As more foreign games make their appearance on Facebook, one of the latest gainers has been a quaint little virtual space app by the name of My Fishbowl. As the name suggests, this title from TwoFishes Interactive has players creating virtual aquarium, and in a somewhat similar fashion to the booming farming genre, raising fish and decorating your own personal aquatic realm.

The game is available in Chinese and English, but seems to be mostly used by Chinese speakers. It is really exceedingly simple, but as with all virtual space games, complication is never necessary. It’s all about how much socially-fueled creativity one can employ, and based on some of the screenshots from more advanced players, there is quite a bit to be had. It was one the fifth-fastest growing game on Facebook last week, among developers with between 100,000 and one million users. When we looked on Monday, it had reached 3.30 million monthly active users, having grown by 1.57 million in the previous week alone. The growth continues, as today it is at 3.76 million.

However, to get started, one needs money before decorations can be bought. So how is it earned through an aquarium? Through its fish of course, and what sort of fishbowl has no fish? Players are able to buy any number of different types of fish; each of which has its own personality when interacting with others. When you purchase them, however, you have to feed them, and as you feed them, they grow. Yes, it is the circle of life, but what is more important is that every day, the fish magically produce random pieces of treasure that can be sold for more “Shellbucks,” the games currency

With Shellbucks, players are able accomplish the primary point of My Fishbowl: Decoration. They can buy decorations like coral, rocks, seaweed, backgrounds, and even some more creative objects like teddy bears or ice cream. The list is actually quite long and some of the more creative fishbowls have made rather bizarre designs such as spaceships, ducks, and even pirates.

Unfortunately, this vast selection of decorations leads to one very obnoxious issue. Like most games of this nature, monetization is through virtual goods transactions. While there is nothing wrong with that, it feels like 80% – 90% of the decorations you can buy (and even a lot of the fish and pets – pets like sea horses) are bought with “Gold,” the currency that is purchased through real money or by completing advertising offers. Here’s the thing, the problem isn’t that there are items using Gold, nor is it that most of the items are bought with it. No, it’s the fact that there doesn’t seem to be enough Shellbuck items for new players, or players not wanting to acquire gold, to really be creative. As such, there might not be enough to really suck most users into the game to the point where they would want to spend that extra cash. However, that doesn’t seem to be holding back the app’s growth.

While Facebook and other parts of its developer ecosystem are busy hiring people from companies like Google and Yahoo, leading social gaming companies are now depleting the ranks of established gaming companies. SGN is the latest to announce some big hires, including EA and LucasArts vet Randy Breen as its chief operating officer. He’s charged with bringing the company’s iPhone-heavy product lineup across key social gaming platforms like Facebook and MySpace.

Overall, SGN’s headcount has reached nearly 100 people between its Palo Alto headquarters and other offices. One in three iPhones has a game installed on it; 24 percent of all iPhones and iPod touches have iBowl alone. The company isn’t disclosing revenue numbers, but here’s one example of how it is doing: Its jet fighter game, F.A.S.T., has sold, more than 400,000 copies.

Breen joined EA in 1986 and spent producing seminal franchises like Road Rash (I certainly played that game growing up), Indie 500, and the Bond series (ditto). He spent the last five years as EA’s Executive Producer and Creative Director before he moved to LucasArts Entertainment in 2000. As its Vice President of Product Development, he produced 25 titles including Indiana Jones, and the Star Wars line. From 2005 until earlier this year, he was the Chief Product Officer at Emotiv, a company that makes a headset capable of reading electrical signals in your brain and interpreting them into actions in a video game.

At SGN, he’ll have a wide array of responsibilities, including game production as well as business development and finance. I interviewed him about his job yesterday at the company headquarters, a three-story office on El Camino road in Palo Alto, close to Facebook’s own offices — an area that has seen a surge of social game developers in the last couple of years. Breen feels the same way as a lot of other veterans about social gaming. He said he could see structural problems in the traditional gaming industry as far back as when he left LucasArts in 2004. Like music labels or Hollywood, the industry had grown focused on making big hits instead of experimenting more with smaller titles. Costs have continued to increase as each new cycle of games and gaming platforms became more complicated, with some games costing more than $60 million to make. These games have to sell millions of copies to even pay the bills.

Social gaming, of course, is far cheaper, with plenty of one or two-man outfits building games that can get hundreds of thousands of users, introduce significant virtual goods payment systems, and start making money. Sometimes people can pull this off in a matter of weeks or a month or two.

