Online games in Turkey
Last week, Diane was at an Online Games summit in Ankara, keynoting the event and meeting actors of the Turkish online games industry. It was a honour to be invited there, and she was very happy to learn more about the Turkish market, which is one of the big ones in Europe already, and is still in a phase of rapid growth.
As more Asian and American eyes are turning to the European market (since market is less mature and the Chinese market is increasingly closed), Turkey is emerging as a rising star of the European region for online games. The country has the second biggest population of the region, and a majority of them are young (60% are under 35) and educated. According to a recent Comscore report, Turkey is the 3rd most engaged Internet audience in the world. The games websites category there has a 68% penetration, higher than in the UK. According to government statistics, 24% of Turks aged 16+ played network games with other people in 2008.
Early entrants like Joymax, K2 Networks or Gameforge have had a lot of success. As the industry grew, companies like GameSultan or GGC rised from the country’s 20,000 cyber-cafe ecosystem to become local operators, handling distribution, payment systems, localization… At its peak, Knight Online is thought to have earned $1M/month from its Turkish operations. Metin2 is thought to have as many as 3 Million active Turkish users. The success of these games has encouraged actors already well implanted in Europe to localize and operate their games in Turkey. New entrants on the European market like Korean publisher NHN are preparing Turkish versions of their games in the very first served.
Browser based and social networks games are also growing a lot . There are more than 14M Turkish members on Facebook, Turkey is the 3rd biggest country on the platform country on the platform. 53% of the Turkish Internet population is on Facebook, and games like Farmville have a very important community of Turkish players . The Flash games website oyunlar1 has more than 6.5M unique visitors. Virtual worlds are growing, as shows the success of Sanalika, which grew to 3M registered users in 6 months.
This huge growth does not come without challenges – some of them are common to many other online games markets, but some others are specifically Turkish. Due to the young age of Internet users and gamers there, there is a lack of mainstream gaming culture which makes difficult to reach new audiences. The home broadband offering has download limitations, which prevent most users from playing from home as getting over the allowances is super expensive. An academic study of 2009 has shown that 78% of Turkish Internet cafe gamers have a PC at home.
This reliance on cyber-cafes have given them a lot of power in the value chain and has made it difficult to distribute new games in the territory, giving a big advantage to already existing distributors. As there are few players and the market is becoming increasingly competitive, the industry will have to become more professional. This should make some issues like e-pin smuggling and VAT evading less acute in the coming years.
There’s also the problem of how to increase the ARPU and how to better monetize besides the system of e-pin (codes sold by the cyber-cafes) – as the gaming population is still in majority under 24, it means opening more accessible means, like pre-paid cards and SMS payments.
The industry is also trying to improve relationships with the government, as recently 6,000 websites have been temporarily banned by the Turkish Internet Bureau, including Farmville, LastFM and MySpace.
The very specific demographics of gamers in Turkey, younger and more male than elsewhere, also leave plenty of room for growth outside of this segment, so maybe we’ll see more games targeted to kids, girls and adults in the future.
Also, there are more and more Turkish development teams with interesting projects, so maybe we won’t have to wait long before we see a Turkish success story overcoming the domestic boundaries, a la Ankama or a Travian Games?
A new edition of the conference should happen in 2010, Diane recommends it for anyone wanting to get more info on this fast-evolving market!
EDIT : Here is also the link to the GFK research on the Turkish market that was presented at the event