Social gaming news roundup: Social Vibe, Mail.ru and Game Closure

Social gaming market to be worth $5 billion by 2015 — BI Intelligence is predicting the US social gaming market will be worth more than $5 billion by 2015, and will be propelled the the strength of tablet computers. The US social gaming market is currently worth about $3 billion by BI’s estimates.

Mail.ru revenues up 59 percent year-on-year, reports $207.6 million in net profit – Russian social network Mail.ru has reported its total revenues increased 59 percent year-on-year in 2011 to $515 million. The company’s net profit was $207.6 million, up 157 percent year-on-year. According to Mail.ru, mobile usage is now a major growth driver, with 43 percent of monthly users accessing the site from mobile devices.

Pachter: social gaming “not a bubble” — Noted industry analyst Michael Pachter of Wedbush Securities has gone on record saying social games are an integral part of the gaming experience. “As for the social bubble, I don’t think it’s a bubble. I play Facebook games with my mother. This is not a bubble,” he said at the [A]List games marketing summit, according to VentureBeat’s report.

Nexon invests in Moyasoft — Nexon has acquired a 19.9 percent stake in South Korean social game maker Moyasoft, according to a report from Gamasutra. Nexon will working with Moyasoft to bring its games to international markets.

Social Vibe engaged users for almost 54 years in 2011 — Digital advertising company Social Vibe has reported several interesting milestones for 2011. During the year the company doubled the number of engagement ads served. The company also reported consumers watched the company’s ads for more than 1.7 billion seconds (54 years) during the year. Social Vibes reported that the average user spent 63 seconds with a Social Vibes ad.

Planet Cazmo secures funding, starts licensed content division – Entertainment portal Planet Cazmo has announced the formation of HappyGiant, a division of the company that will focus on creating licensed content for Facebook and smartphones. The company also announced it had received new funding from the Pritzker/Vlock Family Office Portfolio, but declined to specify the amount. The company is currently working on games for celebrities, films and comic books.

Viximo and Gaia Interactive Ink distribution Partnership — Global social game publisher Viximo has signed a deal with Gaia Interactive to bring several of its client games to Gaia Online and assist Gaia in launching its game Monster Galaxy on a variety of international social networks.

Advertising Agency BBH gets into the social games business — AdAge is reporting that advertising agency Bartle Bogle Hegarty (BBH) has opened its own social gaming studio. Named Chuck Studios, the company will make branded games for BBH client Perfetti Van Melle. The company’s first game is live on Facebook.

Bigpoint partners with GamesAnalytics for its free-to-play games – Bigpoint has signed a deal with monetization and analytics company GamesAnalytics to incorporate GamesAnalytics’ Predict platform into its games. Predict uses data-mining and predictive modeling to help developers target specific groups of players with customized messages and offers.

[Funding] HTML5 game maker Game Closure raises $12 million – HTML5 game development tool maker Game Closure has raised $12 million in Series A funding from Highland Capital Partners, Greylock, Benchmark, General Catalyst and CRV according to VentureBeat. The company’s JavaScript game SDK allows developers to create game that will run natively on mobile, tablet and browser devices.

[Launch] Pirates: Tides of Fortune moves to Facebook – Plarium’s pirate-themed social game is now available on Facebook, following the expiration of its 30 day exclusivity period on Google+. The game was previously available on Vkontakte.

How bootstrapped Serbian startup Nordeus beat EA’s FIFA at its own Facebook game

Of all the sports games on Facebook, soccer-themed games reign supreme, accounting for more than half of the 40 most popular sports games on the platform.

The leader of the pack is Nordeus — a bootstrapped Serbian developer founded by three former Microsoft employees. Its game, Top Eleven – Be a Football Manager is a detailed football management sim, and despite its complexity, has 3.6 million monthly active users and 1.2 million daily active users, far above its closest competitor, the officially licensed title EA’s FIFA Superstars, which currently has 1.9 million MAU and 300,000 DAU according to AppData.

