Posts Tagged ‘virtual worlds’

eRepublik lands a cool $2.8 million for new type of Virtual World

Thursday, June 18th, 2009

In a further show of support for blossoming virtual worlds, Madrid, Spain based eRepublik has recently announced that they’ve secured €2 million (approx. $2.8 million) in Series A funding from AGF Private Equity.  Coining a new term, and dubbing themselves a MOSS (massive online social strategy game), eRepublik had previously secured just over $1 million from the VC firm as well as multiple angel investors.  This new injection brings the total up to $3.8 million.  Not bad for a small company for only about a year and a half and staffs just 30 employees.

erepubliklogoThe MOSS is a browser based virtual world that closely mimics today’s real world.  Additionally, this virtual world contains no A.I., and relies solely on the participation of players (called appropriately, citizens).  Somewhat like, but also different from Second Life, eRepublik allows citizens to participate in politics, the economy, set up businesses (currently at 17,502), interact socially with other citizens, and just to spice things up a bit: engage in wars with other countries (citizens live in eUSA, or eCanada, for example).

Live for only 576 days, eRepublik reports that the MOSS has over 350,000 citizen accounts, with 120,000 of them regularly logging in and participating in the active community.  Taking a look at the traffic numbers, eRepublik is reporting that they’ve received over 3.7 million visits in the month of May alone, generating 95 million page views.  Citizens have arrived from over 200 countries worldwide, and spent over 55 million minutes within the world.

eRepublik’s co-founder and CEO Alexis Bonte says that this new injection of fresh funds will be put towards fleshing out the existing world, as he says the current eRepublik is only 25% of what’s planned.  They’ll also continue to expand eRepublik’s language offerings, as they just released a Spanish speaking version earlier this month, and move ahead with launching a host of new games.

eRepublik is free to play, and monetizes via sales of their in-game currency, eRepublik Gold.  While no mentions were made about expanding out virtual goods offerings, something tells me that a bit of the $2.8 m has already been earmarked to ramp things up in the in-game store.

Hear what eRepublik is all about directly from Alexis Bonte in his TechCrunch pitch from last summer.

 

Citi sees $1 billion in IGA by 2014, and PricewaterhouseCoopers puts global market at $73.5 billion by 2013

Wednesday, June 17th, 2009

Maybe it’s a sheer coincidence, but combining the recent NPD numbers regarding consumer electronics consumption habits, and the extremely positive outlook on virtual worlds recently published by Strategy Analytics things are already looking good.  Well hold onto your hats, as both Citi and PricewaterhouseCoopers published even more news to get pretty jazzed about.

Citi

moneyAccording to a recent Gamasutra piece, a research note by Citi indicates that the In Game Advertising market could reach the $1 billion mark by 2014.  Citi sees the most online advertising growth coming out of the gaming sector, which currently stands at around $600 million.  An impressive number for sure, however, it accounts for only roughly one-third of the total online advertising spend, $20 billion.

According to analysts, today’s average gamer is 35 years old, with 40 percent of “total gamers” being female.  Obviously, this is a highly attractive audience to advertisers.  Citi says that in game advertisements “have higher engagement and slightly higher [cost per thousand users, representing value] than traditional banner ads.”

And this advertising isn’t simply limited to a Doritos banner on the side of an in game truck.  Citi says that this advertising is also tying into the separate trend of microtransactions, as real world brands are setting up shop in virtual worlds.  Looking at high profile, tangible examples, Citi points to both Apple and Tencent’s investments into microtransactions, and gives a thumbs up to the segment, calling it a potential “multi-billion dollar opportunity.”

PricewaterhouseCoopers

Recently releasing their Global Entertainment & Media Outlook 2009-2013 report, financial firm PricewaterhouseCoopers is calling the US and Canadian game industry revenues for 2009 at or around the $17.2 billion mark.  In this report, the “Game Industry” is defined as console, handheld, PC, and mobile game software sales, subscription fees, and in-game advertising (no microtransactions???).

