Archive for February, 2010

5 acquires Six

Friday, February 26th, 2010

After hi5 came close to calling it a day altogether, it seems as though they’re on one heckuva rebound, and obviously putting the social networking chips in the gaming basket was the right call. Announced on Wednesday, hi5 has acquired Austin, TX based social gaming company Big Six. Announced separately, Big Six’s founders Kevin Gliner, Monty Kerr, and Chad Hansing will now join hi5’s management team. These three will now also join one of hi5’s most recent acquisitions, Alex St. John.

hi5logoThe main draw for hi5 is/was Big Six’s proprietary commerce platform. This new acquisition will allow hi5 to expand their commerce in virtual goods and games sales. hi5 currently employs a commerce system that includes a universal virtual currency that can be spent in any of their titles. This acquisition brings new technology to hi5 in terms of payment processing, fraud detection and conversion optimization. As an added bonus to the deal, Big Six have also designed a social gaming platform that will now become part of the core hi5 site.

“The Big Six team and technology are a perfect complement to what we have already developed at hi5,” said Bill Gossman, CEO of hi5. “Over the last two years, we have made a substantial investment in building out the industry’s most robust commerce infrastructure for virtual goods and gaming and this acquisition will considerably augment both our commerce platform and domain expertise.”

“We are excited to be joining a company that shares our philosophy and vision for how social gaming will evolve,” said Kevin Gliner, co-founder and CEO, Big Six. “This deal is a perfect match because it enables us to accelerate our go-to-market plans by leveraging hi5’s huge global audience.”

 

Ngmoco still on the hunt for future acquisitions, likes Android, but sticking with iPhone

Thursday, February 25th, 2010

Following up on Ngmoco’s announcement not only of a new round of funding, but also their acquisition of Freeverse, CEO Neil Young says that both companies will continue to operate as usual, with Freeverse’s current games will remain just as they are.

neilyoung“At this time, we don’t plan to take games that are already in the market and make them free. We’re not going to start charging people for balls on Skee-Ball or anything like that,” Young explains.

However, any games that Freeverse currently has in development will see some changes. Some of these titles will now be converted to reflect Ngmoco’s adoption of the free-to-play model, but others will retain the pay model, thus diversifying Ngmoco’s portfolio of offerings.

“There are games in Freeverse’s pipeline that will do very well as free-to-play games so we’ll have to do a little bit of work to adapt them,” Young says.

“There are some that won’t. For example Warp Gate will be a premium paid game. In terms of new games, we want to build as many of those as possible under the free-to-play model.”

Young also says that Ngmoco is still on the hunt for future acquisitions.

“We will continue to look for acquisitions that make sense at a studio or company level and acquisitions of applications.”

When asked by pocketgamer what Ngmoco’s smartphone plans are, Young can only comment, “The iPhone is in a strong leadership position. I’d say that among the pack of competitors, Android is the furthest advanced but it remains significantly behind the iPhone and iPod touch in terms of user adoption, ease of use, purchasing mechanisms, tools etc. I am encouraged at the rate at which Android is evolving, innovating and growing but for us the real focus is the iPhone OS.”

 

Walmart gets back in the digital delivery game – acquires VUDU

Wednesday, February 24th, 2010

One of America’s largest retailers is getting back in the digital delivery game with their announcement of the acquisition of Santa Clara, CA based content delivery platform VUDU. After pulling the plug on their attempts to get into the digital TV and Movie delivery system in 2007, Walmart representatives feel that now is the right time for this strategic acquisition. Presumably, this is Walmart’s answer to Best Buy’s cooperative effort with Roxio’s CinemaNow offering.

vudu_logoThe VUDU service will allow Walmart to brand a digital delivery service providing consumers with on demand access to thousands of movies and TV shows directly to their broadband connected HD TV’s and Blu-ray players. Presumably one of the largest draws for Walmart is VUDU’s licensing deals with just about every major studio, approximately 16,000 available titles, as well as the world’s largest collection of 1080p on-demand video.

“The real winner here is the customer,” said Eduardo Castro-Wright, vice chairman for Walmart. “Combining VUDU’s unique digital technology and service with Walmart’s retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment.”

And according to Parks Associates’ VP and Principle Analyst Kurt Scherf, “Walmart is re-entering the OTT (over-the-top) market at an opportune time. Parks Associates’ consumer research of online video services indicates that usage from paying users for movie rentals, movie downloads, and TV downloads has doubled between 2008 and 2009.”

Likewise, the folks at Parks Associates project that by 2014, more than 40 percent of revenues for premium online video services will be derived from connected TVs, Blu-ray players, game consoles, and networked digital media set-top boxes (think AppleTV for example). By adding the major online and offline retailer, Walmart could conceivably push the market even further as consumers clamor to the new offering. At least that’s Walmart’s hope.

