Nielsen Interactive Entertainment:

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• Nielsen Interactive Entertainment
• The Mobile Entertainment Consumer
  Active Gamer Studies
• Emily Della Maggiora, Vice President
• March 29, 2006

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Presentation Agenda

• NIE Overview / Research Background
• Mobile Entertainment Market Opportunity
• Mobile Attitudinal Segmentation
• Mobile Segments vs. Standard Demos
• Mobile Gaming through lens of NIE Segmentation
• Mobile Gaming and Active Gamer Crossover
• Active Gamer Market Opportunity
• Economics of the Video Game Marketplace

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Mobile Entertainment Consumer Active Gamer
Studies prepared by

• Nielsen Interactive Entertainment (NIE) is a
  dedicated unit of Nielsen Entertainment, a VNU
  company
• We aim to provide our clients the benefits of
  both global scale and industry specialization
• A client proactive division focused on the
  interactive entertainment industries delivering
  tactical research and strategic services
• Our goals are based upon a disciplined and
  creative approach to market information and
  research
• To better understand and provide for
  entertainment and interactive consumers
• To maximize clients profit potential and
  increase the overall commercial prospects of the
  industry

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Research Background

• For the first time in 2004/2005 videogame sales
  eclipsed US box office figures and the discussion
  of the third screen regarding mobile was
  gaining fast momentum
• Marketplace factors were dictating the need for
  consumer insights and a distinctive benchmark of
  consumer behavior to be trended over time
• Subsequently Nielsen embarked on 6 months of
  marketplace interviews with industry stakeholders
  to define the research scope identify the need to
  know information in mobile and gaming
• In October 2005 Nielsen conducted 2,000
  interviews per study, online, and weighted to
  offline incidence checks to deliver statistically
  significant results

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Mobile Entertainment Market Opportunity
Nielsen Media Research Home Tech Report provided
offline incidence statistics
Mobile Market Defined US Population 2004 US
Census 13-54 years Cell Phone Owner Have
active contract with US carrier (50/50
male/female) Mobile Ringtone Have downloaded a
ringtone Mobile Gaming Have downloaded a game
Mobile Video Have downloaded and viewed
mobisodes, mobile-exclusive commercials, movie
trailers, music videos, broadcast TV, or
watchtones onto their cell phone
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Mobile Attitudinal Segmentation

• In addition to providing marketers the
  traditional media breaks (age/gender) Nielsen
  chose to also pursue a multi-variant attitudinal
  segmentation strategy
• Consumer were exposed to a list of 20 statements
  regarding their attitudes about cell phones and
  asked to rate the question on a scale of 0 does
  not describe at all to 10 describes me very
  well
• Five market segments emerged out of question
  battery Communicators, Busy Bees, Spearheaders,
  Technophobes Utilitarian's

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Entertainment gluttons view their phones as
entertainment devices and spend a significant
amount of their time on gaming, watching DVDs and
movies in theatre and internet
Spearheaders
Highest Priority Segment 20 of mobile pop 29
million people
45 to 54
35 to 44
13 to 17
18 to 24
25 to 34
Feature Usage
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Phones are a means to socialize and seek features
that enhance their ability to communicate they
are the biggest fans of movie-going and DVD
watching during off hours
Communicators
High Priority Segment 15 of mobile pop 20
million people
45 to 54
35 to 44
13 to 17
18 to 24
25 to 34
Feature Usage
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Interested In Dowloading Games In Future

• Males under 25 (11) show the highest interest in
  future downloads, while the Spearheaders have an
  appreciable number of people interested in
  downloading. Important to note that Spearheaders
  have a notable 25-34yr constituency

Highlights broader market segment
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Average Cost Paid Downloading Games

• Traditional media segmentation highlights men
  under 25 as driving the price point for
  downloading games at 4.77 however the
  opportunity becomes more robust when you unveil
  the profile of the Communicator segment as 56
  female and also over indexing to the total at
  4.51 per game

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Times Downloaded a Game in 3months

• Spearheader segment skews male and has the
  highest frequency of game downloads during the 3
  month period at 2.9 games, which synchronizes
  with the males lt25 segmentation at 3.1 games

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Times Played a Mobile Game in 3months

• A reported average of 16.7 for 13-17 years is the
  second highest frequency of gaming however on
  either side of the 13-17 segment lands very
  robust figures for both the Communicators at 17.8
  and Spearheaders at 13.9 where 52 of these
  segments are 18-34 years an audience with
  clearly a higher discretionary income/market
  opportunity

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Mobile Gamer Active Gamer Crossover
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Active Gamer Market Opportunity

• The Active Gamer is defined by being a minimum of
  13 years old, own and personally plays on a
  gaming device and play at least one hour per week

8,958,394
6,146,578
33,143,801
9,130,101
18-34 representing 36 of the total marketplace
11,408,625
20,861,550
11,578,197
11,602,929
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What Do They Game On?

• There is significant levels of platform cross
  ownership with the majority owning at least a
  console (Playstation2, Xbox or Nintendo GameCube)
  and then one other platform PC or handheld
  device. Interesting three in ten or 29 of gaming
  own all three platforms demonstrating category
  commitment

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Who Do They Game With?

• Gaming is largely an independent activity however
  when someone else is involved it is more likely
  to be a friend or family member. In essence a
  game receives on average 1.9 exposures to
  consumers each time it is played

The connected experience has growing importance
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The WOW Factor

• World of Warcraft currently the most popular
  MMO game as of February 2006 reporting over 5
  million subscribers paying an average of 12 per
  month and it is not just men
• Current console connectivity has moderate numbers
  of adoption where next gen hardware is designed
  for an online experience (Xbox 360 / PS3 /
  Nintendo Revolution)

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Economics of Video Game Marketplace

• Marketplace economics
• Royalties
• Development costs
• Porting costs
• Next Gen Programming
• Learning curves
• Product delays
• SKU planning
• Challenges of 11 platform options
• Smaller penetration levels of next gen consoles

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Learnings Summary Gaming

• Next Gen 50 of active gamers stating they may
  wait until both the Xbox 360 and the PS3 are
  released before making a final decision
• Moving Online 57 of active games have played
  online
• Women are Playing While online-enabled console,
  MMO and gambling gamers are disproportionately
  male - 76 vs. 24 - casual gamers who play free
  online games such as puzzles are just as likely
  to be women as men, 49 vs. 51 respectively
• Good Scores on Mobile Gaming 18 of active
  gamers have downloaded a game to their cell
  phone, with nearly two-thirds (63) rating their
  experience from good to excellent

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Thank you!

• Questions please contact
• Emily.DellaMaggiora_at_NielsenEntertainment.com
• 323.860.4608