The Casual Connection

Casual gaming offers advertisers 'more opportunities than ever' [feedly]

2009-06-11T11:01:00.001-07:00

A study conducted by MTV Networks has concluded that casual gamers offer advertisers a huge and attentive audience.

You will however notice that this study is ony 60 people, but it does back up other studies done in the past.

>

[link to original | source: CasualGaming.biz | published: 1 day ago | shared via feedly]

Partnership : Habbo, Seventeen Magazine in Online Fling [feedly]

2009-06-11T07:59:00.001-07:00

Teen-targeted virtual world Habbo and young girl-focused Seventeen magazine announced a partnership today that will see the two heavyweight brands promote each other in their respective beats. The agreement, a short-term deal slated to run for three months (and one...

[link to original | source: Virtual Worlds News | published: 1 day ago | shared via feedly]

Analyst: Online Games Now $11B Of $44B Worldwide Game Market [feedly]

2009-06-11T07:55:00.001-07:00

Analyst Colin Sebastian is estimating that online game revenue has now reached $11 billion as part of a $44 billion worldwide video game market, with 2009 as the "year the pace of change accelerated."

With titles such as World Of Warcraft now bringing around $1 billion in revenue yearly to Activision Blizzard, it's easy to see why one of Sebastian's takeaways from E3, in a new analyst note, was: "Internet moving from sideshow to part of the main event."

The Lazard Capital Markets analyst particularly commented of this shift:

"With roughly one billion Internet users worldwide, the gravitational pull of the Internet is driving publishers to integrate online content and services more explicitly within and on top of traditional games.

As consumers have already demonstrated a willingness to pay to access interactive entertainment, we believe that video games are an important part of the migration of content "into the cloud."

In fact, video games account for the largest portion of paid online content, well ahead of other forms of content, such as movies/video and newsprint.

We estimate that online video games will generate more than $11 billion in revenues this year, up from $3 billion in 2005, and account for roughly 25% of industry game sales worldwide. In this respect, we continue to believe that the Internet is emerging as an important growth driver and content platform, weaving together communication, information, commerce and entertainment.

In addition, 2009 may be remembered as the year in which the pace of change in media consumption accelerated, while 2010 and 2011 may bring improved monetization and mass market adoption of web-based applications and digital content, in particularinteractive entertainment."

Elsewhere in his E3 analysis, financial analyst Sebastian also looks at what increased Internet-based operation could mean for the major publicly traded video game companies, explaining:

"For video game publishers, the Internet platform not only provides room for additional revenue streams and higher ARPU, but also greater operating leverage and economies of scale.

On one hand, the Internet offers enormous efficiency, evening the playing field in content production and distribution, and offering unlimited shelf space.

[A pictured comparison of profit margins between] U.S. and Chinese game companies [with online-only Chinese firms at much higher profit margins] partially illustrates the difference in margin profile of online, packaged goods and hybrid models.

Over time, we believe that better "Internet economics" should provide software publishers with higher growth multiples."

[link to original | source: Worlds In Motion | published: 5 days ago | shared via feedly]

TECH: NEW firefox will enhance gaming

2009-06-11T07:27:00.002-07:00

Check the demo it speaks for its self.

6 Steps to Building a Better iPhone App [feedly]

2009-06-11T07:20:00.001-07:00

Brian LeRoux is Nitobi's Software Architect, and is involved in shepherding the PhoneGap open source project. You can read his blog, or find him on Twitter.

Thanks to increasingly powerful devices and cheaper data plans, the mobile app space is growing faster every year. Apple has been at the forefront of that growth with the iPhone, by both partnering with telecom companies to provide near-unlimited web access, and redefining application distribution with the App Store, which created a new industry and market for smartphone applications.

The App Store has created a gold rush for developers, and there are now over 50,000 applications for sale, making it harder to get a newly released app noticed by users. It has become especially necessary for developers to reduce development time and put their product on the market as quickly as possible.

Here's a list of steps which should be considered when getting into the iPhone app game:

Step 1: Narrow your focus

A mobile application has precious little screen real estate, so be sure to focus on reducing screen clutter. Your application should be as simple as possible without sacrificing usability and completeness. If it has to do multiple tasks to achieve its goal, then these should be performed one at a time.

Step 2: Build a better user experience

All software depends on a great user experience to succeed. You can maximize your chances of success by experimenting with different approaches to your user interface. Quickly discard what doesn't work and build on what does work.

The design process can be as simple as drawing on a whiteboard, but if you are pitching ideas to your colleagues or clients, using a mockup tool will give your designs more polish. For the Mac, the OmniGraffle diagramming software has iPhone stencils, or for Photoshop design firm teehan+lax has created an iPhone GUI PSD file. However, for web applications, the easiest solution may be to create the mockup in HTML.

Whether you decide to paper prototype or take the 37signals approach of skipping the mockup step completely, you need to respect your audience and their goals. You've decided on a focus for the application in Step 1 and now it's time to make sure that your app is not just useful but usable. If you're unclear on the definition of usable, Apple has done a lot of this thinking for you with their Safari Dev Center (which requires the free Apple Developer Connection membership to access).

Step 3: Choose your approach

The development framework you choose will determine the speed and ease of creating the application, as well as what iPhone features are accessible from your application. You have three options: web technology, Objective-C or a combination of the two.

Build in the browser: The easiest option for creating an iPhone, BlackBerry or Android application is to build it in the browser using web development languages like HTML and JavaScript. Web developers already familiar with HTML and JavaScript can build iPhone applications that run in the browser, without having to learn Objective-C, the native iPhone app development language. On the whole, browser-built apps are easier to build and distribute. They're portable and accessible from multiple devices, which helps them spread. Further, browser-built apps update instantly, generally load faster, are easier to read and update and offer more flexibility for future feature updates. Popular browser-built iPhone apps include mobile versions of Gmail and Facebook.

