VIRTUAL WORLDS: IMVU elevator pitch

Very good and short presentation from IMVU

Virtual Economics: Q&A with Gambit Co-founder Noah Kagan

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I wanted to share this great Q&A from inside facebook guys:

As we continue our in depth look at leaders the Facebook Platform payments ecosystem, today we turn our attention to Gambit, a new virtual currency monetization and payment service for social apps and games that went public for the first time here on Inside Facebook back in March.

We recently spoke with Gambit co-founder Noah Kagan (formerly of Facebook) about the opportunities he sees inside Facebook apps and games, and the approach Gambit is taking to help developers monetize.

Inside Facebook: When did you realize the business opportunity in providing payment services to online gaming communities?

Noah Kagan: We've been building applications for the past year and a half. Through that process, we developed our own payment tools. We wanted more transparency, analytics, and customization. These values maximized profit for our own games, and we found that we were doing better than our competitors. To see if it was a fluke, we let other game developers experiment with our payment tools. The results were consistent, and so we closed down our games and focused on providing payment solutions to online gaming communities.

Gambit is a payment solution for online games, and our services vary based on what clients need. We help clients find the best way to implement a virtual economy, structure price points, and use analytics to maximize ARPU.

What geographic markets is Gambit in?

We focus on the U.S., U.K., Australia, and most of Western Europe. We are the leader in these countries for monetization and competitive in South American and Southeast Asia. We are powering the #1 app on MySpace, #1 app on Facebook, and many other small and large properties. The U.S. is five years behind in virtual monetization, but a lot of consumers are willing to pay for virtual goods. I don't spend much on anything, but I care for game consoles. The market is only going to grow: the question is, how do you make it easy for people to pay?

Discuss the value chain of your business model: Who are the key players, and how is value created for each one?

From the developer's standpoint, the tradeoff is between focusing your time and energy on game development or monetization, which includes aspects such as customer support, fraud, callbacks, tech, API, etc. Developers can spend a small percentage of their budgets on PayPal, or a little bit more on us and take advantage of more services. It's a cost benefit analysis. Gambit provides developers with a buffet of payment options that empower them to make decisions based on statistics that show how much revenue they get from advertisers. We value transparency. Other providers give you numbers, but with no certainty.

Users get phone and email support with us – no one else does this. Then there are advertisers that are making offers, as well as payment companies. Our advertising relationships are pretty well developed.

In terms of competition in the payment space, how would you distinguish your products?

We've innovated with our behavioral ad targeting, complete payments customization, fraud reduction technology, and our transparent analytics. Our business is built on what developers want and how to make more money for them: if they want certain metrics, we will make them available if possible. Because we come from a developer background, we know how our clients feel, whereas other companies are coming from a sales and marketing perspective. We emphasize results and performance, and how to build better products and code.

Across the board, all developers have problems with customer support that they are not aware of. This is a huge challenge long-term that most people discount. The common problems are that users aren't getting their credits or didn't complete all the requirements, and technical problems. We have a full time staff, direct phone support and provide a CRM solution for our clients to see what their users are saying.

What's your reaction to Facebook's virtual currency test?

Competition breeds innovation. Facebook has a lot of inherent value to bring, but how will they provide value specifically to game developers? I'm curious what additional value Facebook can produce that we can't.

How is your company doing from a financial perspective?

Gambit has been profitable since December. We've raised some funding in 2007. Since we have not fund-raised large amounts like our competitors, and we do not have unrealistic growth expectations from a venture capital firm - so that's an advantage.

What kinds of developers are most attracted to your products, and what kinds of virtual goods have been most successful for them?

We are serving over 20 million users across our hundreds of clients a month. Social networking applications, online communities, RPG and flash-based MMO games do very well with us.

Where is the virtual goods economy headed in the future?

