Archive for December, 2009

Facebook overtakes Google this Christmas

Tuesday, December 29th, 2009

facebook

Christmas 2009 is shaping up to be a season of change, and perhaps a harbinger of things to come in the next decade. As we reported yesterday, Apple’s iPod Touch overtook the iPhone in terms of App Store Christmas Day usage, the very same ‘huh?’ happened on Christmas Eve and Christmas Day in regards to Facebook and Google. For the first time ever, on Christmas Eve and Christmas Day 2009, according to internet research firm Hitwise, Facebook became the number 1 destination in the US, overtaking Google.

Christmas is traditionally a peak time for the social networking site, as users use the platform to connect with friends and family, with their previous peak usage coming on Christmas day in 2008. And it wasn’t just Christmas Day that saw a massive increase for Facebook. The social networking site has seen a steady increase over the past year, recently topping 350 million users, and Hitwise data shows that facebook climbed from the number nine most visited websites in 2008, to the third most visited sites in 2009.

However, while this report of increased usage bodes well for the social networking platform, a number of the popular apps and social games that it serves as a host for saw a decrease in activity. It can only be surmised that the ‘social networking’ served it’s original purpose of connecting with friends and family that couldn’t be physically present.

 

Christmas Day: huge surge in iPhone and iPod Touch app downloads

Monday, December 28th, 2009

In case there was any concern whether or not Apple’s iPhone and iPod Touch were to be a seller this holiday season, new data from app analytics firm Flurry shows Apple still clearly dominating the app download market.

The data released shows that the App store saw a 51 percent increase in activity between the 26th of November and the 26th of December. In comparison, the Android Market showed only a 22 percent growth rate over the same time period. According to Flurry, the App Store delivers a whopping thirteen times as many downloads as their nearest competitor, Google’s Android Market.

iPhone App Store vs

In terms of usage, Christmas Day saw an increase 10x of Apple app downloads when compared to the previous Fridays in December. Interestingly, it wasn’t just the iPhone that was driving activity. The big winner this holiday season might just be the iPod Touch. According to Flurry, Christmas Day saw a 10x increase in iPod touch activity, including present and past generation models. Flurry attributes the jump in activity to iTunes gift cards ranking high on shoppers’ lists. However, this spike in iPod Touch activity indicates the first time ever that the Touch has overtaken the iPhone in downloads. And not only did the iPod Touch beat the iPhone, it blew it away, with the iPod Touch seeing 3x the activity that the iPhone saw.

While this increase in iPod Touch activity overshadows iPhone app downloads, it’s most probably a fluke, as excited new iPod Touch users were eager to being playing with their shiny new toys. However, this activity does fall nicely in line with Apple’s commitment to taking a foothold in the hand held gaming market. Apple did sell a lot of ‘handheld gaming devices’ this Christmas season, and the question remains: can they capitalize on it (in time) in 2010?

 

Year End Report: Console Games Releases up – but just barely

Saturday, December 26th, 2009

EEDAR’s Jesse Divnich recently disclosed the number of new games for 2009: 1,099 up just slightly from 1,092 in 2008. According to Divnich, this only slight increase doesn’t bode well for the console gaming community.

wii-360-ps3In an interview with GameSpot Divnich comments, “For just the current generation home consoles (PS3/360/Wii), 2009′s release quantities increase the total availability of games to consumers by 55 percent. Unless retail shelf space grows by the same amount, and it won’t, than the retail shelf life for an average game decreases dramatically.”

Divnich also points out that once console titles achieve a certain appeal and/or market presence, they occupy a permanent spot on retailer’s shelves, thereby creating less and less space for new titles. According to Divnich the number of new releases is outpacing the industry’s growth. “It does mean the average new release is producing fewer unit sales than in previous years.” An odd dichotomy in an economic that is seeing game production costs skyrocketing.

However, and this is a big however, Divnich says that digital distribution sales were NOT included in the research data. According to EEDAR’s research, 2009’s largest gainers were Nintendo’s Wii and DS platforms. Both Microsoft’s Xbox 360 and Sony’s Playstation 3 saw flat or slightly decreased releases. But again, this data does not include digital deliver methods, something that both consoles increased over the past year.

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Based on peak release trends from previous generation consoles as well as industry consolidations, Divnich expects the number of new releases to be on the decline in 2010. Adding to the decline of packaged goods on retailer’s shelves will be increased delivery of games via downloads, as well as the continued development of streaming or ‘cloud’ based gaming solutions.

