Los Angeles-based Seismic Games has secured a $2 million first round of funding to put toward reinventing social games. The round was led by DFJ Frontier, venture capitalist Tom Matlack and had participation from a handful of unnamed investors with deep ties to the entertainment industry.

Founded by gaming industry veterans Greg Borrud (Pandemic Studios, EA), Eric Gewirtz (Pandemic Studios, Activision) and Chris Miller (Vivendi Universal), the trio have console hits like Star Wars: Battlefront, F.E.A.R and The Saboteur under their belts and are hoping those successes can be translated to Facebook. The company is one of many social gaming startups founded by former console developers hoping to pivot into social games, and faces competition from the likes of Outplay Entertainment, Row Sham Bow, LootDrop and Rumble, all of whom have AAA console talent and years of industry experience behind them.

Even as the cost of doing business increases on the platform, Seismic’s CEO Greg Borrud is confident that the combination of character driven gameplay and real-world events will make Seismic’s first game a hit when it debuts later this year. Inside Social Games had an opportunity to talk to Borrud, and while he didn’t reveal much about the company’s upcoming first game, he did reveal the development philosophy behind it.

Inside Social Games: You’ve talked a bit about creating the “next” generation of social games. What do you mean by this? 

Greg Borrud (pictured, right): When we first looked at the [social gaming space] we were incredibly excited by what was there. It’s a larger audience than what we’d been making games for previously and social game companies are creating new ways of reaching their audiences and tapping into the free-to-play monetization model.

But, I think we’ve hit a point where there has to be more than analytics-based game design. The Zyngas of the world have perfected this idea of looking at how gamers play and post-launch tweaking the system to get the most out of every single user.  At some point you perfect that so much that you lose the heart and the soul and the entertainment value of the game.

We want to take some of the things we’ve done when we were making console games and marry that with the analytics-based approach to game design to create a hybrid that captures all the viral marketing but gives players something new, fresh and really compelling. I see 2012 as embarking on the second wave of social games that will become deeper and more complex. Our goal is to be part of that conversation.

ISG: The cost per install (CPI) can be quite high on Facebook. What’s your plan to gain traction on the platform?

Borrud: Whenever you’re making a game, you’re thinking about user acquisition. The first thing you’ve got to do make a high quality game. If the game is great on a platform like Facebook, the game is going to spread, so we’ve put a lot of thought into how we can create a game that’s unique, different and compelling — something that people want to play and will encourage others to play. Secondly, we’ve raised some funds so we’re going to advertise. We’re going to go directly to our target audience and pull as many players over as we can with the funds that we’ve got. Lastly, the nature of the product that we’re making allows for a lot of sponsorship opportunities, and that allows us to tap into a lot of what’s happening in the world, and by drawing those things into the product, that allows us to reach new groups through their own viral networks, bringing those users into our network as well.

ISG: Sponsorship opportunities?

Borrud: This ties into our concept of tying the real world with the virtual world. As you get closer to the real world, products fit better and make that virtual world feel more real. As we introduce real-time content, we have an opportunity to grab branded products, sponsorship and promotions and infuse them into the world we’re creating. From the gamer’s perspective, it makes the world we’re creating more alive and more like what they see when they walk out the door.  For sponsors it means deep integration, but not in a forced way like what’s happening in some games now.

ISG: We know you and the other founders have a lot of console experience – how are you applying that experience to social games?

Borrud: We’re trying to avoid being a hardcore product for a small group of people. We want to draw on light RPG elements but it’s from a point of making the game more compelling. We’re surprised that in social games there’s not a lot of character-based games. What we’re talking about is how to get closer to the character and how to add more customization to it so it’s even more unique. It happened in traditional gaming and I think it’s going to happen again in social gaming.

The last thing I want to do is attack a model that’s done incredibly well, but I think there’s an opportunity to take customization even further. There’s a difference between customizing my personal space and building customization around a character. A character is much more personal.

ISG: You’ve also mentioned user generated content, which isn’t something you see all that often in social games. How will this work?

Borrud: This is a cornerstone of what we’re trying to do. Facebook is user generated content and we think the game should be the exact same thing. This has been done before in console and open world games, and we want to give the player those tools so they create something new that they want to share. User generated content will be a reflection of the player into every game we make, not just our first game.

ISG: How do you plan to integrate real-time content into a social game?

