On December 17, the GTC2020 Global Traffic Conference was held at the Sheraton Shenzhen Futian. The conference invited many overseas elites from various industries to present the grand occasion of going overseas in 6 types of activities. Among them, Zhong Le, the head of PANGLE’s overseas game business, attended the conference and delivered a speech on “Best Practices for the Change and Growth of Games in Japan and South Korea”.
Zhong Le said that the Asia-Pacific market is becoming the main force in the global game market, especially Japanese and Korean markets. The scale of mobile games in the Japanese market is growing rapidly and has become the market with the highest app value games in the world. The South Korean market expects that next year’s overall game revenue will be approximately 14.2 billion U.S. dollars, and the overall revenue will exceed 45%. The Japanese and Korean markets have become overseas markets that Chinese developers cannot ignore.
In going overseas PANGLE will help developers to carry out refined operations throughout the life cycle of the game, and help developers provide integrated services for realizing purchases in each life cycle of the game. PANGLE will also launch incentive policy for developers to help them going overseas in all aspects of funding, team, local promotion, and local disguise
I’m Zhong Le, the person in charge of PANGLE games. What I want to share with you today is “Best Practices for the Change and Growth of Games in Japan and South Korea”
Let me first introduce PANGLE. As an application growth monetization platform, we have been committed to bringing full life cycle solutions to developers. At the PANGLE Conference in September this year, we officially upgraded the brand. Now PANGLE is officially a global developer growth platform. We are committed to helping global developers achieve growth goals and make growth more goals.
While ensuring the leading position in the Chinese market, PANGLE also actively expands overseas markets. It officially landed in the Japanese market in July 2019. As PANGLE’s first overseas stop, in the past year or so, our Japanese market’s MAU growth has quadrupled. Now Japan’s DAU has reached 51 million, and the coverage of games in Japan has exceeded 80%.
With the success of the Japanese market, PANGLE opened up more markets this year. At present, PANGLE has been launched in Japan, South Korea, Taiwan, Southeast Asia, the Middle East, Russia and other regions. Our goal is to open up the global market in the next year and bring more regional advertising monetization services to overseas developers.
After the briefly introducing, let’s take a look at the current situation of the Japanese and Korean game markets.
Why PANGLE attaches so much importance to the Asia-Pacific market, because we found that the entire Asia-Pacific market accounts for 49% of the world’s revenue and 54% of the world’s users. The Asia-Pacific market is becoming the main force in the global game market. Therefore, the Japanese and South Korean markets are particularly important for PANGLE.
Next, let’s take a closer look at the situation in the Japanese market.
As the largest gaming market outside of China in the entire Asia-Pacific region, the Japanese market has not experienced a slowdown in revenue due to the impact of the new crown epidemic in the past year. The scale of Japanese mobile game revenue has grown at a rate of more than 10% every quarter, and it will reach its historical peak in the Q3 quarter of 2020. The scale of Japan’s Q3 revenue has reached 5.01 billion, a year-on-year increase of 32%.
As the market with the highest APP value games in the world, we found that Japanese gamers have the following characteristics. First, the ratio of male to female gamers in Japan is relatively low, which makes it possible for any game type to find a good target audience in the Japanese market. Secondly, the age group of Japanese players is generally high. More than 40% of users are in the age range of 30 to 49. This is why the payment rate and payment amount in the Japanese market far exceed other markets.
There is not much cultural difference between the two markets in China and Japan. RPG-type games and Three Kingdoms-themed games have very good popularity and acceptance in China and Japan. We can also see successful Chinese games in the Japanese market, such as “Knife Out” and “Arknights”, which also have very good income in the Chinese market.
When analyzing game categories according to downloads, it can be found that casual game downloads in the Japanese market accounted for more than 60% in 2020. Among them, hyper-casual, RPG, and puzzle categories have become the most popular game categories in the Japanese market. If developers want to try the Japanese market, they can start with the above game types.
