Archive for December, 2010

American Express and Zynga partner to bring Virtual Goods via Membership Rewards

Thursday, December 2nd, 2010

Zynga and American Express have recently announced a strategic partnership that will allow card holding members to spend their Membership Points in a variety of Zynga related ways. An industry first, the partnership offers participants the opportunity to pay for limited edition virtual goods, along with physical and virtual game cards across Zynga titles including FarmVille, FrontierVille, PetVille, YoVille, Treasure Island, and Café World.

“Our partnership with American Express marks the first time that virtual goods are available for purchase with rewards points and reinforces our commitment to offer consumers meaningful experiences that enhance their game play,” said Vishal Makhijani, SVP of Business Operations at Zynga. “Cardmembers can instantly redeem their reward points to purchase limited edition virtual goods for their favorite Zynga games.”

On tap for Amex Membership Rewards members are unique FarmVille manors and windmills, CafeWorld fountains and stoves, as well as YoVille roadsters and robots. Starting December 6th, an additional 20 more virtual items will enter the program including a Fancy Gold Hot Tub and Gold Fountain for FrontierVille players, and a Treasure Island Zebra.

“Our relationship with Zynga, one of the key players in the digital space, marks a new redemption category for American Express and reflects our ongoing commitment to expanding and deepening the value we offer customers online,” said Dan Schulman, Group President Enterprise Growth, American Express. “With millions of Cardmembers looking to use Membership Rewards points, Zynga can now offer our loyal customer base an exciting new way to engage with their popular social games.”

While Zynga continues to push out various reskinned versions of the same game, and now in various global locations; there’s still one Zynga title that stands alone – Zynga Poker. Remember, Zynga filed for a patent on virtual chips, and now they’ve cut an industry first deal with Amex to allow users to spend Membership Rewards points inside a virtual property? It might not be something that American Express would want to associate itself with, but any takers on a the possibility of further Zynga/Amex cooperation? Being able to gamble away spend my Membership Rewards points in a game of Poker? I’m betting that this is not the last we’ll see from Zynga via Amex. Or rather, Amex via Zynga?

 

EA laying off the boxes, focusing on the digital

Wednesday, December 1st, 2010

EA CEO John Riccitiello recently commented at the Reuters Global Media Summit that the Redwood City, CA based gaming giant would cut its slate of titles by as much as 40 percent in 2011. EA is now looking at putting out 35 traditional boxed games this fiscal year, down from 50 last year. And according to Riccitiello, that number will continue to drop year after year to, “some number probably between the low 20s and the high 20s that’s right.”

EA’s traditional bread and butter, boxed, in-store retail games, which account for 75 percent of EA’s revenues has continued it’s downward spiral, and clearly Riccitiello has seen the writing on the wall. Or at least, heard what investors have had to say. As Reuters reports, EA’s shares, as well as those of other video game publishers have seen some tough times over the past year, mostly incited by pessimism about the overall direction of the video game industry.

“I think we’re at the classic hump where we’ve told people where we’re going. There’s evidence we’re going to get there, but Vegas isn’t putting money on it because we’re only in the fourth inning,” Riccitiello said.

With that said, it may look like EA’s long-running turnaround is starting to pay off. In addition to cutting costs across the board, reducing the number of employees, and issuing more conservative financial forecasts, investor excitement is starting to build around the upcoming BioWare developed Star Wars: The Old Republic, which EA hopes will give Activision’s World of Warcraft a run for it’s money. However, a new report issued by Gamasutra, places SWTOR’s release date “sometime” in EA’s 2012 fiscal year, which starts in April 2011. Read:Christmas 2011.

When it comes down to the 1’s and 0’s, EA has seen a healthy 30 percent increase in revenues derived from digital, downloadable, and mobile content over the course of this past year, totaling $570 million, or, roughly 15 percent of EA’s total revenue stream. Riccitiello and company are projecting a modest 30 percent increase on these numbers this year.

EA is currently the highest ranked games publisher on Apple’s App Store, thanks in part to their Playfish acquisition. Likewise, EA’s clearly serious about keeping this top slot, as earlier last month, they snatched up iPhone games developer Chillingo.

If the Playfish and Chillingo acquisitions weren’t enough, Reuters also reports that EA is currently spending around $1 billion per year on research and development, with half of this budget dedicated solely to non-traditional games and gaming.

At the end of the day, it seems as though the giant that is EA has caught on to what smaller, more agile gaming companies have known for a while – boxes are dinosaurs, and mobile and online is where it’s at. And now that that sleeping giant has been awoken … let’s see what kind of havoc (in the best possible ways) it can wreak.

via Reuters