Developing marketing strategy for an online social game

1.5 Scope of the study The scope of the study is to analyze the market, the consumers, the competitors as well as the company itself so that proper marketing strategy can be proposed to

TR NG I H C M TP HCM UNIVERSITÉ LIBRE DE BRUXELLES

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB4

DEVELOPING MARKETING STRATEGY

FOR AN ONLINE SOCIAL GAME

MASTER PROJECT MASTER OF BUSINESS ADMINISTRATION

(PART-TIME)

TUTOR’S NAME: DR. HOANG THI PHUONG THAO

2012

Acknowledgement

I would like to express my heartfelt gratitude and deepest appreciation to my research supervisor, Dr Hoang Thi Phuong Thao, for her guidance, share of experience, valuation suggestions and comments

I would also like to thank my friends in Empire Corp who have helped me a lot during my research: Nguyen Thanh Trung, Hoang Thanh Trung, Pham The Minh from the board of directors of the company and other personnel from the development, support and marketing department

Last but not least, I would like to thank all of my classmates in MBAVB4 who have always supported and encouraged me to complete the research

Abstract

Empire Corp is a successful company in launching self-developed online casino web game However, due to the restriction from the government on this kind of game, the company is facing challenge in sustaining the growth of the company with that set of game It has been decided to develop another set of new game which is not restricted by the government to reduce the portfolio risk of the company as well as to maintain the growth rate In that context, a social online web game is selected to fulfill this goal

The project is designed to help Empire Corp come up with a marketing strategy to launch the new game The outcome of the research will be the proposed targeting segment, the marketing mix to help the game become a successful online game

Table of Contents

List of figures 1

Abbreviations 2

Chapter 1: Introduction 3

1.1 Rational of the study 4

1.2 Statement of the problem 4

1.3 Research questions and objectives 4

1.3.1 Research objectives 4

1.3.2 Research questions 4

1.4 Research approaches 5

1.4.1 Qualitative research 5

1.4.2 Quantitative research 6

1.5 Scope of the study 6

1.6 Structure of the study 6

1.7 Significance of the study 7

Chapter 2: Literature review 8

2.1 Porter’s generic framework theories 9

2.1.1 Cost leadership strategy 9

2.1.2 Differentiation strategy 10

2.1.3 Focus strategy 11

2.2 Ansoff’s matrix 11

2.2.1 Market penetration 12

2.2.2 Market development 12

2.2.3 Product development 13

2.2.4 Diversification 13

2.3 Marketing mix 13

2.4 Customer participation and personalization 15

2.5 Product levels: the customer-value hierarchy 16

Chapter 3: External and internal environment 18

3.1 External environment 19

3.1.1 Types of online games 19

3.1.2 Market overview 20

3.1.3 Competitors 24

3.1.4 The barrier of the industry 27

3.2 Internal environment 29

3.2.1 Empire Corp overview 29

3.2.2 People 29

3.2.3 Processes 30

3.2.4 Program 31

3.2.5 Performance 31

Chapter 4: Data analysis and findings 32

4.1 Characteristics of the respondents 33

4.2 The loyalty segment 33

4.3 The high value segment 35

4.4 Community loyalty 37

4.5 Crucial factors: IT infrastructure and customer service 39

4.7 Customer participation and personalization trend 42

Chapter 5: Proposed Marketing Strategy 43

5.1 SWOT Analysis 44

5.1.1 Strength 44

5.1.2 Weakness 44

5.1.3 Opportunity 44

5.1.4 Threat 45

5.2 Proposed marketing strategy 45

5.2.1 Objectives 45

5.2.2 Segmentation, targeting, positioning 46

5.2.3 Differentiation and competitive advantages 46

5.2.4 People 47

5.2.5 Processes 47

5.2.6 Product 48

5.2.7 Price 49

5.2.8 Place 50

5.2.9 Promotion 51

5.2.10 Performance 51

5.2.11 Evaluation and control 51

5.2.12 Conclusion 52

References 53

Appendix 54

5.3 Online game survey 54

List of figures

Figure 2-1: Porter's generic framework 9

Figure 2-2: Ansoff's matrix 12

Figure 2-3: Product levels 16

Figure 3-1: Gunny web game published by VNG 22

Figure 3-2: Tam Quoc Truyen Ky published by SGame 22

Figure 4-1: Respondent occupation 34

Figure 4-2: Hours spent per day on online game 34

Figure 4-3: Number of games played last year 34

Figure 4-4: Age of the users who spend more than 300,000 VND per month on online game 35

