DFC Intelligence specializes in cutting through the hype. Digital entertainment is big business but it is also an easy space in which to lose big money. The focus at DFC is on providing realistic and reliable market analysis for companies and investors looking to capitalize on growth opportunities while avoiding the many pitfalls that come with incomplete or inaccurate data.
The forecasts that DFC provides are designed to give users a reasonable basis for assessing the Total Addressable Market (TAM) for their products and services. Unlike many research firms, DFC tends to be conservative in forecasting and likes to provide TAMs that are realistic and reliable.
Why We Take This Approach
Of course, savvy investors and planners realize TAM numbers are generally misleading. This is why DFC focuses on bottom-up analysis that can give companies a realistic assessment of where they fit in the marketplace. In many cases the Segment Addressable Market (SAM) and potential Share of Market (SOM) is much smaller.
While most companies initially subscribe to our Worldwide Market Forecasts, in many cases it is DFC’s ability to identify the potential addressable market that sets us apart. Bottom up analysis is a big focus of what we do by presenting realistic goals for companies based on detailed segmentations of the market.
Many investors come to DFC before making an investment to understand the true potential. Smart companies have learned to use DFC analysis to write business plans that will appeal to savvy investors that have learned not to trust hockey stick growth numbers that avoid confronting the downside.
DFC Intelligence Research in Practice
To see some of the public companies that have recently quoted DFC Intelligence in their public filings go here. These subscribers to DFC Intelligence’s Worldwide Forecast service know that having good base numbers that identify the total addressable market are essential to business success.
However, taking it to the next level requires a true bottom-up analysis that accounts for the competitive landscape and the realities of current and expected market conditions. For example, a product that is only going to be released in English with a limited distribution plan is going to have a significantly limited addressable market that is further limited by the distribution network and competition. In many cases, even in a growing market, the risk/reward ratio is simply too high.
One area DFC covered in depth was the rise of games delivered via social networks and mobile devices. At the time of the IPO of social network provider Zynga in late 2011/early 2012, DFC was pessimistic about the long term market potential for the company when the stock was trading in the $15 range. Several months later Zynga stock was under $3. While DFC was proven correct we also argued in late 2012 that there was still potential growth in the social network space, foreshadowing the explosion of King Entertainment a year later.
However, in analyzing the social game space DFC spent a great deal of time trying to understand what made King successful in such a crowded market. To understand this type of bottom up analysis we invite you to read our $99 brief on the success of King for free. Please contact firstname.lastname@example.org for your discount code.