However, what may be most interesting about Top Eleven is the game’s slow burn. Unlike the average Facebook game, which typically sees most of its growth in the first six months, Top Eleven is still adding players 21 months in and is the most popular its ever been. Since the game’s launch in May 2010, Nordeus has taken Top Eleven cross-platform to iOS and to Android and introduced a raft of new features and updates, but has so far been silent about upcoming projects.

Inside Social Games had a chance to interview Nordeus’ co-founder and CEO Branko Milutinović and ask him about the success of Top Eleven, and what’s next for Nordeus.

Inside Social Games: Top Eleven is the most popular sports game on Facebook right now. Why do you think the game has been so successful despite the fact that its competing against officially licensed games like FIFA Superstars?

Branko Milutinović, Nordeus co-founder and CEO (pictured right): As well as double the MAUs, Top Eleven also has over four times more DAUs. That’s really important for us because it means our users are engaged and coming back to play regularly!

But to answer your question, we took the risk of developing a technically very advanced platform that enables rich gameplay, synchronous multiplayer experience and truly cross platform gaming (i.e. it’s exactly the same game on Facebook, Top Eleven.com, iPhone and Android). This gave us the opportunity to offer our users a game they find challenging and exciting to play with their friends.

Another thing we’ve focused on and think is crucial is the level of realism. We’ve tried to be as close to the real world of football management as possible, including a complex match simulation engine based on English Premier League stats. Actually, the only thing missing to bring us to the absolute realism is licensed brands, everything else we’ve covered.

ISG: When you released Top Eleven in 2010, Facebook was a very different platform. Since then user acquisition costs have risen quite dramatically — what are the challenges you’re facing now and how has Facebook changed as a platform?

Milutinović: The platform has changed a lot in the previous two years. We know the Facebook team is working hard to improve the platform for everyone, both users and app developers and most of the changes we find really positive.

From a developer point of view it is true that user acquisition has changed dramatically with viral growth channels narrowed, but I can understand that Facebook had to do that to preserve user experience on the platform. User acquisition is becoming a big obstacle for newcomers and companies that cannot rely on cross promotion from their other games, which is why we think publishing other studio’s games is going to become more common. At Nordeus we look at the changes as challenges we need to overcome. It’s evolution. We improve ourselves every day and try to adapt to the new conditions.

ISG: In September you revealed your relationship with Facebook was “very close” – can you reveal more about how Nordeus and Facebook work together?

Milutinović: Some time ago Facebook launched an initiative to strengthen the collaboration between platform and the developers. We were recognized as one of the brightest examples of how to leverage the platform, build a great product as well as a successful company around it. Since then we’ve been working with Facebook to implement new updates the platform, building the best possible experience for our users. That probably helped Top Eleven to be voted as The Best Sports Game of 2011 by Facebook based on user satisfaction.

The Facebook team is also doing great job in fixing bugs we report and we’re proud that we’ve helped the platform to become better, especially when it comes to Android and iOS support.

ISG: Are you interested in taking on partners for any reason such as publishing, acquisitions, etc?

Milutinović: We’re always open to new opportunities, but on the other hand have full belief in our own capabilities. When it comes to publishing I can say that we are considering the idea of publishing others’ games, but given that developing games is in our DNA we will probably focus all our effort on getting our titles that are under development right now to the market as soon as possible.

ISG: You’ve said before you want to be “the Zynga of Europe” and that you wanted to consolidate the talent in Southeast Europe. What is Nordeus’ long term strategy around this?

Milutinović: When it comes to hiring our long term strategy is actually to continue doing what we’ve been doing in the previous two years, especially in the last few months. We want to combine best young talent of the region with the most experienced experts from the industry. Examples of that effort include our new Head of Business Development who joined us after over 5 years of running sales and user acquisition for Eve Online, as well as a college hire from Caltech, both relocated to Belgrade. (If you’ve ever been to Belgrade you’d understand why ;)).

We’ve also organized initiatives to attract the best talent, like the game development hackathon we held two months ago. Over 200 of the brightest computer engineering students and graphical designers from the region applied. We’ve already hired ten of the students that took part, with more interviews ongoing. We strongly believe our people and company culture are our strongest assets and we will continue to nurture that.

ISG: What’s next for Nordeus? You’ve released iOS and Android versions of Top Eleven. Are you developing a new game or games? Will they be sports strategy games? Will they be on Facebook?

