Virtual Worlds News

Electronic Arts Announces Earnings, Layoffs

2009-11-09T15:57:14-08:00

Within hours of confirmation that Electronic Arts had acquired social game developer Playfish, the company also confirmed that it would lay off 1,500 workers despite announcing record digital revenues of $138 million for Q2 2009 (up 23% year-over-year). Despite digital growth, EA posted a net loss of $391 million for Q2 (up 26% year-over-year). The company announced $788 million in GAAP revenue, a 12% year-over-year decline.

EA internal studios confirmed affected by the layoffs include EA Redwood Shores, Tiburon, Mythic, and Black Box. Mythic is associated primarily with MMOs, while Black Box is known primarily for the Need for Speed and Skate series of games. Layoffs at these divisions are logical in light of EA's ongoing move away from traditional games publishing models and toward digital revenue streams like virtual goods.

Mythic may have been one of the hardest-hit studios, with Katherine Pitta claiming the loss of 40% of the developer's staff (about 80 employees). Rumors indicate that about 90% of those employees may have been working on creation of new content for Warhammer Online. If true, this would be a clear sign that EA is looking to reduce support for the troubled subscription MMORPG.

Layoffs at EA Redwood Shores and Tiburon are more troubling for the virtual goods sector. Tiburon is the primary developer of EA's various sports titles, including Madden NFL, which have all begun supporting microtransactions either as DLC or as part of freemium reinventions of the franchises. EA Redwood Shores is the company's headquarters. All of these franchises had made moves to include virtual goods in their business models, whether as DLC add-ons or online freemium reinventions.

There is some good news for EA to announce this quarter, aside from the Playfish acquisition. The company's non-GAAP revenue was up 2% to a record high of $1.147 billion. The layoffs are part of a restructuring plan that should save the company $100 million annually by letting it close down some of its internal developers. The restructuring itself will cost EA $130 million, a sign of how difficult it can be for a traditional games company to transition into a newer business model.

[This story first appeared on virtualgoodsnews.com]

Electronic Arts Acquires Playfish

2009-11-09T08:33:14-08:00

Electronic Arts Inc. today announced it has acquired social games developer Playfish. The terms of the acquisition were a cash payment of approximately US$275 million with an additional variable cash consideration of up to $100 million, contingent upon the achievement of certain performance milestones through December 31, 2011, plus $25 million in equity-based retention agreements with employees.

Playfish will operate within EA Interactive, a division of EA focused on the web and on wireless, EA said today in a statement.

"Social gaming, with its emphasis on friends and community, is seeing tremendous growth and this is the right time to invest to strengthen our participation in this space," Barry Cottle, Senior Vice President and General Manager of EA Interactive said. Kristian Segerstrale, CEO and Co-founder of Playfish added his comments, saying "EA is the ideal opportunity for us to push forward our goals to lead in the social entertainment evolution on a faster and much larger scale."

The deal, which had been rumored for weeks, is in some respects reminiscent of EA's earlier acquisition of mobile game studio Jamdat. In that move, EA established via an acquisition a presence in a game sector it had long sought, albeit unsuccessfully, to succeed in. Today's acquisition accomplishes a similar goal, only now it is social games sector EA gains a powerful foothold in.

Habbo Takes Twilight Launch Live

2009-11-06T13:41:08-08:00

Habbo's partnership with Twilight studio Summit Entertainment kicks off in earnest today with the availability of Twilight-themed virtual goods. For the next four weeks Habbo Hotel users will be able acquire Twilight-themed goods for their in-world rooms. Additionally, one of the movie's leads (still unannounced) will make one or more surprise appearances in-world to chat with and answer questions from Habbo users. "Habbo users have been very vocal in expressing their interest in the Twilight Saga film series," Teemu Huuhtanen, president, North America, Sulake Inc. says. "Our goal is to provide a fun and easy-to-access online venue for Habbo members around the world to meet up and share their excitement for the upcoming movie, The Twilight Saga: New Moon." The movie is slated for a November 21 worldwide release.