Breen, and the other vets packed into SGN’s bustling offices, are hoping to take social gaming to the next level. SGN has already been looking at introducing cross-platform games, and already has (fluff)friends on not just Facebook and the iPhone, but MySpace. But the plan is more complex than porting games from one place to another. When I spoke with him and chief executive Shervin Pishevar yesterday, they mapped out a vision for a game like F.A.S.T., for example, where you could play the action part of the game on your iPhone, and play an interconnected strategic jet-fighting game on Facebook — same gaming world, same user identity, score, etc. — but different parts of the game in different places. Monetization comes from selling virtual goods and other feature, as well as selling games on the iPhone.

Other recent gaming hires include:

Randy Angle, Director of Game Design. He’s helped build and often led design and creative work for more than 60 titles, including: Star Trek, LEGO, Lord of the Rings, Dungeons & Dragons, Spiderman, Dora the Explorer, SpongeBob SquarePants.

Margaret Foley-Mauvais, Art Director. She did art direction for more than 15 titles, including Road Rash, Soviet and Nuclear Strike,Rumble Racing, Majestic, The Godfather, The Sims Online (aka EALand) and The Lord of The Rings: The Third Age”

Dan Brazelton, Executive Producer. He handled media integration in games including Horde, Solar Eclipse and Gex for Crystal Dynamics, as well as the server systems for massive multiplayer games like Diablo and Quake.

Eric Huynh, Chief Technology Officer and Vice President of Engineering. Huynh joined in February, from Vivendi Games, where he ran its mobile gaming team. He was previously the founding CTO at both mobile gaming company Gameloft and top game developer Ubisoft.

Eric Lindstrom, Chief Creative Officer. He’s been in the industry 20 years, and joined SGN in April, among his more recent previous works was much of the the Tomb Raider series.

In other SGN news, there are also some hires from the social networking world.  The company has announced the hire of Adriana Gascoigne, who joined earlier this year as the company’s Director of Global Communications after having worked at Hi5. Jeff Weiser has been promoted to Vice President of Strategy and Analytics; he joined in 2008 after having worked at MySpace and Yahoo.

A few weeks ago, Moblyng released its text-based RPG with gothic appeal, m:Vampire. However, the company has also released two more RPG’s by the names of m:Mafia and Dungeon Quest that are also worth a look. It looks like Moblyng is designing games that have the same game play mechanics, but painting them with different flavors – much like some of the larger developers on the Facebook and MySpace platforms.

In m:Mafia, players join and create a mobster (though the game forces you to use unique names – more on that later), and like in classic mafia titles, you complete jobs, buy equipment, recruit friends for your mob, and compete with others for criminal fame and fortune. As expected, progress is gated through the familiar stat of “stamina” which is used up by performing various actions, and, of course, this can be mitigated through the purchase of premium services via “The Don.”

Dungeon Quest is, more or less, the same thing, but instead of a gritty, urban environment within the big city, it’s more akin to the fantasy realm as players quest through a world of elves and wizards. Again, the game uses the same quest and social systems, as well as gated limitations (stamina).

Each game is clean and well presented visually for a text based game, so it just depends on what flavor you prefer. However, the real highlight isn’t the games themselves, but the overall connectivity they provide. Like m:Vampires coverage, both are cross-platform. That isn’t to say that they are simply on multiple platforms, but rather that players can interact and challenge each other regardless of which platform the games are on.

Currently, both of these games are available on Facebook, but can also be played on mobile devices such as the iPhone, Android, or Nokia Ovi. In fact, according to the company, these games are actually some of the top RPGs on Android. However, m:Mafia currently has only about 50,000 monthly active users on Facebook, and Dungeon Quest has about 90,000.

This is a Guest Post by Rick Jones.

To ponder whether social games have actually made us more social should really be saved for some post-conference, drink-fueled discussion. Although there is little real research available to understand how these games affect social behavior, we should arm ourselves with the arguments (while sober at least) by looking at evidence behind the emerging patterns of behavior.

A 2004 study by Nicole Lazzaro (Founder and President of XEODesign) was keen to promote the ‘social’ factor in explaining a game’s popularity by recognizing MMOGs as true, socially interactive platforms. But times have already changed. By being casual and in reaching out to traditional non-gamers through social networks — are twisting genres, turning demographics and the definition of what makes a game ‘social’ in the real world seems to be forever evolving.

The study by Lazzaro cutely suggested that it’s the person who is addictive and not the game but Dan Porter, CEO of OMGPOP thinks the social nature of a game that provides the catalyst for longer gameplay. “On OMGPOP, when you’re playing a match and that other real person beats you, you mentally say, OK, one more game and this, on average, turns into 35 matches per session. ” He adds,”you play a single-player game and when you’re done, you’re done. For us, it’s when you’re done competing with other people, which like a great conversation, always extends longer than you imagine.”