Create a native app: Native applications built in Objective-C make full use of all the iPhone features: GPS, accelerometer, local storage, camera, and more. This approach works especially well for robust applications, like 3D games. If your goal is to sell a complex, full-featured application, building a native application is your best bet.

Take the hybrid approach: If you're not ready to take the plunge and learn Objective-C, there's another option that combines the browser-built approach with the benefits of native development. Hybrid development tools, like the open source PhoneGap or RhoMobile frameworks, provide a set of tools and libraries that enable web developers to build iPhone applications with HTML and JavaScript, but also provide access to many of the native iPhone features. The obvious benefit here is that there's no need to learn yet another programming language. You can build apps using the technologies you already know.

Step 4: Use the right tools for the job

To build native iPhone apps you need to have a Mac OS X computer and obtain an Apple Developer Connection membership (which is free, but to submit to the App Store there's a $99 fee) in order to download the latest version of Xcode and the iPhone SDK.

If you're taking the web application or hybrid development route, then WebKit is a great resource. jQTouch and XUI are JavaScript frameworks for WebKit specifically designed for creating iPhone interfaces. You can also use Dashcode (bundled with the iPhone SDK), which has iPhone app templates.

No matter which approach you've chosen for product development, you must be able to test your application on real iPhones (and iPod Touches), because the iPhone emulator in Apple's iPhone SDK doesn't exactly mimic the hardware's performance.

Step 5: Test first, test again, test some more. Also: test

While it is always important to thoroughly test software before releasing it to the public, the App Store's format has made the need for bug-free code a make or break situation. Users who have downloaded your iPhone app can rate it using Apple's 5-star rating system and write reviews. Your application's average rating and review count will appear alongside the title and developer name in searches and the app's listing, and the reviews are accessible from your application's page in the store.

A major bug will inevitably result in a number of poor reviews and ratings from current users, which will discourage some new users even after the bug has been fixed. In addition, the App Store has a thorough submission system and submitting a bug fix often takes several days to be processed and get your application updated, further exacerbating any problems.

It is better to spend extra time testing your application than to publish it early and risk saddling it with a bad reputation from the start.

Step 6: Real artists ship: submitting to the App Store

How long does it take to get an app into the iTunes App Store? While we've seen some estimates of up to 20 days to have your app approved, we've had apps accepted in as few as five. The app review process is notoriously fastidious. Readers will recall, for example, how the Eucalyptus ebook reader was initially rejected because phone users could use it to read the Kama Sutra.

Both Niall Kennedy and Adeem Basraa have written great reports and instructions about the submission process to the App Store.

Reviews: Android, Facebook, Gmail

Tags: developer, iphone, iphone app, iphone application, Lists

[link to original | source: Mashable! | published: 20 hours ago | shared via feedly]

TECHNOLOGY : All the 3rd Generation iPhone rumours in one handy image [feedly]

2009-06-03T06:04:00.001-07:00

With less than a week until Apple's Worldwide Developer Conference, rumours about the third generation iPhone are kicking into overdrive. This image compiles them all into one handy graphic, with a colour code for just how likely each rumour is.

More details and sources of the rumours can be found over at The Green Room.

[link to original | source: TheNextWeb.com | published: 1 day ago | shared via feedly]

VIRTUAL WORLDS: IMVU elevator pitch

2009-06-01T11:06:00.000-07:00

Very good and short presentation from IMVU

video platform
video management
video solutions
free video player

Virtual Economics: Q&A with Gambit Co-founder Noah Kagan

2009-05-29T05:31:00.001-07:00

I wanted to share this great Q&A from inside facebook guys:

As we continue our in depth look at leaders the Facebook Platform payments ecosystem, today we turn our attention to Gambit, a new virtual currency monetization and payment service for social apps and games that went public for the first time here on Inside Facebook back in March.

We recently spoke with Gambit co-founder Noah Kagan (formerly of Facebook) about the opportunities he sees inside Facebook apps and games, and the approach Gambit is taking to help developers monetize.

Inside Facebook: When did you realize the business opportunity in providing payment services to online gaming communities?

Noah Kagan: We've been building applications for the past year and a half. Through that process, we developed our own payment tools. We wanted more transparency, analytics, and customization. These values maximized profit for our own games, and we found that we were doing better than our competitors. To see if it was a fluke, we let other game developers experiment with our payment tools. The results were consistent, and so we closed down our games and focused on providing payment solutions to online gaming communities.

Gambit is a payment solution for online games, and our services vary based on what clients need. We help clients find the best way to implement a virtual economy, structure price points, and use analytics to maximize ARPU.

What geographic markets is Gambit in?

We focus on the U.S., U.K., Australia, and most of Western Europe. We are the leader in these countries for monetization and competitive in South American and Southeast Asia. We are powering the #1 app on MySpace, #1 app on Facebook, and many other small and large properties. The U.S. is five years behind in virtual monetization, but a lot of consumers are willing to pay for virtual goods. I don't spend much on anything, but I care for game consoles. The market is only going to grow: the question is, how do you make it easy for people to pay?

Discuss the value chain of your business model: Who are the key players, and how is value created for each one?

From the developer's standpoint, the tradeoff is between focusing your time and energy on game development or monetization, which includes aspects such as customer support, fraud, callbacks, tech, API, etc. Developers can spend a small percentage of their budgets on PayPal, or a little bit more on us and take advantage of more services. It's a cost benefit analysis. Gambit provides developers with a buffet of payment options that empower them to make decisions based on statistics that show how much revenue they get from advertisers. We value transparency. Other providers give you numbers, but with no certainty.

Users get phone and email support with us – no one else does this. Then there are advertisers that are making offers, as well as payment companies. Our advertising relationships are pretty well developed.

