Archive for April, 2010

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League of Legends/Razer tournament to kick off April 17th

Friday, April 16th, 2010

As we reported earlier this month, Riot Games has partnered with gaming peripherals’ giant Razer in a cross promotional effort. One part of this promotion is the “Twisted Treeline” Tournament which kicks off tomorrow, April 17th.

LoL

With more than $2400 in cold hard cash, as well as a plethora of high end Razer products, and Riot Points up for grabs, League of Legends’ Twisted Treeline tourney is sure to attract even the hardest of hardcore players.

All rounds will be played in the 3v3 format, and will feature a single and double elimination bracket format. The first round of the brackets is the single elimination phase. Teams that lose in this round are eliminated from the tournament. Winners will move on to the double elimination stage.

The double elimination phase is slated for one week later, April 24th, with the final Championship round scheduled for one more week later, May 1st. This championship round will be comprised of the final 4 teams, and will be played sequentially; lower bracket semifinals, upper bracket finals, lower bracket finals, Grand Final.

Looking at the numbers, the League of Legends Twisted Tree Tournament breaks down like so:

  • 64 teams will compete in a group stage
  • 16 teams will emerge victorious from these initial 64
  • 16 teams will be reduced to 8 teams via the single elimination phase
  • 8 teams will play a double elimination bracket to determine the final standings

Sadly, the League of Legends tournament is restricted to residents of the US, Washington DC, and/or Canada (outside of Quebec), and must be 13 years of age or older on April 17, 2010. All participants must also have a level 20 summoner that resides on the North American League of Legends server.

The official rules for the League of Legends Twisted Tree Tournament can be found here. Best of luck!

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Runescape pulls down $58M in 2009 revenues, profits $27M

Thursday, April 15th, 2010

Given the rise in free-to-play gaming popularity over the past few years, it’s no longer a debatable fact whether or not the business model works. And while we’ve talked numbers in the past, additional information on the model and the industry behind it never hurts. It should come as no surprise that one of the most popular free-to-play MMO’s is bringing home some serious cash.

Recently unearthed by Games Brief’s Nicholas Lovell, British game developer Jagex, producers of Runescape, are bringing home revenues pushing £38.4 million (~$58 million), with profits of £18 million (~ $27 million), according to the Companies House, a requirement for all British firms.

jagexfinancials
Jagex’s revenues illustrate a 47 percent operating margin, including the tens of millions of pounds spend on the debacle that became Mechscape. 94 percent of Runescape’s revenues do come from subscriptions, but Jagex is still brining home over £2 million in ad revenue each year. Certainly nothing to sneeze at.

While over 10 million monthly unique users, 9 million of which play the game for free, 1 million of them subscribe to the service each month.

Also according to the Companies House, Jagex shareholders have cashed in over £31 million (~$48 million) in dividends over the past four years, and the company has an active £15 million (~$23 million) in the bank ready to be used for future development.

As Games Brief asks, “Still need convincing Free-to-Play works?”

We don’t.

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2009 survey reveals 4% drop in average game developer salary

Wednesday, April 14th, 2010

Game Developer Research, the folks in cahoots with Game Developer Magazine and Gamasutra have recently released their ninth annual Game Developer Salary survey. The survey found an overall decrease in the average game dev salary of 4% when compared to the same figures from 2008. The average game developer took home approx. $79,000 in 2008, while 2008 saw that salary slip to $75,573.

logogdresearchKeep in mind, 2008 was a banner year for game developers, as they set an industry average record that year, not something to easily top. This drop in salaries is the first case on record of a significant average salary decrease. Game Developer Research points to a loss in consumer confidence, and attributes this to the current economic climate. And while this is a drop in average salaries, the number did not dip below 2007’s number, indicating that this may be a direct result of out of control Wall Street bankers making crazy bets on commodities failing.

Game Developer Research also took a look at today’s independent or smaller game developers, with results to be released soon.