A study into the success of World of Warcraft by Palo Alto Research Center and Stanford University in 2006 looked at the time players spent playing the game in and out of groups and argued the prevalence of a pure social experience in MMOG’s may have been overstated. The report finds that what appears at first to be a sociable environment is actually a game with an addictive and carefully crafted reward structure cajoling single players to form communities with other players purely for mutual interest. This, in turn, puts social pressure on people to play longer in order to ensure a mission does not fail. Indeed, the three most popular character classes were the most “soloable” (better chance of survival alone) and spent the least time in groups. The study’s analysis found that World of Warcraft’s undoubted success in the social sphere does not necessarily come from direct support and camaraderie but instead in simply providing a shared experience and a ‘real’ audience to show off one’s cultivated reputation.

With this in mind we can certainly see a distinction between MMOGs and community games like Second Life which, by their very nature, support a much wider and more casual social play — albeit anonymously through a avatar. As Dr Marc Fetscherin stated in his 2007 study of Second Life, “[These] virtual worlds are not just games as there are no levels, no scores and no game over. They exist in real time where individuals communicate, co-operate and collaborate with each other like a real world.” In this way a pure virtual community allows people to be social and perhaps open up in a more honest way than in real life but that then begs the questions whether these pure communities should be considered social ‘games’.

Indeed, the argument that social games offer a wholly different social aspect to real-life is advanced by Mark Pincus, founder of Zynga, who believes in three principles that contribute to a successful social game. First, they should give the player a feeling of playing with friends; second, they give the player a way of expressing him or herself. As Pincus stated recently at this year’s Social Gaming Summit, “Games need to be a playground for personality.” Thirdly, long-term success comes from games which “give players an opportunity to invest in a game over time” – which is why, he argues, items play such an important role.

Even though it seems the same rules apply to social games online and those in social networks, there are some key differences in the way people connect to each other. In reality, Facebook itself is a social game for people to showcase themselves eager for a friend’s response to a status update or a posted photograph. In the same way, the games that surround it (having now become a key part of the platform) provide an ideal, passive way to ‘stay social’ and keep in touch with people you do not talk to and socialize with normally. To play and compare scores in easy-to-play casual games with your actual friends has been a definite draw for non-gamers and a gateway for the gaming industry to attract people. However, it can be seen again through articles like The Most Popular Girl in Pet Society that Facebook developers are evolving much like MMOGs did in using the social tag and rewarding players for interacting, this time, but with a heavier focus existing friends.

With the boundaries of what is considered ‘social’ being redrawn more often than the Pepsi logo, to decide whether social games have made us more social is both impossible to calculate and easy to argue. Certainly, in a world of convenience, where theoretically we should have more time, social games are a viable and perhaps vital alternative in being the communicative glue that binds us to new ways of thinking and the people that have shaped and are shaping our lives.

[Editor's Note: Last week at GDC Austin, Steve Meretzsky and Dave Rohrl from Playdom presented on the top ten social RPG trends. Long-time game designer and author Raph Koster was kind enough to share his thoughts from the session, which we've included in their entirety (slightly cleaned up and reformatted) below.]

Top 10 Social RPG Trends

One year ago, social apps were barely games. Then Mob Wars launched, followed by lots of imitators. This is now called the social RPG, and social RPGs are 13 of the top 25 games on MySpace – they’re less dominant but huge on Facebook as well. Social RPGs share some DNA with MMOs and longform games – they take months to play, level up, and build your character, but have spare presentation, spreadsheet style UI, and low production values. Play sessions are usually a few minutes due to a mechanic of energy depletion that limits your play sessions. This talk will cover ten trends, and then make some guesses about the next year.

1. New Horizons in Virtual Goods

Started out monetizing with selling currency which you could earn slow or buy fast. Over the year, ways of monetizing have become more sophisticated. Limited edition items are among the most successful now, limited by time or quantity or both. Work best when the goods are closely linked to the game, and meet asopirational fantasies. In games with avatars (which is increasingly common) clothing is huge.

In Vampires you are given a choise of three closed trunks, Monty Haul style. Are also shown the other two trunks after your choice, and then you get to play once per day but can play more if you pay.

Usable buffs are big. Mafia Wars offers a daily lotto ticket but you can buy more. End of week drawing… In MObsters you get a card every day, can buy cards, and try to get a poker hand by the end of the week.

In Sorority Life invited users to design clothing for the avatars. Took the best entries and madethem forsale for real money andthey were some of the best sellers ever in the game.

2. Gifting Invites

The idea of having players send gifts to one another using FB’s channel. Key driver in Lil Green Patch. Not much there: send gifts, plant gifts, visit garden to rake leaves or chase squirrels in another users’ garden.

This mechanic invite flow is in Farmtown then Farmville and is now common. Zynga rolled it across all theirs, Playdom did too. Standard design trope now.