Borrud: This is an opportunity we haven’t really had in traditional games, but [with Facebook] we’re communicating with the player constantly. Companies are constantly tweaking their games and we looked at this as an opportunity not only to refine the gameplay dynamic, but to start to blur the lines between what is happening in the real world versus what is happening in the virtual world. Real-time content means something’s just happened in the real world — how can that be reflected tomorrow in the game? That’s an opportunity to do something unique and different and to get players to come back to see how the game and how their character in the game is reacting to it. We’re talking about a “ripped from the headlines” feel to the game.

ISG: That reminds us of sci-fi stories, where you have characters who play online games and the characters they play become extensions of their personality and their real lives.

Borrud: That’s exactly right. People have dabbled in this, but with this audience and Facebook and everything being tweaked post release we saw it as an opportunity to bring the real world into a virtual world.

ISG: Obviously you’re focusing on Facebook, but what are your plans for other platforms?

Borrud: Facebook is a platform for us in the same way the Xbox and the PC are platforms. We develop our games as much as we can to be platform agnostic so it can move from Facebook to Google+ to an iPad with a little bit of work but without having to re-write the whole system. That said, Facebook is the predominant platform and that’s our clear number one focus. It’s got a huge number of users, a great infrastructure, a low barrier of entry and great viral components.

ISG: You mentioned iPads — are you planning to be cross platform at some point?

Borrud: You can’t just port a game over and have it be as successful. You need to think about the platform, the play styles and the play habits of people and design the game in such a way that it enhances the experience and makes sense on the platform. That’s absolutely in our plans for the future, but for a launch strategy, we’re clearly focused on Facebook.

Israeli social game developer Playtika is now completely owned by U.S. casino giant Caesars Entertainment Corporation, according to a report from Globes filed late last week.

The Slotomania developer raised some eyebrows back in May when it was quietly announced that Caesars (via its Harrah’s casino brand) had purchased 51% of the company for up to $90 million. We couldn’t get the developer to comment for the record at the time, but this week’s report reveals that the partial acquisition contained a an option to acquire the balance of shares within two years — which Caesars has apparently taken advantage of just seven months later. Globes cites an unnamed source that puts the current value of Playtika shares slightly higher than what Caesars paid the first time.

Since that time, Playtika has kept Slotomania growing at a steady pace and recently released an iOS version. A Chinese language version of the game launched in April, but hasn’t seen as much traction. Playtika’s other game franchise, Farkle Pro, has been in steady decline since about October. According to our AppData traffic tracking service, the developer enjoys 5.8 million monthly active users and 1.68 million daily active users across all its Facebook apps.

As we approach the end of 2011, Inside Social Games looks back at the biggest stories in the social games industry based on controversies and rumored controversies around everything from layoffs to sunsetted games.

While not necessarily the most popular articles among investors and developers, these stories and subjects tend to be repeated almost as often as the success stories of mergers and acquisitions, IPOs, and other exits or expansions. In the case of rumors, these stories often couldn’t be independently verified or lacked enough substance to warrant a news report. Even so, some of them were persistent enough to merit mention here.

Zynga’s Stock Clawback Scandal – November, Unconfirmed
This year Zynga took some very poorly timed heat from a Wall Street Journal expose that claimed company CEO Mark Pincus pressured employees to return stock rights due to poor individual performance. Surfacing a month before the company’s hotly anticipated IPO, the article called Zynga’s corporate practices and long term ability to retain employees into doubt. While Zynga never denied the story, CNN did obtain a company memo that said the Wall Street Journal’s article was based on hearsay, but also specifically mentioning “meritocracy” as a core company value. We’ve since heard rumors that the alleged stock clawbacks were only directed at a very small number of employees that truly were under-performing. In the end, Zynga’s shares went on to be priced at $10, netting the company a billion dollars in its IPO and a market valuation of $7 billion. The company’s shares slipped after they began trading, and are now worth $9.75.

RockYou’s Dramatic Pivot – November
The year started off well for RockYou with the Playdemic acquisition and a new ad platform and partner publishing program. By mid-summer, however, it was clear that the Zoo World developer was in trouble even as it continued to expand via acquisition. The first of its partner-published games, Cloudforest Expedition, was delayed and eventually beaten to market by Zynga’s Adventure World. Overall traffic declined across most of RockYou’s owned-and-operated games despite a strong launch of Zoo World 2. By the time SVP of Games Jonathan Knight left the developer-publisher in late summer, rumors of planned layoffs began to circulate. RockYou CEO Lisa Marino confirmed just over a month later, adding that Playdemic would be sold back to its original owners and that Cloudforest developer Loot Drop was released from its contract. RockYou is currently claiming a profit for the final quarter; Zoo World 2 is showing a resurgence in traffic; Cloudforest Expedition remains unreleased, though Loot Drop has signed new agreements with other social game publishers.