NewsBrief: Ngmoco Acquires Miraphonic

2009-11-06T09:38:46-08:00

This week ngmoco announced (via twitter) that it had acquired the social game publisher Miraphonic. Games published by Miraphonic include Epic Pet Wars and Epic Soldier Wars. The games are available both on Facebook and iPhone. Miraphonic's games are generally freemium titles that monetize through sale of virtual goods. In the case of Epic Pet Wars it is an in-game virtual currency called Respect Points.

The move seems to be the first fruit of ngmoco's recently-stated ambition to move into social game development, signified by the recent hire of former MySpace SVP of Business Development Jason Oberfest. Ngmoco is currently enjoying success with its first iPhone freemium game, Eliminate. The Miraphonic acquisition seems to hint that ngmoco may be interested in finding ways to extend its iPhone game experiences into Facebook. [via Pocket Gamer]

[This story originally appeared on virtualgoodsnews.com.]

Cyworld Shutters US Operation

2009-11-06T09:13:44-08:00

Cyworld, Korea's preeminent social network -- one which launched a localized version for the US market in 2006 –- is in the process of shuttering its operations here, according to an e-mail sent to members yesterday. Cyworld's English-language servers started to go offline last week and will be completely unavailable to US subscribers effective November 23. No reason was given for the move, though it seems clear the company's three-year effort in this market never really took off. Two years after launching an English-language version, with a staffed operation in the US to boot, the company started to retrench -- in November 2008 Cyworld laid off its US-based staff, closed its offices, and decided to operate the US shard from Korea. Effective this month, that already reduced level of service will be eliminated completely. Cyworld parent SK Telecom had previously made a commitment to invest $110 million into the US operation.

4,172 Attendees Already Registered for Engage! Expo

2009-11-05T09:41:00-08:00

4,172 people have registered to attend the Engage! Expo at Toy Fair taking place February 16-17, 2010 in New York City. We're extremely pleased with the response and we're still 15 weeks away from the show. The number of companies that are looking for solutions to engage with and monetize with youth online is simply amazing. The exhibit hall offers demonstrations of the latest tools, technologies, products, and services used to build and monetize social games, virtual worlds, web-connected and wireless-connected toys, mobile applications, youth web sites, and interactive entertainment. Confirmed registered attendees include:

- toy manufacturers
- toy designers and inventors
- retail buyers
- industry analysts
- media
- film/TV production companies
- investors/venture capitalists

- animation companies
- game developers
- entertainment companies
- youth product brands
- advertising/marketing executives
- licensing firms
- youth focused startups

Offerpal Media Hires New CEO

2009-11-04T20:47:41-08:00

The former CEO of Mochi Media, George Garrick (pictured), today was named chief executive of ad offer company Offerpal Media. Anu Shukla, founder of Offerpal, relinquishes the role of CEO which she has held since the company's founding in 2007.

Garrick signs on at Offerpal amidst a firestorm that has pit the ad offer giant against TechCrunch editor Michael Arrington. Last week Arrington publicly accused Offerpal of a number of questionable practices including knowingly allowing children to steal their parents credit cards in order to purchase virtual currency or complete ad offers and scamming advertisers into accepting leads of individuals who had no real interest or intention on following through on the offer.

Today's announcement steers clear of the debate (which can be observed via an entry in the Offerpal blog, among other sites online) and dwells on Garrick's skill set and agenda going forward. Shukla said of the hire that "after many months of searching, I believe that George is the best CEO to scale the company to new heights. I am looking forward to working with him closely."

Garrick, who has served as CEO of Wine.com, Jingle Networks, and Mochi Media, guided PlaceWare Inc. toward an acquisition by Microsoft for $200 million. As CEO of Flycast Communications, Garrick repositioned the startup into a major direct-response ad network leading it to a $500 million IPO and a subsequent sale for $2.3 billion.