There will be an increase in online virtual goods spending in the Western world. Regarding online offers, they need to be more relevant and user friendly: for example, a girl who likes frozen yogurt can signup for free frozen yogurt and get credits at the same time. Right now, some users have a bad experience with offers. We will move toward using more social information – age, gender, geography, and a few other factors in improving offer relevancy. In general, the payment solution that will win is one that helps converts users to paying customers as easy as possible.

Thanks, Noah. Anything else you'd like to share with our readers?

We'd love to chat with anyone interested in optimizing or growing their online economy. Check out more on our blog.

[link to original | source: Inside Facebook | published: 18 hours ago | shared via feedly]

NEWS: Free Realms Reaches 2 Million Players

It seems that sony are having more success with this than Cartoon networks Fusion Fall, more on this soon.

Sony Online Entertainment's family-friendly PC MMO Free Realms is now up to two million unique registrants, the company announced today.

75 percent of these are under the age of 17, and 46 percent are younger than 13, SOE says, adding that nearly a third of players are female. The company it plans to celebrate the milestone by awarding all its users with a special bundle of in-game items.

The game, which is free-to-play but has optional microtransaction and subscription elements, lets users play, socialize and battle, and interact on a social networking site alongside the game.

It ties into a trading card game playable both with physical cards and inside the game via digital codes. SOE says the virtual cards are "sales leaders" inside the game's digital store.

"In less than a month, Free Realms has captivated a core player base of tween and teen gamers, while also strongly resonating with MMO gamers," says SOE president John Smedley. "We wanted to create a game to play with our families and are excited to have hit the mark with our intended audience."

[link to original | source: Worlds In Motion | published: 1 day ago | shared via feedly]

RESEARCH: Panel on Casual MMO and immersive worlds

Its from the Summer of Last year but its well worth a watch as it allows you to see how things have evolved from a year ago, also the panelists provide some great stats and insight.

VIRTUAL WORLDS: China's Perfect World Brings In $62.2M

China's Perfect World Brings In $62.2M For Q1

Chinese freemium game publisher Perfect World announced its Q1 earnings today, reporting $62.2 million according to Redline China. This is a 1.8% increase from revenues reported in Q4 2008 and a 40.2% increase year-over-year. It's another signal that the Chinese freemium game market remains healthy and resistant to the global economic downturn that is negatively impacting Chinese Web advertising revenues. The company's net income for the quarter was $31.5 million, up 72.6% from Q4 '08 and 36.1% from Q1 '08.

What's interesting about these figures is that while revenue is up, peak concurrent users is actually down. For Q1 '09, Perfect World reported 615,000 concurrent users. That compares to 690,000 in Q4 '08 and 660,000 in Q1 '08. Perfect World attributes the drop in peak concurrent users to seasonal elements -- as Q1 contains several major Chinese holidays -- and an aggressive anti-cheating campaign that would have necessarily driven a certain percentage of users away.

ARPPU (average revenue per paying user) for Perfect World in Q1 '09 was 244RMB, or about $35.74. That's up 8.1% from Q4 '08 and 61.6% from Q1 '08. Perfect World attributes the increase in revenue from Q4 '08 to Q1 '09 to a series of successful in-game promotions for sales of virtual goods.

Perfect World projects Q2 '09 revenues to fall in a range between $60.1 and $63.6 million, essentially expecting no more than a 2% change up or down in current figures.  Right now user churn is a major concern for Perfect World, so it intends to scale back on the number of sales promotions in the upcoming quarter. It is also expecting to incur higher marketing and operating expenses than usual, which could narrow profit margins.

The Perfect World figures are interesting in terms of how enormously consistent they are with the results recently reported by competitor Changyou. In fact, reported revenues are in the same range. While the Changyou reports did not include projections for Q2 '09, it seems likely that company's future performance will also fall into the same range as Perfect World's.

[link to original | source: Virtual Goods News | published: 16 hours ago | shared via feedly]

NEWS : Tencent’s virtual goods revenues keep growing during recession [feedly]

Asian web companies have been making millions from virtual goods for years — and that story doesn't seem to be changing despite the current worldwide recession. Tencent , a publicly-traded Chinese web conglomerate comprised of an instant message client, a social network, and various other services, says it made $342.3 million in virtual goods in the first quarter of this year.