PWC predicts that these game industry revenue streams will collectively post average annual growth rates of 5.8 percent through 2013, at which point we’re looking at an estimated $21.6 billion.  Looking outside North American waters, PricewaterhouseCoopers expects to see a global compound annual growth rate of 7.4 percent, pushing total numbers to a massive $73.5 billion in 2013.

Included in the report, and cited as a driving force behind these numbers is their prediction of the release of the next-gen console, first appearing in 2012.  PWC predicts that Nintendo will arrive on the scene first, particularly due to the Wii’s inability to output HD graphics.

Echoing Citi’s statements about IGA, the firm notes that this is a particularly strong segment of the market.  PWC places today’s in-game advertising spend at $886 million (could we agree on $743 million?), but sees at 13 percent annual growth rate over the next five years, placing the spend at $1.3 billion in 2013 (again, maybe we can settle on $1.15 billion?).

 

BOOM! Virtual Worlds expect explosive growth

Tuesday, June 16th, 2009

According to yesterday’s release from market research firm Strategy Analytics, the virtual worlds sector is set up for some truly phenomenal growth.  The Boston based firm projects the global virtual world population to grow from today’s approximately 186 million inhabitants to a whopping 640 million (the equivalent of twice the current US population) by 2015.  That’s nearly a 25 percent compounded annual growth rate (CAGR).  Say it with me now….holy crap!

39306The largest growing sector should come as no surprise, kids between the ages of 5 and 9.  Strategy Analytics predicts that this demo will grow 27 percent, while tweens and teens should see a growth rate of 21 percent.  This growth rate may be effected by what I discussed yesterday, regarding NPD’s reports on a younger trend of consumer electronics consumers, particularly regarding laptop computers.

In the report, “Virtual Worlds Market Forecast 2009-2015,” Strategy Analytics goes on to predict that virtual worlds will continue to improve the overall user experience, and thus convert registrations to active users at a 38 percent CAGR through 2015.

“The high conversion of registrants to active users demonstrates that users are finding value – in the form of entertainment, engagement, and social interaction,” according to Barry Gilbert, Vice President of the Strategy Analytics Gaming Sector and author of this report. In addition, Gilbert noted, “Access to virtual worlds across a variety of platforms, from consoles to mobile devices, will help catalyze growth.”

And now for the almighty Dollar.  Where’s the money coming from?  Well, according to the report, the top three to take to the bank are microtransactions, subscriptions, and advertising/sponsorships.  Said microtransactions are expected to grow from slightly over $1 billion in 2008 to….wait for it…..wait for it…..$17.3 billion in 2015 accounting for 86% of the revenue generated by virtual worlds.

Here’s how Strategy Analytics numbers break down (in millions):

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Obviously this is outstanding news for youth focused virtual worlds, including fatfoogoo client CampFu.  If there’s ever been a doubt about the staggering growth potential hidden in these virtual worlds, and the monetary potential stored away in virtual goods, if Strategy Analytics projections are spot on, these doubts could be summed up in one word: Shattered.

 

Video: Interview with Margaret Wallace of Rebel Monkey – creators of CampFu

Friday, May 29th, 2009

I had the fortunate experience to sit down with Margaret Wallace, CEO and Co-founder of Rebel Monkey recently, and discuss not only their hit virtual world CampFu, but where Rebel Monkey comes from, youth oriented virtual worlds, microtransactions and much more!

Speaking to the fact that the youth oriented virtual world space is becoming increasingly crowded, Margaret presents Rebel Monkey’s take on how and why CampFu stands out in the crowd.  “We really wanted to focus on cooperative gaming.  We really wanted to emphasize the idea of the individual player being part of something bigger than themselves.”