When we look at the Japanese market, and then look at the situation in the South Korean market, the entire South Korean market has grown very rapidly in the past five years. In 2016, the overall daily game revenue of South Korea was only 9.7 billion US dollars. It is expected that the entire South Korea will be in 2021. The scale of market game revenue is about 14.2 billion US dollars, and the overall revenue scale exceeds 45%.
Similarly, when we analyzed the game categories in the Korean market according to downloads, we found that casual games accounted for more than 70% of downloads. Among them, the downloads of hyper-casual games far exceeded the second-ranked PUZTIE and the third-ranked RPG. Compared to the Japanese market, Korean players have a higher degree of love for hyper-casual games.
After reading the Japanese and Korean markets, let’s take a look at how PANGLE helps developers build a closed-loop commercialization to achieve success in the Japanese and Korean markets.
Our solution is to refine operations throughout the game life cycle. We believe that only by doing well and stably at every stage of the game life cycle, we game developers can maximize revenue and profit scale.
PANGLE can help game developers provide game selection strategies at the beginning of the game project, help developers provide advertising interactive strategies in game production, and help developers provide refined traffic operation strategies and user acquisition strategies after the game is launched. PANGLE is committed to Help developers to provide integrated services of buying traffic and monetizing in every life cycle of the game.
We will give two different growth plans for casual games and moderate to heavy games. For casual game developers, purchase cost and retention rate are crucial indicators. From a traffic perspective, PANGLE’s casual game coverage in the Japanese and Korean markets exceeds 80%.
In terms of traffic, Japanese manga has a very high coverage rate, and this part of manga users happens to be the first choice for medium to heavy game advertisers. The data shows that the payment rate of comic users in SRG is 30% to 36% higher than that of other types of users, and the overall conversion rate is 17% higher than that of the market. If you get comic traffic users, you have a good chance to get users of the market.
After analyzing a large number of advertiser data on the PANGLE platform, we found that the trial material has a very good performance effect for casual games and moderate to heavy games. For casual games, the trial material can increase the conversion ability by more than 2 times, and for the medium to heavy, the trial material can greatly improve the overall efficiency, CPR and CBR are increased by more than 20%, and the trial material can be greatly reduce our purchase cost.
In the process of communicating with developers, we discovered that the biggest reason why developers did not use demo materials for delivery was because demo materials had a very high production threshold. In response to these problems, PANGLE also provides all of our developers with interactive advertising production platform RUBEEX and interactive advertising conversion tools. RUBEEX reduces the cost of material production, and can use the RUBEEX platform to produce high-quality trial materials.
In terms of advertisement selection, it is recommended that developers choose incentive videos, full-screen videos, and native advertisements to monetize the advertising revenue of the biggest game. For hyper-casual games, most of the advertising revenue comes from full-screen video ads, because the gameplay of ultra-casual games is relatively simple, and the time for each level is relatively short. It is very suitable to insert full screen between levels.
However, compared with full-screen video, rewarded video has a higher ECPM and less disturbs for users. Therefore, for game developers, how to optimize their products to increase the proportion of rewarded videos is very important to increase the overall advertising monetization revenue.
One case might be the barbecue shop. Compared with the hyper-casual game, the gameplay of the barbecue shop is relatively more complicated. Therefore, there are more points that can be motivated by the incentive video. After the optimization of the developer, the double reward and unlocking of multi-location, speeding up the food production process and motivational videos has resulted in an astonishing 15 motivational videos per capita in the barbecue shop. After accessing PANGLE, Japan’s overall revenue ECPM was 20%, and overall revenue increased by 35%. PANGLE accounted for more than one-third of the game’s monetization revenue.
Then comes the most important part today. In order to fully support developers going overseas, PANGLE will invest US$10 million in support funds every quarter to help us better go overseas. In the future, we will continue to implement this incentive policy to help overseas developers in all aspects. In addition to investing these S-level resources in capital, we will also form an integrated team that realizes purchases to provide local insights and local promotion. Local monetization promotes one-to-one services for developers.
Finally, just as our new vision announced at the Stars Conference, full-speed growth and full-speed co-creation, PANGLE hopes to stimulate innovation with all our developers, bring happiness to players around the world, and help developers move to the next level. Thank you!