Figure 4-5: Expense per month on online game of segment age above 23 36

Figure 4-6: Expense per month on online game of segment age below 23 37

Figure 4-7: The benefit apart from relaxation gets through playing online game 38

Figure 4-8: The top most reason makes users stop playing an online game 40

Figure 4-9: How users know about a game 41

Figure 4-10: Do users' colleagues play online game together with them? 42

Abbreviations

SWOT : Strength, Weakness, Opportunity and Threats

MMORPG : Massively Multiplayer Online Role-Playing Game

ADSL : Asymmetric Digital Subscriber Line

Chapter 1: Introduction

1 RATIONAL OF THE STUDY

2 STATEMENT OF THE PROBLEM

3 RESEARCH QUESTIONS AND OBJECTIVES

4 RESEARCH APPROACHES

5 SCOPE OF THE STUDY

6 STRUCTURE OF THE STUDY

7 SIGNIFICANCE OF THE STUDY

1.1 Rational of the study

Empire Corp (name disguised) was established around 3 years ago and has been very successful in developing and launching a set of casino online games The growth rate of the company is quite impressive and has now reached the size of more than 70 employees and owed a 3 million user market size However, lately, the CEO of the company sensed that it’s unlikely the company could keep the existing growth rate with the existing games due to the more and more aggressive competition and the un-support government policies in developing that kind of online games which had been a very big barrier to the growth of the company

To continue growing the company to the next level, it is necessary to move forward with a different path Several different kinds of games were investigated and the conclusion came to a horse racing online social game

1.2 Statement of the problem

The horse racing online social game has been put under development and is about to finish However, the marketing strategy to launch the game has not been considered up till now It’s the time to work on the marketing strategy so that the game can be launched successfully

1.3 Research questions and objectives

1.3.1 Research objectives

In order to solve the problem above, the research has the following objectives:

1 To analyze the current situation of the company and the market

2 To identify the target segments which the game should focus on so that

3 To identify the positioning of the new game as well as its points of differentiation

4 To identify the marketing mix strategy to launch the new game successfully

1.3.2 Research questions

The research problem leads to the following research questions:

1 What segments should the game target to?

2 What should be the core values the game provides?

3 What should be the positioning point of the game?

4 What are the differentiation points of the game?

5 What marketing mix should the game apply?

1.4 Research approaches

1.4.1 Qualitative research

As the existing game has shown to be quite successful, a focus group research is done on the representative users to collect the attributes contributing to its success so that we can leverage those to the new game A group of 15 members are gathered in which 10 from the community leaders inside the game communities and 5 from the most active users The interview is done to expose the information on:

 How they knew the game

 The interesting characteristics of the game which has been keeping them the users of the game

 The attributes motivate them to be the community leaders and the active users

The interview is done with the following questions:

1 How do you know about the game?

2 How long have you been playing the game?

3 How much time and money you spend on the game?

4 What makes you spend much effort to build the community around you?

5 Who do you invite to your community?

6 Are there any comments, suggestions for the company?

7 Are you playing any other game?

1.4.2 Quantitative research

This is done through survey on the top leading game forums in Vietnam with the sample size of 1113 gamers: www.vn-zoom.com, forum.gamevn.com, www.go.vn/diendan, diendan.zing.vn, fgt.vnexpress.net, forum.playpark.vn It is expected through the survey to understand the most attractive attributes of the game that the potential game users expect so that proper strategy can be proposed to fit the needs of the users as well as to proper way to reach them To increase the response rate of the survey, the forum administrators and the high reputation forum users are contacted to post the survey onto the forum