Moving on to microtransactions and how they factored into the development of CampFu, Margaret tells me that the inspiration for CampFu came from her and co-founder Nick Fortuno’s views on the success of the free-to-play model in Asia, and how it was a good fit for what they were planning with their virtual world.  “Free to play was definitely the way to go for online.  It’s no longer a question of if microtransactions will take hold in Europe and North America.  …Now everyone’s onboard and trying to figure out their offering.”  Looking forward, Margaret shared with me her thoughts on where microtransactions are headed.  She sees the marketing becoming much more ubiquitous, with not only innovators like Rebel Monkey experimenting with optimizing revenue streams, but also larger portals, and even the old school powerhouse portals migrate (at least in part) to utilizing microtransactions.  Wallace also sees microtransactions becoming much more wide spread across various platforms, and moves towards universal wallets containing currency that can be spent across these platforms.  Using CampFu as a prime example of this prediction, Wallace goes on to tell me that while CampFu is only available on a browser on a computer right now, down the road she envisions an iPhone component that would carry a level of virtual goods offerings that would tie back in to the main ‘home’ of campfu that lives at campfu.com.  Wallace also hinted at an xbox component, all leading back to a total CampFu experience.

Looking ahead, talking about what’s next for Rebel Monkey and CampFu, Wallace tells me that the virtual world is only in it’s infancy right now, with plenty more additions and revisions planned.  A ton of social networking features are planned, and plenty of new virtual goods, both clothing and virtual housing decoration are on the way.  Rebel Monkey will also shortly be launching new games for CamFu players, and focusing on the way teams can form and support themselves, as well as creating API’s for developers to create their own real time cooperative games to be used within CampFu.

Rebel Monkey also isn’t just satisfied with one virtual world, but as Wallace explains, the engine that powers CampFu will be utilized to grow and develop further virtual worlds, making CampFu just one of several virtual world offerings from Rebel Monkey.

Wallace admits that Rebel Monkey is still ironing out the details surrounding a universal currency that would cover all of Rebel Monkey’s planned virtual worlds, but she does say that it has an undeniable appeal.  “We definitely are leaning towards having a universal currency that would work with all of our virtual world offerings, because if we have a player that has FuCash from CampFu why would we want to establish all these hurdles for them to use their FuCash in other properties that we launch.”

 

Virtual NBA and WNBA stars headed to online communities via Virtual Greats

Wednesday, May 20th, 2009

Virtual Greats LLC and Goodwin Sports Management have recently announced a multi-year deal whereby NBA All stars Dwight Howard and Kevin Durant as well as WNBA MVP Candace Parker will be represented in virtual worlds.  Not only will users have access to these signature line creations, but the trio will also be featured to promote NBA and WNBA licensed products within these online communities.

hangingwithallstars

With this creation and insertion, Howard, Durant, and Parker will become the first pro athletes to launch avatars and associated virtual goods for purchase, joining the ranks of Elvis Presely, Snoop Dogg, Justin Timberlake, and Raven Symoné .  First up on the virtual hitlist?  The award goes to WeeWorld, one of the most popular avatar based virtual worlds, and a proven site by way of user self expression, creativity, and interactivity/communication.  Virtual Greats includes to roll out the new properties to additional online communities in the near future.

“Sports are a key part of the content portfolio we offer to online social network, gaming and virtual world platform operators,” said Dan Jansen, CEO, Virtual Greats. “Dwight Howard, Kevin Durant and Candace Parker are breaking new ground as the first professional athletes to monetize their personal brands and content in these online communities – in doing so they’re proving their business savvy on top of their basketball prowess.”

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“WeeWorld is all about self expression, and WeeMees were asking for more sports and NBA apparel to showcase their team pride,” said Lauren Bigelow, General Manager of North America and SVP of Marketing, WeeWorld. “The addition of the branded Howard, Durant and Parker gear at the height of playoff season is perfect timing. The 27 million WeeMees globally now get to show their team spirit.”

No word yet on the expected timeline to roll out these hot NBA and WNBA stars to other virtual properties, but chances are if they’re a hit within WeeWorld, Virtual Greats will step up to the plate and deliver in due course.

 

Big Stage scores big with an additional $2.7 million

Thursday, April 16th, 2009

Los Angeles based Big Stage Entertainment, Inc. has recently received an additional $2.7m in series B funding from their original investors, Mission Ventures, Selby Ventures and TechCoast Angels.  This round of funding brings Big Stage Entertainment’s total raised to a healthy chunk of change at $10.6 milion.  Presumably, Big State will use this new injection of funding to further advance and accelerate their research and development and sales and marketing for its 3d photorealistic facial avatar modeling technology.  Outside investors still have a shot at getting in on the action, with and additional $3.3 million still remaining in series B funding, open until June 8th.