Why do this? People like sending gifts to friends, feels generous, people like getting gifts. Good for reengagement. One sad thing is that gifting invites are very much carbon copies right now, all the buttons say “proceed to send”:)

3. Making Missions More Interesting

Missions earned cash and loot, but the experience was not very interesting… deterministic. You pressed the button and knew what was going to happen, no gameplay involved. No tthat compelling even though it was the backbone of the experience.

One way is with the introduction of “mission mastery,”first in the game Street Racing. This has been a case where each game has changed and evolved the mechanic. In Street Racing,missions unlocked new missions. In the next game,Mafia Wars, you could move on without mastery,but the twist was you could master tiers with prizes. In MObsters 2, simpler than Mafia Wars, added fourth level of mastery, brozne,silver, gold, platinum mastery,and prizes per missions.

In Hero World, the mission list is dynamic — it changes moment to moment,and missin failure (on random chance but weighted by your skills).  In Yakuza Lords, they have added mission requirements such as battles won,etc.

Last big development is adding minigames, as in Sorority Life.Hidden object game, tower defense game, word game, and payout depends on performance.

4. Customization and Personalization

Didn’t use to be that you could have differentiated player profiles. You had one of three or four classes selected before starting. This has really started to explode.

Avatar Creation, such as Vampire Wars, Sorority Life. When the avatar surfaces as key points of impact, brings a lot more resonance. Does a lot of good things for item iventory too — often the only difference is in color.In the game mechanic items, this would be very bad and annoying (few real choices), but when tied to avatars and customization, it is very attractive. Sorority Life has a “pock hottest avatar”with three random avs, been a real positive for the game.

Mobsters 2 lets you pick from 20classes, varied bonuses, missions, bonuses, etc, to encourage playersto try out identities.

Metatrend: increasing socialness of social rpgs! They only took advantage of playerson a team,but once you invited somone in, limite dinteraction.But now it is more social.

5. Collections and Wish Lists

Mafia wars; as you do missions,you get random loot drops that are probabilistic across all missions.Each are part of a collection, within the theme of the game and aspirational — playig cards, paintings, racehorses, cigars.Complete a collection and get a permanent stat boost. What makes it social is that you publish the ones you are missing as a wishlist, and friends can see it and send you waht you are missing. Now your friends are not just present but they engage with you. It is also viral bc every time you get one, post the wishlist, get an item, it is an excuse for the gameto send out a feed item.

6. Metatrend: lots more ways to work together on common goals

Collections, great, wishlists make it really social.

In Mobsters 2 you have missions that need loot dropped by other missions. But if you don’t have it, you can request it from your friends as a gift. Same for energy,post asking for Mobsters energy drinks so that you can finish a mission.

In Zynga’s Vampire Wars, if you want to throw in money you can spin the wheel of blood magic and get a random ability, and it gives it to all members of your team,so there is strong social incentive to do this.

In Mobsters 2, if you try and fight andlose bc they aretoo powerful, you can post a feed item asking your friends to come beat up on the guy you just lost to.

In Mafia Wars, “declare a war.”You declare war on another player, anda subset of your mob are asked  to fight 1:1 duels with their top mob.

Right on the edge of social RPGs, Mousehunt. You can build hunting parties and participate in tournaments, try to be the team that collects the most mice in a time limit.

7. New Themes

Lots of experimentation. Quick survey here in popularity order:

• Horror/Vampires: 4.3M MAUs on MySpace, 3.4 on FB.
• Auto racing
• Fashion/dress up has been very successful one.
• Fantasy/SF. Historically in gaming, fantasy has been huge, but fantasy has been middling successful on SNS, and SF has been hugely not (120kMAUs). This demonstrates we are looking at a very different demographic,mass market, for the first time.
• Pirates
• Music/celebrity.

8. Using Friends’ Data

You needed X friends to run a mission, but it didn’t matter how much the friends were active.

In Mafia Wars, riends take specific roles and uses their usage history to gauge their effectiveness. In Playdom’s original Mobsters game, how many friends were active in the last day made a difference. In Mousehunt, if you are in the same area as your friend,and huntmice,they “come with you”. At the start of this trend,we will see more of this happen.

9. Narrative

A violation of the metatrend,since there is nothing inherently social about narrative. Why are we seeing it? Same reason we see it in other game genres, it is strong and compelling. For a percentage of the audience, it is a strong reengagement feature, how the story unfolds. It is also easy and cheap to add to a game.

Bloodlines has a comic narrative for the intro screen. Hammerfall RPG has a narrative structure with overhead map and storyline. Missions are stronglynarrated. Yakuza Lords also uses comics to narrate, as brief screens, outloining your character, revenge and redemption as motive. In MObsters 2, very robust storyline, told through the missions, one-timemissions the player does, and the missions have branching narrative through choice of missions. Sometimes there are gameplay differences, but sometimes it is purely narrative: moral choices, etc.