Some industry highlights from the report:

  • Game programmers have an average salary of $80,320. The survey found that programmers with more than six years of experience in their field earned, on average, 36 percent more than the average 2009 annual salary.
  • Art & Animation folks made out better than average in 2009. They saw an average increase in salary, up 2 percent to $71,071.
  • Game Designers also saw a slight increase in salary in 2009. Up 3 percent, the average salary for game designers came in at just over $60k with $61,859. This discipline also includes writers, who earn on average $61,786.
  • Production folks earned on average $75, 082. The survey also found that this area of games is also the most female friendly, with 18 percent of game producers being female. While this figure is down from last years, it’s still almost twice the industry average. Production people also tend to be the most experienced in the industry, with almost half (49 percent) having 6+ years of gaming involvement.
  • QA testers tend to have the fewest years of experience under their belt, with nearly half having less than three years. Therefore, these people tend to be the least paid in the industry, with an average salary of $37,905. However, in contrast, if these people stick around for six or more years, the survey found that this salary more than doubles.
  • Sound Designers and composers are generally the most experienced people in the industry, and are thus compensated for it. While they earned on average $82,085, the survey also found that this segment of the industry is also opening up to new talent, with those with less than three years of experience rose to a new high of 38 percent. Balancing this out, those with more than six years of industry experience dropped significantly, currently holding at 33 percent.
  • And now for the big winners: Business and Marketing. On average, these folks took home $96,408. This figure even includes a 6 percent drop from last years’ numbers. The survey also found that these individuals are the most likely to receive additional compensation. And while this number might be quite lofty, there’s still a wide range of salaries even within this microcosm, as marketing and PR employees averaged $83,804, executives, $129,167.

The full report, “Game Developers Salary Survey” includes more detailed U.S. regional and growth data for year-over-year results from 2005, 2006, 2007, 2008, and 2009, plus international information from Canada and Europe. This report, and others, are now available from the Game Developer Research division.

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Combat Arm opens non-in-game shopping

Tuesday, April 13th, 2010

Nexon’s popular free-to-play title, Combat Arms is adding yet another layer to it’s available purchasing options. Players of the FPS may already customize just about every feature of their character via the games’ in-game item shop, the Black Market. Beginning April 14th, players no longer need to be logged into the game to purchase digital goods for their characters.

Slated to launch tomorrow, Combat Arms players will be able to purchase weapons and gear with NX (Nexon’s currency) directly from the game’s website. In other words, by making this possible, players no longer need to be logged in, and actually playing in order to make purchases. This option now opens an entirely separate revenue option for Nexon. Think student at school, or casual office worker. They both know that their clan is heading into a major battle this evening, but real-life comes first, and that test must be taken, or those reports submitted. They may not have time to get to the Black Market, equip, and get used to their new gear. With nothing more than a website visit, a login, and a few clicks, this new piece of pwnage will be waiting for their character the next time they log into the game.

In addition to the “mobile mall,” Nexon is also introducing a series of new achievements, as well as two new pieces of virtual gear.

The achievement systems aids players in raising their “Combat Score,” (or overall achievement score) which benefits from each of 65 different medals offered within the game. This now brings the added dimension of achievements, allowing players to compare stats, another social driver behind continued game play. At it’s introduction, medals can be earned for both general performance, as well as game mode success.

To celebrate the new gear, achievements, and alternative purchasing power, Nexon will offer a on-day sale of a permanent UMP submachine gun on April 21st. This special piece of trigger pulling fun can be purchased with 100k Gear Points, the currency acquired through game play. This is just one part of a current Combat Arms promotion, “Explosives Month.”

Thought of the Day – What is Nexon testing here? Clearly, they have a number of other successful free-to-play titles. By adding the purchasing power offsite, with a particular emphasis on, “buy on the go,” how long will it take before the rest of Nexon’s titles offer the same? And if so…how long will it be before Nexon releases an iPhone/Android/Smart Phone application that allows players to centralize their in-game purchases, with the added value of cross-promotion?

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Apple iPhone OS 4 – Game Changer?

Monday, April 12th, 2010

Last Thursday, Apple capitalized on the buzz surrounding their newest device, the iPad, with an announcement of a “coming soon” OS 4.0 for the companies’ popular iPhone device. The iPad runs on a modified version of this operating system. While the word on the street was all about the multitasking, the lesser discussed inclusion in the 4.0 OS is Apple’s Game Center.

The Game Center is Apple’s introduction of a social gaming network that will reside within the mobile device. In other words, think about the social (and associated purchasing options) features that consoles such as the Xbox 360 and PS3 offer, but all on the go. The Game Center will allow for friend invites, a number of multiplayer game options, as well as leaderboards and matchmaking features.