In terms of competition in the payment space, how would you distinguish your products?

We've innovated with our behavioral ad targeting, complete payments customization, fraud reduction technology, and our transparent analytics. Our business is built on what developers want and how to make more money for them: if they want certain metrics, we will make them available if possible. Because we come from a developer background, we know how our clients feel, whereas other companies are coming from a sales and marketing perspective. We emphasize results and performance, and how to build better products and code.

Across the board, all developers have problems with customer support that they are not aware of. This is a huge challenge long-term that most people discount. The common problems are that users aren't getting their credits or didn't complete all the requirements, and technical problems. We have a full time staff, direct phone support and provide a CRM solution for our clients to see what their users are saying.

What's your reaction to Facebook's virtual currency test?

Competition breeds innovation. Facebook has a lot of inherent value to bring, but how will they provide value specifically to game developers? I'm curious what additional value Facebook can produce that we can't.

How is your company doing from a financial perspective?

Gambit has been profitable since December. We've raised some funding in 2007. Since we have not fund-raised large amounts like our competitors, and we do not have unrealistic growth expectations from a venture capital firm - so that's an advantage.

What kinds of developers are most attracted to your products, and what kinds of virtual goods have been most successful for them?

We are serving over 20 million users across our hundreds of clients a month. Social networking applications, online communities, RPG and flash-based MMO games do very well with us.

Where is the virtual goods economy headed in the future?

There will be an increase in online virtual goods spending in the Western world. Regarding online offers, they need to be more relevant and user friendly: for example, a girl who likes frozen yogurt can signup for free frozen yogurt and get credits at the same time. Right now, some users have a bad experience with offers. We will move toward using more social information – age, gender, geography, and a few other factors in improving offer relevancy. In general, the payment solution that will win is one that helps converts users to paying customers as easy as possible.

Thanks, Noah. Anything else you'd like to share with our readers?

We'd love to chat with anyone interested in optimizing or growing their online economy. Check out more on our blog.

[link to original | source: Inside Facebook | published: 18 hours ago | shared via feedly]

Business: Playdom Accelerates Hiring

2009-05-29T04:24:00.001-07:00

Playdom, a company staking its future on the fast-developing area of social gaming, is on a hiring binge, and its looking for a CEO. Today, the Mountain View, CA-based company announced two key hires -- and an evolution to its internal organization. First, the company says...

[link to original | source: Virtual Worlds News | published: 9 hours ago | shared via feedly]

Business: Infogrames Is Now Atari

2009-05-29T04:19:00.001-07:00

Atari? Strong brand name. Infogrames? Um, yeah. No wonder Infogrames want to switch its corporate identity to the company Nolan Bushnell founded and made famous.

"The Board agreed to change Infogrames Entertainment's name to Atari," the company announced today. "This decision will enable us to make the best use of the Atari brand, capitalizing on worldwide strong name recognition and affinity, which are keys drivers to implement the Company's online, product and licensing strategies."

In March 2008, France's Infogrames bought out and took over Atari Inc.

[link to original | source: Kotaku | published: 1 hour ago | shared via feedly]

NEWS: Free Realms Reaches 2 Million Players

2009-05-29T04:17:00.000-07:00

It seems that sony are having more success with this than Cartoon networks Fusion Fall, more on this soon.

Sony Online Entertainment's family-friendly PC MMO Free Realms is now up to two million unique registrants, the company announced today.

75 percent of these are under the age of 17, and 46 percent are younger than 13, SOE says, adding that nearly a third of players are female. The company it plans to celebrate the milestone by awarding all its users with a special bundle of in-game items.

The game, which is free-to-play but has optional microtransaction and subscription elements, lets users play, socialize and battle, and interact on a social networking site alongside the game.

It ties into a trading card game playable both with physical cards and inside the game via digital codes. SOE says the virtual cards are "sales leaders" inside the game's digital store.

"In less than a month, Free Realms has captivated a core player base of tween and teen gamers, while also strongly resonating with MMO gamers," says SOE president John Smedley. "We wanted to create a game to play with our families and are excited to have hit the mark with our intended audience."

[link to original | source: Worlds In Motion | published: 1 day ago | shared via feedly]

RESEARCH: Visual short history of video games

2009-05-27T07:40:00.000-07:00

A Short Visual History of Videogames from Kyle Downes on Vimeo.

Rockstar Co-Founders Confirm New Social Gaming Studio [feedly]

2009-05-25T05:45:00.001-07:00

It wasn't going to be long before the big guns sat up and gave social networks some serious attention. The good thing is the crap that is on Facebook is going to have to get better. I can only say this is a good thing as Facebook has opened up gaming to a new type of player, but now they have got an appetite for gaming they will want better quality.

Two of Rockstar Games' co-founders, along with a former facial animation exec and longtime entertainment industry vet, have formally announced New York City-based 4mm Games, a privately-funded web-based game developer.

The announcement of 4mm finally confirms rumors that have circulated the web for nearly two years.

Jamie King and Gary Foreman, co-founders of Grand Theft Auto house Rockstar Games, will act as president of 4mm and CTO, respectively. At Rockstar, King was VP of product development, and Foreman was CTO.

King left Rockstar in 2006, according to his LinkedIn business networking profile. While 4mm games is just emerging today, he founded the company in January 2006. Rumors of 4mm's existence originally surfaced on the blog of former Rockstar designer Jurie Horneman.

King's LinkedIn profile describes 4mm as a "web-based service provider of digital entertainment across a digital distribution delivery platform." He said the company intends on targeting "multiple age demographics."

The studio's website adds that it is creating "online worlds that will define social gaming."

Leading 4mm as CEO is Nicholas Perrett, former general manager with facial animation company Image Metrics. Serving as EVP is Paul Coyne, former VP for NBC and SVP for Warner Music Group.

