Archive for November, 2009

New Report indicates maturation of Social Networks

Monday, November 30th, 2009

In a recent report released by Reality Digital, the latest demographic data concerning social media usage indicates the increased usage of social media networks as a marketing tool.

social_networking_sitesBased on research conducted by Pew Internet and American Life’s daily tracking survey, the October 2009 report indicates that U.S users of the leading social networks, Twitter, MySpace, LinkedIn, and Facebook have seen an aging trend in demographics.

The median age of Twitter users remained firm at 31 between May 2008 and May 2009, while both MySpace and LinkedIn saw a one-year age drop year-over-year from 27 to 26 and 40 to 39, respectively. The most dramatic change however, comes via Facebook users. In May of 2008, the majority of Facebook users were aged 26. One year later, that demographic has shot up to 33 years old in May 2009.

Rob Proctor, Head of EMEA, Reality Digital said: “The marked increase in the median age of Facebook users is significant and represents a further maturation of the sector, which is now being wholeheartedly embraced by marketers. Naturally, the increase in users has not passed marketers by and as a result there has been a significant development in terms of content. Where, with a younger demographic certain types of lightweight content proliferated, the maturation of the sector has witnessed an evolution of content, with considerably more practical usage that appeals to a broader, less niche audience.”

And while this report primarily focuses on marketers, some direct correlations of the overall demographic research can be applied to gaming on social networking platforms. Over the past year, we’ve seen a massive interest in and activity of gaming on social networks. If common wisdom says that games are for kids, then this aging study of social networking users flies directly in the face of this supposition. It’s hardly a coincidence that as social networking users skew upwards in the age trend, social gaming, and the associated monetization, have risen almost on par.

The average 26-year-old Facebook gamer is most probably much more concerned with how rent will be paid that month, rather than his status in a social game (at least from a microtransaction perspective). However, the average 33 year old, with credit card in hand, most probably has a bit more money to throw around and make a microtransaction purchase here or there.

A final interesting data proposition put forth by the study indicates that the number of users that say that use social media sites to share updates has risen to 19 percent, up from 11 percent from December 2008. Again, this is pure marketing data, but the question remains to be asked – does social gaming have something to do with this? As more and more users play more and more games, with the associated ‘status updates’ that are posted to players feeds, the question is – who’s driving who’s growth?

 

Zynga brings Black Friday madness to social gaming

Friday, November 27th, 2009

Ladies and Gentlemen – let the holiday shopping season…..begin! It’s post turkey day in America today, which can only mean one thing: Black Friday. Traditionally, Black Friday is the kick off to the massive holiday shopping spree that most retailers depend on to bring the revenues home. Perhaps even more so this year. But that’s not to say that the virtual world is free from any mass marketed consumerism.

black_benjaminWhile there’s a number of virtual goods price drops headed our way today, the biggest fish in the sea, Zynga is offering virtual world players some serious Black Friday offerings.

Starting out with their biggest bread winner, Zynga’s Mafia Wars will be offering discounts on some of it’s most in demand items. Starting today, and running the entire weekend (including Monday until midnight PST), Zynga will be running promos and deep discounts on “Limited Edition and consumable items.” To up the ante (and sales figures), users can track how many items they’ve purchased on a “mastery bar”. Once said users acquires a minimum of 20 items, they’ll received a special gift “über” gift.

But wait…there’s more. Mafia Wars will also be offering an hourly featured item (blue light special) that’s reported to be insanely cheap. The Black Friday promotion is tied to the already running Thanksgiving Fight promo, in which both mobs have the chance of dropping Thanksgiving themed items.

If Mafioso aren’t your thing, fear not, Zynga’s serving up other tasty Black Friday treats. Their 15.5 million monthly users Roller Coaster Kingdom will also feature a number of promos. The concept of Roller Coaster Kingdom is simple – build a world class amusement park. Not always something accomplished on the cheap. Therefore, Zynga is offering steep 25% discounts across the board. I.e. not only are they offering a 25% discount on in-game coin purchases, but also those of RMT’s.

