Bret on Social Games

Scrabulous (oops Lexulous) offers a mobile version

2009-01-16T05:57:00.000-08:00

Mobile is hot. And the movement of social to mobile is even hotter. But I did not expect Lexulous to offer a mobile version. And I did not expect that mobile version to be incompatible with iPhone and Blackberry.

Here's the scoop as stated on the Lexulous app:

And I'd never expect them to incentivize invites. The Agarwalla Bros have always been scrupulous about obeying the letter and even more the intent of FB's platform policies. I am correct in thinking that offering a mobile version for inviting 30 friends is an incentive, right?

iPhone Current Demographics - Gender

2009-01-13T05:01:00.000-08:00

There's a pretty strong data (albeitly indirect) that most current iPhone owners are men 25-35.

However, if you take a look at the current traffic to buyiphone.apple.com (Apple's info portal for buying an iPhone), you'll see that 48% of the visitors are women (according to Quantcast).

Tracking back 6 months, I found that Hitwise did a similar analysis and found the traffic was nearly 50/50.

I haven't been able to find any good current demographic data regarding gender on the iPhone, if anyone has a good link, let me know.

I'm not sure if I find this data conclusive, but I suspect that with the price of the iPhone dropping we will see the percentage of female owning growing (men are much less price sensitive when it comes to gadget purchases).

I'd say if I was building an app for the iPhone for a release in the next 3-6 months, I'd stay focused on the male demographics.

Here's some more demographic data, mostly income. (http://theappleblog.com/2008/11/24/profile-of-an-iphone-user-interesting-statistics-about-yourself/)

And I'd charge money. :)

I'm Back, and so is Scrabulous!

2009-01-09T06:06:00.000-08:00

Hey all.

Then blogging break extended further, but I'm emerging from the darkness to note that Scrabulous is back as Lexulous. It's currently at 38,000 DAU.

As many of you know, Hasbro dropped their lawsuit against Scrabulous a couple of weeks ago.

Will Scrabulous/Lexulous get back its 600,000+ DAU? Doubtful. It's much harder to stand out from the noise on the Facebook platform nowadays.

I'm guessing that it'll hit 100,000 DAU by March 15. That's a total gut call. It's still the best Scrabble game on Facebook, it'll get much of its audience back.

However, the gameplay has been altered slightly. The scoring squares are in different locations. You get eight tiles instead of 7. Those are the two I noticed at a quick glance. There's likely to be more differences

Whatever, I'm happy for Rajat and Jayant. They built an awesome game and people can enjoy it again.

Blogging Break!

2008-12-22T15:08:00.000-08:00

First, I want to thank all the people who congratulated my on the new gig at Zynga. I really appreciate the support.

Second, Happy Holidays. I'm taking a blog vacation until next year, when I will resume with regular updates. I have quite a few ideas brewing, I promise it'll be worth the wait.

Bret

Zynga Hires Biz Dev Gold, Pt. 2

2008-12-15T06:02:00.000-08:00

So earlier this year, I wrote a post about former Pogo employee, Hugh De Loayza being hired by Zynga as VP of Biz Dev. I entitled it: Zynga hires Biz Dev Gold. I mentioned how he was a great person, a shining example of humanity.

Boy, was I wrong. :)

Six months later, the jerk hires me to be Zynga's new director of biz dev thus shattering the last vestiges of hope that I could make a living at blogging.

Thursday, at the Casual Games Association's Minna Mingle, I came out publicly. Revealed to the world that I'm now employed by Zynga.

So will I continue blogging?

Yes. But only 2-3 times a week. You'll notice that my blogging frequency has already slowed considerably. Sorry about that, Zynga's been keeping me busy for the last two weeks.

One of the things I cherish about my blog is that I have the complete freedom to talk about anything I want. Amazingly, Zynga is cool with me running my mouth off about whatever happens to come into my head at 3 in the morning. They're brave.

Having said that, I decided to not talk about Zynga in the blog. Once you're part of a company it's very hard to be objective about it.

However, since you may be interested, here are the main reasons I decided to join Zynga (over some other options):

1. Hugh. The guy's a rockstar and I want to learn whatever I can from him. (wow, do I feel like a suckup, I'm going to get so much crap about this post at the office.)

2. The job. In many ways, I'm getting paid to do what I had been doing already for the last year. Tracking the industry, identifying trends, and conversing with guys making cool games (so please keep emailing me, I'm still happy to offer free advice).