As reported back in December, Big Stage uses a 3D facial modeling system that renders 3D versions of a person from 3 digital photos taken from different angles.  Now known as @ctors, the entire setup and processing method should take users less than two minutes, making creation easy for even the non-technical.  Third parties can integrate Big Stage Entertainment’s proprietary PortableYou 3-D facial modeling system seamlessly into video games, virtual worlds, Web sites, mobile apps, kiosk-based systems and more. The BackStage white label product offers a turnkey solution to partners who want to leverage the same 3-D face modeling technology as part of high impact participatory experiences under their own brands, with the added benefit of easy-to-use social sharing tools to maximize viral effect.

The company grew out of an advanced stereo reconstruction technology R&D project at USC funded by the CIA and other government grants.  Big Stage Entertainment’s initial round of funding raised $7.9 million from investors Mission Ventures, Selby Ventures and Tech Coast Angels.

“Big Stage Entertainment offers the most realistic 3D facial avatar-creation technology that’s accessible to consumers today. Our service is built on a hub strategy to provide consumers a single online location for the projection of self into digital life,” said Phil Ressler, Big Stage Entertainment CEO. “With this investment, we will continue to push the limits of participatory media to meet the evolving needs of brands and content owners who recognize the immense potential of enabling audiences to star in media experiences created by themselves or others.”

“Big Stage Entertainment brings the deeply personal phenomenon of projection of self to mainstream consumers, breaking new ground in interactive entertainment,” said Robert Kibble, managing partner, Mission Ventures. “Mission Ventures led this Series B investment out of recognition of the huge long-term opportunity in helping Big Stage Entertainment realize its full potential.”

This new influx of cash should keep Big Stage right on track, and delivering top-notch products to current and future clients.  At the present time, Big Stage counts some high level clients amongst their roster including Sony BMG, Lionsgate, Funcom, Intel, Stephen J. Cannell Productions, GGL Global Gaming, The Venue Network, Icarus Studios, Virtual Space Entertainment and Splash News.

 

Social gaming increases sales of virtual goods in social networks

Monday, March 30th, 2009

Putting some hard numbers behind what we’ve been thinking and believing for quite some time now, SnipClip trainee (read: intern) Matthias has poured over copious amounts of data over the past few months, and the results are in.  The survey was conducted over 15 various virtual worlds, social games and non-game social applications, and found significant differences in purchasing trends.  Most notably – sales of virtual goods in social gaming applications are ten times higher than those in non-gaming applications.

snipclip_logo_verticalAccording to the study, social games generate an average of $3.65 per monthly active user (MAU) per year.  Conversely, non-gaming applications have an MAU of only $0.37, with the highest average revenue being generated in virtual worlds, with an average of $8.04 per MAU per year.

Examining data strictly from social games and virtual worlds, the study found the average spend to be between $0.82 and $6.40, and $2.03 to $25.42, respectively.   This data supports SnipClip’s theory that virtual worlds and gaming applications are more engaging, therefore users are willing to spend more on virtual goods if they offer special functionality or higher social status.

Looking forward, SnipClip’s study projects potential virtual goods sales in social games at around $340 million per year.  Their non-gaming siblings should be looking at around $215 million.  Virtual Worlds arrive at the party, just slightly ahead of non-gaming social application with projected virtual goods revenues of approximately $244 million.  SnipClip does give a nod to the recent Tencent study, with their projections reaching into the billions mark, but does not include this data in their survey.  Reason being, that Tencent did not make a distinction in their survey between the virtual goods applications, i.e. classical online games, instant messaging, and social networks.

It’s no secret that social gaming is rapidly becoming a driving force on social networks, and obviously the providers are carefully watching revenue streams generated from virtual goods sales.  Facebook has been toying with microtransactions and a homogenized platform wide currency for years now. SnipClips’ survey points out that it’s more about the context in which virtual goods are sold and how this can clearly affect monetization rates.

Oliver Hanisch, heading the partnership and strategic alliance efforts at SnipClip recommends focusing on virtual goods applications that provide users with an engaging gaming experience and at the same time enable them to promote their social status within their community.