A statement from 4mm said that it has already secured a "significant title-based investment" through a strategic partnership with CEA Autumn Games. 4mm said it has "ambitious goals" to create "high profile properties." The company is keeping the exact amount of funding under wraps.

4mm plans on making more announcements about its projects in the weeks to come.

[link to original | source: Worlds In Motion | published: 2 days ago | shared via feedly]

AT&T First Android Phone HTC Lancaster Leaked [feedly]

2009-05-25T05:44:00.001-07:00

AT&T First Android Phone HTC Lancaster Leaked>

Engadget apparently hit upon the motherload of AT&T powerpoints: Slides detailing the Palm Eos, a new HP iPaq and probably most thrilling, HTC Lancaster (aka the Android phone we've been waiting for).

I've always wondered what Android would be like on a Touch Pro, that's basically Lancaster. There is the dreary little note that "Initial Lab Entry dates were based on Google Mobile Services (GMS) UI, AT&T standard UI has been requested, which puts schedule in question" meaning AT&T could muck it up with their own UI, and take longer putting out the phone in the process. Its target date is Aug. 3, and it'll be AT&T-exclusive for six months it looks like. Update: Oops, didn't notice at first the screen resolution is a bit too squee for our tastes (240x320). Bummer.

The Palm Eos slide basically just confirms everything from before: emaciated WebOS phone with 4GB storage and AT&T all over it.

Update: Oh look, a whole bunch of BlackBerrys are now confirmed for AT&T too—Onyx, Gemini, Magnum and a 3G Pearl.

AT&T's fall lineup is looking pretty unassailable at this point: With iPhone 3, a WebOS phone, and a solid Android piece, all of their bases are covered, with the exception of a touchscreen BlackBerry, but um, who really wants one of those now? Good thing AT&T's network blows, since the other carriers have their work cut out for them. [Engadget]

[link to original | source: Gizmodo | published: 13 hours ago | shared via feedly]

NEWS: London Studio celebrates five years of SingStar [feedly]

2009-05-21T05:04:00.001-07:00

Wake up people........if you do it right you can build a brand that is sustainable......

London Studio celebrates five years of SingStar

And Sony studio prepares for another five years with user-generated content hint

[link to original | source: Develop | published: 10 min | shared via feedly]

Micro-transactions: Q&A with Twofish President Lisa Rutherford #feedly

2009-05-20T14:10:00.001-07:00

You need to take a look at this Q&A, if you are seriously getting ivloved in micro-economies, virtual items then this is good information.

President Lisa Rutherford

[link to original | source: www.insidefacebook.com | via: feedly]

RESEARCH: Panel on Casual MMO and immersive worlds

2009-05-19T07:21:00.000-07:00

Its from the Summer of Last year but its well worth a watch as it allows you to see how things have evolved from a year ago, also the panelists provide some great stats and insight.

RESEARCH: The top 12 trends of the video game industry

2009-05-19T06:29:00.001-07:00

An Great report from Login that I had to share he does a great job of looking back at trends. I have always said one of the best routes to success is to look to the past..... well here is a little help.

Report By Dean Takahashi from the Login Conference

It's good to step back and get a good look at the various cross-currents in the games landscape. Over the last few weeks I've been surrounded by game developers at the Login online games conference in Seattle and the Quo Vadis game developers event in Berlin, both events where I was invited to speak, and have seen several trends emerging — some good, some bad. Here they are:

1. Game startup financings have slowed from last year. Everyone in the game industry is aware that sales for U.S. console games in March slowed by 17 percent and another 17 percent in April. That's not too alarming, since a year ago the launch of Grand Theft Auto IV was a huge event, and it's hard to beat the numbers from a year ago. But it's the first sign that the game industry can't work miracles in the midst of a recession.

Along with that, financings have slowed. So far this year, 25 companies have raised $126 million, according to our calculations. Game and virtual world fundings for 112 companies hit $936.8 million in 2008 by our count. That compared to $613 million raised by 62 companies in 2007, according to Jussi Laakkonen.

It looks like 2009's game venture fundings are not going to exceed last year's totals. The biggest funding so far this year was Offerpal Media, which monetizes social games with special offers for users. It raised $15 million. By comparison, the biggest funding last year was $100 million raised by China's 9You. While the funding environment's not as good as a year ago, it isn't so bad that game fundings have dried up.

2. The broader game industry continues to expand, command more respect, and draw outsiders. This isn't a contradiction to No. 1, in part because game startups are still a relatively small slice of the overall industry. Pricewaterhouse Coopers says the global game market will grow from $42 billion in 2007 to $68 billion in 2012. DFC Intelligence says online games will grow from $3 billion in 2005 to $12 billion in 2011. There's no question games are gaining market share on other forms of media, which is why the industry is drawing big investors, from USA Network to Time Warner.

While funding may drop for game startups this year it's interesting to see how far they've come. Five years ago, no respectable VC wanted to make a bet on hit-driven businesses. They stayed away from it the way they stayed away from Hollywood movies. But now the active VCs this year include some of the best-known in the venture capital industry: Charles River Ventures, Mohr Davidow Ventures, Kleiner Perkins, Norwest Venture Partners, Draper Fisher Jurvetson, D.E. Shaw, and Oak Investment Partners. Among those actively looking are Trinity Ventures, Lightspeed Venture Partners, Blue Run Ventures, and many others.

The ecosystem is healthy, and the reason is that games are constantly expanding their borders. The Wii has done a great job recruiting new gamers. But the monthly NPD sales numbers haven't captured the explosion of games on the iPhone, Facebook, casual games on the web, and PC online games. Even more immeasurable is Funware, which refers to the use of game mechanics in non-game applications. Other industries are recognizing that games are so engaging that they're trying to make their own products more game-like.