While Apple has previously stated that they’re serious about games, particularly in regard to the iPhone, this is Cupertino’s first rock solid “above and beyond” feature that definitively backs this statement up. Clearly, this is Apple’s attempt not only to bring gamers together, and presumably push more product, but also to cut in on the action that Facebook has been enjoying for quite some time now.

While the details in Thursday’s announcement were vague at best (possibly contributing to the lack of buzz), the beta release of the OS is slated to include a preview of the Game Center for developers, and include a set of APIs, thus allowing devs to start taking advantage of the newest features offered.

And since the iPad is already running a very similar OS, it’s not a far leap to assume that iPad owners’ behaviors and usage patterns would be similar to iPhone users’. Low and behold, a look at some initial demographics back this theory up. Clearly Games are dominating both of Apple’s portable devices. Now throw some social matching making and friend connections in there, and the avalanche of dollars is poised and ready.
ipadstatistics_april10

And now for the bad.

In theory, Apple’s Game Center is amazing, and should open up hundreds, if not thousands of new opportunities for not only games developers, but developers of all apps. That is, however, if you’re welling to write them all in C/C++/Objective-C. This tiny little snipped, aka clause 3.3.1, has already sparked a debate, with points and counterpoints coming from Jobs himself.

The problem herein, is that a vast majority of today’s games run on a third party engine. And while Apple says that they want to get into the game of games, already limiting the ways and means of getting into the club is a bit counter productive. Yes, developers will bend to Apple’s mighty ways, as they are the keeper of the proverbial castle, but it does show a bit of their obtuseness and arrogance, especially when trying to cater to a crowd that’s traditionally been PC or none-at-all based.

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Bebo to Begone by May’s end

Friday, April 9th, 2010

One look at AOL’s share prices over the pat few days indicate that investors are willing (looking forward to?) to letting the social network Bebo go the way of the Dodo. Announced on Tuesday of this week, the following day, AOL’s shares surged to a price they haven’t seen since it’s November spinoff, rising almost 4 percent to close at $27.44

fail-boatThere’s a couple of things going on here that have lead to Bebo’s epic fail. First and foremost, AOL executives obviously have their collective heads up their ass, as they clearly weren’t able to learn a thing from News Corp’s purchase of MySpace.com. AOL shelled out a massive $850 million to Joanna Shields of Bebo in 2008, hoping to corner the marketing on UK teen girls.

All of these girls are now, of course, are on Facebook.

The official memo that was distributed to employees states that, “Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space.”

Read: Bebo is a money pit, and we’re not going to sink another dime into it.

While AOL states that they are looking for a buyer for the ailing social network, they’ve also publically stated that a shutdown might allow them to write down some of the acquisitions costs, thereby yielding hundred of millions of dollars in tax savings. 3 guesses, the first 2 don’t count; which option to you think AOL is going to go with here? AOL has also stated that they’ve set a final hour of the end of May to either find a buyer, or they’ll pull the plug. Friendster anyone?

While based in San Francisco, Bebo never really gained traction in the US, but had, at one point, a strong user base in the UK. They got into the virtual goods market last year as part of a promotion for their Bebo Mobile service. And like many other social networking services, Bebo is a host for social gaming apps including titles from Zynga.

The sale of Bebo isn’t the only “Hmmm…maybe that wasn’t the smartest use of capital we’ve ever made,” issue going on at AOL. They’re also working on selling off the ICQ IM business, most likely to a foreign investor. This sale has been moving at a the pace of molasses, but once if completed, could net the company between $100 – $150 million in cash.

This pile of plunder could give CEO Tim Armstrong a nice position to sit in at the Google and Microsoft table when negotiations commence over a new deal for AOL’s search business. The Google deal is set to expire in December.

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Call of Duty: Modern Warfare 2 map pack shatters Xbox LIVE record

Thursday, April 8th, 2010

Slightly under a month from it’s initial reveal, and only into it’s first week of sale, Infinity Ward’s Stimulus Package DLC map pack has sold over 2.5 million copies. This data has been released by Microsoft, and confirms that this DLC has shattered Xbox LIVE records, as more than 1 million gamers around the world downloaded the new map pack within the first 24 hours of it’s release.