3. Zynga's vision. After a long chat with Mark Pincus, Zynga's CEO, I decided that I liked him (the most important factor for me) and that he had a smart long-term vision for Zynga (also pretty important). Fact is, it took a lot for me to link myself to someone else's vision rather than my own. A lot. So believe me when I say this: Zynga is going to kill it.

Less Than 2% of Adult Gamers have Visited a Virtual World, and Other Tidbits from the Pew Charitable Trust

2008-12-08T06:32:00.000-08:00

That's right, folks, only 2% of American gamers have visited a virtual world. However, if you're just looking at teenagers, around 10% have visited a virtual world.

Meanwhile 43% of all adult gamers (or 23% of all adults) play online games. For teens: 76% of ALL teens play online games.

Here's what the newly released Pew Internet and American Life Report: Adults and Videogames says about online gamers:

Just under a quarter (23%) of all adults play games online. Put another way, some 43% of adult gamers play online games. Adults are much less likely to play games online than teens, as about 76% of all teens play games online and 79% of teen gamers play games online.

As with all games, younger adults are more likely to report playing games online than their older counterparts. Fully 43% of adults ages 18-29 play games online, compared with 26% of people ages 30-49, 13% of people ages 50-64, and 5% of those 65 and older.

Respondents who report playing games online tend to play more often than gamers who do not play games online. The majority (59%) of online gamers play at least a few times a week, significantly more than the 41% of strictly offline gamers who play that often. Those who play massive multiplayer online games (MMOGs),5 such as World of Warcraft, are even more likely to play frequently, as 89% play at least a few times a week.6 Nearly half (49%) of MMOG players play everyday or almost everyday, while just one in four online gamers (26%) and 17% of offline gamers play as often.

Here's the demographic breakdown of adult videogame players in the US:

How a Normal User Finds Games on Facebook

2008-12-03T06:13:00.000-08:00

I was in a cafe in San Francisco Sunday and I saw a girl playing a Facebook game on a computer. By girl, I mean a college-aged woman, the core demographic of social networks.

The game she was playing was Twirl, an SGN game. I asked her how she discovered the game. On a friend's profile.

I asked if she played any other games. Only one other. Texas Holdem Poker by Zynga. She found about this game via an invite from a friend. A friend that she happened to be with who found out about it via an invite from another friend. Neither played any other games, but only as they explained because they hadn't seen any others.

Both girls had been on Facebook for about two months.

I asked one of the girls how she'd go about finding a game. "I guess I type games in the search box". She did. Only three games came up.

The top one: Mindjolt Games - the app from my friend Richard Fields (yeah baby!).

The Point

Game discovery on Facebook and Myspace sucks. Horribly. If either social network improved the app discovery experience, I think we'd see a lot more players in our games.

The sad thing is right now if you want users to discover your games, you can't rely on quality alone, you have to leverage virality (i.e. send a crapload of invites), or no one will even see your game. As of today there's just over 4000 games on Facebook. More than a few of them are great games and would get more exposure on your average flash game portal then they do in the Facebook app directory.

Chinese Games Market Evolves to a Mixed Revenue Model

2008-12-01T05:26:00.000-08:00

The Asian markets are often considered a guidepost for how online games will evolve in the West. In particular, observers of the Asian market point to the success of the free to play business model. In the free to play model, users get free access to games and usually have to pay for virtual items or game enhancements via microtransactions. Traditional Western MMOs such as World of Warcraft use a subscription-based revenue model.

In a recent paper, researchers from Bournemouth University, Professor Philip Hardwick and Jessie Ren noted that online game companies are re-adopting a time-based revenue model (i.e. subscription or pay-by-minute, I'm assuming).

In correspondence, Mr. Ren said that the readoption of a time-based model indicates a quick reaction to the changing preferences of the market. Evidently, some people are getting tired of microtransactions. Before you all get too worried, Ren also said that he believed the item-based model would continue to be the dominant business model. Collective sigh of relief.