 

Disney nominates Facebook COO Sheryl Sandberg to board

Friday, December 25th, 2009

Facebook’s COO Sheryl Sandberg has just received a last minute holiday gift. However, this is one present that she won’t be unwrapping. Walt Disney Co. announced on Wednesday that they’ve nominated Facebook’s Sheryl Sandberg to its board. The act is widely hailed as a move by the 86 year old media company to tap into the younger demographic that spends a large amount of time with online social networks.

disney20logo20colorsg8Over the past 16 months, Facebook’s user population has tripled and grown to more than 350 million users. Adding Sandberg to the Disney board as a director would give Uncle Walt direct access to a highly coveted access. Not to mention, this appointment would facilitate an unprecedented level of cross platform promotion and integration between the worlds largest social network and one of the worlds largest entertainment giants.

“It shows that Disney is committed to taking social networking seriously, integrating social networking into its traditional entertainment content,” said Needham & Co analyst Laura Martin.

Martin also added that this appointment would be a cost-effective way for Disney to acquire web expertise without having to acquire a company. In contrast, News Corp. paid $580 million for social networking platform MySpace in 2005, only to be eclipsed by Facebook.

sheryl_sandberg_lgDisney spokesman Jonathan Friedland comments, “She knows a lot about a lot of the areas of new media and technology growth that we are interested in, so it makes a lot of sense for us to have her.”

While Disney is steeped in big media companies, owning the Walt Disney Pictures film studio, ABC Television networks, ESPN, and a portion of Hulu, Oppenheimer & Co. analyst Jason Helfstein says that Disney’s internet operations are currently immaterial to its earnings.

“None of the big media companies make much money on the Internet,” said Helfstein.  However, with the appointment of Sandberg, this might be the beginning of a major shift.

Again, this is only an appointment to the board, but does open up a highly mutually beneficial relationship for both companies. Disney stands to gain access and industry know-how in a highly competitive market, while Facebook could capitalize on Disney’s 86 year media market experience. Disney shareholders are expected to vote on Sandberg’s nomination, along with the company’s 12 other directors (including Apple CEO Steve Jobs and Sybase Inc. CEO John Chen) at a shareholder meeting in March.

 

Facebook to overtake MySpace marketers spend in 2010

Thursday, December 24th, 2009

A new report published by emarketer.com indicates that 2010 will see Facebook over take MySpace in terms of dollars being spent by marketers and advertisers. Facebook has overtaken MySpace in terms of overall popularity and social networking destination of choice, and is already the premier destination for marketers in the US and a number of worldwide markets.

In 2010, emarketer reports, Facebook advertising spend will be $605 million, versus $385 million on MySpace. “As more marketers incorporate social networks in their business, they will no longer look at them as siloed destinations. Instead, they will look to increase the impact of their social network presence by linking it to other marketing initiatives, both online and offline,” said Debra Aho Williamson, eMarketer senior analyst

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The report also states that combined social and mobile, as well as local interactions will yield more advertising opportunities in 2010. The key theme of social network marketing will by earned media. Adding to the advertising opportunities, emarketer predicts that social ad networks will increase in importance.

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To this end, the report states that US online social network ad spending will top over $1.21 billion in 2009. This represents a 3.9 percent increase over 2008, and 2010 is predecited to have a 7.1 percent increase. However, this data flies directly in the face of overall US online ad spending this year.

“When companies budget for social media marketing in 2010 and beyond, a substantial portion of their expenses will go toward creating and maintaining a fan page, managing promotions or public relations outreach within a social network, and measuring the impact of a social network presence on brand health and sales,” noted Ms. Williamson.

The report “Social Network Ad Spending : 2010 Outlook” is now available from emarketer.com and also addresses:

  • How much money are marketers spending for paid advertising in social networks?
  • What percentage of marketers use social network marketing?
  • Why is the concept of earned media important?
  • How will social networks affect local advertising?
  • Where do social and search intersect?
  • Will social ad networks deliver results?
 

Virtual Worlds platform Metaplace to pull the plug in 2010

Wednesday, December 23rd, 2009

It might just be the biggest loss to the virtual world space yet, as San Diego based Metaplace announced recently that they’re shutting down operations as of the 1st of the year.

Metaplace, which provides a platform for anyone to create their own web based virtual world made the closure announcement via email, stating, “Today we have unfortunate news to share with the Metaplace community. We will be closing down our service on January 1, 2010 at 11:59 pm Pacific. We will be having a goodbye celebration party on January 1st at noon Pacific Time.”

The business model itself sounds fairly solid, with users creating virtual worlds ranging from the simple to the relatively complex. Metaplace users could also attend live concert events, watch movies and view art shows together, as well as a host of other virtual events. However, as a revenue generating machine, it simply wasn’t working out. “Unfortunately, over the last few months it has become apparent that Metaplace as a consumer user-generated content service is not gaining enough traction to be a viable product, requiring a strategic shift for our company.”