“Collecting branded virtual goods, as offered by SnipClip, provides both: a social gaming experience and a way for fans to express their passion for their favorite sports team, music group, or TV show. Therefore, we encourage community providers and content producers to consider the sales of virtual collectibles and provide our partners with an easy and ready to use solution.”

The SnipClip survey aggregated revenue and number of users data from 15 social games, social networks, and virtual worlds.  Average values were weighted by the number of users to provide a better-balanced picture.  Social games with 15.1 million or more active users and virtual worlds with 21.8 million or more active users were used.  Social networks, including facebook, social games such as Mob Wars, and virtual worlds such as Habbo Hotel are included in the study.

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MindArk receives real world banking license

Friday, March 20th, 2009

MindArk and their wholly owned subsidiary Mind Bank AB made virtual world history earlier this week when the Swedish Financial Supervisory Authority (Finansinspektionen) granted a license to ‘conduct banking activities’ in MindArk’s virtual world(s) Entropia Universe.  This license officially sanctifies Mind Ark AB to act as a central bank within the Entropia Universe and conduct real world banking, and all associated financials for users.  This announcement follows the January announcement of MindArk launching their first planet company to oversee Planet Calypso.

“This is an exciting and important development for the future of all virtual worlds being built, using the Entropia Platform. Together with our partner planet owner companies we will be in a position to offer real bank services to the inhabitants of our virtual universe.” Says MindArk CEO Jan Welter Timkrans.

Again, MindArk is the first virtual world that has incorporated a real world bank into it’s systems.  Millions of transactions can be prcessed by the bank for further transfer to MindArk and the virtual universe.  Mind Bank says that they are also planning to offer selected banking services to customers on the conventional (read: real world) market.

So if running an MMOG wasn’t enough for the growing virtual world developer, they’ve now jumped into the unbelievably complex world of financial institutions.  Fighting fraud and microtransaction/monetization leakage is a topic that even the most savvy in-game monetization experts battle everyday.  MindArk is now taking this issue to an entirely new level by adding financial services.  Granted, they’ve segmented this operation into it’s own free standing business, but it is still plugged into the entire operation.  Since MindArk is the first Virtual World to brave these waters, they’re clearly blazing a trail, and my guess is will be watched with eagle eyed scrutiny.  If they get it wrong, the fingers are sure to be pointed in their direction very quickly.  If they get it right – well, now that’s something to study, isn’t it?

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Fail: Worlds.com – Patents FTW!

Thursday, March 12th, 2009

In what may very well go down as the WTF of 2009, Worlds.com CEO Thom Kidrin has put the entire Virtual Worlds industry on notice.  He claims that his company patented and owns the IP rights to scalable virtual worlds.  Let’s let that soak in for a moment. ….and we’re back.  In essence, what Kidrin and Worlds.com are doing is threatening the livelihood of an entire industry.  And yes, this lawsuit and IP infringement applies to the big boys as well, including Second Life and World of Warcraft.

It's a Whole New Worlds - of LawsuitsAnd while I thought Atari and Codmasters legal assault on gamers was pretty up there on the ‘say what now?’ scale, Kidrin and Co. may have just taken the number one spot.  Worlds.com is already taking action against NCSoft, creators of City of Heroes and Guild Wars, filing in East Texas, an area know for it’s plaintiff friendly rulings in intellectual property cases.

Speaking to Eric Krangel from The Business Insider, Kidrin said that he “absolutely” intends to pursue follow up suits against Second Life and WoW.

But let’s take a step back and find out where all of this is coming from.  Back in December ’08, the then relatively unknown Worlds.com claimed to be holding a patent on virtual worlds ideas from 1997.  This patent originated from a developers work on a Steven Spielberg backed ‘Starbright World’, a part of the Starlight Starbright Foundation’s work with seriously ill children.  Wanting to protect the privacy and relative closed network feature of the virtual world, the Starbright folks, rightfully so, kept the project quiet.