New York Marriott Marquis Selected at Official Hotel For Engage! Expo NYC

2009-11-04T15:48:40-08:00

New York Marriott Marquis is the official hotel for Engage! Expo taking place February 16-17, 2010 in New York City. We have established special pricing (link below) for Engage! Expo attendees. Through our special travel booking site you can secure the rate of $269 per night. Located in world famous Times Square, the Marriott Marquis is the official headquarters hotel for both Engage! Expo and Toy Fair. Bus service is provided directly from the Marriott Marquis and the Javits Convention Center. https://www.tphousing.com/r/startres.asp?EICode=1797&AttCode=961

Linden Details Second Life Enterprise

2009-11-03T22:31:09-08:00

Linden Lab tomorrow will announce the launch of an open beta program for its behind-the-firewall product, Second Life Enterprise (formerly known by the moniker Nebraska). In addition to Second Life Enterprise, the will also announce the Second Life Work Marketplace, slated to be launched in early 2010. Marketplace, according to the company, will enable users to "further customize their virtual world environments while also creating additional revenue streams."

Linden Lab says there are 14 organizations already participating in the beta program for Second Life Enterprise, including IBM, Northrop Grumman, Naval Undersea Warfare Center, DefenseWeb Technologies, Case Western Reserve University, and The New Media Consortium.

Linden says the current tally of organizations which hold meetings, conduct training sessions and prototype new technologies using the Second LIfe platform number over 1,400, some of which may choose to privatize their virtualized businesses via Enterprise.

Pricing for Second Life Enterprise starts at $55,000. Linden Lab expects the beta program to run through the year; it will then announce additional details surrounding the general availability of the new product sometime during the first half of 2010.

The Second Life Work Marketplace is currently under development and a closed alpha is planned for the end of calendar Q1 2010.

Songwriter Award Surfaces in Fashion Fantasy Game

2009-11-03T14:13:54-08:00

Fashion-focused virtual world Fashion Fantasy Game (FFG) and The New York Songwriter's Circle today announced the three finalists in the Young Songwriter Award competition. The virtual world, created by fashion designer Nancy Ganz, teamed up with the long-standing music organization which promotes up-and-coming songwriting talent from around the world for this first-ever collaboration. Video of the three finalists can be seen from within the Fashion Fantasy Game world. The winner will be chosen by FFG visitors and will be announced on November 19 at a live event held at the Bitter End music club in New York City. The Young Songwriter Award was established in 2007 and is dedicated to supporting one exceptional young songwriter under the age of 18 -- to help them launch their music career and showcase their craft.

Bebo Launches Game Section

2009-11-03T13:51:50-08:00

Social network Bebo launched its Social Games Experience yesterday. The new section of the popular social network includes developer tools and games. Developers on board for the launch included Playfish and MindJolt. "Gaming activities continue to be one of the most absorbing online entertainment experiences and this area continues to explode in popularity," Bebo's president Stephane Panier said. "We want to create an engaging and fun environment and by providing our audience with a dedicated social gaming experience and developers access to the tools to make it as immersive as possible, we create an ecosystem that makes it easier for our audience to connect and express themselves around games." The Games Homepage, which anchors the Social Games Experience, allows users to access social games applications; find out what the most popular game apps are on Bebo; check out high scores on an interactive leader board and receive recommendations.

Second Life Q3 User-To-User Transactions Up 54%

2009-11-03T13:34:41-08:00

Today Linden Lab issued its Q3 economic report, announcing that user-to-user transactions were up 54% year-over-year. A total of $150 million changed hands during user-to-user transactions in the quarter. Quarter-over-quarter, Second Life's Q3 performance indicated 4% growth. Activity on the LindeX, which converts real currency into Linden Dollars, amounted to roughly $29 million. This is a rate that is flat compared to the previous quarter and up 3% year-over-year.

This quarter Linden Lab opted to release "spotlight" data breaking down the influence various nations had on the Second Life economy. Users from the United States accounted for 37% of the economy, followed by Germany and Italy at 8% each, France at 7%, and the UK at 5%. Similarly, users from the United States accounted for 41% of all Second Life user hours, followed by Germany at 9%, the UK at 7%, France at 5%, and Brazil at 4%.

Gross sales through Xstreet SL, the Web marketplace for Second Life virtual goods, were 420 million Linden Dollars or about $1.6 million. This represents 13% growth quarter-over-quarter and 72% growth year-over-year. Linden Lab notes that Xstreet SL transactions represent roughly 1% of the total value of the Second Life economy, represented by the $150 million that changed hands between users in Q3.