Now some of you might be wondering why we’re talking about TV shows and Movies on demand? Look at this as a first foray into something that we believe is the next logical step in online gaming. Remember what our good friend David Perry has been preaching (and working on) for quite some time now – gaming in the cloud. If Walmart (and Best Buy) are able to develop and push this technology in such a way that Joe Average consumer ‘gets it’ and regularly consumes it, the question is – how long will it be before Mr. Average starts asking for the same delivery method, just slightly different content, i.e. games?

There’s a huge untapped market waiting to happen if today’s ‘casual’ gamer can and will want to make the swap from a desktop or laptop method of playing their favorite game to that of the living room. Walmart clearly sees the opportunity in the making, as they did in 2007, although they might have been a bit too progressive at the time, and want to cash in. Our best estimate is that this is a staging and testing ground for something much, much bigger.

 

Ngmoco lands $25 million – acquires Freeverse

Tuesday, February 23rd, 2010

It looks as though Ngmoco’s decision to switch from paid iPhone game apps to a free-to-play, in-game purchases revenue model has paid off. Announced yesterday, Ngmoco has raised $25 million in their third round of venture capital. Without missing a beat, the company announced their acquisition of fellow iPhone game developer Freeverse (Skee Ball and NBA Hotshot). Ngmoco CEO Neil Young told Gamasutra that the new influx of cash will enable the company to “scale as quickly as possible,” in regards to it’s new free-to-play model.

ngmocoThe funding round closed at the end of 2009 and was lead by Institutional Venture Partners. As is customary, IVP general partner Sandy Miller will now take a seat on Ngmoco’s board of directors. Previous investors Kleiner Perkins, Norwest Venture Partners, and Maples Investments also took part in this round of funding, raising Ngmoco’s total investments to $40.6 million. Not bad for a 1.5 year old startup.

The Ngmoco and Freeverse courtship has been in the works for a while now, as Freeverse was the first developer to use Ngmoco’s “Plus+” social network tools into their games. From Ngmoco’s side, CEO Neil Young comments, “We’ve been thinking about how to accelerate our strategic growth though acquisitions of companies and intellectual property, and Freeverse was really at the top of our list.”

Brooklyn based Freeverse started out as Mac software developer, but quickly became entranced with the iPhone and gained notoriety for their chart topping apps on Apple’s App Store. Given their success with paid applications, Freeverse VP Colin Lynch Smith comments that Ngmoco, “had to make the case to us for free-to-play,” but “Neil and the guys at Ngmoco made a really strong case.”

“Neil’s vision for where the industry is going, and where the market is going, was pretty compelling, and we’re on board with that,” he added. “There are still some opportunities on the paid side, but the real opportunities are on the free-to-play side.”

 

Games industry to balloon to $64.9 billion by 2013

Monday, February 22nd, 2010

A new report issued by Strategy Analytics, Inc. this past Thursday forecasts that the global video game software market will continue it’s growth in the coming years. According to Strategy Analytics, 2009’s revenues are in the $46.5 billion ballpark, and will continue to grow to a massive $64.9 billion by the close of 2013, indicating a 40 percent growth rate over 4 years.

new-playstation-store-frontThe report predicts both physical game software (console, handheld, and PC) growth, and digital download activity, IGA, sales of virtual goods, and subscription services. The online games revenues sector is expected to have a compound annual growth rate of 18.7 percent, reaching $24.8 billion by 2013, accounting from more than 38 percent of total video game software recenues.

“Strategy Analytics predicts more revenue growth from online sources instead of from traditional physical game sales as broadband adoption continues, which is similar to other media sectors. More gaming devices and games are being connected online and new online revenue models are appearing on the market,” said Martin Olausson, Director of Digital Media Research at Strategy Analytics.

The big winner in Strategy Analytics’ research is virtual goods sales in social networking based games. As to be expected, the Asian market is expected to lead this consumption, however North American and European markets will experience accelerated virtual goods sales growth.

Jia Wu, Analyst in the Strategy Analytics Digital Media Strategies (DMS) service and author of the report, added, “New online revenue streams, such as in-game dynamic advertising and sales of virtual goods, will spur rapid growth in online game revenues in the coming years.”

The Strategy Analytics “Global Video Game Market Forecast” is available from StrategyAnalytics.com and includes information on online gaming revenue streams, electronic sell through, subscription services, IGA, and virtual goods sales data. The report also includes country specific data from a wide range of markets including Argentina, China, Demark, Germany, Mexico, Russia, the UK and USA.

 

Faunasphere comes to Facebook

Friday, February 19th, 2010

Big Fish Games announced yesterday that they are now offering their free-to-play MMO title, Faunasphere on Facebook. The title stands above the crowd insomuch as it’s now a cross platform title, having the stand alone browser version linked to the Facebook based game so that players can have a seamless experience, regardless of the platform.

faunasphere“As a standalone site, Faunasphere has demonstrated incredible user growth and consistently high average spend per user. We are excited to see it perform at scale on Facebook, the world’s largest social network,” comments VP of Social Games at Big Fish Games Will O’Brien.