These discounts are great for fans of the game, but they also bring up an interesting case of controlling a virtual world economy. If said ‘desireable’ objects in Mafia Wars are suddenly common (due to the large number of purchases of these items), do they still retain their desirability – and associated price point? On the other side of the coin, this might be a good way for Zynga to unload a large amount of virtual content, preparing the way for newer, rarer, and therefore more expensive items to be released into the game in the near future? Say….around Christmas? We’ll have to wait and see – but my money’s riding on new, rare content soon.

 

The 9 reports a 94% drop in revenues post WoW

Thursday, November 26th, 2009

Shanghai, China based MMO operator and developer The 9, formerly holders of the Chinese license to operate World of Warcraft recently reported a whopping 94 percent drop in third quarter revenues YOY.

intro_03Third quarter revenues for the 9 came in at $3.7 million, a 91 percent drop from from second quarter revenues, $42.2 million. At the same time, only one year prior, The 9 was posting a revenue take of $59.8 million. If there’s any question not only about Activision/Blizzard’s dominance with World of Warcraft, but also how much revenue the Chinese market is generating, not only with WoW, but online gaming in general – this report from The 9 should put things into perspective.

Having lost out on the regional contract back in June to competitor NetEase, The 9 executives are still optimistic about future prospects, as their games catalogue contains a healthy mix of decent titles including FIFA Online 2, Soul of the Ultimate Nation, and Granado Espada. Since the loss of World of Warcraft, this catalogue has seen a 55 percent increase in activity in Q3 when compared to the numbers one year prior.

The 9 is quick to point out that these titles attracted around 3.4 million active users in Q3, up from 3.2 million active users in Q2. The leader in this increase has been Soul of the Ultimate Nation. This increase in activity was spurred on by a new content upgrade, as well as a theft-proof security system. FIFA Online 2 and Atlantica both saw increases in activity, as well as a web based card game Jiu Zhou Zhan Ji.

“Although our revenue loss cannot be recovered within a short period of time, we are glad to see that our research and development capabilities continue to strengthen as a result of our investments,” said The9′s CEO and chairman Jun Zhu. “Our proprietary games have shown substantive progress and a strong potential to be well received by Chinese game players.”

 

Nival Network raises $5 million for social strategy game

Wednesday, November 25th, 2009

Usually, when one speaks of social gaming and it’s associated start ups, certain geographical areas come to mind. Obviously the US is a big player in the market, as is most of South East Asia. However, with 142 million residents, Russia has quite a large number of interested consumers. And while they don’t make the news that often, TechCrunch Europe recently spotted a potential diamond in the rough. Moscow based game developers Nival Network have recently secured $5 million in funding for a new MMO titled Prime World, which is slated to run on the Russian online gaming portal ZZima. Ok, let’s go ahead and have a giggle and remember Zima.

zzima

Initially reported in an interview with CEO and founder Sergey Orlovskiy in the Vedomosti paper (in Russian), the funding comes from an undisclosed investor. As stated above, the funding is expected to be put to use in further development of the firms own Prime World. The MMO is meant to be a strategy game that features a number of social networking features. And for the first time in a long while, the mention of ‘social networking features’ does not directly point to Facebook. Facebook, while arguably THE social network globally, has a rather meek market penetration in Russia. However, that’s not to say that the social network doesn’t have a foot to stand on in Russia – as usership grew last month by 123,000 people, topping out at 669,000. Not a bad number, but when compared to the 142 million inhabitants…well, yes. Not good.

And yet, there’s still hope for the Russian developer to tap into the global ‘big-game’. In the same Vedomosti article, it’s reported that Digital Sky Technologies, the now parent to Astrum Online Entertainment, subsequent parent to Nival Network, has also invested in vKontakte, the leading Russian social network, as well as Facebook. So ruling a Facebook Connect option isn’t totally off the table.