Diner Dash Finished on Facebook – July
San Francisco-based PlayFirst began the year wtih big plans for bringing its IP to Facebook and a $9.2 million round of funding it secured at the end of 2010. Despite a solid launch and strong initial growth of its premier franchise, Diner Dash, the developer sunsetted the game after just eight months due to poor performance — the third failure in a row following Wedding Dash Bash and Chocolatier: Sweet Society. SVP of Games and General Manager Eric Hartness left the company around the time of the game’s demise and an unspecified number of employees were laid off not long afterward. At it stands now, the developer appears to have made a full scale retreat from social games, with a company representative telling Joystiq that PlayFirst will now focus on on the “mobile casual gaming space.”

Kabam’s Restructuring – December, Partially Confirmed
At the end of spring 2011, Kingdoms of Camelot developer Kabam closed an $85 million fourth round of funding to put toward ramping up its existing Facebook games and launching new ones. At the time that the funding was announced, Kabam said it had 400 employees across multiple studios — including a newly-opened San Francisco studio. Around August 2011, however, multiple anonymous tipsters told us that Kabam was preparing or had already begun rounds of layoffs. The stories seemed inconsistent as Kabam maintained a steady flow of hiring during this time period, and continued to launch new games. We observe, however, that Kabam sometimes launches games on Facebook that are neither branded nor announced — for example, Samurai Dynasty, which we first saw on our AppData charts in June — and then sunsets them if they fail to gain organic traction. These scrapped games could be cause for layoffs as could general restructuring. Kabam came out this month and announced the latter, claiming that fewer than 80 employees were affected. This contradicts the information provided by the tipsters, which place the number between 80 and 200. A spokeswoman tells us that Kabam currently has around 475 employees; the developer recently launched a licensed Godfather game on Google+ and on its own site.

Sticky Situation at Digital Chocolate – October, Unconfirmed
Once a major competitor to Zynga, Digital Chocolate was already losing ground at the beginning of 2011 despite launching new games Army Attack and Millionaire Boss and expanding onto mobile and Google+ with some of its older titles. As Millionaire Boss began to decline rapidly and planned updates to Army Attack were delayed, it came as no surprise to hear from a tipster who worked at the company that the developer was considering layoffs. A Digital Chocolate spokesperson denied any major layoffs when we contacted the developer in October, but a second source with knowledge of the company told us that Digital Chocolate’s social studio branch in San Mateo had been completely shut down due to rising user acquisition costs on Facebook. Additionally, this source says a failed publishing agreement with a first-time social game developer hurt Digital Chocolate’s ability to offset user acquisition costs. Digital Chocolate recently launched a new social game, Galaxy Life, on both its own site and on Facebook.

Vostu’s Most Litigated Form of Flattery – June to December
Brazilian social game developer Vostu made some ink in June this year when Zynga sued the company for copyright infringement, claiming Vostu had copied their games wholesale, right down to unintended glitches and mistakes. Vostu hit Zynga with a countersuit alleging Zynga had unsuccessfully tried to negotiate a partnership or acquisition with it before Zynga’s initial lawsuit. The companies settled out of court this month, with Vostu agreeing to pay Zynga an unspecified amount in compensation and make changes to MegaCity, Café Mania, Pet Mania and MiniFazenda. Vostu is currently branching out and is on track to release more casual social games, thanks to its earlier acquisition of MP Game Studio. Vostu is also working on adding new features to its core social games, like the custom in-game radio stations it just added to MegaCity and MiniFazenda.

Sony Online Entertainment Exits Facebook – May
Sony Online Entertainment started off the year by publishing a tie-in Facebook game for its EverQuest II franchise and continuing to operate several games developed by independent studios. None of these games found much traction in the first months of 2011, and somewhere around May, SOE quietly walked away from Facebook. Its games were either abandoned completely or handed back to their developers, as was the case with Night Owl Games’ Dungeon Overlord. A spokeswoman for the publisher wouldn’t confirm that SOE is completely out of the social game industry, but did say that the company was trying to get back to its MMO roots.