1.5 Scope of the study

The scope of the study is to analyze the market, the consumers, the competitors

as well as the company itself so that proper marketing strategy can be proposed to launch the game successfully The detail marketing plans as well as the financial issue are not covered in this study

1.6 Structure of the study

This study is structured into five chapters as following

CHAPTER 1: INTRODUCTION

This chapter provides an overview on the purpose “WHY” the study is conducted,

“WHAT” is the problem that needs to be addressed, “HOW” the problem should be addressed as well as the scope and the contribution of the study

CHAPTER 2: LITERATURE REVIEW

This chapter covers the literature review related to the study It mentions the theories, concepts that are useful in analyzing the situation as well as in proposing the suitable marketing strategy in the study

CHAPTER 3: EXTERNAL AND INTERNAL ENVIRONMENT

This chapter analyzes the secondary data on the market trend, users’ attributes and competitors It also presents the overview information of the Empire Corp and

its existing marketing mix per the updated 4Ps: People, Processes, Program and Performance

CHAPTER 4: DATA ANALYSIS AND FINDINGS

This chapter analyzes the primary data collected through the focus group interview and the survey research and also present the findings based on the analysis which used to solve the research objectives and questions described in chapter 1

CHAPTER 5: PROPOSED MARKETING STRATEGY

This chapter analyzes the SWOT of the Empire Corp Based on that and the data analysis and findings in chapter 4 as well as the market trend in chapter 3, the proposed marketing strategy is presented which identify the target segments and the marketing mix for the new game

1.7 Significance of the study

The study provides great value to the company in driving the new product into a proper path so that the target revenue can be achieved and the growth rate of the company can be sustained in the upcoming years

Chapter 2: Literature review

1 PORTER’S GENERIC FRAMEWORK THEORIES

2 ANSOFF’S MATRIX

3 MARKETING MIX

4 CUSTOMER PARTICIPATION AND PERSONALIZATION

5 PRODUCT LEVELS: THE CUSTOMER VALUE HIERARCHY

2.1 Porter’s generic framework theories

According to Porter (1998), a company can use Porter’s generic framework theories to identify its optimal position in the industry The one places itself in the correct optimal position would definitely generate more profits than ones who are not A company should analyze its strength and weakness to identify its competitive advantages Michael Porter argued that a company’s strength ultimately could be placed into two categories: cost advantage or differentiation Application of those strengths in either a broad (industry wide) or narrow (market segment) scope results in three generic strategies: Cost leadership, differentiation and focus

Figure 2-1: Porter's generic framework

2.1.1 Cost leadership strategy

Cost leadership means that the company wanting to adopt this strategy is trying to

be the producer with the lowest production cost in an industry The results of such

a strategy is that the company who try to be the cost leader sells products at an industry average to earn higher profits than competitors or goes below the industry

average to steal market shares from rivals If a company has sufficient strength to

go below competitor products in price, this can be of advantage in order to grab market shares from the opposed, weaker company This strategy usually targets a broad market, which in my view makes sense, as one need to sell higher volumes

in order to maintain a healthy level of profits

One of the helping factors playing into a successful cost leadership strategy is that the market one is selling into should have a relatively high level of price sensitivity This is because greater price sensitivity increases the advantage a cost leader has over other firms

2.1.2 Differentiation strategy

A differentiation strategy is when the company develops a product or service that offers unique attributes that are valued by customers and that customers perceive

to be better than or different from the product of the competition The uniqueness

of the product allows for the company to charge a higher price The higher price also reflects the fact that with a differentiation strategy the customer base will usually be smaller and the production costs might be higher Therefore, some of the costs are passed on to the customers

In order to succeed with a differentiation strategy there is a need for a unique internal strength within the company This can be a strong sales force that can communicate the strengths of the product, access to leading research and development teams and good corporate reputation