Call-of-Duty-Modern-Warfare-2DLC moving over 1 million units in 24 hours? Ok, not unconceivable. However, here’s the rub: the Stimulus Package is downloadable content. Most downloadable content usually falls in the ‘microtransaction’ range (with a heavy influence on micro). The “new” map pack costs $15. Looking around at various retail sources, on average, this $15 expansion pack (or 1200 Microsoft Points) costs one quarter of the game’s price. Not exactly a “micro” transaction. Especially considering that only 3 of the 5 maps that are included are new, with 2 being “slightly reworked” maps from Call of Duty 4.

Putting the world of FPS in perspective, DICE’s Battlefield 1943, which the company makes no qualms about pitting head-to-head with Call of Duty: Modern Warfare 2, is also selling a map pack for the same price, $15. DICE’s content pack broke records last month when it became the fastest game to reach 1 million units sold on Xbox Live since its July 2009 release. Obviously the two companies are now locked into a ‘one up’ing of each other, which should ultimately benefit the consumer. However, when looking at expansion packs, and granted these are bundled map packs, is the price point of a quarter of the original games’ price too much for gamers? Obviously not.

In a free market economy, the consumer will ultimately decide what is too pricey, and what is not (in pure theory, at least). If players are so hungry for additional content, does this inhibit or promote further game development? It’s a tricky rope to walk for devs, as they want to keep players interested in the current title, expansion packs, while at the same time working on the new version of the game, or even creating something completely new.

To this end, while Call of Duty: Modern Warfare 2 is also available on PC and the PS3, the title has seen much higher sales on the Xbox 360 platform, and Activision confirms that the Microsoft console has the largest player base. Thus, the new content was produced for the Xbox 360 first, but Infinity Ward is preparing PC and PS3 versions for a later this spring launch.

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Zynga. Worth $5 billion?

Wednesday, April 7th, 2010

If you’re a social gamer, i.e. one who regularly plays free-to-play games in short doses, most probably on Facebook, chances are you’ve come across a Zynga game or two (or 6 out of the top 7 games). And while we know that Zynga certainly has a valuation on not only their properties, but the company itself, I’m not quite sure anyone would have guessed that this valuation would be in the $5 Billion range. This figure is according to an investment report issued by investment news blog Second Shares yesterday.

zynga_MAUWhile Zynga has no short term plans to go public (at least that we know about), industry analysts Jay Gould, Lou Kerner, and Bill Auslander estimate that if Zynga were to go public tomorrow, shares would trade around the $15.75 per share mark. This estimate is determined based on a multitude of factors, one of which being the price that current Zynga employees could fetch on the secondary market by selling their stock options.

Keep in mind – these estimates are conceived through complex financial projects and mathematical computations. I’m not going to use the word, but it should have already occurred to you where you might have heard this terminology before (can you say derivatives?).

However, financial wizardry aside, the Second Shares report highlights that Zynga is clearly leading the social gaming industry. Their MAU (Monthly Active Users) clocks in a massive 237 million, with the nearest competitor, EA via their purchase of Playfish, hits the finish line with a respectable 53 million, but still dwarfed by Zynga. The only other player mentioned that is significantly larger than Zynga is Chinese firm Tencent Holdings with an MAU of 400 million. As a reminder…Tencent is testing the Facebook waters.

Naturally, with a number this big, there’s bound to be a few folks scratching their heads, and asking…Why? How? Etc…Notably, LOLapps CEO Kavin Stewart has suggested that Zynga artificially inflates it’s MAU numbers by counting the same user over multiple applications. For instance, the Second Shares report specifically points out that Zynga receives 15 MAU from the FarmVille.com, indicating that the MAU may not be a proper valuation based on a single platform.

Building on this theme, while the report considers Zynga a strong investment opportunity, it does highlight some of the risks involved. Currently, Second Shares says that 50 percent of Zynga’s revenues are generated from one title: FarmVille. As well, 35 percent of Zynga’s MAU is generated from FarmVille alone. And adding to this house of cards, Second Shares also points out that users use FarmVille 50 percent more than any other title.

As a veteran of the first dot-com boom, I can only think of one very valuable token of advice bestowed upon us from the venerable and wise writers of Battlestar Galactica, “All of this has happened before, and all of this will happen again.”

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Gameloft launches eight iPad specific titles

Tuesday, April 6th, 2010

With the Apple iPad making it’s triumphant splash on the market, it’s time to take a look at the social games developers that are undoubtedly lining up in droves to cash in. One such games maker is Gameloft, who last Friday announced not one, not two, but eight specific titles that are ready and waiting for new iPad users to dive right into.