The following chart (excerpted from the paper) shows the evolution of the revenue model in the Chinese market:

Slide 1

	Revenue model changes	Revenue Model Change Procedures
Stage 1: (2004-early 2008) *Revolutionary* *revenue model* *innovation*	Time-based revenue model (TBRM) ↓ Item-based revenue model (IBRM)	Period 1: IBRM was Adopted by 3 less dominant companies without much notice. oGamania (Game:Jushang), Sept 01, 2004; oHappydigi (Game:Tantra), Dec 15, 2004; oCDC (Game:Yulgang) , May 13, 2005;
		Period 2: Top 1 company Shanda adopted IBRM for its 3 games in Nov 2005, and followed by most less dominant game companies (2006-2007)
		Period 3: The last 2 dominant companies who adopted IBRM oThe9, May 2007; oNetEase, Early 2008
Stage 2 (early 2008- Present) *Evolutionary* *revenue model* *innovation*	Mixed revenue models (MRM) ( Item-based + Time-based + possible other models)	Top 10 dominant companies who adopted MRM oPerfect World (April, 2008); oKingSoft (May 2008); oShanda (July 2008); oGiant (July 2008); Less dominant company who adopted DRM oIyoyo.com (July 2007)

Good News for the Games Industry Week: Black Friday Edition

2008-11-28T05:17:00.000-08:00

Below is a list of the top 10 most searched-for consumer electronics in the UK courtesy of Hitwise.

Eight of 10 are gaming platforms, one is a gaming peripheral (Wii Fit), and one is the iPod Nano. Yes, the iPod plays games and so does the Nokia N96.

Happy Thanksgiving!

2008-11-27T05:55:00.000-08:00

Just wanted to give thanks that I'm in an awesome industry with fantastic people. And in particular the great friends I've made since I started in this biz.

Note: image found on a random Myspace page. I think it's hilarious. Must be an L-Tryptophan overdose.

Good News for the Games Industry Week: Celebrity Edition

2008-11-26T06:05:00.000-08:00

In this weekend's New York Times Magazine, Jennifer Aniston was asked about Facebook.

Here's her response:

It's not for me. I'd be opening myself up too much. I don't want to sound like a computer innocent - I've looked at things, of course....And I like to play Scrabble. And poker. I discovered Wii this weekend. I'm a late bloomer.

Think about it this way. Female, early 40s. Plays online social games (poker, Scrabble), though not on Facebook. Considers herself behind the curve because she just discovered the Wii.

Sounds to me like games are the new mainstream. (Thanks, Wii!) I mean think about it, Rachel from Friends plays videogames. Twenty bucks says Sarah Jessica Parker has played a set of Wii Tennis.

Good News for the Games Industry Week: UK Edition

2008-11-25T05:45:00.000-08:00

According to UK market research firm Verdict, videogames sales will outpace music and video sales in the UK this year. Sales of videogames is expected to grow 42%, to $7.5 billion, while sales of music and video combined will total $7.06 billion. (Thanks Digital Media Wire!)

Big trend: videogames sales have doubled over the past five years.

Hmm...so videogames are bigger than music and video combined.

There are some nuances here to extract.

1. Those projections include consoles sales. However, according the Entertainment Retailers Association, even taking that into account, videogames will still surpass video sales.

2. These projections only account for retail sales, so revenue from online games subscriptions and microtransactions are not counted.

Videogames are big people, aren't you glad you chose the right industry to be in during a recession. :)

Good News for the Games Industry Week: Retail Edition

2008-11-24T05:08:00.000-08:00

A couple weeks ago I highlighted some bad financial reports from EA and THQ. Since then I've seen a few stories that cast a positive light. This week I'll highlight some of the positive trends. Today's post features insights in the traditional retail games sector courtesy of Acitivision most recent earnings call.

1. Activision projecting 2.2 billion in revenue for 4th quarter. Largely on the back of three franchises, World of Warcraft, Guitar Hero, and Call of Duty.

Here's a quote from their earnings call where Activision discusses their view of the holiday season in light of the current economic conditions (interesting bits bolded by me):

First, retailers are continuing to increase shelf-space allocated to the videogame sector, as games begin to take a larger share of consumer spending versus other forms of entertainment, and are viewed as a growth driver. Over the past year, global retailers have allocated up to 40% more in-store space to the videogame category at the expense of other categories.
Most of this increase has been dedicated to the music genre and Activision Blizzard of course is the largest beneficiary of the increase, given our strong market share in this category.
Second, we’ve all heard that foot traffic at retail is down but actually, the increased share of store in videogames appears to be mitigating this risk. Our survey samples at key retailers suggest that in September and October, while other categories were challenged, videogame software and hardware showed sell-through growth in the high-single-digits, helping to validate our market expectations.
And third, the cost per hour of entertainment of videogames provides a great return on investment for the consumer as they seek value. To illustrate this, last month NPD conducted a holiday shopping survey that found for most shopping categories, consumers’ intent to purchase were flat or slightly lower than in 2007. The most notable exception again was videogaming systems and games, where consumers’ intent to purchase rose seven points over the prior year, putting videogames in the top five holiday purchases for the first time ever.
With respect to retailer purchasing behavior, what we have heard is that retailers are ordering less up-front and are focusing on chasing the winners, and they are being more cautious with their open-to-buy dollars on second-tier titles. We do see some of this but much less so with top-performing titles where expectations remain high.
What this means is that publishers with top-selling titles will likely benefit disproportionately this holiday quarter. For the last three holiday seasons, on average 90% of the top 10 titles were based on proven properties and we couldn’t be better positioned with our strong lineup of proven properties like Call of Duty, Guitar Hero, James Bond, and Madagascar.