Fast forward 10+ years, and a number of Starbright’s patents pass from the original creators to Worlds.com.  And while these patents do not cover ‘Virtual Worlds’ per se, and how we view them today, they do cover an architecture for enabling thousands of simultaneous users in a 3D virtual space.  Lawyers from General Patent Corporation pointed at this patent to the Worlds.com management, and encouraged them to pursue licensing deals.

Kindrin asserts that he’s not out to take any companies down and put them out of business, it’s just that he wants to get paid for what he and the Worlds.com management see as their lawful intellectual property.  Ummm, right.

Given the amount prior art available, chances are that this patent lawsuit is already moot.  As WoW Insider deftly points out, the same case could be made around the term ‘Cyberspace’.

However, let’s take a look at the definition of Cyberspace. It was first used in William Gibson‘s 1982 story “Burning Chrome” and again used in a few of his books, with “Neuromancer” being the most popular. Gibson’s definition for Cyberspace reads:

“Cyberspace. A consensual hallucination experienced daily by billions of legitimate operators, in every nation, by children being taught mathematical concepts… A graphic representation of data abstracted from banks of every computer in the human system. Unthinkable complexity. Lines of light ranged in the nonspace of the mind, clusters and constellations of data.”

Now there are a few interesting parts there, in that the Gibson created a fictional representation of a world that was shared graphically with billions of legitimate operators. Sound familiar? It’s exactly what WoW is: a graphical world shared by millions of legitimate operators, abstract data that is unthinkably complex, arranging lines of light in the nonspace of the mind, and teaching children mathematical concepts (ie: threat, gear statistics, etc…)

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Disney’s free-to-play Pixie Hollow drives online growth

Tuesday, February 17th, 2009

Along with launching DisneyXD last week, the big mouse also announced that recent ComScore data reveals that Disney Games takes third place among all online gaming destinations with 13.4M visitors in December 2008, a 13% increase yoy.  Reaching one further, ComScore’s January 2009 data sees Disney leapfrogging EA Games and grabbing the number 2 spot.

Disney’s not-so-secret ingredient?  Their free-to-play, virtual world Pixie Hollow.  According to Virtualworldsnews.com, a Disney representative explains the surge in traffic as, “largely driven by our virtual worlds, and specifically by the popularity of the new Disney Fairies Pixie hollow virtual world.”

And while Disney’s corporate policy dictates that no concrete numbers could be released, the rep also adds that Club Penguin has been a consistent driver for Disney, “but that the recent spike in Fairies traffic helped boost Disney last month.”

These numbers might seem large and impressive, but keep in mind that back in October Senior Vice President of Disney Online Steve Parkis stated, “More than 7 and a half million Fairies have already been created and, until now, have been all dressed up with no place to go. Now, in Pixie Hollow, Fairies can join their friends, take flight and live their very own Fairy adventures.”

To this end, it’s fair to say that Disney did they due diligence in ‘pre-loading’ the site with over 7.5M players that were ready and waiting for the magical world of Pixie Hollow to roll out the welcome mat.

The game itself is free-to-play, but similar to Disney’s Club Penguin, players may buy into a $5.99/month membership fee that gives them exclusive access to a number of game features.  Also noteworthy is Disney’s ‘real-world’ tie-ins to the online virtual world.  When played in the real-world, the companies’ Clickables Fairy collection rewards players with a number of special content unlocks that allow them to add unique clothing, accessories, and décor to their virtual world collection.

Disney may have taken the number two spot in online gaming destinations, but not all is well at Disney’s Interactive Studios.  Earlier this month in an earnings call, DIS made it quite clear that they’re in a similar bind as a number of other games publishers: falling prices.  Disney CFO Tom Staggs says that DIS sold more units last quarter, but ended up with less coinage in the bank due to, “a competitive and difficult market put pressure on pricing.”

Despite recent DIS layoffs, Staggs says that Disney expects to “continue to invest in… videogames, websites and virtual worlds.”

Given the problem facing the folks at DIS, combined with the massive growth in their free-to-play Pixie Hollow, I’d be interested in the revenue numbers Disney’s virtual world product sales are generating.  Is it time for Disney to seriously rethink how they’re monetizing the online and/or gaming space?

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