It was found that companies that were successful in their differentiation strategy had three tactics which were significantly related to organizational performance These included innovation in marketing technology and methods, fostering innovation and creativity and focus on building high market shares In order to succeed with a differentiation strategy a company needs to be able to be new and creative both in terms of understanding customer needs and connecting with their customer in order to differentiate themselves from the competition and to create better customer value

2.1.3 Focus strategy

A focus strategy is concentrated on a narrow market segment where the company tries to achieve either cost advantage or differentiation According to Porter, a focus strategy means that the needs of the group can be better serviced This often results in a higher degree of customer loyalty, which gives the companies successfully using a focus strategy an advantage in that it discourages direct competition

Akan et al (2006) identified four tactics that appear to be critical for organizations adopting a focus/low cost strategy These are providing outstanding customer service, improving operational efficiency, controlling the quality of products or services and extensive training of front-line personnel From this I found that these changes are actions or focuses that put emphasis on changes internally in the organization to improve the offering to the customer It seems to me to be changes that are geared towards making a cohesive and holistic offering of a particular kind that serves the customer need

From the same paper as mentioned above (Akan et al., 2006), two significant tactics for success in a focus/differentiation strategy is mentioned These are producing specialty products and services and producing products or services for high price market segments The findings from this is that in order to succeed with

a focus/differentiation strategy the company needs to know their customers particularly well as selling in this segment often means that the product range is narrow but of high quality or tailored to a specific taste or need Firms that succeed

in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well

The Ansoff Product-Market Growth Matrix by Igor Ansoff (1957) portrays alternative corporate growth strategies It focuses on the company’s present and potential products and markets The matrix is meant as help for companies to understand what actions need to be carried out given current performance

Figure 2-2: Ansoff's matrix

As an example of a suitable scenario for implementation on Ansoff’s matrix could

be a company that is in need of a strategic change in order to maintain growth In relation to Ansoff’s matrix this means that a company need at some point in their growth phase to make a decision as to what products or services they should offer

in which markets

2.2.1 Market penetration

The market penetration strategy is said to be the least risky since it uses and builds upon the company’s existing resources and capabilities If the market is growing, a company maintaining market share can experience growth If for example, competitors reach capacity limits; this should be an opportunity for other companies to take market shares It is important to point out that market penetration has its limits, because of market saturation If the market saturates, companies must use another strategy in order to continue their growth

2.2.2 Market development

A market development strategy means that the company moves beyond its immediate customer base towards attracting new customers for its existing products One aspect needs to take into account when considering a market development strategy are barriers to entry These barriers to entry to the market

might have implications for the short and long term contribution to overall profitability

2.2.3 Product development

A product development strategy retains the present mission and develops products that have new and different characteristics such as improving the performance of the mission It is argued that this strategy will be most effective if the company’s strengths are related to its specific customers rather than to the specific product itself The reasons for wanting to implement a product development strategy can be to utilize excess production capacity, counter competitive entry, maintain the company’s reputation as a product innovator, exploit new technology, and to protect overall market share One appropriate step

in developing a new product to its existing customers could be to identify a customer need either by looking at competition or discovering a need-opportunity This strategy is said to carry more risk than attempting to increase market share for example

2.2.4 Diversification

Diversification strategy means that moving simultaneously into new products and new markets It is the most risky strategy of the four However, with careful selection of the right kind of business considerable improvements in profitability can be achieved It is important to note that diversification may be into related and unrelated areas Related diversification may be in the form of backward, forward, and horizontal integration A diversification strategy is likely more suitable for well-established, capital strong companies The advantages of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk

2.3 Marketing mix

The traditional marketing mix is the following 4Ps: product, price, place and promotion

 Product: the product is the physical product or service offered to the consumer In the case of physical products, it also refers to any services or conveniences that are part of the offering

 Price: the price variable of the marketing mix refers to an organization’s pricing policies which are used to define pricing models and to set prices for products and services Company must consider its service level before setting the pricing strategy Offering very low prices may lead to low level of customer service while it may not acceptable for customers who have poor support and a bad experience may stop them using the service again Company must think about establishing its brand through products and quality of service rather than having the lowest prices

