SOFT-WORLD GROUP

SOFT-WORLD GROUP
2014 Outlook
Investor Relations
May 2014
1
Outline
 Market Trends in Gaming Industry
Section I Business Outlook
 Soft-World Group Overview
 Game Distribution
 Game Development
 Game Publishing & Operation
 Third Party Payment
Section II Financial Report
 2013 Chinese Gamer Consolidated Income Statement
 2013 Soft-World Consolidated Income Statement
2
Market Trends
in Gaming Industry
3
Gaming Industry Production Line
Soft-World Group
Upstream
Development
Midstream
Downstream
Game Publishing & Operation
Distribution Channel
Content Design
Server System
Product Positioning
Packaging Design
Art/Graphic Design
Membership System
Marketing Promotions
Packaging Process
Programming
Data Security System
Advertising
Product Distribution
Music Production
Billing System
Brand Collaboration
Prepaid Game Card
Stability Testing
Network System
PR/Media Exposure
Channel Marketing
Game Localization
Website System
24/7 Customer Service Cyber Café Collaboration
4
Evolution of Global Gaming
Mobile Game
Market Size Has Been
Growing Over Years!
Social Game
Browser Game
Free Play
MMORPG
3D Subscribed
MMORPG
2D Subscribed
MMORPG
PC Game
← 2000
2001
2005
2006
5
2008
2009
2011→
Trend of Global Gaming Market
2012 - 2016
《MMO GAMES》
• Market Share: 19.8%→22.7%
• CAGR: 10.4%
13.8%
17.4%
21.1%
27.8%
24.6%
2012 - 2016
《MOBILE GAMES》
• Market Share: 13.8%→27.8%
• CAGR: +18.8% ˃ 6.7%
Source：NewZoo，July 2013
6
2013 Mobile Gaming Market in Asia
Country
Taiwan
China
Japan
Korea
Mobile Gamer
8 Million↑
180 Million↑
30 Million↑
25 Million↑
(Population)
(23 Million)
(1.3 Billion)
(120 Million)
(50 Million)
Market Size
In USD
200 Million↑
1.7 Billion↑
3.3 Billion↑
660 Million↑
NO. 12
NO. 3
NO. 2
N/A
NO. 6
N/A
NO. 1
NO. 2
Tower of Saviors
GunZ Dash
Puzzle &
Dragons
Taiming Monster
Global
Revenue
Ranking
No.1 Game
※ App Store Revenue Ranked NO.1：USA
※ Google Play Revenue Ranked NO.3：USA
Source：MIC(2013/09)、NewZoo(2013/07)、AppAnnie(2014/01) 、News Reports
7
SOFT-WORLD GROUP
OVERVIEW
8
Soft-World Group Structure
Soft-World Group
Mobile Platform
Cloud
Computing
E-commerce
Chinese Gamer
Zealot Digital
Lingo Soft
Fun Yours
Soft Star
User Joy
Game Flier TW
Game Flier CN
Game First
Taomee Taiwan
Soft World TW
Soft World HK
Soft World SG
Pay2go
Wise Cloud
Jorsen
CCMG
51
%
97
%
45
%
15
%
6
%
4
%
95
%
100
%
70
%
28
%
100
%
100
%
100
%
100
%
51
%
80
%
1
%
9
9
Game
Distributor
Game Publisher/
Operator
Game Developer
 Listed Companies highlighted
Main Subsidiaries
Developer
Publisher/Operator
Distributor
Company
Chinese
Gamer
Zealot Digital
Game Flier
Game First
Soft-World
Founded
March 2000
February 2008
July 2002
July 2005
July 1983
Ticker Symbol
3083
N/A
N/A
N/A
5478
Listed
December 2003
N/A
N/A
N/A
March 2001
Market Cap
(as of May 2nd)
5.32 Billion
N/A
N/A
N/A
13.51 Billion
Capital
874 Million
425 Million
406 Million
360 Million
1.27 Billion
Employees
524
208
272
109
375
 Market Cap & Capital in TWD
10
Game Distribution