So to summarize, proven franchises win (shocker). Music games are growing the market (awesome). People are going to be buying videogames systems this year despite the bad economy (yay!).

How does this affect social games? Not at all directly. Social games aren't exposed to the retail sector. However, the fact that retailers are devoting more shelf space to digital games is a pretty strong indicator that games are becoming more mass-market. Excellent news for social games which offer the lowest friction vector of adoption by non-gamers (free, invited by friends, low tech requirement).

EA Shuts Down Social Games Division, EA Blueprint

2008-11-21T05:49:00.000-08:00

According to Edge Online, as part of its recent cuts, EA has shut down EA Blueprint.

From what I've read, EA Blueprint was set up to publish games on top of social networks, or as we like to call them, social games.

In its time, EA Blueprint released a Facebook version of Smarty Pants, developed by Context Optional, the apps-for hire company. It currently has a respectable 40,000 monthly users. For perspective, the cut-off for a hit game on Facebook is 1 million monthly users.

I'm guessing that EA will opt to focus on the other new games platform, the iPhone. It's already seeing success there, unsuprising since the iPhone is much closer to the traditional retail game environment to which larger players are accustomed.

Here's the big picture.

I learned recently from a brilliant guy that when companies fail to build something internally they usually opt to acquire a company with whom they have an existing relationship.

Social games are going to be huge. Eventually, EA is going to need to acquire a large social games company. They're going to want to either acquire the #1 or #2 player in the space, because that what big acquirers tend to do. Right now, that's Zynga and Playfish. I don't see anyone else challenging either company's dominance at the moment, but anything could happen. If nothing changes in the next 18-24 months, when EA is ready to acquire, I think they'll be TRYING to buy Zynga. Why? Cuz Bing Gordon, former Chief Creative Officer of EA is on Zynga's board and a key adviser. Relationships matter.

Note: while SGN is still a player, they've opted to turn their focus on iPhone games , a space in which EA is already competitive. An acquisition of SGN would be primarily to expand EA's mobile games portfolio - feels unlikely at the moment.

Let me know if I'm crazy or overlooking something in the comments.

UPDATE: Awesome Comments Aplenty. Lots of insight. Read them.

Virtual Goods Summit 2008 Video Now Available.

2008-11-20T06:06:00.000-08:00

I'm sure many of my out of town readers missed the Virtual Goods Summit 2008 in San Francisco a month or so ago. I was there and missed most of the sessions due to intensely interesting lobby convos. So I suggest we both watch them. Believe me, no matter what it'll be more entertaining then this season of Heroes.

Check out the Virtual Goods Summit videos here.

And my notes from the summit (previously published) here.

BTW, just found out my parents finally discovered that I have a blog (I blame Google).

Hi Mom! Hi Dad!

Play Conference: Coverage of the Games Panel

2008-11-19T05:35:00.000-08:00

A special treat today, I actually liveblogged (kinda) the Level Up: What's Next for Gaming? session at the >Play conference on Saturday. It's not word for word, because frankly some discussion points weren't interesting enough for me to write down. You'll notice that Mitch Lasky is quoted a lot. It's basically because I developed a mancrush on him as the session went on. You'll see why. What follows is a best-of. Enjoy.

Moderator: Dean Takahashi - Lead Writer on Digital Media, Venturebeat

Panelists:

Rajat Paharia - Bunchball - Founder, CEO

Frederic Deschamp - Trion - Marketing Guy

Mitch Lasky - Benchmark Capital - General Partner

Manuel Bronstein - Microsoft Interactive Entertainment Business - Director, Xbox LIVE Primetime

Kevin Bruner - Telltale Games - CTO, Co-founder

Q: Where is innovation happening in games?

Bronstein - integration between media, i.e. game show on TV but contestants can play along via Xbox.

Lasky. Distribution. Retail model decline. Service likes Steam from Valve.

