Posts Tagged ‘mochi media’

Shanda Games acquires Mochi Media

Tuesday, January 12th, 2010

China based Shanda Games Ltd., the gaming unit of Shanda Interactive Entertainment Ltd., announced today that they’ve reached an agreement to acquire browser based games network Mochi Media. The total selling price was set at $60 million in cash and $20 million in equity retention arrangements.

Shanda Games, by name a newcomer to the gaming world, but in practicality, around for quite some time now. As we reported back in September, Shanda Interactive Entertainment spun off a gaming division, aiming to focus the holding company’s efforts on e-book publishing and distribution, as well as a digital music service. Shanda Games currently manages and operates both in-house developed games, as well as co-developing games with developers acquired either through investments or a third party license.

Perhaps a coincidence, but this announcement also appears just one day after holding company Shanda Interactive Entertainment announced that they’ve appointed Xu Chaojun as Chief Operating Officer.  In their last quarter, Shanda Interactive Entertainment brought home a healty $63.7 million in profit on $202.5 million in sales. I guess it’s fair to say we know where that profit margin will be headed.

“We are excited to be bringing two of the best teams in the online game industry together in the perfect marriage of content and platform. Mochi Media’s impressive array of browser-based games is an ideal complement to Shanda Games’ portfolio of nearly 70 multi-player online games,” commented, Diana Li, chief executive officer of Shanda Games.

With approximately 15,000 games being displayed on almost 40,000 publisher websites, and 140 million active monthly users, Mochi is/was a prime candidate for purchase. San Francisco based Mochi Media is an open platform that offers game developers products and services to help them push their product. These tools range everywhere from analytics and tracking data, to distribution and microtransaction monetization methods.

“The additions of Shanda Games’ extensive content catalog and proven monetization capabilities unlock tremendous value on our platform for everyone involved,” noted Jameson Hsu, co-founder and CEO of Mochi Media.

This buy signals a very strong foothold for Shanda in the North American gaming market. As well, Shanda is not only buying into an established player in the field, but one that’s been pushing the envelop from the very beginning and is looking down the road; most recently evidenced by their Flash Games survey.

The final sale is expected to close in the first quarter 2010.

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Mochi Media survey reveals only 6 percent of Flash games monetized through microtransactions

Wednesday, December 9th, 2009

San Francisco based Mochi Media recently announced the results of their Flash Games Market Survey finding that only 6 percent of all Flash game developers are using microtransactions to monetize. Oddly enough, Mochi Media says that the survey was conducted prior to Flash based games having a widely available microtransactions tool kit. Bad timing, or just bad luck?

flash-games-market-survey-copyThe survey found that the most popular method of monetizing Flash games is still rooted in in-game advertising. The majority (58 percent) of respondents indicated that they use in-game advertising as their primary monetization method, with sponsorships taking second place at 43 percent. Licensing held down third place with 26 percent, and web site ads landed in forth with 20 percent. Monetization via microtransactions scored dead last in developers methods, garnering only 6 percent.

While this data might not look so hot for the Flash gaming community in terms of microtransaction monetization, it’s important to keep in mind that this community is unique amongst the greater game development population. Of those that were surveyed, the study found that only one-third of developers consider themselves ‘full time’. The survey found that the vast majority of Flash games developers are hobbyists who create games in their spare time. This same percentage also indicated that they’d only begun developing Flash games within the last two years. Matching up with these responses, it’s duly noted that approximately three-quarters of all Flash game portals are still in start-up mode, only having been founded within the past two years.

Taking a look at the numbers, it’s quite easy to deduce from the survey results that monetization within Flash cased games could use a severe shot in the arm. Only twenty percent of all 1100 Flash developers reported that they could be earning $1000+ per month from their games. When jumping to the $5000+ per month mark, the numbers drop even lower, down to five percent. And those that could support a staff and associated actual ‘business’ at $10,000+ per month are represented by a tiny 2 percent slice of the entire industry.

Conducted in partnership with Adobe, Newgrounds, Casual Gameplay and FlashGameLicense.com, the Mochi Media survey was conducted over a three month period. However, Mochi has yet to specify which three months the survey was conducted, begging the question – was it really conducted before microtransaction monetization tools (i.e. Mochi Coins) were made available to developers?

Not merely a coincidence, Mochi also announced their second annual Flash Gaming Summit together with the survey release. The summit will be held this coming March 8th at the UCSF Mission Bay Conference Center.

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Alex St. John joins hi5

Tuesday, December 1st, 2009

It seemed for a while that once-social-network, now online gaming destination hi5 was down for the count. At the end of March of this year it was announced that the company had failed to secure a round of funding, which was then followed by a round of layoffs. These layoffs essentially left hi5 with only it’s entertainment, gaming and microtransactions unit left in tact. By the end of the month, hi5 was already beginning it’s resurgence, when they announced that industry veteran Bill Gossman was taking over as CEO, shortly after announcing a deal with Mochi Media. And now, almost 9 months to date later, hi5 has scored another major player: Alex St. John. St. John will be now filling the President and Chief Technology Officer role at hi5.

St. John’s new role at hi5 will be to primarily focus on product development, technology, network operations and audience acquisition. In other words, St. John has been brought in to add his expertise to hi5’s currently operating business model – social gaming and entertainment.

“We are very excited to add a gaming visionary like Alex to the hi5 team as we continue our evolution into becoming a dominant, next-generation social entertainment platform,” said Bill Gossman, CEO, hi5. “Alex’s background is a perfect fit for moving the company forward. His extensive experience and leadership in gaming platforms, traffic optimization, and game monetization make him a vital addition to the hi5 team.”