 Place: the place element of the marketing mix refers to how the product is distributed to customers Typically, for offline channels, the aim of Place is

to maximize the reach of distribution to achieve widespread availability of products while minimizing the costs of inventory, transport and storage In

an online context, thanks to the ease of navigating from one site to another through hyperlink, the scope of “Place” is less clear since Place also relates

to Promotion and Partnership Successful retailers are those that maximize their representation or visibility on 3rd party sites which are used by their target audiences These 3rd party sites will include search engines, online portals about mobile phones and product comparison sites

 Promotion: the promotion element of the marketing mix refers to how marketing communications are used to inform customers and other stakeholders about an organization and its products

However, given the breadth, complexity, and richness of marketing, Kotler (2011) thinks that clearly these four Ps are not the whole story anymore If we update them to reflect the holistic marketing concept, we arrive at a more representative set that encompasses modern marketing realities: people, processes, programs, and performance

 People reflect, in part, internal marketing and the fact that employees are critical to marketing success Marketing will only be as good as the people inside the organization It also reflects the fact that marketers must view consumers as people to understand their lives more broadly and not just as they shop for and consume products and services

 Processes reflect all the creativity, discipline, and structure brought to marketing management Marketers must avoid ad hoc planning and decision making and ensure that state-of-the-art marketing ideas and concepts play an appropriate role in all they do Only by instituting the right set of processes to guide activities and programs can a firm engage in mutually beneficial long-term relationships Another important set of processes guides the firm in imaginatively generating insights and breakthrough products, services, and marketing activities

 Programs reflect all the firm’s consumer-directed activities It encompasses the old four Ps as well as a range of other marketing activities that might not fit as neatly into the old view of marketing Regardless of whether they are online or offline, traditional or nontraditional, these activities must be integrated such that their whole is greater than the sum of their parts and they accomplish multiple objectives for the firm

 Performance is defined as capturing the range of possible outcome measures that have financial and nonfinancial implications (profitability as well as brand and customer equity), and implications beyond the company itself (social responsibility, legal, ethical, and community related)

2.4 Customer participation and personalization

Kotler (2011) also points out in the modern marketing realities that consumers have found an amplified voice to influence peer and public opinion In recognition, companies are inviting them to participate in designing and even marketing offerings to heighten their sense of connection and ownership Consumers see their favorite companies as workshops from which they can draw out the offerings they want

Besides, thanks to advances in factory customization, computer technology, and database marketing software, companies can make and sell individually differentiated goods

2.5 Product levels: the customer-value hierarchy

In planning its market offering, according to Kotler (2011), the marketer needs to address five product levels Each level adds more customer value, and the five constitute a customer-value hierarchy

Figure 2-3: Product levels

 The fundamental level is the core benefit: the service or benefit the customer is really buying A hotel guest is buying rest and sleep The purchaser of a drill is buying holes Marketers must see themselves as benefit providers

 At the second level, the marketer must turn the core benefit into a basic product Thus a hotel room includes a bed, bathroom, towels, desk, dresser, and closet

 At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this

product Hotel guests minimally expect a clean bed, fresh towels, working lamps, and a relative degree of quiet

 At the fourth level, the marketer prepares an augmented product that exceeds customer expectations In developed countries, brand positioning and competition take place at this level In developing and emerging markets such as India and Brazil, however, competition takes place mostly

at the expected product level

 At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future Here is where companies search for new ways to satisfy customers and distinguish their offering

Chapter 3: External and internal

Social game

A social game can be considered as a casual game plus It owns the simplicity attribute which require no special skill to play and no long time commitment However, the key differentia here is it involves social interaction It encourages community activities and interactions It is a game not only for personal relaxation but also a place where people can build network relationship through the advance internet technologies Social games are also typically played on a personal computer online in a web browser

Web game

Web game or browser game is a computer game that is played over the Internet using a web browser Browser games can be created and run using standard web technologies or browser plug-ins Browser games include all video game genres and can be single-player or multiplayer Browser games are also portable and can

be played on multiple different devices or web browsers

Browser games come in many genres and themes that appeal to both core players and casual players