10. iPhone and social RPGs

Zynga made a gorgeous version of Mafia Wars, nicer than the FB version! Interesting pricing strategy driven by Apple’s rules — Zynga’s iTunes page has a whole bunch of apps for the same game, at different price points with different points. Playdom links to existing SNS accounts, so you don’thave separate mobs, you have one mob run remotely on your iPhone.

Interesting challenges on rendering complex HTML on iPhone.

5 of top 40 free apps are social RPGs, but none of the top 150 paid apps are. Apple does not allow micropaymentsin free apps, so this is concerning.

What is next?

One trend is a lot more temporary buffs, virtual items that get used up.

Gift invites: recent arrival,we will see a lot of mturation on it. Giving away standard items today, we are not seeing innovation in terms of stuff that can ONLY be gifts.

More dynamic gifting invite splash pages — different selections of gifts based on their actions, or their level, etc.

Missions, look for the mechanics we discussed to spread widely.

I hope we’ll see a lot more interesting interrelationships between missions.

And minigames will become way more prevalent. The ones so far have driven engagement way up.

Customization will keepgrowing,the more individuated a player is, the more social. We will see this go much deeper.

As a concept collections are solid, but the user interface is complex.

Collaboration will be a fruitful and interesting areato explore. Can’t forecast this well,but I think there will be a lot more interesting ways to work together for common goals, timebound and not.

MOre experimentation will themes is coming.

Gameplay data stuff is just scratching the surface. Thousands of clicks are being generated, very hooky and addictive, so there is a lot of data that is not beingtransformed back out to the players in ways that deepend their interaction with their friends. As longas the data can be packaged in digestible fashion,this can be a major trend in the next 12 months. Have seen way more advances on the Flash game side here.

The narrative trend is that it will become another item on the checklist, something the players expect and demand.

As far as iPhone… not speaking on behalf of Playdom here, personaltake on the market.Not sure it is a place to put a huge bet for social rpgs. They work well on web: fast HTML, large canvases. They don’t fit very well with the iPhone, which does rich media, varied control, small screens. The viralchannels on iPhone are higher friction. Not sure we will see this as a huge trend. If they do succeed, willbe as adjunct and extension of the web game, not as standalone.

[Editor's Note: This is a guest post by David Bailey, a partner at Kauth, Pomeroy, Peck, & Bailey LLP.]

The saga of the Facebook hit game Mafia Wars has made the issue of intellectual property obvious to any serious social game creator. But given how these laws have developed in the rest of the gaming industry, many games likely contain intellectual property. This will gradually reshape social gaming.

In 2008, Mob Wars creator David Maestri — a developer at top social gaming company SGN — left to launch the game on his own. He was sued by SGN, and settled amicably: He owns the game but SGN has some rights. Then, he sued top social gaming companies, Zynga and Playdom, for creating quite similar games called Mafia Wars and Mobsters. Those cases were settled earlier this year. Meanwhile, these companies and many others have continued building mafia role-playing games and expanding them to other platforms, like the iPhone.

Today, social game developers are increasingly focusing on strategies to prevent imitators from luring away potential users.

A mixed IP history

Unfortunately, games inspired by the successes of others have plagued the entire industry since its inception and the courts have rarely intervened. This inability to prevent imitation, however, has led mainstream game developers to devise a number of successful strategies for preventing imitators from gaining a significant user base. More “traditional” strategies pioneered by console gaming developers are based upon copyright and trademark law, and are equally applicable to social games. Newer strategies are also emerging in the Massively Multiplayer Online (MMO) and social gaming industries that leverage innovation in underlying technical infrastructure as the basis for seeking patent protection for game features.

A great deal of experience in preserving the distinctiveness of a title was obtained in the arcade and console gaming space during the 80s and early 90s. Developers of successful games initially attempted to stop imitators by claiming violation of copyrights in the successful game concepts. However, the courts were persuaded that no copyrights existed in the game concepts under the scenes a faire doctrine — it prevents copyright in incidents, characters, or settings that are common in the treatment of a given topic. These rulings and subsequent affirmation by the courts have green-lighted imitation in a succession of titles including Asteroids, Street Fighter II, and Golden Tee. Even in the most egregious cases, where an imitator specifically set out to create a game so similar that users could switch without difficulty, the courts were willing to permit the imitation. Only the copying of distinct characters from a game was considered sufficient for the courts to intercede.

Starting a franchise

Console and arcade game developers frustrated in their attempts to prevent competition from imitators turned to releasing new titles tied to built-in audiences in hopes of rising above the noise and achieving commercial success. The majority of top-selling games on almost every console gaming platform are part of a series or franchise and many also include a tie-in to a television show, movie, comic book, sports league, or celebrities. The current notable exception is the Wii, where the platform itself has been disruptive. Accordingly, Wii game developers, much like social game developers, are enjoying a window in which success can be achieved via an innovative game concept. The prediction can be made, however, that as the market for Wii games and social games becomes increasingly crowded franchises and tie-ins will play a larger role in game success.