Paharia. Gameification - applying game mechanics to other types of online experiences.

Note: Paharia did not use the term gameification. It's a term I coined to describe what he was speaking about.

Deschamp. Dynamic content. Rather than static content like in World of Warcraft. Imagine an online world that changed while the player was present.

Bruner. Distribution. Internet makes it possible for small teams to thrive.

Q. Why is there so much investment in game right now?

Lasky. Because the internet has changed distribution. Games can now scale like a web service.

Bruner. Internet allows experiments impossible in retail.

Lasky. Also, because VCs are lemmings. World of Warcraft proved you can make a billion dollar business. VCs making me-too investments to be next Warcraft. Further example: $200 million was invested in mobile games between 1999-2004. In the six months after JAMDAT (Lasky's mobile content company) filed to go public, $250 million was invested in the space.

Lasky. Casual games is an overfunded space.

Q. Should VCs invest in content businesses?

Bronstein. Better tools will make content cheaper to make and less risky. At some point, 50,000 units sold will be a viable business. (My note: but not one VC's would be interested in investing in.)

Q. UGC games. Will they be big or not?

Lasky. Making a game is hard. Making a video is easy. Anyone will a camcorder can make a video or their dog rolling over. Games will not be democratized like video. Games are a fascist business. You need millions of Paul Preece (creator of Desktop Tower Defense - best Flash game ever) to have a Youtube of games.

(Note: I couldn't agree more. Companies focused on UGC tools are barking up the wrong tree.)

Bronstein. UGC doesn't have to be full games. Can be avatars, levels, recordings of gameplay, i.e. Halo videos.

Takahashi. It's interesting to me that XNA toolkit (to create games for xbox live arcade) has been downloaded over a million times.

Takahashi. 22,000 questions answered voluntarily by one user on dell's support site so he could earn a badge. (BT: the power of gameification, baby!)

Q.Why does innovation come from startups rather than big companies?

Lasky: When the budget for a game hit around $10-15 million, publishers require that developers either use existing game engines (same gameplay) or existing franchise (with new gameplay).

Bronstein. Big companies do innovate. Some bets too expensive for small comapnies. Example: only Nintendo could have created a system based around the Wii mote.

Lasky. Historically, most money lost in the games industry on failed peripherals. Exceptions: steering wheels, yokes (for flight simulators). Only succeed when tied to specific content.

Lasky: 16% of console games sales from Rockband or Guitar Hero.

Bruner: Establishment can't react to paradign shifts. Example. Broadcast TV lost to cable.

Lasky: EA and Activision will become little more than hedge funds.

Lasky: EA and Activision do not innovate. I worked at EA as an executive. EA does not innovate.

Bruner: NPD sales report only show one side of the games industry.

Q. Games: Silicon Valley vs. the World?

Lasky. Gaming is a monoculture. Terminator poster and heavy metal in game dev studio whether in Palo Alto or Vietnam. (BT: perhaps that's why traditional game are so focused on teenage boys. It's made by men in prolonged adolescence.)

Predictions

Takahashi. Good November for games sale will lead to more investment.

Lasky. Xmas will be terrible. Talked to retailers. Cutting games orders by 30-40%.

Deschamp. Free 2 play biz model will be good fro Europe and Asia.

Audience Question: Mobile games. How do you get through the noise to the consumer?

Lasky. Needs to be free.

Takahashi. Don't rating solve the problem of finding good content?

Bronstein. Quality matters. Most expensive XBLA games often sell most units. Lack of price sensitivity.

THE END

Monetization: How Much Can I Make From Advertising With My Facebook App?

2008-11-17T05:36:00.000-08:00

Another question I get from developers all the time: how much money can I make on Facebook?

Shocking, I know that some people care about money when it comes to Facebook apps. <cynicism>Wait...I think that's all most developers care about. </cynicism>

At the moment, there's only one publicly traded app developer, SNAP Interactive. <cynicism>Keep your fingers Max Levchin (Slide), it'll happen for you too one day, I'm sure of it!</cynicism>

Fortunately for us, SNAP Interactive has to publish their revenues, which currently comes exclusively from advertising on the dating apps on Facebook. Those apps: Are You Interested? (#1 dating app on Facebook), Meet New People, and Flirt With Me.

Here's the numbers from the SEC filing:

Revenue increased from $286 for the six months ended June 30, 2007 to $1,053,159 for the six months ended June 30, 2008, an increase of $1,052,873.

That's right, zero to a million in revenue in one year. Not bad. Especially, if you look at the expense side.