Prime World will find itself in good company, as Nival’s current games portfolio contains some top quality titles including Dragonica, Shaiya: Light and Darkness, Cabal Online, and Level-R, as well as browser based strategy game Khan Wars 2., and Acclaim’s Rock Free.

In total, the Russian online gaming market is valued at around $238 million – up a healthy $53 million from last year. $210 million goes into MMOg’s, and the remainder heading into social and casual games.

HatTip TechCrunch Europe and Quintura

 

EA uses social app to promote upcoming console title

Tuesday, November 24th, 2009

With EA moving further and further into the social gaming sector, it should come as no surprise that they’ve recently launched a social game that serves not only as a stand alone game, but a teaser for an upcoming console title: Dante’s Inferno.

GoToHellHailing from the Visceral Games branch of EA, the social (read Facebook) game launched yesterday, and serves two purposes. ‘Go To Hell’ makes use of the famous poem’s nine circles of hell. The game itself is nothing really we haven’t seen already done. I.e., gameplay is a well worn – don’t like so and so? Send them to the ‘anger’ ring of hell. Mad at an ex-lover? Send them to the ‘lust’ ring. You get the idea. However, the game is not limited solely to the Facebook platform, as users can share play data across other online platforms including MySpace, iGoogle, and Twitter.

Players can choose to punish or absolve other players and see how the community reacts to such actions. For stats trackers, the ‘Go To Hell’ app also includes a ‘Hell Browser’ that serves up a daily snapshot of all activity in Hell. This ‘Hell Browser’ serves is a pushed leader board, thereby encouraging others to play for dominance, without forcing them to an external area to check stats.

“This app is awesome! Not only will it be a blast to see who the world sends to hell, but it’s also a great opportunity to take Dante’s notion of the 9 circles of hell and make it current and relevant for people who may not be familiar with the poem,” said executive producer Jonathan Knight. “Let the damning begin.”

Again, the app itself is nothing special, but rather, it signifies an interesting move for EA. While Dante’s Inferno still hasn’t received a PEGI classification, and isn’t due out until February 9th, 2010, launching a stand alone app that serves as a teaser – and this far out- is noteworthy. Keep in mind that both the Xbox360 and PS3 contain social networking input/output exchanges – wouldn’t that be something if these consoles one day allowed Facebook apps to run on them. Perhaps EA knows something we don’t?

Go To Hell can be found at http://apps.facebook.com/gotohell while non-facebook users (is there such a thing?) can play the browser based version at http://gotohell.dantesinferno.com with other social networking API’s in place. A free iPhone version of the app is expected soon.

 

Planet Calypso and Florida State set out to study virtual buying habits

Monday, November 23rd, 2009

Swedish developer First Planet Company (part of MindArk) – makers of the virtual world Planet Calypso recently announced that they’ve partnered with researchers at the Florida State University College of Business as well as the Stockholm School of Economics to study the far reaching implications of virtual buying preferences in MMO’s and Virtual Worlds.

CalypsoBoasting the world’s largest real money economy within an MMORPG, Planet Calypso is the perfect setting for a study that will primarily focus on determining if a player’s experience with a product in a virtual world influences their intention to purchase a products and how that experience can affect the brand – either positive or negative.

Slated to commence during the upcoming ‘Miss Calypso’ contest, the study will seek to understand how the mental state of a virtual world user influences his/her attitude toward a product, and measure the effectiveness of in-game/world placement has on either real world or virtual purchase of said item. The ultimate goal of the study will help scientists better understand the mental states of players, and how these ‘moods’ affect consumer behavior, with an obvious focus on purchasing power. Results are expected in Q1 2010.

“Despite the increasing attention that virtual worlds have seen with respect to marketing by companies, little is known about the perception of products within virtual worlds. Even less is known about how a consumer’s cognitive state resulting from an experience with a product in a virtual world may influence his or her intention to purchase a product,” said Rob Hooker, a doctoral candidate who is conducting an independent study in the College of Business at The Florida State University. “This study is the first chance to determine if people will buy products in real life that they see on avatars, and what influences them to buy those products for their own avatars as well.”