As Jordan Weisman, founder of 42 Entertainment, once said, "Games are like oxygen. They are part of every activity, from reading to toys to TV to any kind of experience. They can be played on any kind of platform," beyond the consoles. The broadening of the game market is why games can be somewhat resistant to the recession, even as other retail products suffer.

3. Competition is heating up and driving prices toward zero. Of course, if too many competitors enter the market, profits can tank and prices can crater. One of the bad things about having so many fundings last year is that, if you're raising money this year, you're going to have to compete with those 112 companies who, because of the way the recession is playing havoc with pre-recession business plans, are likely going to have to raise new rounds of money.

Even scarier is the rise of free games. There are a couple of thousand free games on the iPhone. There are thousands more on social networks and casual web portals. Perhaps 90 percent of players on the web are choosing to play games for free when they have a choice between a free version or a paid version. And the quality of the free games is getting better and better.

What happens when the user decides that free is best? This is the same problem that newspapers, movies, music, and other producers of content are facing as the Internet undercuts the traditional barriers that have kept prices high, as conveyed in Chris Anderson's recent book, Free.

4. Advertising in games has taken a hit. Free gaming was supposed to be supported by advertising. In-game advertising, where the ads run inside a game as players play, got off the ground in 2004, picked up momentum in 2006 when Microsoft paid a lot of money for Massive. A bunch of rivals entered the market, including Google. The peak of the market had to be when the Obama campaign ran ads on billboards inside a racing game. Then the recession hit. Ad budgets began to dry up. Now IGA Worldwide, an in-game ad company, is up for sale, and Microsoft's Massive in-game ad division just laid off 28 percent of its staff.

In-game advertising may turn out to be a great market. But this is what happens when expectations race too far ahead. Back in the days of the building of the transcontinental railroad, everyone was optimistic about railroad companies. But many of them went bankrupt, just like a lot of the companies that poured money into the dotcom market. From the point of view of venture investors, the in-game ad market has "jumped the shark," a phrase I'm told means passed its peak. It just means that the people who are going to make big money here have already invested, and there's no way you can make money by chasing their exhaust. Or so the thinking goes.

While in-game ads may be suffering, other ad-based game businesses can still grow. Video-based wrapper ads are growing so much for Wild Tangent that the company posted 65 percent growth in its ad-based revenues in the first quarter. Analyts Edward Hunter of market researcher comScore disagrees with me that in-game ads are sinking. He notes that in-game advertising will show faster growth if it's measured properly by independent media trackers. And he notes that while total ad views on the Internet dropped 20 percent in December of 2008, in-game ads saw a rise of 8 percent. Once the advertisers catch on, they may pile into this sector, he says. But in the meantime, the layoffs suggest there is a big reset in expectations happening.

5. Virtual goods are benefiting from the weakness in ads. Virtual goods businesses are taking off on Facebook and at other companies such as China's Tencent. My colleague Eric Eldon estimates that virtual goods micro-transactions could generate $500 million in revenue for game and app makers on Facebook this year. Zynga, which makes games such as Texas Hold 'Em Poker, has become the top third-party company on Facebook. It looks like such games are creating real, sustainable businesses on Facebook. Zynga is reportedly on a run rate to make $50 or $60 million. Playfish and Playdom are likewise on track to make tens of millions of dollars. Their games get real cash, albeit in small chunks of change, from users. They're spending real money on virtual items like poker chips or a better weapon. When you have 12 million active monthly users like Texas Hold 'EM Poker, the change adds up.

PlaySpan has stepped into the market to provide everything from a payment system to handle virtual goods to in-game virtual goods sales processing to retail game cards that let kids who aren't old enough to have credit cards purchase virtual goods. Some of the games are getting pretty clever at integrating virtual goods. You can buy a virtual race car in Upshift Strike Racer, a racing game on Gala-Net. Then, after you put some miles on the car, you can sell it as a used car to another player. PlaySpan's chief executive, Karl Mehta, predicts the company will handle a billion transactions, worth a total of $100 million, this year.

Other companies in the larger space of monetization include Twofish, LiveGamer, Fatfoogoo, Offerpal, Super Rewards, Viximo, and Jambool. Outspark, which is importing free-to-play games to the U.S., has said 10 to 13 percent of its users are buying virtual goods. And of those, the average revenue per user is $45. That's so high that those players would be better off paying a subscription. This virtual goods wave has swept through the whole world. It's wonderful that the game industry is returning to that micro-transaction currency that's served it so well in the past: the quarter.

6. Don't believe too much of the hype about Chinese game companies taking over. Will the rise of new business models in Asia, and the rise in game company valuations, enable them to take over those in other territories?

Virtual goods started thriving as a business model for companies such as Shanda in China a few years ago. Online games thrived in China because they enabled operators to authenticate users and thereby beat rampant piracy. World of Warcraft did great in China's Internet cafes, but the free-to-play model is taking over, according to market researcher Niko Partners.

Will this become a global advantage for the Asian companies that have embraced this business model first? It was a couple of years ago that Shanda said it would switch all of its games to virtual goods models. And now Shanda is the biggest online game company in China with $500 million in revenues. In my speech in Berlin last month, I brought up the topic of geographic arbitrage. I noted that a couple of books by Annalee Saxenian, Regional Advantage, published in 1996, and The New Argonauts, published in 2007, showed how differences between regions could make a big difference in terms of who thrives and who doesn't.

Geographic arbitrage means that you exploit your region's advantage. For a time, the French stock market overvalued game companies. That gave rise to Infogrames, which used its valuation to buy other game companies. One of the most symbolic occasions of the French invasion of the video game industry happened when Infogrames bought Atari. DFC Intelligence has noted that much of the profits of the game industry have migrated from the money-losing Western companies to the Far East.