Gameloft iPad

Keeping in mind that the iPad is (arguably) just a giant iPod Touch, at least in respect to the (modified) operating system, games developers are poised to make a killing with social apps. Remember, the current iPhone OS incorporates microtransactions, as does the iPad. While there’s no specific mention of microtransactions in Gameloft’s releases, a number of them are ripe for the option. Gameloft’s lineup includes: N.O.V.A. Near Orbit Vanguard Alliance, Modern Combat: Sandstorm, Dungeon Hunter, Asphalt 5, UNO, NFL 2010, Let’s Golf, and Real Football 2010.

Currently, Gameloft is riding the “new” wave, capitalizing on a number of the iPad’s unique interface. Noting that the screen resolution of the iPad is 1024 x 768 (remember that one?), HD gaming has now come to the portable platform. All of Gameloft’s iPad specific applications have a much higher level of detail. For example, their Real Football 2010 has been completely remastered to include HD resolution grass, textures, characters, and animations.

Likewise, Gameloft’s N.O.V.A. Near Orbit Vanguard Alliance App utilizes the iPad’s control features, allowing users to open an airlock door by rotating three fingers, as well as sliding buttons to make various object move, elevators for example.

Where Gameloft expects the iPad to excel is in level of complexity now available. That’s not to say that a number of iPhone apps are not highly detailed, but rather the more powerful iPad allows for greater flexibility. Increased depth of field, complex map layouts, and more intense action sequences can be found in their iPad specific applications. For example, the N.O.V.A. title allows for multi-target acquisition, activated via a user-drawn grid that serves as the targeting method for an in-game rocket launcher.

Finally, we all know that gaming is fun, but even more so when doing it with friends. Gameloft’s iPad titles will be easier and more attractive for multiplayer gaming. One of my personal favorite casual/social games produced by Gameloft, UNO, allows for up to four players to compete against each other on one iPad by selecting “One Device Multiplayer” mode. Likewise, for multiple device play, UNO also allows friends on different iPads or iPhones to connect for local and online Wi-Fi gameplay.

“With iPhone and iPod touch, Apple changed the way consumers perceive and interact with their devices and created a revolutionary era for the mobile gaming industry,” said Michel Guillemot, president of Gameloft. “We are taking full advantage of all the new possibilities and features iPad is bringing to developers with games that will once again transform the digital gaming experience.”

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Niko Partners: Chinese Game Revenues to reach close to $10B by 2014

Friday, April 2nd, 2010

Niko Partners, a leading research firm focused on providing market intelligence about the Chinese video game industry, recently released data from their upcoming study, projecting $9.2 billion in revenue from online games in China in 2014. This study falls right in line with their 2013 projections, which place the market at a valuation of $8.9 billion.

According to the report, the vast majority of revenue generated in the Chinese online gaming market is derived from sales of virtual goods in free-to-play titles. To put this growth in perspective, Niko currently estimates the 2009 market to generate around $3.57 billion. Their 2010 prediction indicates a 21 percent growth to $4.5 billion.

The report also references a survey conducted by Niko of Chinese gamers. Conducted in 10 various major Chinese cities, the survey reveals that 65 percent of gamers in China access games from Internet cafes (still), and that their spending increased a whopping 63 percent in the past year. While most gamers do own their own PC’s, they indicated that the “gaming café” culture is still alive and well, as most Chinese gamers prefer to café game because of the social interaction.

“While the global economic downturn hurt video game publishers in much of the world, China’s online game industry reflected no pain in 2009 and gamers continued to embrace online games as the best inexpensive source of social entertainment available,” said Lisa Cosmas Hanson, managing partner of Niko Partners. “While the era of online gaming is generating lots of interest and growth opportunity in the West, China is one of the countries where online gaming is a well established market segment that extends its reach to more and more Chinese consumers every year.”

Other figures of note from Niko’s release:

  • Chinese gamers prefer the Free-to-Play (F2P) model of online games in which online operators generate revenue via the virtual economy, rather than the time-based model in which access is provided for a fixed number of pre-paid hours.
  • Social Networking Sites (SNS) games have gained popularity among Chinese consumers, and 88% of the gamers Niko surveyed claim to play SNS games.
  • At least 65% of gamers use Internet cafés at least part of the time.
  • There were 68 million online gamers in China by our definition at the end of 2009 and by 2014 the number should reach 141 million, a 15.5% CAGR.

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