The numbers seem to indicate the resiliency of virtual goods — such as virtual clothing that users can buy for their avatars in a game — versus advertising.

Tencent's web-based virtual goods saw a quarter-over-quarter increase of nearly 20 percent and a year-over-year increase of 75 percent, coming in at $278 million. Its mobile virtual goods sales were smaller but also growing, coming in at $64 million. That revenue stream saw nearly 10 percent growth by quarter and more than 52 percent growth by year. Meanwhile, its advertising revenue got virtually hammered, dropping by 30 percent quarter-over-quarter to come in at $21 million.

In 2008, Tencent made more than $1 billion in total revenue , of which $719 million was from virtual goods.

The caveat, the company says, is that virtual goods revenue "reflected the positive seasonal impact of the Chinese New Year holidays and winter break for students as well as the Company's continued efforts in service enhancements." There won't be as much virtual celebrating later this year, though. The Hong Kong-based company, expects people to spend less on virtual goods due to fewer national celebrations. Ad revenue, however, could climb as advertisers get a better handle on how their businesses are faring during the recession.

Tencent's number dwarfs the amount any Western company is making from virtual goods. Of course, Tencent has a social network, but its massive QQ instant message service and other sub-sites mean it's not directly comparable to social networks like Facebook and MySpace. And clearly, cultural differences are benefiting it in ways that have yet to equally manifest themselves for Western services that use virtual goods. Still, third-party developers on Facebook could make up to $500 million in revenue this year , mostly through virtual goods, as we and Inside Facebook have reported. Facebook, and other companies like MySpace, have yet to make serious money from the virtual economy. Facebook only has a gift store, and MySpace doesn't have anything — yet. But both companies are working on forms of virtual currency that could tie in with third-party applications, and let them get in on the action.

[link to original | source: VentureBeat | published: 4 days ago | shared via feedly]

VIRTUAL WORLDS : FutureTechnology?? or a joke

Some ridiculous people n the UK have developed a headset that offers a stereoscopic display and four speaker surround sound, and throws in smells, tastes, and a fan for heating your face up (or cooling it down) . The Virtual Cocoon developed by Professor Alan Chalmers and team of Warwick University is betting that you're going to welcome the opportunity to smell your co-workers when telecommuting, or your fellow cybernauts when running around Second Life. The device, which will have an estimated cost of £1,500 (around $2,100), should be ready for production within five years, so why tell us now.

I can see it now a lion shits in the jungle in Africa and we can smell it here..... Who is going to wear a helmet in 5 years with pipes stuck up your nose and a stupid fan blowing hot and cold air in your face?...... Will it really look like this as a contact lens that has a heads up display is already in dev and microprocessors are getting smaller by the day.....

VIRTUAL WORLDS : A MUST SEE !

Ok once in while a film maker will come along and pull out all the ideas floating round in our heads an articulate them in such a brilliant way that you can not help but smile, and in other ways sent shivers down my spine as I have actually had those thoughts due to something that happened to me when I was younger. (the film will explain) The thing about this is the development, world builder tool used in the film is totally possible and I feel that this is a glimpse in to our future. It Begs the question what happens we can not tell the difference between what is reality and is computer generated? May be we are already there!


World Builder from Bruce Branit on Vimeo.

VIRTUAL REALITY: gets a step closer

Ok this is a long way of for mass market and will need improving but have a little vision and you can see where we could go.

VIRTUAL WORLDS : Home passes 4 million users

Sony has announced PlayStation Network has over 20 million reg accounts.

Its taken over two years to reach this level, alothough HOME was only released end of 2008.

Other stats were also announced saying that over 600 games with online features have now been released for PS3, and PSN itself now hosts over 14,500 pieces of downloadable digital content. To date over 380m pieces of content have been downloaded, with sales reaching $180m.