In Berlin, I all but predicted that the Koreans and Chinese would take over here. But we've seen some abortive attempts at crossing borders. NCSoft made a fortune with Lineage in Korea and tried with Destination Games in the U.S. But NCSoft's Tabula Rasa failed and was shut down. And Perfect World has launched a couple of games in the U.S. but hasn't yet acquired anyone. The whole Chinese online games market is expected to be $3.8 billion in 2009, according to Niko Partners. It is growing at a rate of 38 percent.

But here's the reality check. The revenues for Shanda are still only about an eighth of the revenue at Electronic Arts. ChangYou had one of the only IPOs in the past few months. The Chinese company raised $200 million in its debut on the NASDAQ. The Chinese companies are not yet in a position to come into the U.S. market and take over. The wave could happen someday, but not just yet.

The market capitalization of the top eight Chinese game companies is about twice that of EA's That will get bigger. The Chinese companies are scouting now in anticipation of buying more later. Maybe they'll do better than the Koreans. But troubled U.S. companies can't look to the Chinese as saviors.

7. Social gaming is spreading beyond the borders of game platforms. Social gaming has caught on along with virtual goods because it's a lot of fun to play with your real friends with real identities on social networks such as Facebook. There are now more than 5,000 games on Facebook.

Companies such as Zynga, SGN, and Playfish are thriving on Facebook. They're taking advantage of the ability to spread games in a viral fashion to stand out. If you can get your users to spread your game for you, then you don't have to worry as much about marketing costs. Thanks to viral marketing, it's possible for small titles to get noticed in the long tail of thousands of games all competing on the Facebook platform, which has 200 million users.

Zynga, SGN and other Facebook companies are moving to the iPhone. Playdom is moving from MySpace into Facebook games. One of these days, somebody is going to build a cross-platform social games empire.

8. Creative destruction rules the game job environment. Are these new businesses with new business models going to grow up and threaten the big console companies? Michael Pachter, an analyst at Wedbush Morgan, said he thought there were a lot of cool companies in the space. But he doubts that the startups will overtake the traditional console startups anytime soon. It will be interesting to see if jobs created at the new companies can compensate for jobs lost at the old ones.

Wanda Meloni of M2 Research came up with some interesting data about this last week. She said that since July, 2008, 60 game companies/studios have publicly announced layoffs that have eliminated 8,450 jobs. Most of those are in North America, where there are an estimated 53,900 people working at game companies, according the Game Developer Census. She calculates that roughly 12 percent of the whole game industry has been hit by the layoffs. That sounds awfully depressing.

But there are thousands of people now jumping into iPhone game development, or development of games for smart phones. Moblyng just announced last week that it developed games that could be quickly and easily ported across all smart phones. Just as some big companies die, new ones are being born.

People call it creative destruction when one thing collapses and another takes its place. The big companies cut back, and the game startups form to fill the void. 3D Realms, the maker of Duke Nukem, closed its doors the same day WonderHill announced it raised $7 million. The lesson of 3D Realms is, don't take more than 13 years to develop your game.

9. Apple and Nintendo are at war. There were only 1,500 games on the iPhone in December. Five months later, there are more than 9,000. Clearly, some of those unemployed game developers are trying their hand at striking it rich by uploading a game or two to the AppStore. At the very same time that many companies are crumbling, we're witnessing a Cambrian explosion of indie game companies. These companies are all capital efficient, which is music to the ears of recession-ravaged investors.

Nintendo has sold more than 100 million DS units since 2004. Apple has sold 37 million iPhones and iPod Touches in little less than two years. At that rate, Apple is likely to overtake the Nintendo DS. Maybe that's why Nintendo lowered its forecast for DS games in the coming year. I don't know. But it's worth pointing out that DS games sell for $30, while at least half of Apple's games sell at 99 cents. Jeremy Liew of Lightspeed Venture Partners estimates that the whole AppStore has generated no more than $45 million in revenue for Apple. As you can see from the price difference, it's going to be a long time before Apple knocks out Nintendo.

The difference in approaches is going to be a fascinating experiment in capitalism. Nintendo deliberately limits its own games on its platforms and closely regulates what games can be published for the Wii and the DS. There are only dozens of WiiWare downloadable games on the Wii, whereas Apple has opened the floodgates. Apple clearly offers its consumers more choice in games, but iPhone developers may have a terrible time getting noticed on the iPhone and keeping hits alive for more than a couple of weeks. Nintendo says it prefers to have healthy developers on its platform. The suggestion is that Apple's platform won't truly take off until it provides ways for developers to make money. If you know who's going to win, tell me.

Apple has a popular and fast-growing platform. With the iPhone 3.0 software, it's going to have new game-friendly features such as virtual goods. But it is leaving the game development to its developers. At some point, it would be great to see dueling keynotes between Nintendo CEO Satoru Iwata and Apple's Steve Jobs at E3.

10. Gesture-based control systems will spread industry wide. Just about everything Nintendo starts turns into an industry-wide trend. The company started the wave of brain-training games with Brain Age. And then it started the fitness craze with the launch of Wii Fit. Now everyone from Lumos Labs to Electronic Arts with EA Sports Active is piling into those markets.

With the Wii, and soon the Wii MotionPlus, it has redefined the game controller and inspired a wave of gesture-based technology companies that include PrimeSense, 3DV Systems (acquired by Microsoft), Canesta, Softkinetic, Omek Interactive, and others. Microsoft is rumored to be working on its own gesture-control system, and Sony will likely go farther with this technology as well.

11. Backfill strategies may work. Companies such as Quick Hit are trying to take on Electronic Arts' Madden franchise by launching a free-to-play online football game. The plan to attack Madden via the online route reminds me of a strategy I call backfill.

It's like in real estate. A whole neighborhood gets built out, but there are a few empty lots. Some companies just move on to new neighborhoods because they figure the game is over in the old ones. But then the backfillers go back to the empty lots and build houses on them.