11
No.1 Game Point Card
Market Share
Provide
Collaborate with
Sold in
over 50%
in Taiwan
1500
5 Million
400
50,000
Game Cards
Sold per Month
Games & Services Content Providers
Over 200 Mobile Games
provided by
100 Game Company
Physical Stores
Game Payment
Content Service
Social Platform
PC Games
Music
Streaming
EXCLUSIVE
MMORPGs
Value-Added
Service
Brower Games
Mobile Games
Casual Games
12
Fortune Telling
Online Dating
In-House Game Distribution
Type
In-House
Development
In-House Publishing
Amount
Online Game
70↑
Mobile Game
20↑
13
Non In-House Game Distribution
Type
Non In-House Products
Amount
PC Game
Online Game
Browser Game
1200↑
Mobile Game
200↑
14
Soft-World’s Distribution Channels
Convenience
Stores
OK
Text
Hi-Life
MyMall
Family Mart
Telecom Bill
7-Eleven
Physical
Channel
65%
Web ATM
Internet Bill
Telecom Stores
Online Shopping
Cyber Cafes
Credit Card
Retail Stores
DSL Bill
Bookstores
e-PLAY Platform
PayPal
3C Stores
15
Virtual
Channel
35%
in Overseas
Overseas Channels
7-Eleven
Chain Stores
Hong Kong,
Macau
Thailand
Brunei
Retail Stores
Taiwan
Vending Machines
Vietnam
Malaysia
Philippines
Indonesia
Singapore
Cyber Cafes
Online Payment
Cellphone Payment
Australia
Cellphone Refill
16
Game Development
17
2014 Online Game Launch Plan
Zealot Digital
2013 Blockbuster
Adapted from a Household Taiwanese Puppet Show
PiLi Online
• Launched in Q1 2013
• Puppet Show Fans Targeted
• A Huge Success
2014 Product Pipeline
GuLong Online
• Adapted from a famous
Chinese Kung Fu novel
• Launched in May 2014
Fate Hunter Online
PiLi Online II
• To be launched in
H2 2014
18
• Adapted from an
Taiwanese online fiction
• To be launched in H2, 2014
2014 Mobile Game Launch Plan
Chinese Gamer
2013 Blockbuster
SAKURA
TS TOUCH
• Successfully Licensed
in Taiwan & Japan
• Adapted from TS Online
2014 Product Pipeline
I AM HERO、CPBL TOUCH、
DRAGON PROTECTER、DRAGON MACHI & more
Zealot Digital
2014 Product Pipeline
PILI FANTASY
1-2 more Mobile Games
to be Launched
• Adapted from PiLi Online
Soft-World
Over 100 famous
PC Game Titles
8-10 Mobile Games
to be Launched
2014 Product Pipeline
20 Mobile Games
to be Launched
To be Transformed
to Mobile Games
19
Game
Publishing & Operation
20
2014 Game Titles Publishing Plan
Game Flier
Online Games
Mobile Games
<5-7 Games to be Launched>
xcx
War Thunder,
Kingdom Under Fire II,
Dungeon Striker & more
<10-14 Games to be Launched>
Vegetable Hero, Shooting Hero, Devil Maker,
YJ Mobile, Dragon Nest Mobile & more
Game First: Exclusive Blizzard’s Partner in Taiwan
Operation
World of Warcraft
Distribution
Distribution
Star Craft II
Diablo III
21
Payment
Hearth Stone
Third Party Payment
22
Cross-Strait E-Commerce Markets
Taiwan E-Commerce Market
China E-Commerce Market
Unit: Billion in RMB
Unit: Billion in TWD
20000
1200
1000
15000
800
600
400
767.3
879.6
Over
1000
14000
Over
18000
2014(f)
2015(f)
10000
5000
200
0
10670
0
2013(e)
2014(f)
2015(f)
2013(e)
Source：MIC Taiwan, 2013
Source：Chinese News Reports, 2013