Total user hours were down 6% quarter-over-quarter and up only 13% year-over-year. Peak concurrency declined to 77,367 from around 88,000 users the previous quarter. Linden Lab attributes this to a new policy that bans bots, which would mean that user hour and peak concurrency totals in previous quarters may have been inflated by bot activity. Monthly repeat logins for September 2009 peaked at 750,446. This is a slight decrease from May of 2009, the last month before the new anti-bot policies went into effect, but still a 23% increase year-over-year.

Resident-owned land expanded to reach 1.8 billion square meters, up 3% from the previous quarter but down 6% year-over-year. Residents also owned 23,566 Islands (private regions), up 3% from the previous quarter. Of the three types of Islands, ownership of Open Spaces declined 6%, ownership of Homesteads increased 6%, and ownership of Full Regions increased 1% (all over the previous quarter).

Synopses of the Q1 and Q2 Second Life virtual economy reports can be found here and here. Linden Lab has predicted that the 2009 total value of the Second Life economy will be $450 million, a figure the company is currently on track to meet or exceed. Total value of the 2009 Second Life economy through Q3 is already $414 million.

[This story first appeared on virtualgoodsnews.com]

Report: No World of Warcraft in China

2009-11-02T16:23:42-08:00

China's General Administration of Press and Publication, the government arm that regulates online gaming in that country, has reportedly suspended approval for NetEase.com Inc. to operate Activision-Blizzard's online role-playing game World of Warcraft, putting the future of that game in China in question and likely impacting the bottom line of both NetEase and Activision. According to Reuters, "the regulatory body posted a statement on its Web site that demanded the NetEase affiliate company that operates World of Warcraft to suspend charging users to play the game, and disallow new account registrations." The news service goes on to say. "NetEase launched the World of Warcraft game commercially in China on Sept. 19. Roth Capital Partners analyst Adam Krejcik said the move by the GAPP was not surprising, given previous reports that the agency was displeased that the popular multiplayer online game was launched without its approval."

Aurora Feint Partners with Japan's DeNA

2009-11-02T12:44:45-08:00

Aurora Feint, developer of OpenFeint, a social gaming platform for the iPhone, announced today its partnership with DeNA Co., Ltd.; the operator of Japan's largest mobile social network and virtual goods company. DeNA will reportedly make a multi-million dollar investment in Aurora Feint for a 20 percent stake in the company.

"DeNA is a major player in the mobile, social networking and gaming space," said Peter Relan, Chairman and founding investor of Aurora Feint. "Their investment and partnership positions the OpenFeint platform for long term stability and dominance in the smartphone market."

DeNA's Mobage-town mobile virtual world and gaming platform is the biggest mobile social network in Japan. OpenFeint will power the company's smartphone market entry strategy.

"We are delighted to partner with OpenFeint which is the clear market leader in its category," said Tomoko Namba, CEO of DeNA. "We look forward to a long term partnership which will produce the synergy of our experience in operating large mobile social networks and the experience of OpenFeint in operating a large social gaming platform in the smartphone market."

The synergy is already producing results. One of DeNA's major partners in the games industry, and a veteran international entertainment company; Hudson, has agreed to use OpenFeint as the platform for its upcoming iPhone games line up beginning this holiday season with Bomberman, the first Japanese game for OpenFeint.

"We believe that OpenFeint is an extremely powerful social networking solution in the ever-changing iPhone market. We are planning to release several games which utilize this beneficial tool to the fullest extent," said Masato Shibata, Corporate Officer of Hudson Soft Co., Ltd

-- Wes Nihei

Metaplace Takes Audio Chat Live

2009-11-02T12:39:15-08:00

Metaplace, the virtual world brainchild of game industry veteran Raph Koster, is launching chat functionality that will let users speak with each other in the more than 70,000 Metaplace virtual worlds currently active. Reportedly, Metaplace users access audio chat capabilities via a single-click option that goes live today across the platform; then a "push-to-talk button" will appear in-world. Users ca avail themselves of the chat function using virtual coins. As in Second Life, the chat system is spatial. [via Venture Beat]