting,
casino games, exchange platforms and all forms of gamification.
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5. THE PAY2PLAY CONVERGENCE MODEL
REACH ENGAGE MONETISE RETAIN
Signups
Traffic Daily Active Users Social gaming build reach and open new markets
Unique Visitors
SoMoOn Bounce Rate
Signup conversion
Play 4 Free
Monthly Active Users Forums Mobile platforms grow engagement
Pages viewed Custom downloads
Ease of payment Retention bonuses
Average Booking per User Customer Service
Subscriptions Re-ignition marketing
Cash Gaming Cash gaming monetises and drives retention Micro transactions
Registration to Depositor
CRM Programme
VIP programmes
rate
Cross-selling across all platforms and channels
Brands become key
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6. THE PAY2PLAY ENTERTAINMENT MARKET
The Pay2Play Entertainment market size
• Fastest growing digital industry in the 125
world
15% CAGR
• 15% CAGR; 3x faster than the global 100 52.8
M&E industry 47.1
43
Other 75
$121.00bn 38.3
$ billion
34.1
Newspapers 50
$82.00bn 31.1
Television subscription 49.3
$290.00bn
44.8
40.3
36
25 30.3
Filmed Entertainment
$97.00bn
20.7
Consumer & Educational Books 0
$116.00bn 2011e 2012e 2013e 2014e 2015e 2016e
Digital Pay2Play
$102.00bn
SoMoOn Cash
Business to Business
$180.00bn Source : Citigroup, PWC, Xyologic.com, Zynga S1, Inside Networks, Gartner, NPD Group,
Euromoniter, GfK, Flurry,, Evercore Group L.L.C. Research, Dec 2011; Gaming Capital, Morgan
Stanley, Think Equity, Burlywood estimates
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7. THE LONG TERM GROWTH TRENDS
• Growth in global consumer spending : The rise of the Middle Class in emerging markets and
substitution spending in the developed markets.
• Technological advances. Smartphone shipments outstripping PCs.
• New digital business models. Virtual goods market to double by 2014
• The separation of digital from physical media. New regulations and new market growth
opportunities.
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8. TECHNOLOGY AND REGULATION DRIVE
GROWTH
• Disruptive technologies emerge : Tablets, Smartphone, iTV 2.0. Windows share of internet devices
barely 50%
• Balkanisation of the internet. Apps beat web, walled garden, thoughtful content. Index search now
down to 50%
• Wide scale global platform extension through social media platforms.
• Regulation of cash gaming throughout the world, especially USA. The un-demonisation of
gambling
• Easier and more profitable routes to market with regulation, straight-forward payment channels,
and higher-rated earnings.
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9. TRANSFORMATIONAL MONETISATION
• A massive addressable market : 1.6 billion estimated social network users by 2014; 3% would
treble the digital cash gaming market .
• Lower friction and acquisition costs.
• Adoption of best practices :
• Ease of payments.
• Player lifetime analysis and player profiling
• Fraud detection and back customer relationship programs.
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11. CONCLUSION
• The world’s fastest growing media and entertainment sector
• Transformational profit growth for the best operators.
• Our name for a new era : Pay2Play digital entertainment.
• New sources of investment.
• The Third Epoch.
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