 

Facebook and Zynga named in class action lawsuit

Friday, November 20th, 2009

Well here it is. The day that both Facebook and Zynga have been dreading. Yesterday the two were officially named as defendants in a federal class action lawsuit.

Filed by Kershaw, Cutter & Ratinoff, a Sacramento firm that specializes in class action lawsuits, in Northern California yesterday, the complaint is seeking damages upwards of $5 million. The issue in question? Well, if you’ve not been following TechCrunch’s ongoing series on the ScamVille affair, it’s best to just head on over and give it all a healthy read right now. Kershaw, Cutter & Ratinoff have been seeking out those that were subject to a number of unauthorized charges emanating from currency offers via social games including Mafia Wars and FarmVille.

Now here’s where things get interesting – neither Facebook nor Zynga actually produce(d) the offers themselves, but rather simply sold advertising space to external ad providers. At it’s most basic, we’re looking at a revenue sharing program here, and reportedly both firms have made heaps of cash from said offers. Apparently, Zynga garners almost a third of it’s revenues from these offers, something that Kershaw, Cutter & Ratinoff have exemplified in their filing.

complaint

And to make matters worse, Zynga CEO and founder Mark Pincus has been fimed stating, “I did every horrible thing in the book just to get revenues.” Ouch. A judge certainly isn’t going to take kindly to such statements.

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Valleywag has the entire complaint here – if you’re so inclined to read legalese.

And while a number of pundits are quick to point out that this recent filing has got to have investors quaking in their boots, it flies directly in the face of Zynga’s announcement earlier this week that it had acquired another $15 million in VC funding. Bad timing? If it is – that’s gotta be one of the worst calendar mis-schedules we’re seen in the Valley in a long time.

 

And the money just kept a rollin’ – Zynga raises $15 million

Thursday, November 19th, 2009

If you’d been wagering on the explosion of venture capital investments in social gaming firms late in 2009, you’d be making off like a bandit right now. Just days after RockYou brought home $50 million in funding, and Playdom announcing their $43 million haul – according to VentureBeat, the biggest fish in the pound, Zynga has recently raised an additional $15.18 million in funding.

Zynga founder Mark Pincus

Zynga founder Mark Pincus

With more than 196 million users on Facebook alone, Zynga is clearly the market dominator right now. According to the VC filing, there were no new investors listed, presuming that the additional funding has arrived from previous or currently funding partners. This latest round of funding is equal to almost half the initial $40 million Zynga raised in their first round of VC funding. Previous venture capital has been provided by Kleiner Perkins, Foundry Group, Avalon Ventures, Institutional Venture Partners and Union Square Ventures.

This latest influx of cash is only one part of the party going on at Zynga. The social gaming company current enjoys the number one app spot on Facebook, with over 65 million monthly users, FarmVille is clearly the industry benchmark to beat.

And while Zynga might be the top of the heap in the Facebook app world, a market that they’ve been less than success in is mobile (read:iPhone) games. In a recent interview with AdAge, Zynga founder Mark Pincus states, “Smartphones. They’re the next frontier in social gaming.” While some might argue that that frontier is already here, we’ve still yet to see what wonders Zynga can do for mobile gaming when given the proper amount of funding and resources to devote to the platform. Could this recent bestowment of funding be earmarked for that exact purpose? And remember, Apple only recently gave the green light to microtransactions within free-to-play games, and area where Zynga shines.

Another way of looking at this new capital is a clear display of faith from investors that the potential class action lawsuit that Zynga and other social gaming companies are looking at is something that can be handled, and shouldn’t slow development.

 

RockYou scores another $50 million

Wednesday, November 18th, 2009

After passing on an intial offer to be bought out by EA (who eventually went with Playfish as their social gaming acquisition), Redwood City, California based RockYou has recently secured an additional $50 million in series D funding. This recent influx of cash was lead by SoftBank. The news funds are expected to further enhance RockYou’s current offerings and expand development, boost global brand, as well as create products that are ripe for in-game advertising possibilities.