REPORT: Account Registrations

Quick overview of registered accounts against start up date. Remember these are not active players and you have to take into account double or triple accounts. However it does demonstrate what is possible short term and long term.

NEW pixels

Franktown 6 months 100K

Wizard 101 5 months 1 million

Fusion Fall 2 months 2.5 million

Action All-Stars 2 weeks 100,000

Football Superstars 4 months 250,000

Old pixels

IMVU 4 years 20 million

Meez 2 years 8 Million

Club Penguin 4 years 20 million

Habbo 8 years 100 million

BUSINESS: Ourworld lands Miniclip deal

Great news for the people at Ourworld they have landed a deal with Miniclip. I can imagine that its a very aggressive rev share deal with possible equity since Miniclip were partly responsible for the massive growth in club Penguin and did not reap the rewards of the sale to Disney.

Its no secret that Rob was not over the moon when they sold it for $700 million. Any partnership must be right for both sides and if Ourworld suddenly has 0ver 1 million UPPM and 50% increase in revenue then who cares if you gave a very small equity stake and rev share for the life of a player? right?

Good luck to Derrick and the team at Flowplay.

Currently Ourworld has around 200k UPPM and it will be interesting to see what the growth is and if the quality of traffic is good and converts to paying customers.

NEWS: LEGO MMO delayed till 2010? 11 12 who knows?

There has been a story released which you can read here

But the short version goes Lego universe is delayed and wont be released 09, to add to that it may not release 2010 and they wont confirm a release date. They are claiming its strategic which may be the case but not releasing in 2010? thats a bit more than strategic.

For me part of the problem with LEGO UNIVERSE is that they are trying to build a UNIVERSE.......its a mistake many people make. One bit of advice start small grow strong, listen to your community and add features and content that they want.

For Lego they have the advantage of being a mega brand, and may be they can make this delay into a positive may be timing is not right for them, or may be just may be they have realized that building a UNIVERSE is an ongoing for ever evolving mammoth task....just look at ours.

VIRTUAL WORLDS : Funding News

mEgo has raised $2.5 million in a second round of angel funding. mEgo lets users create widgets with avatars that serve as a central point for all their social media information.

IMVU closed a $10 million Series D round of investment led by Best Buy Capital with participation from existing investors Menlo Ventures, Allegis Capital and Bridgescale Partners. IMVU says it will use the money to invest in continued development of its community, which has grown to more than 30 million registered users. The company monetizes off of a virtual goods catalog, which boasts over 2 million user-created items and is proving especially attractive to investors as the advertising market shrinks. IMVU says it currently generates over $1 million a month in revenue, 90% of which comes from the sale of credits for purchasing and selling virtual goods.

Moggle Raising $10M for Development Platform

It announced yesterday that it had signed two deals to help it raise several rounds of financing this year. RCF SA, a Swiss banking firm, will work with Moggle on a variety of investment and banking issues, including raising equity outside of the U.S. Alexander David Securities Limited, a London-based securities firm, will serve as lead corporate financial advisor and broker for Moggle in the United Kingdom, help the company enter the London Stock Exchange's, AIM market and raise private equity capital outside of the U.S.

Moggle, which is working on a platform to develop at the convergence of MMOGs, virtual worlds, and social networks, says it is raising $10 million in two equal rounds this year. The first is set to close next month.

NEW GAMES :Cartoon Network launch Fusion Fall

Here it is the much anticipated online MMO Fusion Fall

Check out the game here or watch the video below.



CTN will obviously leverage their position and characters to entice players to fusion fall. The key thing will be, is story engaging? and most importantly will the game be fun? Lets wait and see what the real kids think. As expected the early figures are showing above 1.5 million Unique Visits Per Month, but will that rise and can they sustain it, lets hope so.