Client game

Client games are games require users to download a piece of client software and have it installed on their personal computer in order to play the game Client games typically have sophisticated graphics, gameplay and are normally the MMORPG games

MMORPG

Massively multiplayer online playing game (MMORPG) is a genre of playing video games in which a very large number of players interact with one another within a virtual game world As in all RPGs, players assume the role of a character (often in a fantasy world) and take control over many of that character's actions MMORPG typically have sophisticated graphics, gameplay and require a huge investment in developing them

role-3.1.2 Market overview

The dawn day of game online industry

The first noticeable event of game online industry in Vietnam is the introduction of ADSL service in Jun 2003 The birth of the ADSL service significantly improved the internet bandwidth which opens the opportunity to the game players to experience the online game entertainment The growth of the ADSL service along with its price drop is an important factor contributing to the blossom growth of today’s game online industry

As soon as the infrastructure was improved, the first online game named MU which was a client MMORPG game produced by a Korea company had taken its chance to flourish in 2003 Even though there were no legal framework for online game existed at that time, many people had set up private servers to host the game due to the leak of the game source Soon enough, the game was spread rapidly to all game player communities

Since then, many industry big players like VNG, Asiasoft, FPT Online, VTC… took turn to establish, imported and distributed various client games from China and Korea to the market

The trend of web game

Till 2008, especially from 2009 to 2010, the game studios in China had turned their attention to develop online web game They not only focused on the China domestic market, but also put their foothold onto the South East Asia countries like Vietnam, Singapore, Philippines, and Malaysia Vietnam was always being considered as the most potential market in South East Asia; it is naturally that the China game studios had targeted it to be the major market to enter which brought the new trend of online web game to the Vietnam game online industry

The first web game was introduced in Vietnam was named “Linh Vuong” distributed by VTC It was a perfect success story in the year of 2009 Following this successful step was the game “Dac Ky”, “Dai Gia” from the game publisher SGame in year 2009 – 2010 However, as it was still a new trend, it was not attracted enough attention from all game publishers Many of them were still focusing on the sophisticated client game in the old days and not yet invested enough time and money to investigate its potential

However, the year 2011 had marked an important milestone which the game publishers would need to revisit their strategy in distributing the online game The milestone was set by the spectacular success from the two web game products Gunny and Tam Quoc Truyen Ky It was said that these two products had contributed greatly to the development of web game trend in Vietnam market Built with a simplicity playing style, combined with the strength from the Zing Me community – a social network from VNG, the leading game publisher in Vietnam, Gunny was a casual game which created a WOW effect from the game players in year 2011 This was considered to be the game which took the first rank in the game hit list from Audition published by VTC; a client game had dominated the casual style game for a very long time

Figure 3-1: Gunny web game published by VNG

As for Tam Quoc Truyen Ky, it was a phenomenon in Vietnam market which attracted hundreds of thousands of users in just 7 days It was a strategic game with much improvement comparing to the similar ones The game was accepted rapidly by a large number of game players

Figure 3-2: Tam Quoc Truyen Ky published by SGame

After that, a series of web games were published to Vietnam market and had achieved a certain success level like Ngao Kiem, Nhat Kiem, Vo Lam Chi Mong, Thap Nien Nhat Kiem, Pockie Ninja, and Ngoa Long…

It could be said that Gunny and Tam Quoc Truyen Ky were the father who found the web game foundation for the online game industry in Vietnam Due to its simplicity in the gameplay and requires not long time commitment, it’s very suitable for the business officers who do not have much time to spend online Hence, the trend of game is a promising market

Web game and client game co-exist in year 2012

South East Asia is an attractive market for the game studios, in which, Vietnam is the most potential one China has the biggest impact to the game online industry

in Vietnam who provides the majority of the web and client games The big companies like Perfect World, Shanda, Uuzu, Kunlun, Soho, Tencent, Giant Entertainment… are targeting Vietnam as the strategic market for them to expand their business due to its potential growth