Prior to joining hi5, St. John founded currently operational WildTangent, which he grew to the world’s largest privately held gaming destination, garnering some 30 million unique monthly visitors. And if microtransaction based revenue is what hi5 is banking on, St. John is worth his weight in gold. While with WildTangent, St. John was involved with several revenue generators, least of which was the implementation of WildCoins, as well as an advertising partnership with WPP, offering microcurrency to Fortune 500 brands.

St. John’s most notable previous position is his work with Microsoft. He was a leading player in developing the now practically standard DirectX media architecture. This suite of tools including 2D and 3D graphics, sound, video, multiplayer gaming and input control are essentially the basis for the current Mixrosoft Xbox gaming OS. However, it was his role as Group Manager for Windows Media Strategy and Marketing at Microsoft that firmly placed DirectX as THE architecture of choice for games developers.

“The next wave of innovation and differentiation in gaming is happening in social gaming and hi5 is at the forefront of this sea change,” said St. John. “I’ve long said that the current generation of game consoles will be the last and that the future of the game business will be online. I’m thrilled to be joining a company that has the team, technology and vision to lead that transition.”

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Industry Vet Bill Gossman takes the reins at Hi5

Tuesday, April 28th, 2009

April has certainly been an interesting month for (now dubbed) social entertainment website Hi5.  After breaking new from VentureBeat and Techcrunch reported that the social portal had failed to receive additional funding, things weren’t looking so good.  Hold that thought for 48 hours, and Hi5 jumped back into the game and headlines with their announcement of a partnership with Mochi Media.  Well, just to round out the month with a bit more news about Hi5, they’ve recently announced the appointment of a new CEO, Bill Gossman.

Gossman, former CEO of Audience Science, CEO of Sabrix and founder and COO/CFO of  @mobile, as well as a current executive in residence at Mohr Davidow Ventures, hi5’s main investor, brings his wealth of experience in online advertising, behavioral targeting, and additional forms of online audience monetization.

“The founding team at hi5 has built a tremendous asset in one of the world’s largest online communities, and a truly global distribution and monetization platform for games and other social entertainment content,” said Gossman. “I’m excited to be joining the organization to help leverage that asset by focusing on our continued leadership in the social entertainment space and building a scalable, highly profitable business.”

So another layoff at Hi5?  Not quite.  Ramu Yalamanchi, founder and CEO since the companies beginnings in 2003 will not focus his efforts on operational responsibilities and leading the product and engineering departments.  His new goal is to deliver innovative features that set hi5 apart from competitors in the social entertainment space, with a heavy focus on expanding hi5’s microtransaction infrastructure and maximizing revenues.  Not a bad thought for a company who’s recent round of funding fell through, however, interesting to note that the new CEO comes from one of hi5′s primary investors.

“It is great to have Bill joining hi5 at this exciting stage of our business,” said Yalamanchi. “We have been incredibly successful in building a huge global audience and pioneering the social entertainment space. Bill brings highly applicable, stage-relevant leadership experience, particularly in monetizing online traffic and building scalable sales organizations, that will help take our company to the next level.”

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Hi5 layoffs could have a silver lining

Wednesday, April 1st, 2009

Hi5, the world’s third largest social network hasn’t exactly had it easy this April Fools day.  Both VentureBeat and TechCrunch lit up the airwaves yesterday with reports of this, that and the other.  Let’s take a look at what happened, and what’s going to happen.

hi5logo_300dpi_3300x2550The social network news reports were abuzz yesterday afternoon when rumors were confirmed that hi5 had recently failed to secure another round of funding.  According to MG Siegler’s source, the deal was as good as done, just in need of a few signatures.  This wasn’t just pocket change, as the deal would have been somewhere in the $30 million range, effectively doubling it’s previously raised $35 million.

VentureBeat’s source admitted that hi5 was now down to one group  – the group focusing on entertainment, gaming and microtransactions.

Hold up.  Let me get this straight. The world’s third largest social network was passed over for additional funding, and are now down to the gaming/microtransaction group?  Seriously?  With 62 million monthly visitors, this could be downright huge.

Enter stage left – the silver lining

Ok remaining hi5 folks, take a second and give a deserved lick to those wounds.  Layoffs are never fun.  It’s comeback time.

And coming back they are.  Hi5 has just announced a partnership with games distributor and ad network Mochi Media.  Mochi will introduce 200 flash games initially, with plans for many more to come.  Games on hi5 is not new, as they introduced their virtual currency, Coins, in December of last year, and approximately 40 games back in February.  However, in the newly introduced Mochi Media games, hi5 coins will allow users to buy virtual items, download a select number of games, and access special, or additional features.  It might be fair to say that hi5 is arriving fashionably late to the party, as the site has on average 62 million users per month, but hasn’t really nailed down how to monetize these users.  Given Tencent’s conglomeration of an instant messaging client, social network and web portal recently reported over $1 billion in revenue from a variety of virtual goods, and Habbo recently announcing their $60 million in virtual goods sales (although I’ve also seen $70m and $74m – dang € to $ conversion), chances are hi5 is still very much in the running.  Earlier this month the company stated that they were aiming towards a $25 million take this year, with half of the revenues stemming from virtual goods, half from currently existing advertising.

Again, hi5 may have sustained a significant blow when additional funding fell through, but clearly they’ve already been working on monetization via microtransactions and virtual goods sales, so they’re already one step closer to a complete re-invention of themselves.  Will all of those 62 million users stick around?  That is yet to be seen.  My guess is that sure, some of them may go when they start to see dramatic changes to the site, but on the other side of the coin, by re-inventing themselves as a primary gaming destination, and combine both forms of revenue generation, we might very well see not only the return of hi5, but perhaps a hi10.

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