New Addtion :- Virtual worlds charts

I have added a list of virtual worlds which will be organized by the amount of unique visitors per month. Later on I will organize them into sections, above 10K, above 50K above 100K above 500K and 1M+. But for now this gets things started.

The idea is to demonstrate the the spread of players across the web and highlight similarities in worlds. As more and more worlds are coming online, coupled with the online internet population not growing as fast as worlds come online the only thing that can happen is a shift from one world to another. That said the race will be all about the fun factor, quality of experience and who delivers it best. That can only benefit players.

BUSINESS: Meez & Pulse Merge

I told you lots of partnerships, mergers and acquisitions this year, hear is one of the first.

Meez announced yesterday that it has merged with Pulse Entertainment, an avatar-based messaging service for phones and the Web, and that it had raised a new round of financing led by Anthem Venture Partners. Meez will integrate Pulse's messaging with its own avatars, social network, and virtual world. Meez, has around 500k UUPM in the US but virtual worlds says that they boasts 8 million users but I guess that's registered. This mean pulse customers get Meez products and Meez gets out into the mobile world.

Now that is a smart move, this follows the other prediction I made about 1 login across multiple platforms allowing users to take their experience with them.

The merger will also see a shake up in the management team. Read about it on the Meez website.

One thing I would say is that Meez seems to be positing itself in competition with the popular IMVU which has around 2.5 million UUPM in the US, and the look and feel is leaning towards one that IMVU made popular, Both sites look really great and Meez has some unique features like the content deal they did for on demand TV, while IMVU offer a unique music features.

PROFILE: GAIA ONLINE

Gaia Online
280 Staff
(36 recently laid off)
Rivals IMVU & Habbo

Biz models

Advertising and Micro-transactions
Sells more than $1 million a month of virtual goods
Very selective if advertising & sponsorship partners

Monthly Traffic

Global 2.1M UVPM
USA 1.4M UVPM

Top 5 locations
United States - Canada -United Kingdom - Brazil - Mexico

Funding

Series B funding $12 M USD 2007
Series C Funding $11 M USD 2008
Series A Funding $8.93 M USD 2006

Total financing of around $32 M USD

Latest project
Casual MMO ZOMG

NEWS: Gaia lay off 36 staf members

According to a blog post from the company, the layoffs are the result of 'the huge downturn in the economy' requiring 'staff reductions and other operating cost cuts as [they] head into an uncertain 2009.'

'While we are still anticipating a healthy upcoming year, we're going to grow less than we originally expected,' the post continues, 'and we have to adjust costs to reflect the new realities.'

The post concludes that the company has 'raised a lot of money from investors a few years back'—indeed, as recently as this July—and as a result does 'not need to make as deep a headcount reduction as most other internet companies.'"

Its hardly surprising they have a big head count and have had massive investment, they have achieved great things but do need to have a plan to survive.

I don't think its anything to do with a down turn in the economy especially as they reported and increase in spending on virtual items. It will be purley the realiseation that the money they got is the last they will get and so they better use it wisley and start to make a profit. It shouldn't be too hard for them to do they have the players and a really great product.

Read the upcoming profile on Gaia in the first of a series.

VIRTUAL WORLDS : 25 million Weemees created

This is great news as it once again validates past research which will soon be published. On average sites are retaining around 5 to 10% of registered accounts as regular monthly players.


According to statistics from comScore, WeeWorld grew faster in the United States than its competitors in terms of unique visitors (60 percent), total minutes spent on the site (400 percent) and total visitors (200 percent).

WeeWorld users spend an average of 135 minutes per month in the virtual community and 90 percent of new users result from word-of-mouth.

"What drives so many users to WeeWorld is the universal appeal and iconic image of the WeeMee for all demographics, regardless of age, race or gender," said Lauren Bigelow, General Manager and SVP of Marketing for WeeWorld. "What keeps users coming back is the continuously evolving experience. There is always something new to explore, whether it is a new game to play, a new place to visit in World or a new item to accessorize their WeeMee or Room."