The MGI Games segment (gamigo group), includes a broad portfolio of online PC, console and mobile games, including casual games, role-playing and strategy games. The most important markets are Europe and North America.
The so-called free-to-play massively multiplayer online games (MMOGs) account for the largest share of revenues.
Free-to-play means that users can basically play for free, but can purchase goods subject to a charge (so-called “items”) within the games. This business model requires continuous support of the games, in close coordination with the players. In addition to in-game events and competitions, new items (e.g. new costumes) and expansions (new functions, levels and opponents) are regularly developed and made available, which increase the gameplay fun and/or enable faster successes. Due to good support for the games, users often remain loyal to the game for several years and can invest money in the game as needed over the entire period. For many of our games, more than 50% of the revenue is generated by users who have been active in the game for more than 5 years.
MMOG means that there are often several thousand players in a game or in a server environment, interacting with each other and often organized in player communities (so-called “guilds” or “clans”), which in turn leads to a strong bond between the users and the game.
In addition, more than 5,000 casual games – mostly single-player games – are offered on the platforms of deutschland-spielt.de and WildTangent Inc., mostly sold via monthly subscriptions, which allow users to access all games on the respective portal as desired.
The video games market is characterized by a large diversity of products. The most common genres include action games, simulations and arcade games, followed by puzzles, adventures, casual games and strategy games. Due to the strong competitive landscape, the video games market is hit-oriented; many games on the market are discontinued after a short period of time; only a few have a long lifetime and generate profits. In MGI´s experience, games with a proven reputation can stay relevant in the market for 10 years and more. This is shown not only by gamigo’s titles, such as Fiesta Online (2006) or Grand Fantasia (2009), but also by competing products such as Eve Online (2003) or World of Warcraft (2004). Globally, video games companies generate revenues and profits via various business models, including the sale of games or game apps, the sale of in-game items, the sale of games subscriptions and the placement of advertisements in the games. The bulk of revenue within the video games market is generated by selling in-game items and premium versions of games.
With more than 2.5 billion gamers in the world, the video games market has stepped into the spotlight as an important digital entertainment industry. Emerging as a subculture back in the 80s and 90s, the global video games market has grown to be one of the largest digital entertainment industries with a CAGR of 13.4% between 2015-2019 and estimated sales of USD 152.1 billion in 2019. By 2022, the market is expected to have grown further to USD 196 billion, showing no signs of slowing down. Some games have become significant in size, attracting millions of players, hosting world championship events and creating a strong community among their players. In 2018, League of Legends held their World Championship event with 100 million viewers, to be compared with Super Bowls which had approx. 98 million viewers in 2019.
The global gaming activity is, and has historically been, dominated by individuals in the age group between 6-24 years old. In recent years, the age group between 25-34 years has grown significantly and represents the strongest growing age group with a 8% Year-on-Year (“YoY”) growth in 2018, making it the strongest growing cohort of players. Overall, the share of gamers is well-diversified between genders and age group. (source: Newzoo, global games market report 2019)