Operating Expenses for the six months ended June 30, 2008 increased to $717,349 from $277,634 for the six months ended June 30, 2007, representing an increase of $439,715.

That's ~$300,000 in profit. A 30% profit margin. And it looks like that doesn't include the founder's salary. Nice.

Hosting costs, <cynicism>for all you STILL writing business plans...poor bastards</cynicism>are as follows:

Hosting Expense for the six months ended June 30, 2008 increased to $87,512 from $0, representing an increase of $87,512. These increases are attributable to the need for substantial hosting infrastructure and server capacity to handle the high volume of traffic that our applications receive. Our need for a customized hosting solution was minimal at this time last year.

Read the rest of their filing here. Trust me, if you haven't learned to enjoy reading SEC filings yet, you will.

By the way, SNAP Interactive's money comes from ad revenue. The real money is in virtual goods.

Super Awesome Resource For Games Industry Info

2008-11-14T05:28:00.000-08:00

David Perry, super awesome developer and games industry thought leader, and if you ask me the most honest panelist ever, has a great site compiling data on the games industry.

Here's some highlights:

A list of every known MMO out there. Around 650 MMOs and counting.

A list of all games industry acquisitions and investments.

And the venerable games industry map, which shows the location of 1000+ game development studios worldwide.

It's fueled by users, so if you notice some missing info, submit it.

Zynga's Live Poker Bridges the Gap Between Mobile and Social

2008-11-13T06:00:00.000-08:00

I'm excited. It doesn't happen much any more, perhaps I've been in the social gaming space for too long to be impressed by the new entrants rehashing the same game mechanics over and over again. And for business models, we've settled into virtual currency sales via CPA offers from companies like Offerpa l and Superrewards for monetization.

Since I got into social games about two years ago, my vision has always been this:

Play. Anywhere.

It's what I was trying to do with my failed company, and to me, it's still the greatest opportunity for social gaming.

Imagine being able to play a game with a friend while you're waiting in line at McDonalds and they're halfway across the country sitting on their parent's couch with their laptop.

Think about this: tens of millions of people play social games every day. They all have mobile phones. It's going to be huge market.

And Zynga is going to be the first company to really capitalize on it.

Today, Zynga released Live Poker, which is the first iPhone game to use Facebook Connect, giving it access to Facebook user info, so they can display user photos and such. It's a real-time game fully integrated with their Facebook version of Texas Holdem Poker.

It's a significant move and part of a larger trend of social gaming companies moving onto a mobile platform.

Social games company, SGN has already had some successful iPhone games and are working on integrating them with Facebook but has yet to do so. New market entrant, Socialdeck managed to have a iPhone connected to friends, but did not use Facebook Connect.

I actually expected social games company, Mytopia, to be the first company to launch a mobile social version of Poker for iPhone. They currently have a Poker app that runs on Windows Mobile that lets people play in real-time with their friends playing on Facebook. However, they've opted to be a platform company rather than a games company.

I've decided to coin a new term to describe games like Zynga's Live Poker: mobile social.

Sample usage:
BIZ DEV GUY: Hey, looks like Zynga really ripping it up in mobile social.
BLOGGER: Yeah, the mobile-social industry is at the nexus of three major trends...blah...blah...blah. (we bloggers tend to pontificate.)

Anyway, here's the press release (so you can see who the lazy bloggers are who just regurgitate it - I'm so mean.):

Zynga Launches "Live Poker" for the iPhone; First Live Game Turns iPhone into a Social Gaming Platform

San Francisco – Nov. 13, 2008 – Zynga, the largest social gaming network, announced today the launch of "Live Poker," the first truly live game on the iPhone. The game, a mobile version of Zynga's popular Texas Hold'Em game, turns the iPhone into an always-on social gaming device.

"Live Poker" allows iPhone users to compete with 1.4 million daily players in the web's largest free poker game. The game makes it easy for users to play with their real friends from Facebook, MySpace, Bebo and Hi5 as well as make new poker buddies. Players can easily see which of their friends are online, and join them with just one click. Since the casino is always open, users have people to play with at all levels.

Zynga's new application turns the iPhone into a social gaming platform. "Live Poker" is the first application to leverage Facebook Connect, delivering the first social game to the platform. Using Facebook Connect, "Live Poker" allows social information such as real photos to be displayed.

"We have just seen the creation of the next important social gaming platform, thanks to 'Live Poker,'" said Mark Pincus, CEO, Zynga. "Delivering the first social game on the iPhone is a logical extension for us. Social gaming continues to grow, and this is another giant step towards taking it to the mass market."