Turning a successful game into a franchise involves a title becoming recognizable enough to drive engagement with future titles. Consequently, branding is an important component of establishing a franchise. Trademark law grants powerful rights in brands that are distinctive. A game with a distinctive name or characters more readily lends itself to becoming a franchise, because trademark rights in the name or characters can be used to keep others from offering games using a similar name or characters. The ability to protect the distinctiveness of the title is ultimately more likely to result in a user playing the next title in a series instead of being lured away by a title with a similar sounding name, and look and feel.

When the broader entertainment industry took a greater interest in video games as an additional way to derive revenue from its intellectual properties, game developers were provided with opportunities to adapt television shows, movies, and comic books into video games. Developers were also able to obtain exclusive rights to use the likenesses of athletes in professional sports leagues. Many states grant individuals publicity rights to control the use of their name, signature, voice, or likeness in advetising. Securing an exclusive license to copyrights or publicity rights proved extremely lucrative. As one example, PGA Tour Golf was originally developed to imitate the game play of Golden Tee. However, the developers of PGA Tour Golf secured the rights to feature golf courses and the likenesses of professional golfers from the PGA tour. Tiger Woods PGA Tour has gone on to become an extremely successful franchise for EA Sports. Social game developers may find that the presence of existing licensing agreements with console game manufacturers complicates their ability to access the copyrights, publicity rights, and associated trademarks that have traditionally been licensed to the video gaming industry. However, opportunities exist where social game developers can form partnerships within the video gaming industry or exploit tie-ins to content that is not already licensed either because the content is too new or was unsuited to adaptation for console games.

What about patents?

Patents have not traditionally played a role in preventing imitation of video games. While hardware manufacturers held many patents, game developers submitted very few applications as their games were largely tethered to platforms created by hardware manufacturers. The landscape began to change with the advent of MMOs and to a lesser extent Internet-connected console gaming systems.

Starting around the 2003-2004 time frame, MMO developers began to realize the potential for obtaining patents with respect to features within their MMOs. The implementation of many of the features involved overcoming technical challenges that had not previously been encountered, which meant that the solutions to those technical challenges and the resulting game features were candidates for patent protection. Delays inherent to the patent system have meant that, to date, very few of the patent applications have actually issued.

Assuming the Patent and Trademark Office grants the applications at some point, the developers holding the patents will be at a significant advantage with respect to their competitors and the overall effect will likely be to significantly raise the barrier to entry in the MMO space. A similar opportunity exists for social game developers to “own” features of their games. A new feature that could only be implemented by overcoming a technical challenge is, more often than not, capable of receiving patent protection. The decision to seek patent protection should hinge upon whether securing exclusive rights to the feature preserves a core part of the distinctiveness of a particular title’s game play. Unfortunately, the ability to obtain patents in a space means that there is a greater risk that social game developers will become targets for patent trolls as has been the case in the MMO space. Therefore, maintaining accurate records and code base backups to preserve prior art today could be vital to proving the invalidity of someone else’s patent at some point in the future and avoiding a costly lawsuit.

Conclusion

Ultimately, the history of the video gaming industry is one of innovation and imitation. While the copyright laws continue to permit the imitation of successful social games, the developers of those games should seriously consider imitating the manner in which copyrights, patents, and trademarks have been used in other contexts to build successful game franchises.

David Bailey is a founding partner of KPPB, a California-based intellectual property boutique law firm that services a global clientele across a broad range of industries and technologies. David has extensive experience in representing clients in all aspects of the video game and digital video industries and his current practice focuses on developing IP strategies for rapidly growing start-up companies including social gaming, social application, iPhone and Android developers. David holds degrees in electrical engineering and law and is admitted to practice in California, New York, and before the United States Patent and Trademark Office.

Zong is rolling out a subscription service, where users can sign up to buy premium features in online games and on web sites and pay via their mobile phone accounts. Along with a variety of other companies, Zong already lets users pay for virtual goods via their mobile phones, so this is a new way for customers to pay and for merchants to make money.

Flagship members of the subscriptions service include photo and video-sharing site Photobucket and social gaming site OMGPOP.

Zong lets people enter their ten-digit phone numbers online, get a four-digit confirmation PIN number by text message, then enter that number online to finish the purchase. Fees appears on the user’s monthly phone bill.

Mobile subscriptions, unfortunately, have been associated with online scams, where users get tricked into buying subscriptions within quizzes or other simple games. We asked Zong about this, and here’s what chief executive David Marcus told us:

As to the concern about “scammy” ringtones providers, we are looking to raise the standards here and build a brand that consumers know and trust, ZONG. We vet each and every ZONG merchant and don’t work with any scam artists or other unsavory businesses.  Our customers are “blue chip” providers or digital good and services.

