Games and Entertainment Content. Games and Entertainment Content Value Chain Strategy. From Telecom Way of Thinking to Internet Way of Thinking
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1 Games and Entertainment Content in i-mode i Value Chain Strategy From Telecom Way of Thinking to Internet Way of Thinking March 4th, 2003 Takeshi Natsuno NTT DoCoMo, Inc. Games and Entertainment Content in i-mode i Value Chain Strategy From Telecom Way of Thinking to Internet Way of Thinking March 4th, 2003 Takeshi Natsuno NTT DoCoMo, Inc.
2 Real phones sold in Japan now Powerful Features of the latest 2G phones -JAVA File size; JAR30K + Scratchpad 100K w/http and HTTPS connectivity -Waiting Mode on screen for JAVA applications (Screen Saver like function) -ihtml, GIF, JPEG, MIDI (all de-facto standards) -end to end SSL -TFT/TFD thousands colored LCD (65k colors) -28.8Kbps -Camera (100K to 310K pixel) Embedded -IrMC (Infrared) embedded (w/ JAVA API) -300 hours to 400 hours Standby and around 100g From NEC, Sony Ericsson, Panasonic, Mitsubishi, Fujitsu initially
3 JAVA World on i-mode Key Words; Non-telecom way of thinking Positive Feedback De-facto Standard Content Centric Business Model Consumer Oriented Marketing Digital Content Market Value Chain Eco System Seamless and Continuous Evolution
4 Positive Feedback created by Content (as of March, 2003) i-mode subscribers 36.9 million ACTIVE USER Proper Business Model De facto Standard Technology More than 2,300 Companies offering Over 3,400 sites Positive Feedback Positive Feedback De facto Standard Technology De facto Standard Technology Corporate Use Intranet and VPN Packages already available Positive Feedback More than 61,000 voluntary internet web sites registered in a search engine. 3 Key i-mode Strategies to arouse positive feedback Technology Service Design & Business Model Marketing -7-
5 3 Key i-mode Strategies to arouse positive feedback Best selection of technology most attractive for content providers, not for telecom operator nor for wireless vendors. (i.e. HTML, HTTP, GIF, MIDI, JAVA, etc.) Best set up of business model and service design (including handset specification) attractive for content providers, not for telecom operators nor for wireless vendors. (i.e. Small Payment System, User Friendly Portal, etc.) Understandable marketing for ordinary subscribers, not for nerds or techy guys. Content centric Marketing, not technology. Aggregate ARPU -Boosted by i-mode ARPU Aggregate ARPU (?) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 12,570 10,800 i-mode ARPU Voice ARPU 9,270 8,620 ARPU generated purely from i-mode i x (No. of i-mode i subs / Total cellular subs) 8,740 8,650 8, ,540 7,770 6,940 8,160 1,670 1,690 6,490 7,980 6, /3 1998/3 1999/3 2000/3 2001/3 2002/3 2002/9 2003/3(E) Higher i-mode ARPU Introduction of Java Handsets Contents Expansion Introduction of Handsets with Color Displays I-mode ratio 19.1% 78.0% 80%up 1) Includes the 310 increase resulting from the access charge income from mobile to mobile communication wallstreet Japanese Equity Story draft ppt
6 Positive Feedback with Java (as of March, 2003) JAVA Subscribers 16.3 million ACTIVE USER JAVA Application 600 sites JAVA Based Corporate Application 6,000 Independent Java Sites on the Internet Why DoCoMo Java (DoJa) is so successful? Technology ; 30KB Application and 100KB Scratch pad (easy download and http(s) connection to servers expected) Best API sets for Games and Graphics Business Model ; Monthly Subscription (better perception for users, sustainable business for game providers) One time download business model may cause morale hazard (e.g. Korean market) Marketing ; Application oriented mass-marketing (The word JAVA is not important for ordinary users, application is.)
7 Packet Usage Boosted by JAVA Handsets Packets 2,000 1,800 1,600 1,400 1,200 1, Packet usage of PDC i-mode handsets (packets/day/sub) Average of i-appli-compatible handsets Average of all i-mode handsets Average of non-i-appli handsets 503i i Series Released 1/ , % 24, % No. of i-mode subscribers (1,000 subs) Numbers in the parenthesis below are % of i-appli-compatible handsets (PDC) No. of i-appli-compatible handsets (PDC) 27, % Details /02 5/02 6/02 7/02 8/02 9/02 10/02 11/02 504i i Series Released 251i i Series Released 30, % 504iS Series 251iS Series Released 32, % Average of of all all 504 series handsets Average of of all all 251 Series handsets 33, % 35,568 34, % 43.1% Reference 504iS Reference 251iS Packets 2,000 1,800 1,600 1,400 1,200 1, /01 2/01 3/01 4/01 5/01 6/01 7/01 8/01 9/01 10/01 11/01 12/01 1/02 2/02 3/02 4/02 5/02 6/02 7/02 8/029/02 10/02 11/02 The Size of Digital Content Market on i-mode Excluding e-commerce and other payment method provided by third parties. More than JAVA $1 Launch 10 million subs billion digital content market 3,707 in 2002! 3,107 4,750 9,150 9,665 8,553 7,769 6,954 5, momentum EquityStory 18 Jan, 2000 Japanese_Large.ppt 1,596 Launch
8 Market Size of GAMES in i-mode (1) Market Size of GAMES in i-mode (2)
9 Market Size of GAMES in i-mode (3) Market Size of GAMES in i-mode (4)
10 Eco-system of i-mode No one can rule the world. Operator s Marketing Co-marketing Product offering Product offering Advertise & PR Competition Marketing opportunity Guide users De facto standard technology i-mode Portal Content Add attraction Content offering Sales channel & media Portal functionality Content Partners Presentation capability Handsets Technological capability Platform Competition Inter-operability
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