"Live Poker" is available on any iPhone with 3G or Wi-Fi access, and will also work on the iPod Touch. "Live Poker" is free, and an upgraded version giving players a larger chip package and access to tournaments is also available for $9.99. The application is offered in the iTunes store at: http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=295913419.

About Zynga

Zynga is the largest social gaming network with more than 5.4 million daily users. Zynga's games are available on Facebook, MySpace, Bebo, Hi5 and Friendster and include Texas Hold'em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group and Avalon Ventures. Zynga is headquartered at the Chip Factory in San Francisco . For more information, please visit www.zynga.com .

# # #

Is Myspace Games Cannibalizing the Audience From Social Games in the Myspace App Directory?

2008-11-12T05:28:00.000-08:00

So what if I told you the following:

Myspace and World Poker Tour announced that they had partnered to launch a real-time poker game on Myspace, and
World Poker Tour would get prime placement in the Myspace Games directory.

Do you think it would cannibalize players from successful poker apps, like Zynga's dominant Texas Holdem Poker?

Now, if I told you Texas Holdem Poker had 80,000 people playing right this second, how many people do you think would be playing World Poker Tour at the same time?

80. That's right. Eight-zero. Or 1/1000th of the people playing Zynga's version in the app gallery. Games in the App Gallery have nothing to worry about.

I'd always assumed that Myspace Games would compete with games in the app gallery to the advantange of Myspace Games. Turns out, they have no apparent effect on each other. They serve different userbases.

I took a look at the growth curves. Myspace Games was around before the App Gallery, so it seems reasonable to expect that the launch of games in the App gallery would cannibalize traffic from Myspace Games. Nope, traffic remained flat. As the months wore on, traffic to the App Gallery grew steadily. Meanwhile, Myspace Games growth remained flat.

It looks to me that rather than serving the existing market of casual gamers (which Myspace Games does very well - it's powered by Oberon Media, a powerhouse in casual games distribution), social games in the App Gallery are creating a new market of gamers.

I'll say that again for emphasis: social games is opening up an entirely new audience for games. A massive audience. A mass-market audience.

For the curious, according to Quantcast (whose data is always a bit suspect), the Apps Gallery has 5.2M monthly visitors (about 8% of Myspace's total traffic), and Myspace Games gets about 688k monthly visitors (less than 1% of Myspace's total traffic).

Flash or Java - Which One Should I Use?

2008-11-11T06:04:00.000-08:00

One of the most frequent questions I get is whether to build games in Java or Flash. It's a debate that's been going for some time. The early entrants into the casual games biz opted for Java, which overall was a better language for quality game development. Back then, Flash was pretty terrible for game development.

Since then, Flash has improved significantly with the most recent version Flash 10 offering improved 3D support (whether it's any good for 3D games, you'll have to tell me, I haven't played with it yet).

I think Flash is the clear winner, and I'm not the only one. Sharendipity, a company that's spend over a year building a game creation tools platform for user-created games recently announced that they're abandoning the Java for Flash. It's a significant move that's requiring them to port over 60,000 lines of code.

Here's their reasoning (from their blog):

Up front, I’ll say that the reason we are moving to Flash is because of Java’s adoption rates. It is not, in fact, because of the language itself but because of Java’s deployment model. We suspect that we lose somewhere between thirty and fifty percent of users due simply to the fact that we are in Java.

This isn’t pure speculation, but backed up by a significant amount of internal data. There are also other game companies that have experienced the same thing.

Daniel James, CEO of Three Rings, has been advocating the move to Flash for years now. He estimated that Puzzle Pirates, his company's Java-based casual MMO, while successful, suffered from an extremely low conversion mainly because it was in Java.

Fact is, Flash has ~95% penetration among Internet users. If want people to play your game, Flash is the only option.

BTW, if you're interested the technical aspects of moving from Java to Flash, Sharendipity is doing a series of blog posts on their experience. Check it out here.

Slide Turns Popular Facebook App Top Friends into a Game

2008-11-10T05:44:00.000-08:00

Screenshot from Slide's Top Friends app

This weekend (or earlier - hard to tell since I don't use Top Friends regularly), Slide added a game element to Top Friends. It's called Ownd. The name might sound familiar, since it's one letter off from the name of a very successful game on Facebook called Owned. Like Owned, Ownd is a game where you call buy and sell friends.

