Posts Tagged ‘video games industry’

$23.74 million invested in virtual goods this week

Friday, January 22nd, 2010

Over the course of 2009 we saw the world on the verge of an economic collapse. While the current economic situation has hit some industries harder than others, and as we learned, even the video games industry isn’t recession proof. However, if venture capitalists remain bullish on virtual worlds and goods as they did this past week, 2010 could be a banner year for the industry as a whole. This past week alone, three individual companies saw injections of cash totaling $23.74 million. Let’s take a look at who got a part of the take this week.

Crowdflower

Crowdflower is an outsourced labor startup that rewards work with both real world money and/or virtual currency. Led by Trinity Ventures and Bessemer Venture Partners, Crowdflower also received funding from it’s original angel investors including the Founders Fund, Travis Kalanick, Marcus Ogawa, Manu Kumar, Gary Kremen, and Lorenzo Thione. This round of funding saw a healthy $5 million aid Crowdflower’s startup efforts.

The concept is simple enough: outsourcing mundane task that can’t be automated to a crowd sourced pool of workers that sign on to perform a small part of each task. For their efforts, workers man then choose between monetary or virtual currency payment. Currently partnered with Gambit, Crowdflower has completed over eight million tasks, grown revenue over 750 percent, and increased their labor output by 760 percent.

6 Waves

Hong Kong based 6 Waves made out with the bandits share of this week’s booty, garnering $17.5 million. Funding arrives from Insight Venture Partners. 6 Waves has filled various roles within the virtual worlds community, one of developer, and the other as publisher, specifically through promotion and monetization support for other social game developers.

“We started publishing for Chinese developers, but we have since diversified to work with developers from all over the world. “ comments co-founder Rex Ng. “To date, we have partnered with many developers from US, Canada, France, China, Hong Kong, and Singapore, with more in the pipeline. Since our audience spans across North America, Europe and Asia, 6 waves provide a one-stop shop for developers to reach a global audience.”

If you’ve never heard of 6 Waves, now would be the time to sit up and notice. Currently, they’re one of the largest developers on Facebook, operating 141 apps and serving approximately 44 million monthly users. To put their growth rate into perspective, only one year prior, 6 Waves was serving 22 million monthly users from a pool of around 60 apps. And now for the kicker – the 6 Waves team is made up of only 18 people, proving that lean-and-mean can get the job done.

Rixty

Rixty, a payment services provider recently announced a $1.24 million seed from Javelin Venture Partners, Accelerator Ventures, First Round Capital, Freestyle Capital, Nueva Ventures, and Soft Tech VC. Additionally, “several” undisclosed angel investors took part. As part of the deal, Javelin Venture Partners Managing Director Noah Doyle will not be sitting on Rixty’s board of directors, as will DIgg’s current VP of Product, Kevin Desai. Both men have experience in online payment platforms, Doyle formerly of MyPoints.com and Desai from Achex, which went on to be acquired by First Data.

Rixty’s main tenant is facilitating virtual goods purchases for those that might not always have access to said content (read: no credit card). Working in cooperation with CoinStar, Rixty users are issued an exclusive PIN that they can enter into a CoinStar machine to receive their payout not in the form of cold, hard cash, but rather in virtual currency points. The currency points are then tabulated at Rixty, and through partnerships, gamers may then use this Rixty cash in their (hopefully partnered) game of choice. By keeping users’ virtual currencies in house, Rixty leverages this power and is certain to keep users coming back for more through various promotions, contests, and giveaways.

Again, $23.74 million in Venture Capital funding was announced just this week alone, and we’re only three weeks into a new year. Let’s hope that these funding sprees continue, and that 2010 will see a continued increase in not only the number of options available, but as the industry grows, so will the quality and innovation levels increase.

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NPD Report: casual gaming and digital downloads on the rise

Friday, May 22nd, 2009

A recent snippet of The NPD Group’s “Entertainment Trends in America” survey reveals that over the past six months, more Americans have turned to casual gaming and downloadable content over a night out at the cinema.  Close to 2 out of 3 Americans (63 percent) indicated that they’ve played a video game, while just over half have been out to the movies (53 percent) during the same period.

The survey also indicates that the increase in gaming is directly correlated to the increased availability and visibility of new and existing outlets for playing.  While not an overwhelming number, overall 10 percent indicated that they’d played a game on a social network, and 5 percent said that they’d paid to download a game from the web, a 2 percent increase from the same question last year.

