The online casual games market is growing rapidly,‭ ‬as anyone involved with the industry will attest.‭ ‬

Opportunities for advertising and cross-promotion with correlated media products are emerging as the bulk of the communications industry is consolidated on the Internet.‭ ‬There is such a high volume of entertainment choices on the Internet that,‭ ‬for a casual games portal,‭ ‬it takes a lot of careful planning and execution to stand out from the crowd.‭ ‬

In‭ ‬2008,‭ ‬our company,‭ ‬Spil Games,‭ ‬enjoyed a‭ ‬269%‭ ‬increase in total unique visitors in the‭ ‬US‭ ‬and‭ ‬76%‭ ‬overall,‭ ‬according to comScore.‭ ‬These increases would not have occurred had we not entered emerging Internet markets strategically, and aggressively.‭


Forging new territories
While the Internet markets in the‭ ‬US,‭ ‬UK,‭ ‬Germany,‭ ‬and‭ ‬France continue to rank among the highest worldwide for Internet usage and broadband penetration,‭ ‬we here at Spil Games are already looking to get in on the ground floor of markets that are currently in their infancy but have the potential for incredible growth.‭ ‬

Emerging market countries like‭ ‬China,‭ ‬Brazil,‭ ‬and‭ ‬Poland,‭ ‬with large,‭ ‬expanding populations,‭ ‬are slowly accelerating the development of their broadband Internet infrastructure.‭ ‬As Internet-access technology becomes more readily available,‭ ‬so too will the opportunities for online media production,‭ ‬particularly highly-accessible,‭ ‬browser-based casual games.‭


Why target emerging countries
Since our primary objective at Spil Games is developing and operating successful online casual game portals in multiple regions around the globe,‭ ‬part of our growth strategy is to enter markets where Internet-adoption rates are accelerating faster than normal.‭ ‬

Identifying parts of the world where Internet usage is projected to grow,‭ ‬and factoring in other variables such as local government regulations,‭ ‬PC install bases,‭ ‬etc.,‭ ‬help us identify the markets we estimate to be most receptive to our content.‭ ‬

While we obviously target established countries with a large and active user base of online gamers,‭ ‬the reason we also target emerging countries is that users in rapidly-accelerating Internet markets represent our ideal customer:‭ ‬they demand a low barrier of entry,‭ ‬they spend less time online per day than users in regions with ubiquitous Internet use,‭ ‬and they’re more likely to visit familiar sites repeatedly.‭

For the highly-competitive space of online casual game portals and online community destination sites,‭ ‬it's vital to get in on the ground floor of emerging Internet markets in order to establish and build a significant user base.‭ ‬

In addition,‭ ‬by getting an early start on researching and understanding these territories,‭ ‬we are able to construct a strategy that is flexible enough to adjust to unexpected changes in the region that might affect the acceleration of Internet use.‭ ‬

Taking into clear consideration the potential limitations of emerging markets helps prevent us from over-extending our reach,‭ ‬thus leaving ample resources for us to use to develop new content for our new customers.‭  


Targets for‭ ‬2009
From our research,‭ ‬we've identified‭ ‬China,‭ ‬Brazil,‭ ‬and‭ ‬Poland as the most promising territories for expansion of the online casual games industry in‭ ‬2009.‭


China
Considering the speed at which‭ ‬China’s technology industry is growing,‭ ‬it should be no surprise that we would identify this country as an emerging market for the casual games industry.‭ ‬With over‭ ‬298‭ ‬million Internet users,‭ ‬it has by far the largest Internet population in the world.‭

‬According to eMarketer,‭ ‬81.4‭ ‬million households in‭ ‬China currently have broadband access‭ (‬21.4%‭ ‬of the population‭)‬,‭ ‬and this is expected to grow at a rate of‭ ‬37.1%‭ ‬percent to‭ ‬148‭ ‬million households by‭ ‬2012.‭ ‬This increasing level of broadband penetration leads to greater access to and interactivity with rich media including streaming video and browser-based games.‭ ‬

In addition to broadband access growth,‭ ‬consumer spending on e-commerce is expected to increase by about‭ ‬50%‭ ‬per year through‭ ‬2011.‭ ‬For online advertisers‭ (‬our primary source of revenue‭) ‬and companies monetizing games through digital downloads or through the sale of virtual goods,‭ ‬this shows substantial potential for online sales revenue.