Deep Realms Deep Sixed – June/July, Unconfirmed
Disney Playdom was just beginning to exit its moratorium on new game launches at the beginning of the year, first with Deep Realms and then with Gardens of Time. The latter completely eclipsed the former — and just about every other game Disney Playdom released this year, even the Disney-branded GnomeTown and ESPN Sports Bar & Grill — and so we weren’t surprised to hear rumors that the Deep Realms team had been trimmed down early on in the year as the developer shifted its attention to other ventures. Given Deep Realms’ current traffic, it’s unclear at this point if the game will survive Q1 2012.

Rocket Ninja’s Wrestler: Unstoppable Makeover – May
2D wrestling sim Wrestler: Unstoppable had a very outspoken and loyal fan following by the time the game was acquired by Rocket Ninja in 2010. It appears to be these same fans stirring up controversy around the developer’s updates to the title — mainly, the visual makeover from 2D to 3D with Rocket Ninja’s proprietary engine. Players cited numerous bugs and performance issues caused by the new engine as their main complaint and a petition was circulated, calling for a return to the game’s original visuals. Wrestler: Unstoppable went into a sharp decline around the end of September; Rocket Ninja announced a $7.5 million second round of funding in November to put toward scaling its 3D engine in social and mobile games.

The under-served Facebook crossword puzzle genre gets a huge addition today with Crosswords from new social game developer PuzzleSocial. Through licensing agreements, the developer has secured many of the top crossword puzzle constructors in the United States to supply the game with new content daily.

Speaking to Inside Social Games, PuzzleSocial founder and crossword enthusiast Jeb Balise explains that though there are 50 million people in the U.S. that solve at least one crossword puzzle per week, only about 50 to 60 people are responsible for creating that content (we call them “constructors”). Fourteen months ago, he founded PuzzleSocial with the intent to create a crossword puzzle social game; in the last six months, he’s been able to secure the rights to constructors’ puzzles that appear in nearly all the major newspapers like the New York Times and the Washington Post. Incidentally, Balise says that many of the constructors and top competitive players featured in the 2006 documentary film “Wordplay” are also featured in the game. Bios for each of the puzzle constructors are available from the game’s main menu.

Crosswords is launching with two game types, two game modes, and four types of crossword puzzle that are updated daily. The game types are Singles or Doubles, where players complete the puzzle alone or with a friend. The modes are “for fun” or “for stats” where players can choose whether or not to rank their performance in solving a puzzle (speed, accuracy, etc.). Lastly, the puzzle types are divided by Newsday (the puzzles that appear in daily newspapers), A.V. Onion Club (which appear in the humor publication), CrosSynergy (which runs in the Washington Post), and a proprietary type called Celebrity where each of the daily puzzles is relevant to a piece of celebrity news gossip circulated that week. Each type gets new puzzles daily.

While playing Singles or Doubles in any of the daily puzzles, players can choose to receive word hints, reveal solutions for individual words, toggle a red-text “wrong” hint that shows players when a letter is incorrect, or reveal the entire board solution. All of these tools are provided for free, and players can even print PDFs of the puzzles to play with more traditional pen-and-paper. In Doubles, players are both playing the same puzzle in real time with each filling in words in their own time with no tracked score (although statistics will be counted if playing Doubles in stats mode).

Crosswords also features tournament and head-to-head competition play, which is one of the ways in which Crosswords monetizes. Players are given a certain number of “puzzle tokens” to spend on entering tourneys or creating head-to-head matches; additional tokens can be purchased with Facebook Credits. While in tourney mode or a head-to-head match, players are graded on speed and accuracy and do not have access to some of the puzzle-assisting tools available in the non-competitive modes. Head-to-head does lock correct words in place so that players cannot write over another player’s correct answer.

Scores also fluctuate in the competitive modes consistent with real life crossword competitions, where a correct answer is 1 point and an incorrect answer is -1 point. Taking a hint from Tetris Battle, Crosswords features a changeable level system where player can move up or down levels depending on their performance in tourneys or head-to-head. This determines which tourneys a player can enter, although in the future, head-to-head mode will allow players to challenge their friends at any difficulty level.

The second key way in which Crosswords monetizes is through ads. An integration with MediaBrix‘s ad platform allows the game to show players display or video ads just after completing a puzzle, similar to what Zynga is doing in Words With Friends. Viral mechanics include earning puzzle tokens for inviting friends to the game, and an “Add Friend” button that allows players to add strangers that they meet in tournaments or head-to-head mode to their Facebook friends list.

Crosswords launches on Facebook today. Developer PuzzleSocial currently has around 10 people on staff and is in the process of raising a first round of funding.