Currently the largest independent ad network in the social media field, with more than 213 million monthly unique visitors, the company logs over 15 billion monthly impressions. Since it’s inception in November 2005, RockYou (originally called RockMySpace) specializes in providing marketers unique and industry leading solutions to reach specific market segments. Primarily focused on widgets and social applications, RockYou has commented that with this new round of funding they will also begin venturing into the currently rather risky waters of in-game offers, i.e. the Scamville affair.

“RockYou has been an innovator in the social media industry since our launch more than four years ago, and we are excited to expand our relationship with SoftBank with this round of funding,” said Lance Tokuda, co-founder and CEO, RockYou. “In 2009, RockYou is on target to triple our revenue from the previous fiscal year, demonstrating our continued growth in the space.”

With rumored revenues in the $30 – $40 million per year range, if Tokuda’s statement is on track, RockYou is well within the revenues range of major players including Zynga and PlayEAfish.

This latest round of funding brings RockYou’s combined total raised to a healthy $118 million. This round D funding effectively doubles what previous round C had netted – $52 million from SoftBank and SK Telecom Ventures this time last year. In addition to SoftBank and SK Telecom Ventures, Rockyou’s finding arrives via Sequoia Capital, Partech International, Lightspeed Venture Partners, and DCM.

 

Educational virtual world SecretBuilders wins NAPPA Award

Tuesday, November 17th, 2009

Billed as a virtual world “ powered by a web 2.0 community of children, parents, educators, writers, artists and game developers” SecretBuilders have been secretly building a massive following and winning some high praise.

Specifically not targeting the SecondLife demographic of 30-40 somethings, SecretBuilders is aimed at the 7-14 year old market, thereby putting it in the same genre as Club Penguin and ZooKazoo, an already boiling hot market. However, SecretBuilders have set out to introduce a new standard to kids’ virtual world experience. Instead of just another “do this, play this mini game, go do that” format, SecretBuilders focuses on teaching through interactive learning.

In the virtual world children live and play with significant historical figures. Players may complete quests alongside the likes of King Lear or Galileo. Naturally, these NPC’s will aid a player’s quest – as well as provide some historical facts about themselves along the way. Likewise, kids can tour through Frank & Stein’s art gallery, or order up some slimy treats in the Weird Brew Café (as inspired by the weird sisters from Shakespeare’s MacBeth).

This commitment to learning through fun is something that hasn’t gone unnoticed by the National Parent Publications Awards (NAPPA). SecretBuilders were selected earlier this month as a 2009 NAPPA honors winner in the Children’s Products competition.

“Being chosen a 2009 NAPPA winner is a high honor for SecretBuilders,” said Umair Khan, CEO of SecretBuilders and parent of three. “It goes a long way to validate what we at SecretBuilders have been working so hard to achieve: a website that parents want their children to visit that children also want to go to. And it is especially gratifying that the NAPPA award selection includes the opinion of children.”

With eMarketer placing 53% of all kids involved in one virtual world or another (or several) by 2011, bringing home an award like this only further validates SecretBuilders’ commitment to educational excellence through fun.  Currently, SecretBuilders is averaging around 180,000 unique visitors per month, with an average of 450,000 visits per month.  And again, their commitment to a quality educational experience has been validated by the 1000+ schools and libraries around the world that have SecretBuilders installed at their institution.

“Typically, children’s web sites offer pure entertainment but little nutritional value – ‘chocolate fudge’ – while educational sites sugar-coat skills-building programs but lack real appeal – ‘chocolate-covered broccoli’,” says Bob Brattesani, VP of Creative Design. “SecretBuilders is neither ‘chocolate fudge’ nor ‘chocolate-covered broccoli’ – it is more like Cheerios, both appealing and nutritious. And we are delighted that NAPPA agrees!”