Brazil
In‭ ‬2008,‭ ‬for the first time ever,‭ ‬Brazil was included in the top ten broadband countries in the world.‭ ‬By adding over‭ ‬600,000‭ ‬new broadband lines,‭ ‬Brazil leap-frogged Spain and is now within striking distance of Canada,‭ ‬which it is expected to surpass in‭ ‬2009.‭ ‬

eMarketer currently shows‭ ‬Brazil with‭ ‬38.8‭ ‬million Internet users,‭ ‬for a penetration rate of‭ ‬20.2%.‭ ‬In‭ ‬2012,‭ ‬these numbers are expected to rise to‭ ‬56.7‭ ‬million and‭ ‬28.5%,‭ ‬respectively.


Poland
Currently,‭ ‬Poland is growing almost three times faster than‭ ‬Japan in installation rates for new broadband subscriptions.‭ ‬For this reason,‭ ‬Poland is the third country on our list.‭ ‬With a total Internet population of‭ ‬16‭ ‬million,‭ ‬Poland's accelerating Internet usage is expected to increase by‭ ‬20%‭ ‬over the next three years.‭ ‬By‭ ‬2012,‭ ‬eMarketer expects‭ ‬Poland’s Internet population to swell to‭ ‬20.7‭ ‬million users.‭ ‬

Although‭ ‬Poland lags well behind the European average,‭ ‬eMarketer reports that‭ ‬Poland will have more than half of its population online within the next five years.‭ ‬So it is easy to see why‭ ‬Poland’s potential excites us and potential marketers.


Entering the market
So how do you enter an emerging market like‭ ‬China or‭ ‬Brazil‭? ‬Focus on localizing for a specific demographic.‭ ‬If you're targeting teens playing online games in‭ ‬China,‭ ‬the game content,‭ ‬language and context,‭ ‬and website’s user interface must all match that specific segment.‭ ‬Simply translating a website or game from English into Mandarin is not enough to capture an audience and provide them with the content they're going to want to play.‭ ‬

To better understand the needs of a specific demographic,‭ ‬and,‭ ‬in particular,‭ ‬one that is based outside of your area of expertise,‭ ‬I recommend conducting research into existing media products,‭ ‬popular aesthetics,‭ ‬and unique cultural considerations.‭

Success in an emerging market will be a function of how well you can equate a wide variety of variables,‭ ‬like demographics of segments of Internet users,‭ ‬government regulation of technology consumption,‭ ‬and even the special role personal computers play in the home culture‭ – ‬it does vary from region to region.‭


Conclusion
Times may be hard right now as the global economic downturn prohibits many companies from expanding aggressively,‭ ‬but the opportunities are there and they are plentiful.‭ ‬As you project where your business is headed in‭ ‬2009,‭ ‬I hope you find the story of Spil’s success encouraging.‭ ‬

Surely there is a lot of room for the Internet to expand within nearly all developed countries that are increasing their subscriptions of broadband Internet access.‭ ‬Mexico,‭ ‬Russia,‭ ‬and‭ ‬Indonesia are on the horizon with many more following suit.‭ ‬For‭ ‬2009,‭ ‬we will remain focused on the aforementioned three countries,‭ ‬and what‭ ‬2010‭ ‬will bring remains to be seen.


Peter Driessen is the CEO and Co-founder of‭ ‬Spil‭ ‬Games,‭ ‬a global network of over‭ ‬50‭ ‬online casual game portals based in the Netherlands with‭ ‬100‭ ‬million monthly visitors and a catalog of over‭ ‬4,000‭ ‬games.