Zong also recently launched mobile payment tests for virtual currency with Facebook. The subscription service will first roll out in the US, then expand to Canada, Australia and Europe in the coming months.

Casual games builder Arkadium is expanding its partnership with Lifetime Networks’ digital arm. Continuing Lifetime’s focus on women’s entertainment, the new partnership will feature new series of Lifetime-branded iPhone titles, and the integration of prizes and sweepstakes for myLifetime.com’s existing online games portal.

In August, we looked at Arkadium’s efforts to further monetize advertisements in games by enhancing its community gaming portals, dubbed “Arenas,” through improving user loyalty. This included publisher options to drive traffic to revenue-based activities such as rating systems for existing games, user reviews, and player profiles. Also added were social elements such as mailboxes, messaging, friend activity notifications, avatar creators, and leaderboards. Even before these additions, however, Arena sessions lasted an average of 20 minutes, as of August, across major online sites (ABC, ESPN, CBS, etc.) and saw over 120 million page views per month.

As a partner of Arkadium, Lifetime Digital’s myLifetime.com games platform experiences a good portion of these perks. Perks that have led to a 20 percent increase in visits since the games section’s launch earlier this year. With over 3.6 million women visiting the website each month (ComScore Media Metrix – May 2009), 20 percent is no small number. Suffice to say, Arkadium’s loyalty improvements look to be paying off.

NumberJumper is a deceptively simple new puzzle game, launched on Facebook earlier this month. For casual gamers who want a challenge, it’s worth a look.

In the game, players are presented with a grid of blocks, numbered 1 – 7. The objective is to line up four of the same number horizontally, vertically, or diagonally. Here’s the trick though: Every time you make a move, two new numbers appear, so each one needs to be planned very carefully.

Also, the numbers slide across the grid, so if there is no path leading to where you try and place it, then you cannot make that move. So, again, this means that very careful movements as well as some patience is needed.

But, one cannot be too careful as the developers have incorporated a time limit. To balance this out, removing consecutive groups of numbers adds time back onto the clock. More often than not, however, space on the board is what seems to run out first, and if there is not enough real estate left for new numbers, the game is over.

As one can probably imagine, the game includes a simple scoring system with leaderboards so you can see how you’re doing versus other players.

When you first start playing, it feels a lot like a matter of just survival and is somewhat difficult to devise a working strategy. This isn’t necessarily a bad thing, but it does make the game a little annoying at first.

Curiously enough, the game was strangely alluring, despite annoyances. At first it merely feels like bad luck when blocks appear right where you were planning to place a fourth number, but there are ways around it. Eventually, a strategy does begin to formulate as you end up trying over and over and over again to beat your last score until you realize, “hey, wasn’t I doing something more important?”

Though it is bad for time efficiency, NumberJumper’s addictive nature certainly makes for a fun, deceptively simple game.

Founder of both Electronic Arts and a relatively new mobile start up, Digital Chocolate, Trip Hawkins has said that the way to monetize iPhone games was with virtual goods. However, if recent data has taught us anything, growth isn’t just limited to the mobile space. On the contrary, free to play virtual goods revenue models are being seen more and more across the board; be it iPhone, PC, Xbox, mainstream, or casual. Of course, we have covered many of these before, but what we haven’t looked at closely is just how many mainstream developers are going this route.

Virtual goods in the US were worth roughly $265 million this year, according to Piper Jaffray (an estimate we think is very low) but around $5 billion in Asia, according to +8* | Plus Eight Star. So the concept is proven elsewhere and growing here.

Electronic Arts has been one of the most prominent behemoths to slowly lumber its way into the virtual goods realm.

The EA Mobile release of the Sims 3 marked a small step into the social space for the company, but greater plans are still in store for the high quality iPhone title (which according to EA was classified as a mere “test” to see if high production value for a social iPhone game was worth it). Well, with over 1.4 million sales within one week, it is probably safe to assume the game did well, but shortly thereafter came virtual goods that were purchasable using a virtual currency called SimPoints. Supporting both PayPal and major credit cards, the virtual goods store for Sims 3 would mark one of the earlier renditions of mainstream virtual goods.

Another PC game from EA, the real-time strategy (RTS) and collectible card game (CCG) hybrid BattleForge was a project intended to test the waters of virtual goods in a full price game, forcing players to purchase virtual cards to further grow their fantasy-like armies. Initially, the game cost about $50, but even after a $20 price drop, the game still sold less than 100,000 copies. Developed by Phenomic, the RTS/CCG creation was bombing.