Scotland-based newcomer Outplay Entertainment enters the social and mobile game market this month with two games launched on Facebook that will eventually become cross-platform experiences on iOS and Android in the first quarter of 2012.

The term “cross-platform” has been used a lot by developers in the last year as Facebook-spawned devs make their first attempts at mobile games and mobile developers attempt to migrate their apps to Facebook and other social networks. It can mean two completely unrelated games that share a common theme, like CrowdStar’s It Girl for Facebook and Top Girl for mobile. It can mean a game that is identical across all platforms, but not connected by platforms, such as Rovio’s Angry Birds on G+ versus Angry Birds on just about every other device under the sun. It can also mean games that are the same game no matter what device the player users, like Zynga’s Words With Friends — which is what many developers term “true” cross-platform play.

Outplay Entertainment currently falls toward the Words With Friends end of the spectrum with its two games, Booty Quest and Word Trick. When the mobile versions launch, players will be able to initiate games on Facebook and then have that same game immediately available to them on iPhone or Android if they switch devices. For future projects, the developer may lean more toward CrowdStar’s cross-platform model where one platform has the “main” gameplay experience while another platform provides supplemental elements. Similar to what Ubisoft has planned for its upcoming Ghost Recon games, this could take the form of a mobile companion game generating additional currency or experience points for the Facebook main game.

For now, though, Outplay is focused on getting its foot in the social-mobile games door and scaling quickly. Though there is some skepticism that developers cannot use Facebook as a sustainable starting point on which to build a business, the developer feels it has an edge by virtue of experience, compelling gameplay, and ample resources to direct toward marketing. The company was founded by brothers Richard and Doug Hare, two video game industry veterans that have come a long way from 1997 when they first founded a development studio focused on porting Windows games to the PlayStation console. In the following interview, the brothers outline Outplay’s approach to the rapidly shifting market:

Inside Social Games: How two brothers can work together without killing each other?

Richard Hare, Outplay Entertainment Co-Founder (pictured right): It’s probably the fact that we grew up playing games together. It’s been a hobby and then it became a common interest. The first company of scale we created was The Collective, which we formed in 1997 with one other business partner, and focused on console development. We grew that over the course of eight years to 150 people, then we merged with Backbone Entertainment in 2005.

Doug Hare, Outplay Entertainment Co-Founder (pictured right, with child): We merged the companies, created Foundation 9 Entertainment, and then sold the majority of it in 2006. As a result of that investment, we grew to about 800 people in 11 different studios. That’s when we started [researching] Facebook as a platform and at the same time saw the [rise] of Apple with the launch of the App Store. It was difficult to go after those markets from within our company, so it ended up being easier to start a new company. We’re still substantial individual shareholders at Foundation 9, but we have no operational involvement.

ISG: How did you end up back in your native country, Scotland? What’s the development culture like there?

Doug: We started with the idea of doing Outplay in the states as a very virtualized company with lots of different individuals collaborating on the product — after 800 people, we were drawn to the idea of a small company. As we refined our view of the market, it became apparent that games were services rather than products you could fire [off] and forget, so we started realizing that we needed a fairly substantial internal capacity. We started looking at various locations where we could set that up, and [chose] Scotland. We came to that realization around April or May of last year and came back in September to start meeting with VCs and angels investors. We officially opened our doors in April 2011.

We can’t claim to be experts, but a lot of stuff happened while we were away [from Scotland]. But one of the surprising things [about] Scotland is that it’s the home of Lemmings and Grand Theft Auto. Those games originated here and Grand Theft Auto is still developed here. [Video games] is not a huge industry in terms of headcount, but in terms of the size of the country — five million people — the amount of relevance is amazing for such a small country.

ISG: We’ve heard some people say that Facebook isn’t the best place to launch a studio anymore now that Zynga dominates the market and cost per install (CPI) is really high. Where do you see opportunity on the platform?

Doug: It’s a question of having the type of product people want to play. Whether it’s the App Store, the Android Market, Facebook, or Xbox Live, they have the same challenges around discoverability — grabbing people’s attention so that they come back. [The opportunity] comes from the quality of the product that we create, the genres that we select, and the part where we can direct a reasonable amount of marketing toward [the games] to get traction. We’re not trying to be Zynga, we’re not trying to compete for the same audience. They’re an atypical outlying phenomenon. We’re making different types of games that will ultimately attract a different audience.

ISG: Booty Quest is a match-3 game and Word Trick is more like more like Scrabble, both very casual older female-skewing genres. Is that the demographic you’re primarily focused on?