Moving forward, Metaplace said that it’s shutting down billing immediately, and will refund any virtual item purchase costs and subscriptions for the month of December. Metaplace will leave the doors partially open for virtual world creators to grab their virtual commodities, presumably to allow them to move these creations to other virtual worlds.

The loss of this platform won’t go unnoticed, as approximately 70,000 virtual spaces will disappear as of 11:59 pm on January 1st PST. Moreover, Metaplace was founded by former SOE games vet Raph Koster. Even more interesting, as late as November, Metaplace was still developing the platform, announcing an audio chat feature, as well as investigating ways to integrate with Facebook.

The company Metaplace itself will not be dissolved, but future plans are yet to be determined.

 

Tap Tap ka-ching! Tapulous pulls down over $1m per month

Tuesday, December 22nd, 2009

It’s a fair statement to make that developers of successful iPhone apps stand to make a pretty penny. Until now, it’s not been known just how big that penny may be. Recently, iPhone app developer Tapulous stated that they’re approaching $1 million in sales per month.

Tapulous CEO Bart Decrem

Tapulous CEO Bart Decrem

Based in Palo Alto, CA., Tapulous is staffed by a mere 20 people, and has had a string of hits, most notably “Tap Tap Revenge”. This title alone has been installed over 20 million times, and clocks a hefty 600 million total games played. And if these massive numbers weren’t enough, earlier this year comScore reported that “Tap Tap Revenge” has been installed by one-third of all Apple app users, iPhone and iPod Touch combined.

The companies’ newest iteration, “Tap Tap Revenge 3” costs only $1 from the App Store. The company employs a successful microtransaction business model to garner the $1 million per month in sales. Players have the option to download additional songs for the game from major artists for $.50 a piece. In addition, Tapulous also generates revenue through in-game advertising spots.

This new figure highlights the growing importance (as well as Apple focus) of the iPhone and/or iPod Touch as a gaming platform, as well as the App Store itself. Bart Decrem, CEO of Tapulous said that he expects the company to ride the wave of “exponential growth” in mobile app commerce in the coming years. “It’s going to be big and all of a sudden people are going to say, ‘Holy cow, where did those guys come from?’,” he said. Given these recent sales numbers, the day may have already arrived.

As we’ve seen over the past year, social gaming on the iPhone and iPod Touch has exploded with Zynga, Playdom, and Playfish all garnering massive exposure, downloads, and associated revenue. With Playfish being acquired by EA for $275 million this year, Playdom generating $50 million in annual revenue, and Zynga’s juggernaut seemingly unstoppable, Tapulous’ stock (figuratively, not literally) in the social gaming space just shot up 10 fold.

With Christmas just around the corner, Apple is expecting a boost to it’s already healthy iPhone and iPod Touch sales numbers. Apple claims over 50 million devices in circulation already, and since launching the App Store in July 2008, users have already downloaded over two billion applications.

 

Habbo Hotel publisher Sulake cuts staff, tests facebook app

Monday, December 21st, 2009

Sulake, the Finland based publisher of virtual world Habbo Hotel has recently let 28 staff members go. Originally discussed back in October, the company planned to reduce staff by 20%, or around 40 jobs. Obviously, plans were altered, as the final number ended up being 12 persons short of this original projection. Sulake communication specialist Jahani Lassila commented that the current restructuring and cuts have, “dramatically improved profitability.”

However, according to articstartup.com, some Sulake staff members have chosen to leave by their own accord (perhaps the missing 12?), and that the internal atmosphere at Sulake is somewhat less than joyous.

However, on the other side of the coin, Sulake has announced that they’re actively working on adapting their popular teen title Habbo Hotel to a facebook ready application. Signaling their true commitment to the project, Sulake has also recently integrated a Facebook login options with all global Habbo Hotel sites. In doing so, Sulake has effectively removed the hurdle of joining the virtual world, as the registration process is greatly streamlined.

Habbo

The United Kingdom Facebook crowd has first dibs on the Habbo Hotel integration. Sulake is currently testing the project on Facebook UK, but not limited usage to UK users alone. To have a go at Habbo Hotel on Facebook, head on over and see how close it is to the stand alone version. Personally, if I didn’t know that this platform was on Facebook, I’d believe I was playing a ‘regular’ version of Habbo.

While Sulake has yet to release any information about when they’ll release the project to the global Facebook community, but not limited who and who can not use the app, chances are that they’re already in the middle of a soft launch.

 

Third largest social games maker Playdom will see $50M in revenues this year

Friday, December 18th, 2009

The third largest player in the social games space, Playdom is expecting a profitable year with $50 million in revenues expected. In an interview with ThinkEquity’s Atul Bagga, Playdom CEO John Pleasant confirmed that the company is profitable, and 2009 will see over $50 million in revenues. This statement falls right in line with last October’s leaked data regarding Playdom’s revenue numbers.