According to Big Fish Games, both versions of Faunasphere will operate under the same microtransactions system, whereby users can buy additional virtual goods and items for their fauna and commission scientific tests to learn more about the hidden skills their selected character(s) may exhibit. Big Fish Games is also touting the title as a “real” MMO on the Facebook platform, finally introducing the casual games community outside the normal realm of Mafia Wars, Happy Aquariums, and/or FarmVilles.

“MMOs are the original social game,” said Toby Ragaini, Big Fish Games vice president, MMO. “What’s great about bringing MMOs to Facebook is that you have a built-in network of friends to play with. People who play other social games on Facebook will enjoy the increased immersive experience that Faunasphere offers, thanks to the ability to have real-time, synchronous interactions with friends and fellow players. And because Faunasphere was designed for the casual gamer, it’s a perfect fit for the Facebook audience.”

Big Fish Games raised $83 million in 2008, and is continuing to invest in social games and that Faunasphere is just one of many efforts it has in the pipeline for this year. Obviously, Big Fish Games is taking cues from Zynga, hoping to cash in on the massive success of social gaming on the Facebook platform.

 

Open Feint launches social features for free-to-play iPhone games

Thursday, February 18th, 2010

Announced late yesterday, Burlingame, CA based Aurora Feint officially opened their private beta of OpenFeint X, a solution for developers to have the ability to create free-to-play games, including those stocked with microtransaction based virtual goods. The company positions the product as a logical adoption, given the runaway success of free-to-play games on social networking platforms.

openFeint_logo“OpenFeint X is by far our most ambitious and transformative effort,” said Jason Citron, Founder and CEO of Aurora Feint Inc. “We know that there is tremendous interest in creating the next Zynga, CrowdStar, and PlayFish of the iPhone. We also know that developers who aspire to these ambitions want the platform on which they can build these kinds of lucrative businesses. OpenFeint X is exactly that platform.”

Launched in conjunction with strategic partner DeNa Group, OpenFeint X will be rolled out in phases over the coming months. Core services of OpenFeint X will be fee to developers. The up side to using Aurora Feint’s toolkit is the exponential exposure devs will gain from the community. Social features include a chat wall, similar to Facebook, a newsfeed showing recent in-game activity, and game nudges, again all taken from the Facebook platform page here. Most notably, OpenFeint X includes tools for developers to fully integrate a full virtual goods store, detailed analytics, a game-specific currency, and downloadable game assets.

“OpenFeint X is the culmination of bringing the best of Xbox Live and Facebook’s App Platform to the iPhone, and extending the multi-billion dollar virtual goods social gaming economy to mobile,” said Peter Relan, Executive Chairman of Aurora Feint. Relan also holds the same position at CrowdStar, the #2 Social Game developer on Facebook, which makes huge hits such as Happy Aquarium, Happy Island and Happy Pets.

Relan concludes, “OpenFeint X is the platform on which the next big social gaming companies will be created.”

The existing OpenFeint platform currently powers social gaming services for over 12 million users, and has a monthly growth rate of 25%.

 

Charging for online content – who’s willing to pay for what?

Wednesday, February 17th, 2010

A new study conducted by Nielsen has revealed that consumers will definitely “maybe” pay for online news and entertainment content that they now receive for free. However, the majority of respondents (85 percent) indicated that they’d rather the currently free content stay that way. Interestingly, survey respondents were far more willing to pay for certain services, while others don’t seem to be worthy of breaking out the credit card for, especially if they’ve previously done so. The study is in depth, as Nielsen surveyed over 27,000 consumers across 52 countries.

The big winners in the “will maybe pay for” category include theatrical movies, music, games, and professionally produced video (i.e. television). The current print industry buzz around microtransactions in online magazines and newspapers fell into the middle of the pack, an improvement over a Forrester Research report in November found that 80 percent of U.S. consumers would not bother to access online newspaper or magazine sites if they were no longer free. Rounding out the pack were amateur productions including podcasts, consumer generated video and blogs. Interestingly, social communities (i.e. social networks) scored just above podcasts and below Radio. A dichotomy unresolved, as the gaming activity on these social communities is clearly generating large amounts of revenue, that some are obviously interested in paying for.

paid-content-type

Some statistics from Nielsen’s survey:

  • More than half of those surveyed (52%) preferred a microtransaction payment model over a full subscription to acquire content. However, only 43% indicated that implementing an easy payment method would make them more likely to pay for online content.
  • Better than three out of every four survey participants (78%) believe if they already subscribe to a newspaper, magazine, radio or television service they should be able to use its online content for free.
  • At the same time, 71% of global consumers say online content of any kind will have to be considerably better than what is currently free before they will pay for it.
  • Nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost.
  • As a group, they are ambivalent about whether the quality of online content would suffer if companies could not charge for it—34% think so while 30% do not; and the remaining 36% have no firm opinion.
  • But they are far more united (62%) in their conviction that once they purchase content, it should be theirs to copy or share with whomever they want.