I think gameifying Top Friends is a great move on Slide's part. They've finally jumped on the games bandwagon after sitting on the sidelines for the last year. However, I don't think this signals a major push into social games by Slide. It feels more like an experiment.

And I don't think it will impact the popularity of existing friend exchange games on Facebook, Owned! and Friends For Sale. Ownd will simply makes existing users of Top Friends more engaged.

Looking at Top Friends for the first time in a while, I realized that had recreated the old Facebook profile design. Perhaps that's why Top Friends grew 13% since the redesign, according to Developer Analytics.

I've always thought that Slide's strategy with Top Friends was to create a social network within Facebook under Slide's control so Slide could collect data on users.

Ownd doesn't help with that goal as far as I can see. But Ownd does open up another avenue for monetization. After all, for the moment games do monetization better than anyone, and Slide famously needs help with that. Hey, we might see them end up in social games, after all. :)

Recession-proof? Game Industry Giants THQ and EA Layoff Hundreds

2008-11-07T06:25:00.000-08:00

Many, including myself, have touted the fact that games are a recession-proof industry.

Together, THQ and EA have posted hundreds of millions of dollars in losses and laid off over 750 people in the last two weeks.

Doesn't sound very recession-proof.

Meanwhile Zynga is still hiring like mad (check out their open jobs here).

I'm not surprised. I expect social games companies to do better than traditional games companies in the recession.

Here's why:

Traditional games - $30-80 upfront.
Social Games - $0 upfront.

If you don't have a job, which one is more appealing to you?

Recent Fundings in the Social Gaming Industry - November 4

2008-11-06T05:10:00.000-08:00

Rockyou. $17 million. From Softbank (Japan) and SK Telecom (Korea). While Rockyou is not a social gaming company, they are a social entertainment company with quite a few gaming properties. Apparently, the fresh cash is for expansion into the Asian markets, most notably the Chinese socnet, Xiaonei, which btw, already has a virtual currency system. Since China already has a robust virtual goods market, it will be interesting to see how Rockyou fares. Oh, and Xiaonei already has clones of the most successful games on Facebook, so don't get too excited.

Playfish. $17 million. Series B. From Accel Partners and Index Ventures. With 10 million monthly actives, 4 of the top ten games on Facebook, and this round of funding, Playfish has cemented their place as the number 2 social gaming company behind Zynga. According to Playfish CEO, Kristian Segerstrale, the cash is to be used to expand into other platforms, notably Myspace. I suspect they'll be launching mobile games sooner than later, Kristian did run a successful mobile games company for six years, after all.

Crispy Gamer. $8.5 million. Series A. From Constellation Ventures. For a Games Review site. Yes, a games review site. That had 1 million uniques AT LAUNCH. I mention this funding because it's further evidence that games are HOT.

My Favorite Commentary on the Virtual Goods Summit

2008-11-05T05:28:00.000-08:00

I've been following Adam Martin's commentary over at his blog T-Machine for a long time. He covered the Virtual Goods Summit for Free to Play and his insights are awesome. Unadulterated, opinionated goodness. His posts came a week after the initial burst of coverage, so if you missed them, here they are.

Virtual Goods and Social Networks

Making Virtual Economies Work

Branded and User-Generated Virtual Goods

Here's some choice quotes from the coverage (bolding by me):

Outspark - Susan Choe
At the end of the day the gameplay will keep some of the users, but not all of them. Half the gamers in our ecosystem come because of social interactions; the gameplay is good, but really the events and social activities is what gets them to come back, even in monster-killing games.

Meez - Sean Ryan
we start with the holiday theme. Then look at what the advertisers want to see. Then we look at the upcoming features, and make sure we have compelling items there. A lot of our prod dev driven by trends/fads in the userbase - pop culture influences etc.

Meez - Sean Ryan - what is a VG? We all talk about it like they’re just clothes, but that’s just one third. Another third is world-features (can I levitate, can I glow like a lightbulb), and final third is privileges, access - “can I sit in a special seat in a public space?” etc. [Adam Martin - think this is the future - VGs that open up new activities, as opposed to merely being about status etc.]

I agree with Sean and Adam. When we designed our virtual goods economy at Tenuki, it was based on Legend of Zelda, i.e. acquiring items that unlocked abilities that opened new areas of the world or new functionality. Players could customize those special items, so functional was tied to decorative. (We had the problem of trying to innovate everything we touched - don't make that mistake. Honestly though, basing all our game design decisions on Nintendo games is probably the smartest thing we could have done.)