“Video games account for one-third of the average monthly consumer spending in the U.S. for core entertainment content, including music, video, games,” said Anita Frazier, video games industry analyst for NPD. “While a portion of that share stems from the premium price of console games, we’re also seeing an overall increase in the number of people participating in gaming year-over-year.”

Clearly, as NPD’s Q1 2009 update to the “Entertainment Trends in America” survey includes data noting that the average gamer spent just over $38 per month on any and all types of gaming content.  Over the past year, NPD found that almost 1 in 3 (31 percent) of gamers purchased either a console or portable game, representing a .7 percent increase year-over-year.  Most interestingly, these ‘traditional’ gamers seem to be branching out, as among consumers who regularly play console or portable games, 31 percent indicated that they’d also played a game on a gaming website.  19 percent are playing on their mobile phones, 12 percent on a social networking site, and 11 percent purchased and downloaded a game to their mobile.

“As with video and music, sales of physical gaming products still account for the bulk of consumer spending on video games, but digital downloads and other delivery and game-play formats are also rising in popularity,” said Russ Crupnick, entertainment industry analyst for NPD.

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Perry predicts cloud gaming, the rise of free-to-play, and the death of single player games

Friday, February 20th, 2009

This year’s DICE event which wraps up today in Las Vegas wouldn’t be complete without video games industry veteran David Perry’s take on the current state of play, and what he sees as ‘the next big thing’. We’ve covered some of Perry’s predictions in the past, but for those out there that don’t remember or know of David Perry, he’s the founder of Shiny Entertainment which was responsible for Earthworm Jim, and Messiah to name a few along with MDK, Wild 9 and Enter the Matrix.

Taking a page from his standard presentation playbook, Perry started out his DICE talk by showing some old marketing collateral from his first computer, the Sinclair ZX81, noting that at the time the mainstream consensus was that computers would be used solely as a productivity tool. “I, like everyone else, however, used it to make and play video games,” he said.

Looking forward, Perry notes how far and fast computing technology has progressed since its humble beginnings. Specifically, Perry speaks to increased storage space and read/write speeds. He foresees a future with unlimited storage media delivered via fast, ‘available everywhere’ wi-fi. Not limiting future options just to storage, Perry also predicts cloud processing, i.e. the end of in home owned single or multi-core processor platforms.

Driving this prediction, Perry explains that he’s been looking into technology that’s powered by remote storage and processing, thus removing the need for players to own powerful software or processing power. The end goal is to deliver the final rendered frames to gamers via Flash video.

“It’s like going back in time to when we had terminals instead of desktops.”

Speaking to distribution mediums, Perry didn’t waste any time aiming a canon at GameStop, who’s COO Dan DeMatteo recently stated that the era of full digital distribution is 12 to 17 years away. Perry’s thoughts consider this timeline ridiculous, and he’s quick to point out that much of the Asian market is largely dependent on digital distribution. And we all know how the Asian market is hurting in the video games department.

With perhaps his most startling statement of the day, Perry also sees the end of single-player games. Instead, he sees free-to-play, mulit-player online games as the absolute future, “I personally think the days of single-player games are numbered. Without question, our focus is entirely on multiplayer.”

Duly noted, Perry serves as Chief Creative Officer with Acclaim, a completely free-to-play, microtransactions based game developer/distributor, so it’s fair to say that his view might be slightly biased.

Using imagery of some of the greatest game designers of all time, Shigeru Miyamoto and Hideo Kojima, Perry notes that Japan has turned out some of the best games and designers the world has ever seen, and asks, “would you be willing to bet China will never produce one of those names?”

A highly relevant question, as David warns that if and when this level of talent starts popping up in China or Korea, both areas where free-to-play is rapidly becoming the de facto business model, traditional game developers with traditional business models may find themselves on the outside looking in.

Summing up his presentation, Perry says, “The key trend is that we are going to be closer to our audience than ever before. We must listen to them at every step. … Your entire executive team must speak with them, not to them.”

Amen to that statement Mr. Perry. Got anything to say to us? We’re listening. Talk to fatfoogoo on twitter.

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Korean Government serious about Games -$200m serious

Tuesday, December 9th, 2008

Gaming is no joke in Korea.  Not only is Starcraft played competitively, but cybercafe’s run around the clock.  To this end the Korean government is taking serious steps in making sure that Korean game developers stay on the map.