The social gaming company of the year award might land with Playfish, as their acquisition by traditional gaming giant logged over $300 million. In second place, at least in the revenues department, Zynga, with their recent $180 million from Russian investor Digital Sky Technologies alone puts them in second place. Not to be outdone, Playdom’s $50 million places them strongly in third place.

And now for the numbers…

Pleasant, who left Playdom his COO position at EA earlier this year to head up Playdom, stated that three-quarters, or $37.5 million, of Playdom’s revenues are generated from virtual goods sales. Given the on going ‘scamville’ fiasco, Playdom treads on some thin ice with 15 percent of it’s revenues being generated from third party advertisers who offer users marketing “offers” in exchange for virtual goods that are rewarded after a users completes a survey or related activity. The remaining 10 percent comes from advertising deals.

Bagga’s report states that Playdom currently cites 28 million monthly active users. In comparison, EA/Playfish has 50 million users on board, and the top dog, Zynga, reports that they have 200 million active monthly users. However, the measure of “monthly active users” does span the gap across multiple titles from the same producer. When seen in this light, Zynga reports 100 million monthly uniques.

But where’s the disconnect here? Both Zynga and Playfish have been making a killing. That’s not to say that Playdom’s $50 million is a paltry figure, but still hovering in the double digit range, while it’s closest competitors are a decent way into the three figure digits. The missing link? Facebook. When looking at Playdom’s platform distribution, 60 percent is played on MySpace, while 40 percent is focused on Facebook. After receiving $43 million last month in a most recent funding round, Playdom execs state that they plan to double the number of it’s current offerings in 2010. The question is – will they ramp up offerings on the much hotter social gaming platform Facebook?

 

Sony gets serious about MMO’s, social gaming, and microtransactions

Thursday, December 17th, 2009

Arguably, SOE’s virtual world/meeting place, Home has been a bit of a dud. It’s had a rocky road thus far, but it looks like there might be a glimmer of hope on the horizon. To be fair, Sony has always stated that Home is a testing ground for a number of future projects. It looks like this holiday season and early 2010 will see the first true realization of these behind-the-scenes- projects.

sony home 1While Sony counts approximately 27 million gamers on it’s flagship platform the PS3, they’re currently just shy of have 50 percent of these users involved with Home (appox. 10 million). And even though these numbers seem paltry when set next to figures such as Zynga’s, Sony has a unique market, as they’re playing in a closed room, but now trying to open the doors to play with others. To this end, Sony announced today that a new game, quite different than Home players are used to will launch within Home’s virtual world. Typically, Home’s offerings are nothing short of an ‘average’ Second World experience. 3D avatars, wandering around, playing a mini-game here or there, etc. With the launch of Sodium One, all of that is about to change.

Not only will Sodium One give players a completely new experience with Home, it’s also a stepping stone to an even larger ambition SOE has in store. Following the lines of a traditional MMO, Sodium One is a virtual world within the virtual world of Home. In premise, the game is a simple action/pilot/shoot type game. However, any worries about the title’s ability to stand on it’s own within Home have been quickly dashed, as early reports state that the 3D art and animations are on par with today’s standards. I mention this, as Home’s standard wander around action is relatively slow, often begging the question – is there something wrong with my console?

As with a number of features within Home, Sony also plans on taking advantage of users’ willingness to pay with RMT’s to distinguish themselves. The first five levels are free, but after that, players have the option to unlock more xp through microtransactions ranging from $.99 to $4.99.

PlayStation Home director Jack Buser comments that this in only the beginning of a virtual goods business model in Home. “We’ve evolved Home into a true social gaming platform,” Buser said. “We are poised to take a leadership position in social games with Home.”

And as we predicted, 2009 has truly been the year of the free-to-play. Sony may not have been first on the spot, but that’s not to say they’re too late to the game. They’ve quietly been building the back end processing, currency, digital objects, and development and infrastructure to open the doors for developers to create virtual goods to be sold within Home.

Sodium One, developed by Nottingham, UK based Outso is only a first piece of a much larger full scale MMO developed specifically for Home. Halli Bjornsson, CEO of Lockwood Publishing, the firm behind Outso’s development work, said that Sodium Two will launch early next year with additional multiplayer combat options. Launching the title piece by piece allows Outso to tweak the game to users’ preferences as they move through the development cycle, and thereby reduce risk of non-acceptance.

As it stands right now, Sony’s outlook for Home is twofold: one piece will continue to expand the virtual content within the complete world of Home, while the other piece continues to develop tools for outside developers to create immersive 3D gaming experiences for Home users. Buser comments that around 30 game developers have already signed up for the process.

And to top it all off, Home’s numbers have been on the rise. October of this year saw 8 million users, while only two months later, Sony has capped the 10 million user milestone. 2010 already looks interesting and promising for Sony.