Richard: There’s a multitude of reasons why we led with those genres. From our perspective, they’re great games. It’s a style of casual game that we enjoy playing. And because we’re forming a new team in a new country, we wanted smaller scale products with a relatively constrained and focused style of developing. From a market analysis standpoint, they seemed like logical bets to start with [because] even though there are many match-3 games, there’s a large appetite for that style of entertainment. We also felt we could create something that was innovative within those [genres]. These are an exercise in proving out the team and proving out our product. As we move into next year, you’re going to see more complexity in content types and development.

ISG: How do you offset CPI on new games, being such a new studio? Is it all in the marketing or will you integrate an ad platform or hot new viral mechanic no one’s thought of yet?

Doug: We’re moving rapidly and beyond simple raw marketing. We have other secret sauce as to how we [attract] audiences that we’ll be rolling out next year. It’s something along the lines of what you mentioned — only it’s saucier and more secret.

ISG: On the cross-platform side, what’s your approach? Are you using HTML5 or building native apps by platform?

Doug: We built our own technology for cross-platform development. HTML5 is interesting, but the experience that we have on mobile devices is just not something that you’d be able to get on HTML5 right now.

Word Trick and Booty Quest exist very happily on [PC or mobile]; the experience is satisfying regardless of the platform. However, that’s [not the case] for most types of games. Taking another type of game and making the same experience [on multiple platforms], one of them is going to be a pure experience on one of the platforms whether you like it or not. We’re not going to make the games identical all the time; we’re going to have games that you want to play on Facebook, on PC. And then we’ll have another game that’s a different experience [but related to the Facebook game] on a different platform. The two games are standalone, but if you play both, you’ll move faster through the experience. It’ll be a better experience overall.

There are other companies that are doing this. But there will be a change in the patterns that people play [by] and we want to have an approach to where we’ll be there whenever [the player] want us, no matter what the device.

Richard: The key is being sensitive to the context of the platform you’re playing on. There’s certain things that work extremely well or are only possible on mobile. We want to make sure it’s not going to be an exercise in porting between desktop and mobile, but trying to recognize the true experience based on the context. We’re not going to do, “Here’s the Facebook game,” and then a few months later, “Here’s the mobile game.”

ISG: You define your games as “skill-based,” even though they’re not actually related to the concept of gambling — where players compete against one another to earn prizes relative to their skill. What does the term “skill-based” mean in the context of your games?

Richard: One way of looking at it would be that there’s always a level of challenge that can be worked and mastered. That’s something that has a natural appeal and draw over time because it’s not too easy. With gameplay mechanics, we want to make sure that it’s always rewarding and satisfying. It’s finding the right level of skill or challenge. That will be based on the style of product — [Booty Quest] is more reaction-based while [Word Trick] challenges your vocabulary.

Doug: Both games require you to develop [a skill]. It’s rewarding to see your development of that skill, more fundamentally satisfying than games that are based on patience. The term “skill-based” reflects casino gaming, but the idea is really that you’re demonstrating a skill and the evolution of that skill is underpinning the overall enjoyment. There are a lot of games on Facebook that don’t have the requirements for what [we define as] skill. They have behaviors that can be rewarded, but there’s no change in behavior.

ISG: What does the road ahead look like for you, beyond launching new products? Are you in the process of raising funding?
Doug: We raised our seed funding at the start of the year, so we’re not raising money right now. When we pitched the company as an investment opportunity, the idea was that we were going into it [with] the functionality a publisher would have — dedicated community management, dedicated quality assurance, marketing, and public relations. We’re at 32 people right now — we started with two in April — and we grew ourselves in the space of three-and-a-half months. We’ve built these games and mobile versions that are nearly complete. What we’ve accomplished, when you think about it, is quite a lot.

Australian developer Halfbrick has received government funding for its new Sydney studio. The Fruit Ninja developer will be one of several Australian high tech companies taking advantage of the $3 million New South Wales Interactive Media Fund.

According to a government-issued press release, Halfbrick’s Sydney studio will be working on a new iteration of the Fruit Ninja franchise. Halfbrick has recently brought Fruit Ninja to Facebook as Fruit Ninja Frenzy, released a new game called Jetpack Joyride, created a Fruit Ninja spin off to promote DreamWorks’ Puss in Boots movie, and teamed with Chinese developer iDreamSky to develop a version of Fruit Ninja specifically for the Chinese market and has even released Fruit Ninja plush toys. In the press release, New South Wales’ Deputy Premier Andrew Stoner says the game would take Fruit Ninja in a new direction, but Halfbrick Marketing Director Phil Larsen tells Gamasutra that the gameplay details have yet to be finalized.