The Korean government recently announced that they’re pumping 350B Korean Won (approx. $200M) into a fund that’s designed to be used by the video games industry.  This fund should ensure that Korean developers not only stay competitive, but should also fund innovation.

Yu In-chon, Korean minister of Culture, Sports and Tourism made the announcement noting that the current growth rate must be maintained if the country is to reach it’s goal of becoming the world’s 3rd largest video gaming market, only behind the US and Japan.  In-chon noted that in addition to the cash influx, the government has an additional 59 projects to ensure these goals are met.  The proposal seeks to fund the gaming industry through 2012 with the end goal of exporting a massive 5 trillion won ($3.3 billion)

In a rough and tumble economic climate, obviously this is a noted departure from the norm, and a refreshing vote of confidence from a national government.  NCSoft, one of the world’s largest developers of MMO’s is headquartered in Korea, and could be on the beneficial end of this deal.

What strikes me as slightly odd is that it took the Korean government this long to actually notice the video games industry?  When Starcraft tournaments are broadcast on live television, and specific video gamer training camps are established, this is clearly no longer under the radar.

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UK gearing up for best-ever Q4 game sales

Tuesday, November 25th, 2008

A recent report published by Top Global Markets, a combined monthly report from leading providers of the video games industry consumer and retail information, The NPD Group, GfK, Chart-Track Limited and Enterbrain Inc., shows that combined video game software sales across the world’s largest three markets had a 1 percent growth Q3 (July-Spetember) 2008.

The United Kingdom took the show, with a remarkable 15 percent growth rate, the US coming in a second at 8 percent.  To clarify, the UK has a skewed growth rate pattern though, as a 26 percent gain was experienced in console software, while portable software dropped 1 percent.  The US on the other hand might be a better indicator, with console software shipping plus 6 percent and portable software growing 10 percent.

“Taking into consideration the marked differences between the 3 territories, the UK market in particular is gearing up for a best-ever Q4 performance overall, even under the well-documented financial climate,” said Dorian Bloch, Business Group Director, GfK Chart-Track Limited.  “We fully expect UK consumers to drive sales for the full year to unprecedented heights, especially considering the line-up of exciting single and multi-format new franchises currently hitting the market, not to mention the evergreen portfolio of Nintendo-published Wii & DS titles which have done such a great job of expanding the market to a far more mainstream consumer.”

The US market, however, was the only sector to experience positive growth YOY with an 5 percent growth in Q3 ’07 and 8 percent Q3 ’08.  The UK, on the other hand, is experiencing explosive console software sales, but actually diminished growth YOY – a 34 percent increase in Q3 ’07 vs. a 15 percent increase in Q3 ’08.

“In the U.S., third quarter total industry unit sales grew 8 percent versus 2007, even as the economy showed accelerating signs of recession,” said Anita Frazier, industry analyst, The NPD Group.  “As would be expected at this point in the console lifecycle, games sales are starting to take the spotlight even as the average retail prices of games increased slightly.  Heading into the critical fourth quarter, the U.S. games industry is on solid ground.”

And then there’s Japan.

Most, if not all of our consoles are pumped out of Japan at an astonishing rate.  The flat performance of unit sales in Nippon cast a wave upon the Japanese software market, currently being felt across the industry.  Q3 ’08 shows a dramatic 21 percent overall decrease YOY, with consol software taking the biggest hit at 33 percent, portable software at 13 percent.

“Japan did experience sales declines in both software categories, but it is important to keep in mind that not only is Japan a more mature market than the U.S. and UK, but 2007 was a banner year for the Japanese software market, with the titles released in the third quarter of 2008 not being as highly anticipated as those released during the same time period in 2007,” said Ricky K Tanimoto, Global Marketing Analyst, Enterbrain, Inc. “Also, software titles generally have stronger launch sales in Japan, which represent a large percentage of the total sales in Japan compared to the U.S. and UK. In regards to expectations for the remainder of the calendar year, we estimate overall video game sales in Japan this holiday season will not be greatly affected by the world financial crisis, especially in the portable space. Portable software sales are particularly strong, and new portable hardware systems like Sony’s PSP-3000 and Nintendo’s DSi will prove to be driving market forces in Japan throughout the 2008 holiday season.”

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