I thought of this strategy when I heard about Virtual Families. This game from Last Day of Work is focused on taking on The Sims, which has sold more than 100 million copies. This category of people simulation has been dominated by Electronic Arts. Most people would, and have, stayed away from this neighborhood. But Virtual Families is shooting to produce a much more casual experience than The Sims.

Along the same lines, Thriller New Media, headed by Wild Bill Stealey and Fred Schmidt of MicroProse fame, are trying to do a backfill in the military simulation space. The market moved away from the hardcore military games as the console market broadened. It no longer made sense to make games that only 100,000 people played. But so many companies left the space that Thriller is trying to go back and replant on old soil. They're applying new tricks, such as social networking and free-to-play business models, to online military simulations. There is even a generational play here, just like how Disney creates movies that appeal to both kids and their parents. The parents get a kind of retro nostalgia while the kids enjoy something they haven't seen before.

12. Digital distribution is gathering steam. GameStop has more than 4,000 stores across the country. But retailers had better pay attention to the gathering momentum of Valve's Steam service, which distributes games direct to users over the Internet. OnLive, meanwhile, dispenses with the downloading. When the company launches its video games on demand service this fall, you can play games that are stored on distant servers as if they were right on your home PC. For a subscription fee, you'll be able to play fast-action games on low-end machines. This will become a viable distribution channel, even if it doesn't kill retail, and even if Valve and OnLive aren't the ones that succeed. It's like gravity, with the full force of the Internet behind it.

Conclusion: Games deserve the same kind of financial maturity that others have enjoyed. Why should you only be able to get rich -– or lose your shirt — at a Web 2.0 company? Or at an investment bank? Or a cleantech company? Games are a haven from the storm. More venture money is bound to flow into games as VCs retreat from shell-shocked markets into ones that are better off. Big game companies such as Gazillion (which has a license to make Lego and Marvel massively multiplayer online games) and OnLive, which is creating a server-based games on demand service, are tapping the financial community in a big way to get what they need. These are the kinds of companies that have the potential to be home runs.

As VCs pour money into the different markets, some segments will become saturated. Virtual worlds accounted for more than half of the fundings last year. There are now 200 kids virtual worlds in development. But there are promising new areas in brain training, funware, games for health, educational games, music games, exercise games, and sports 2.0. I can only imagine that some more exciting than the iPhone, perhaps a new version of it, will come and blow us all away with its gaming capabilities. And, of course, it's not too early to start thinking about next-generation game consoles. There are great riches on the horizon, as long as you don't step into that ditch right in front of you.

Do the trends matter for those starting businesses? Let's consider the trend related to movie games. Brash Entertainment, a movie game company that shut down in November, was the latest to prove that bad movie games really suck as a business.

Movie games come and go, as does Hollywood's interest in games. Certainly, they generate a ton of revenue. The latest Lord of the Rings game from Electronic Arts got bad reviews, but it still sold a million copies. Most of us would like movie games to fail, just because they are so cynically piggybacking on something better.

But even inside a lousy trend, it's possible to build an interesting company. Exponential Entertainment won both the judge's pick and people's choice at GamesBeat. They're making a casual game site with movie-related material. These folks were the makers of SceneIt?, the DVD trivia game that has generated $500 million in sales. Here they are in a new company that takes the same kind of movie trivia game to the web. They're looking to raise just a small amount of money.

Even though you can be aware of what's a good trend or a bad trend, you can ignore them when you're thinking about your own game. What a game really needs is a combination of passion, innovative thinking, and execution. If you have all of that, then you can pull off something great no matter what the trends are.

[link to original | source: VentureBeat | published: 3 days ago | shared via feedly]

VIRTUAL WORLDS: China's Perfect World Brings In $62.2M

2009-05-19T05:33:00.001-07:00

China's Perfect World Brings In $62.2M For Q1

Chinese freemium game publisher Perfect World announced its Q1 earnings today, reporting $62.2 million according to Redline China. This is a 1.8% increase from revenues reported in Q4 2008 and a 40.2% increase year-over-year. It's another signal that the Chinese freemium game market remains healthy and resistant to the global economic downturn that is negatively impacting Chinese Web advertising revenues. The company's net income for the quarter was $31.5 million, up 72.6% from Q4 '08 and 36.1% from Q1 '08.

What's interesting about these figures is that while revenue is up, peak concurrent users is actually down. For Q1 '09, Perfect World reported 615,000 concurrent users. That compares to 690,000 in Q4 '08 and 660,000 in Q1 '08. Perfect World attributes the drop in peak concurrent users to seasonal elements -- as Q1 contains several major Chinese holidays -- and an aggressive anti-cheating campaign that would have necessarily driven a certain percentage of users away.

ARPPU (average revenue per paying user) for Perfect World in Q1 '09 was 244RMB, or about $35.74. That's up 8.1% from Q4 '08 and 61.6% from Q1 '08. Perfect World attributes the increase in revenue from Q4 '08 to Q1 '09 to a series of successful in-game promotions for sales of virtual goods.

Perfect World projects Q2 '09 revenues to fall in a range between $60.1 and $63.6 million, essentially expecting no more than a 2% change up or down in current figures. Right now user churn is a major concern for Perfect World, so it intends to scale back on the number of sales promotions in the upcoming quarter. It is also expecting to incur higher marketing and operating expenses than usual, which could narrow profit margins.

The Perfect World figures are interesting in terms of how enormously consistent they are with the results recently reported by competitor Changyou. In fact, reported revenues are in the same range. While the Changyou reports did not include projections for Q2 '09, it seems likely that company's future performance will also fall into the same range as Perfect World's.