More and more client game and web games will be launched in the year 2012 The success level of the game will be, of course, decided by the game players Whatever game satisfies the needs of the users will be presence on the hit list of the year no matter it is a web game or client game

2D game vs 3D game

Looking at the warm welcome from the game communities to the game Battle Star, Kiem Tien in the recent days, it also unleashes the promising land for the 3D games This is because the 2D, 2.5D games have been dominated the market for

a very long period of time, from 2009 till the first quarter of 2010, because of the low hardware configuration of the PC This fact caused bored to the game players who are now looking forward to experience new style of gameplay

With the improvement of the hardware technologies, the PC configuration nowadays was two to three folds stronger than the ones back in 2008 – 2009 This

was a crucial factor which helped the MMORPG 3D game to be introduced and started dominating the market

Looking at the great success from Kiem The at the end of year 2009, and then, the success of the game Tay Du Ky, MMORPG 2D games were losing their foothold

on the market This was a sign that 2D games will be sharing more and more market share with the 3D games

However, this did not mean that 2D games would be disappeared This was because of two reasons First of all, 3D games required sophisticated interaction with the game users Many game users did not like sophisticated actions They looked for simple game for their relaxation The simplicity interaction in 2D games served that purpose This is especially true for the old age game users who most preferred the point & click style games Secondly, the 3D games required much greater investment to develop and hence would definitely cost the game publishers more in paying the licensing and loyalty fee Comparing to distributing the 2D games, the initial investment was much smaller which lowered the risk in distributing the games

Vietnam – The most potential game market in South East Asia

Based on the market research from Nikko Partners in its “Game market report in South East Asia year 2011”, the industry in Vietnam is still growing and is leading the area in terms of revenue The market size for South East Asia in year 2015 will

be near 1 billion USD with the amount of near 100 million game users

Nikko Partners also reported the revenue from game in year 2011 in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam reached the number of

474 million USD Comparing to the number of 405.7 million USD in 2010, the revenue of the area had increased more than 17% It also forecasted the revenue

in 2014 will be nearly double and reach the number of 833.7 million USD

3.1.3 Competitors

It is easy to identify the key players in this game online industry More than 60% of the games were distributed by them (Ivan, 2010) The biggest one was VNG It

achieved tremendous growth from a few members established in 2004 Only after

6 years of development, VNG has marked its leading foothold in the industry both

in terms of the number of distributed game and the number of game users in Vietnam Its revenue exceeded 50 million USD in 2009 and covered more than 50% of the market size (Ivan, 2010)

Following the step of VNG, VTC was founded later However, based on its strength in finance and communication power together with the right strategy, VTC had set itself to the leadership level of the industry with several very successful games: Audition in music entertainment, Dot Kich in shooting area and Fifa Online

in the sport category Leveraging its communication channel, the events organized

by VTC always attracted attentions from the community Besides, VTC also expressed its big ambitions in the industry in setting its strategy to distribute games to foreign countries like Korea, China, Indonesia, Cambodia, US, and Russia…

The 3rd key player in the market was FPT Online It had strong support from its mother company group: FPT Group both in terms of finance and the IT technology knowledge Though, it did not own many games, but clearly it had distributed a few very successful games to the market including the 6-year-old MU game, Thien Long Bat Bo which ranked top in the most successful MMO game in Vietnam and the newest game Tay Du Ky which was marketing heavily in 2010 All of those put FPT onto the top 200 private company in Vietnam (Ivan, 2010)

The 4th key player was Asiasoft Its success had been tied with the once most popular game Gunbound and then Hiep Khach Giang Ho, Tam Quoc Chi and the blockbuster Cabal

Although the market size was huge, however, those key players are only targeting themselves as the game publishers Nearly all of the games are imported from China and Korea Games developed from scratch by Vietnamese company like Thuan Thien Kiem are able to be counted on the fingers Besides, most of the imported games belong to Wuxia and action genres which government office