According to our AppData traffic tracking service for social games and developers, Halfbrick’s mobile offerings outside its core Fruit Ninja franchise have been in decline. While Fruit Ninja is still the #4 paid app and the #20 top grossing app, Fruit Ninja: Puss in Boots has fallen to the #166 spot on the top grossing apps list and Jetpack Joyride has dropped down to #263. On Facebook, AppData shows that Fruit Ninja Frenzy has also seen a slight drop in the past month, with MAU falling to 590,000 and DAU to 70,000.

6waves Lolapps has teamed up with developer Game Ventures (Howzat Cricket) for Homerun Heroes, a new baseball game for Facebook. The game combines arcade-style batting mechanics with league-based play, power-ups, and training options.

According to our traffic tracking service AppData, Homerun Heroes currently has 5,000 monthly active users and 300 daily active users.

Homerun Heroes lets players choose the name and colors for their imaginary team before heading out onto the field. Rather than play full games, the title has them meet specific requirements to win, such as scoring a certain number of runs without striking out more than an allotted amount. Gameplay unfolds from a viewpoint over the batter’s shoulder, with a clearly defined strike zone and an indicator of where players are aiming their swing with the mouse. Swing types can be switched between center (easiest), left or right field (harder), and power (most difficult to connect). The pitcher throws automatically and players can see where the ball is heading inside or outside of the strike zone a moment before they must swing.

If players are able to hit the ball, they’ll take their base automatically and the computer-controlled fielders will do their best to get them out. Players only control their team when they’re at bat; there’s no fielding gameplay. Players can’t steal bases, but can tell their runners to go home if they think they can make it, but there’s a risk of being tagged out.

Playing a game requires one challenge point. These recharge over time, and the maximum amount of them the player can have increases as they level up. Challenge points can be purchased should players not wish to wait for them to refill automatically. Coins and Glory Points are also awarded for winning games. Coins can be spent on buying new equipment to help their teams play better (one-game use) and on training to restore stats for tired teams. Training takes time, and players can’t play a game while training, but can hurry up the process using Facebook Credits. Glory Points count towards players leveling up.

The game is structure such that there are various tournaments players can enter into that become progressively more difficult and contain a varying number of match-ups. When players have completed all of the games in one tournament, a new one opens up.

Homerun Heroes lets players add their friends so they can compare scores in a real-time leaderboard a the bottom of the screen. It’s also possible for players to share stories about games they’ve won and other activity via viral channels.

The game is monetized using Facebook Credits, which can be spent to purchasing the soft currency, coins, which are then used on power-ups, training, and Challenge Points. Facebook Credits can be used directly to speed up training.

Speaking to Inside Social Games, Game Ventures Founder & CEO Zaki Mahomed explains that the developer hopes to satisfy what he feels is the under-served sports game fan community on Facebook, mobile, and other social networks and web games portals. The management sims that currently dominate the sports game genre on Facebook, he says, have a limited appeal and a lack of intensity. In 2012, Mahomed hopes to see Game Ventures launch five sports games on Facebook and at least one for Android (and possibly iOS). The developer raised a bridge round of $800,000 from investors Neoteny Labs, Digital Garage, IIPL and from the NRF Singapore fellowship program, bringing their current funding up to about $1.1 million.

You can follow Homerun Heroes’ progress using AppData, our traffic tracking service for social games and developers.

Russian developer and publisher Nival is deepening its commitment to social and mobile gaming with an investment in Russian independent studio Bytex.

Nival, most famous for developing PC games and running the Russian free-to-play MMO portal zzima.com, is teaming with Bytex to help the smaller company co-publish a new HTML5-based collectible card game (CCG) on Facebook called Berzerk: The Cataclysm. While CCGs are typically played in real time, Berzerk: The Cataclysm is asynchronous, and has social features that allow players to showcase their card collections according to Bytex’s founder and CEO Dmitri Karasev.

What makes Berzerk: The Cataclysm and Bytex most attractive to Nival is that the game is built in HTML5, meaning it’s naturally cross platform on Facebook and mobile. This aligns with Nival’s long term game development goals and puts the developer in a space currently occupied by Zynga, Wooga and OMGPOP, which each have HTML5 games running on Facebook’s mobile platform.