What’s also interesting to note from this survey is the top slots. Movies, Music, Television, and Games. Is there perhaps a program a great number of us already have installed on our machines that gives us direct access to all 4? If you own and iPhone or iPod, or simply like music, television, and movies at your fingertips, chances are you’ve got iTunes installed on your machine. While I’m not going to say that Apple itself has revolutionized the industry, but they have certainly built a platform that has introduced millions to the concept and procedure of purchasing content online with a direct digital deliver method. Now….if print media publishers could reconcile a content gateway through iTunes…well, that might drastically effect the results of the Nielsen survey.

 

Females are big casual gamers, but don’t ask them to pay

Tuesday, February 16th, 2010

A new study released by Q Interactive further confirms the results from their earlier study released last November, indicating that women are big social gamers. But don’t call them gamers, nor ask them to pay to play.

770 women were surveyed in January and questioned about their knowledge of online gaming and virtual worlds. 36 percent indicated that they regularly play games on Facebook, with 54 percent admitting that they play at least on social game per day. Mafia Wars and Farmville scored top ranks on female gamers’ choices.

“This provides a terrific opportunity for brands to serve as a trusted, valued partner to them. By having a presence in the game and app space, brands get the benefit of reaching an influential consumer set,” said Ian Johnson, Director, Social Media World Forum. “With the support of brands, advance in games and apps and we’re finding also get information from brands they value.”

And while women may be huge consumers of casual games, please do not refer to them as ‘gamers’. Less than half of those surveyed (42 percent) would call themselves a ‘gamer’. However, these ‘non-gamers’, 67 percent of them, consider between 1 and 5 hours per week a socially acceptable amount of online play time. Likewise, when asked if they would pay (i.e. use real money transactions) to play, over three quarters of them (77 percent) indicated that they would pull the plug on their ‘non-gaming’ addiction playtime. 97 percent said that they would rather ‘earn’ virtual currency through games rather than investing actual, real-world money.

 

Edinburgh Interactive and Media Guardian Edinburgh International take cues from SyFY and USA Network

Monday, February 15th, 2010

Edinburgh Interactive, a part of the Edinburgh Festival and the Media Guardian Edinburgh International Television Festival announced today that they plan to bring the gaming and television decision makers together in one room this coming summer.

PrintOn the closing day of the Edinburgh Interactive, August 26th 2010, the two groups will host the first creative industries event in the UK, bringing television and games industry bigwigs together for not only information sharing, but to see where to two can go together.

The MediaGuardian Edinburgh International Television Festival, or MGEITF will feature a keynote by “a games industry leader” (i.e. yet to be confirmed), while the Edinburgh Interactive branch will feature a televsion industry leader. The MGEIFT will also host a creative Masterclass, bringing games developers and artists together to discuss the game dev. process, and which opportunities for crossover into the TV market, particularly interactive television. In the UK alone, there are 13 million next generation consoles (Wii, Xbox, and PS3), all with access to the internet, as well as the BBC’s iPlayer or Sky’s Player.

Chris Deering, Chairman of Edinburgh Interactive, said: “Games have had a significant effect on the use of the television in the home. Over the last 12 months this has moved on dramatically with recent research showing that 10 per cent of all BBC iPlayer requests are being driven by games consoles. The debate between the two industries has not yet begun; it will begin in August at Edinburgh Interactive and MGEITF.”

With the dawn of the next generation 3D HD TVs just around the corner, titles such as I’m a Celebrity…Get Me Out Of Here, Countdown, Family Fortunes and Ready Steady Cook the interactivity is already underway. The question the Edinburgh conference seeks to address is: what’s next, and how do we get there?

Deborah Turness, Editor of ITV News and Advisory Chair of the MGEITF Advisory Committee, said: “This is an exciting opportunity to explore joint format development between television and games and is a natural evolution driven by major advances in technology. In bringing together executives from these two entertainment industries to discuss, network and share ideas, we place both Festivals at the centre of a new global debate in Edinburgh.”

If any of this sounds familiar, remember, US television network SyFy has already started to kick things off, most recently featuring an interactive tie-in with the release of the MMO Star Trek. Likewise, USA Network, a part of NBC Universal has been steadily building up it’s casual games catalog.  Naturally, it would be a good bet that UK developers will be closely following SyFy’ and USAs progress over the next few months, and will surely discuss what their American counterparts are up to.