[link to original | source: Virtual Goods News | published: 16 hours ago | shared via feedly]

NEWS: Top headlines in bite-size chunks

2009-05-18T16:45:00.000-07:00

PopCap strikes PlayStation Network deal

Sony Online Entertainment has given PS3 a serious casual games boost with the new that it has penned a deal with leading publisher PopCap to bring five its best selling consoles to PlayStation network for PS3.

Free Realms welcomes 1m members

Sony Online Entertainment's promising browser-based MMO Free Realms has already seen one million members register on the virtual world service - despite having only gone live 18 days ago.

All iPhone apps must support 3.0 firmware

iPhone developers have been sent an email instructing them that Apple will no longer approve content created for version 2.0 of the device OS.

Bigpoint opens doors to external developers

Browser based online games portal BigPoint has revealed plans to open up its platform to external game providers and developers - a move it hopes will elevate its global position as a free-to-play online games provider.

NEWS : Tencent’s virtual goods revenues keep growing during recession [feedly]

2009-05-18T16:39:00.000-07:00

Asian web companies have been making millions from virtual goods for years — and that story doesn't seem to be changing despite the current worldwide recession. Tencent , a publicly-traded Chinese web conglomerate comprised of an instant message client, a social network, and various other services, says it made $342.3 million in virtual goods in the first quarter of this year.

The numbers seem to indicate the resiliency of virtual goods — such as virtual clothing that users can buy for their avatars in a game — versus advertising.

Tencent's web-based virtual goods saw a quarter-over-quarter increase of nearly 20 percent and a year-over-year increase of 75 percent, coming in at $278 million. Its mobile virtual goods sales were smaller but also growing, coming in at $64 million. That revenue stream saw nearly 10 percent growth by quarter and more than 52 percent growth by year. Meanwhile, its advertising revenue got virtually hammered, dropping by 30 percent quarter-over-quarter to come in at $21 million.

In 2008, Tencent made more than $1 billion in total revenue , of which $719 million was from virtual goods.

The caveat, the company says, is that virtual goods revenue "reflected the positive seasonal impact of the Chinese New Year holidays and winter break for students as well as the Company's continued efforts in service enhancements." There won't be as much virtual celebrating later this year, though. The Hong Kong-based company, expects people to spend less on virtual goods due to fewer national celebrations. Ad revenue, however, could climb as advertisers get a better handle on how their businesses are faring during the recession.

Tencent's number dwarfs the amount any Western company is making from virtual goods. Of course, Tencent has a social network, but its massive QQ instant message service and other sub-sites mean it's not directly comparable to social networks like Facebook and MySpace. And clearly, cultural differences are benefiting it in ways that have yet to equally manifest themselves for Western services that use virtual goods. Still, third-party developers on Facebook could make up to $500 million in revenue this year , mostly through virtual goods, as we and Inside Facebook have reported. Facebook, and other companies like MySpace, have yet to make serious money from the virtual economy. Facebook only has a gift store, and MySpace doesn't have anything — yet. But both companies are working on forms of virtual currency that could tie in with third-party applications, and let them get in on the action.

[link to original | source: VentureBeat | published: 4 days ago | shared via feedly]

I will be back soon

2009-05-18T15:56:00.000-07:00

I have been working on a way to share more crucial information faster, while of course still writing my own stories around the blog, and keeping the studio dev team running smooth and on track.....

I have almost completed the process so keep checking as a flurry of info will be coming your way.

Ciao

Metrics for a Brave New Whirled

2009-05-05T05:19:00.001-07:00

RESEARCH: Check out this SlideShare Presentation:

Metrics for a Brave New Whirled

View more presentations from capncleaver.

A GEEK moment

2009-04-20T13:49:00.000-07:00

Love this image map tracking Apple from the 70's to 2009.

MOBILE NEWS: 5 stories you should now about

2009-04-20T13:15:00.001-07:00

All the stories all linked.

The theme is the impact new platforms are having on the market, and reactions of companies to try to catch up or how they lead the way

Nokia, reporting a 90 per cent fall in profits for Q1 2009. (shame big fan of the N series for years very good phone, all though its iPhone all the way now for me)

Net profits reached €122m, heavily down on the €1.2bn in the same period in 2008.

Sales were also down, dropping 27 per cent from €12.7bn last year to €9.28bn. However, the results were not as bad as many had predicted, the result of which was an eight per cent increase to the company’s share price.

Samsung steps on to a new platform with Google Android handsets soon to be released S8000 will be sporting the exciting mobile OS.

Samsung is also believed to be planning a trio of Android devices.

Sony Ericsson confirm that it will be revealing more details on its Entertainment Unlimited service on May 28th.

The company has already confirmed that the Idou – its first Entertainment Unlimited handset – will be launched in the second half of this year. Entertainment Unlimited itself broadly unites Walkman music, Cyber-shot imaging and Java gaming, with messaging and other services/apps also in the mix.

It also allows consumers to share content through the TV, PC and wi-fi and syncs with web applications and PlayNow.

The company earlier confirmed a massive pre-tax loss for Q1 09, albeit in line with earlier forecasts, and swiftly embarked on a €400m cost savings drive that will see 2,000 more jobs go this year.

PSP platform opened up the store to encourage uptake with tomorrow's 5.50 firmware upgrade removing the need for a PlayStation Network account to browse the store.

As long as a wi-fi connection is at hand, any PSP user will now be able to check out the latest games, trailers and demos available to download on the machine.

The 5.50 update also allows for access to the PSN Information Board via the machine’s XMB interface.

DSi sells 435,000 units in first US week

In an official response to the NPD's March 2009 sales numbers, Nintendo revealed that the Nintendo DSi handheld - released April 5, has sold 435,000 units in North America in its first week.

This figure surpasses initial sales of the handheld's previous iteration, the Nintendo DS Lite, which sold 226,300 in its first week on the market.