“We’re focusing on cross-platform social strategy games,” Nival’s president Sergey Orlovskiy (pictured) tells us. “When we found out that [Bytex] wanted to go to the direction of making social CCGs, because of their experience we decided to invest. All of the games we’re doing right now — and we’re doing a bunch — all of them are socially connected and most of them will be cross platform.”

The partnership with Bytex is Nival’s second foray into Facebook games. Earlier this year Nival teamed with another independent Russian developer, KranX to publish Kings Bounty: Legions, a turn-based strategy game targeting hardcore gamers. While Nival is proud of the game, it has yet to hit its stride in terms of traffic. Since its release, King’s Bounty: Legions has risen to 20,000 MAU and 4,000 DAU according to AppData, but even Orlovskiy admits that the game performed below expectations initially.

“In terms of monetization, the [average revenue per user] is very good, but I would say that we’ve underestimated several things, and we’ve spent a lot of time improving the social and viral features of the game,” he explains. “We believed that the rarity of the deep, hardcore experience plus the quality of the game would create viral buzz even with a small audience, and that would make the game grow. Frankly, that didn’t happen. What we can see is that the combination of good viral mechanics built into the game, plus high quality gameplay, plus hardcore appeal works much, much better than [a game] without the viral mechanics.”

Orlovskiy is happy to use Kings Bounty: Legions as a learning experience, and it hasn’t reduced his confidence that social games will be an important part of Nival’s offerings in the future. Facebook-only development, however, is not a viable strategy for Nival as user acquisition and marketing costs are far higher on the platform for new companies. Orlovskiy says that the amount of advertising and filtering required to create a dedicated player base of hardcore users would be unfeasible, even though these players tend to produce much higher APRU than casual ones.

Orlovskiy goes on to say that the still-emerging mobile platform presents more opportunity and a more natural platform for strategy games thanks to touch interfaces. Mobile development is also being pushed forward as developers find better ways to incorporate social features thanks to Facebook Connect and the emergence of true mobile social gaming networks.

“Since the whole industry is moving from web to mobile, the same needs to happen to us,” Orlovskiy says. “It’s inevitable that evolution will take us in this direction, the same way that games evolved from an offline to an online experience.”

Nival opened a studio in Kiev specializing in social and mobile development this September.

Taiwan-based social game publisher SNS Plus has landed a $4 million “co-lead” round of funding from Chinese early stage investment firm WI Harper Group and Matrix Partners. This brings SNS Plus’s total funding to $12.5 million.

Announced via press release, the funding will go toward expanding the SNS Plus distribution channels in Asia, where the company already enjoys growth from China, Taiwan and Thailand. The funding will also help SNS develop its own games to bring to market on Facebook — where the company has published over 60 games — and other platforms like iOS and Vietnamese social network Zingme. SNS Plus’s largest app currently published for Facebook is แฮปปี้คนเลี้ยงหม, a Thai-language game involving pigs. Across all its Facebook apps, the publisher enjoys 5.4 million monthly active users and 1.5 million daily active users according to our AppData traffic tracking service.

Rocket Ninja, current developer of Facebook game Wrestler: Unstoppable, has secured a $7.5 million second round of funding from European private investor Marcel Boekhoorn. This brings the developer’s total funding to $11 million.

Wrestler: Unstoppable started as a complex 2D fighting game for Facebook developed by SteamStreet. Rocket Ninja purchased the game last year and essentially relaunched it earlier in 2011 as a 3D fighting game that runs on its proprietary Shr3d game engine. The developer claimed it saw stronger retention with the dramatic change. Data collected from our AppData traffic tracking service shows that Wrestler: Unstoppable lost growth momentum in September, however, with 80,000 monthly active users and 10,000 daily active users as of today.

Even so, Rocket Ninja means to scale its San Francisco-based office with this second round of funding, largely based on the promise of the Shr3d engine delivering 3D visuals to both social and mobile games. A statement from CEO Oded Pelled included in the funding press release says, “3D revolutionized the gaming industry, and it will forever change the social web by delivering a new dimension in self expression and interactivity.”

It is possible that the developer could license the engine to other social game developers, putting them in direct competition with Unity, StoneTrip’s ShiVa, and a handful of other services that promise social and mobile game developers 3D. The clear advantage Rocket Ninja has is that it doesn’t currently require a plugin to run on Facebook — although Unity will be able to drop the plugin for Flash Player 11 games. The press release says that the developer is currently “accessible across devices and applications,” though to date we’ve only seen Wrestler: Unstoppable available on Facebook.

Representatives for Rocket Ninja did not respond to request for comment as of press time.