23
23
Soft-World’s Strengths
to Get into Payment Industry
Strong
Platform
Operating
Ability
Professional
IT System
Setup &
Support
Effective
Membership
Marketing
Strategies
Based on Decades of
MyCard Prepaid System Experiences
24
Reliable
Client &
Customer
Service
Pay2Go Integrated Payment Solutions
Pay2Go 100% Security
Escrow & Trust
Credit Card
WEB ATM
Virtual Account
CVS Payment Collect
Delivery Payment Collect
Deposit Account
Mobile App Payment
Cross Border Transaction
25
FINANCIAL REPORT
26
2013 Soft-World Consolidated Financial Report
(Unit: NTD in Thousand)
Q1
%
Q2
Operating Revenue
2,723,792 100 2,509,762
Cost of Goods Sold
1,772,176
%
Q3
%
Q4
%
Total
%
100 2,616,851
100 3,165,510
100 11,015,915
100
65 1,633,625
65 1,871,797
72 2,332,427
74 7,610,025
69
Gross Profit
951,616
35
876,137
35
745,054
28
833,083
26 3,405,890
31
Operating Expenses
794,250
29
760,617
30
745,178
28
826,024
26 3,126,069
28
Operating Income
157,366
6
115,520
5
(124)
0
7,059
0
279,821
3
23,269
1
21,017
1
16,253
1
33,718
1
94,257
1
3,301
0
(8,522)
(0)
2,076
0
(2,272)
(0)
(5,417)
(0)
Net Income Before Tax
183,936
7
128,015
5
18,205
1
38,505
1
368,661
3
Net Income After Tax
161,403
6
149,505
6
27,923
1
30,377
1
369,208
3
Non-operating Income
Share of Profits(losses) of
Subsidiaries and Associates
EPS
1.21
1.05
0.37
27
0.38
3.01
2013 Chinese Gamer Consolidated Financial Report
(Unit: NTD in Thousand)
Operating Revenue
Cost of Goods Sold
Q1
%
Q2
%
Q3
%
Q4
202,225 100 213,369 100 145,224 100
10,100
5
15,739
7
5
8,802
95
127,194
94 654,604
94
171,523 126 706,031
101
10 (39,751) (27) (44,329) (33) (51,427)
(7)
93 137,655
Operating Expenses
180,909
89 176,193
83 177,406 122
6
21,437
Non-operating Income
6,332
3
4,749
Net Income Before Tax
17,548
9
Net Income After Tax
12,766
6
EPS
0.15
100
6
95 197,630
2
22,021
3
26,186
12 (36,104) (25) (37,036) (27) (29,406)
(4)
29,409
14 (36,202) (25) (40,175) (30) (34,202)
(5)
0.34
3,647
(0.42)
28
3
7,293
6
%
42,210
192,125
11,216
Total
135,996 100 696,814
7,569
Gross Profit
Operating Income
%
(0.47)
5
(0.40)
Soft-World Assets
Unit: Thousand in TWD
2013
2012
2011
Current Assets
8,462,460
7,599,051
7,238,423
- Cash & Equivalents
3,591,200
2,767,653
3,539,802
Total Assets
9,605,921
8,939,543
9,050,077
ROE
6.39%
5.97%
8.39%
Chinese Gamer Assets
Unit: Thousand in TWD
2013
2012
2011
Current Assets
1,682,061
1,867,342
2,077,389
- Cash & Equivalents
475,289
593,226
1,848,609
Total Assets
1,863,573
2,119,429
2,401,186
ROE
-1.97%
2.52%
13.57%
 Current assets and total assets are based on the consolidated balance sheet.
29
Soft-World Dividend
Year
2013
%
2012
%
2011
%
EPS
3.01
100%
2.19
100%
3.27
100%
Dividend
per Share
1.80
60%
1.50
68%
2.50
76%
-Cash
1.80
60%
1.50
68%
2.50
76%
-Stock
0
0%
0
0%
0
0%
Chinese Gamer Dividend
Year
2013
%
2012
%
2011
%
EPS
(0.40)
100%
0.56
100%
3.62
100%
Dividend
per Share
0
0%
0.55
98%
3.30
91%
-Cash
0
0%
0.55
98%
3.30
91%
-Stock
0
0%
0
0%
0
0%
30
─ THANK YOU ─
31