BattleForge was not a sinking ship yet, though. To EA’s surprise, the virtual goods – card booster packs – were selling amongst users like wildfire. Noticing this, EA Games President Frank Gibeau made a curious call. BattleForge would go freemium, granting access to all of the game’s content, but offering fewer cards to start out with (originally, players began with 16). To Gibeau’s elation, the unorthodox move (from EA’s perspective) would lead to “record sales.” Unfortunately for us, Gibeau has not revealed average revenue per user (ARPU) metrics specifically, but he has stated that some freemium players were spending over $100 for virtual goods.

According to the LA Times, the freemium change may have single handedly saved Phenomic from a rather expensive failure. To that end, Gibeau also stated to the Times that EA did, indeed, have “four or five” new freemium projects in development. This was at the start of June.

Perhaps one of the aforementioned projects was Battlefield Heroes, as about a month later it appeared on the scene. This online, freemium, and multiplayer shooter announced, shortly after release, that it had over 1 million registered players. With two forms of virtual currency to purchase items for a player’s avatar, Valor Points for playing and excelling, and purchased Battlefunds, the game offered two very viable options for advancement. But, with a matchmaking system that was designed around skill levels, EA kept players from advancing strictly because they had a lot of money to spend.

As Virtual Goods News noted in July, “industry standards suggest that less than half of Battlefield Heroes’ 1 million registered players will be active and that fewer than 10% of the active players will ever purchase anything.” This is a common sort of revenue distribution in freemium games. EA is actually expecting around $80 million dollars in revenue, from digital sales (which includes virtual goods transactions) for 2009.

Electronic Arts isn’t the only developer looking into virtual goods. More recently, Atari made a similar movement with the closed-beta launch of its first-person shooter/RTS mix, Battleswarm (developed by Reality Gap) earlier this month. This system utilizes a virtual currency system called MetaTix, which according to Atari founder Nolan Bushnell, functions a bit like those found in arcades.

Through it, users can purchase virtual items that might allow them to gain an early advantage. Sounds useless for just Battleswarm, doesn’t it? Well, not to worry, because this currency will actually work across multiple games. The idea is that if a player has a number of MetaTix, they are more likely to try a game they know little about. Furthermore, with MetaTix costing about one penny and be attainable through in-game means (such as selling items), there is going to be quite a few in circulation and available for use.

As a matter of fact, the system is all ready live in the game Monato Espirit which is licensed from the Korean developer, Gamasoft. That in mind, Reality Gap Co-Founder J. Mark Hood told VentureBeat that seven developers have thus far agreed to participate in using the virtual currency system.

Even the largest game developer in the world, Activision-Blizzard, may be looking into virtual goods. The possibilities, at the moment, stem more from the Blizzard end of the table, but according to Battle.net Project Director, Greg Canessa, the company is not going to “rule anything out” in regards to a virtual goods platform addition to the Battle.net online gaming service. In essence, Blizzard commentary suggests that it would be remincient of Xbox Live’s current Avatar Marketplace, but the question lies in how such a new system would play out. Since its launch in 1997 with the role-playing game Diablo, everything from Battle.net has been free.

“Blizzard’s reputation is about providing an amazing value — an amazing amount of stuff for free. And then enabling additional stuff, like value-add services, to maintain the free level,” said Canessa in comments to 1up.com. “Okay, you pay for StarCraft 2, and Battle.net is free. All the stuff we’re talking about: the Achievements, the profiles, the Avatars, the unlockables, the leagues; it’s all included for free. Then there’s value-added services — like for [World of Warcraft] where you have a paid subscription with tons of stuff, and we then added paid character transfer services on top of that later. So we may add some stuff to Marketplace, but it won’t interfere with the free tier.”

Certainly the road leading to these new virtual goods possibilities can be seen, and with the upcoming release of the StarCraft 2 RTS, a relaunch of Battle.net will include a new store, the Map Marketplace, where players can purchase new game maps (something that was free in the original StarCraft). As it stands, the fees are likely to be very small,. Of course, the availability of anything beyond the StarCraft 2 maps is mere speculation, but the probability seems high.

In the end it doesn’t matter who you are. Virtual goods are not something to be taken lightly. These minuscule pieces of digital art, animations, and sound have been adopted by the public. As a billion dollar industry world wide, some of the largest players are stepping forward to take a crack: Electronic Arts used virtual goods to boost the sales of the Sims 3 for the iPhone, mend a wounded BattleForge, and attempt to repeat the success with Battlefield Heroes. One of the oldest developers, Atari, even stepped in with both virtual goods and its MetaTix virtual currency to promote new, and unfamiliar games. And even the best of the best, Blizzard Entertainment looks to be considering a virtual goods bonus for its players for its new releases. Suffice to say, virtual goods have proven to be one of the fastest evolving and most successful new additions to come to not just social games, but the gaming world as a whole.