Milutinović: Unfortunately I can’t share as many details about specifics as I’d like to, but we are working full speed ahead on the next generation of games, which will introduce a lot of new concepts. They will continue to carry on our philosophy of unified gaming experience throughout devices, so they will definitely be available on Facebook, Android, iOS, and other platforms as well.

Vostu confirms layoffs, will be consolidating operations at Buenos Aires HQ

Latin american developer Vostu has confirmed TechCrunch’s report that it is laying off a number of employees. The company will now be consolidating operations in its new Buenos Aires headquarters. According to a Vostu spokesperson, the company will be releasing two games next month and the layoffs will not affect the company’s future release schedule.

Vostu’s full statement on the matter was:

Vostu grew a significant amount in the last 18 months and is constantly focused on improving efficiency for future growth which includes select and strategic hiring. We are consolidating our game design and development at our new headquarters in Buenos Aires.

While Vostu did not reveal the scope of the layoffs, it did tell us it will be maintaining its offices in Sao Paulo and New York. Last year, Business Insider reported the company had more than 580 employees spread between Brazil, Argentina and New York.

Vostu did not comment on the reason for the layoffs. In December, Vostu settled a copyright infringement lawsuit Zynga had filed against it earlier in the year. Under the terms of the deal, Vostu had to pay Zynga an undisclosed amount in compensation and agreed to make changes to four of its games.

Despite the lawsuit and settlement, Vostu has been busy in recent months, rolling out in-game radio and real-time multiplayer to its social games on Facebook and Orkut and launching four mobile games on iOS and Android. The company has also been growing its Facebook presence, adding more than a million monthly active users in the last 30 days and increasing its total on the platform to 3.5 million MAU according to our traffic tracking service AppData. Vostu’s two most recent titles, Candy Dash and World Mysteries are now its most popular Facebook games.

According to a December interview with Vostu’s chief scientist Mario Schlosser the company has between 18 and 20 million MAU spread across Orkut, Facebook, Google+ and its own platform.

Social gaming news roundup: Activision, EA and Kabam

Call of Duty Elite earns Activision more than $75 million – Despite a rocky start, Activision’s Call of Duty Elite social network has been a massive hit. According to the company’s fourth quarter earnings results, more than 7 million users have signed up for the service and 1.5 million players have chosen to pay for $49.99 annual subscription memberships, translating to $75 million in additional sales for the franchise.

PlayDemand grabbing PopCap’s former Baking Life users for Diner Life – Manchester-based PlayDemand is trying an interesting new user acquisition strategy –  the company offering former players of ZipZapPlay and PopCap’s now-shuttered Baking Life free in-game currency it its game Diner Life.

Wooga sees user growth of 185 percent in 2011 — German social game developer Wooga saw its Facebook user base increase by 185 percent to 40 million players in 2011. According to the company’s founder and CEO Jens Begemann, 5 percent of new users are acquired through advertising, 40 percent through viral features and 55 percent come from cross promotion.

Casino company MGM Resorts to announce social game soon — MGM Resorts’ CEO Jim Murren has told Forbes his company will soon reveal its first social game. The game, which Murren compares to FarmVille, will allowe players to run a casino empire.

Kabam sets up new San Francisco headquarters – Gamasutra is reporting that Kabam has signed a multi-year deal for a new 63,000 square foot office in San Francisco. All of the company’s 450 employees will be housed in the same space.

EA Vancouver confirms layoffs – As multiple news outlets reported this week, EA’s Vancouver studio will be laying off an unspecified number of employees. Although the studio was responsible for hits like FIFA Soccer, the company is restructuring in order to shift focus to digital “high growth formats” according to Develop’s report.

Konami revenues up, social games growing – According to Konami’s latest financial results, the company’s net revenues rose to 194,522 million yen ($2.5 billion) in the nine month period ending on Dec. 31, up 3.3 percent over the same period a year ago. The company has adjusted its earnings outlook for the rest of the financial year upwards, and is now expected to earn 265,000 million yen ($3.4 billion), up from 250,000 million yen ($3.2 billion.) The company’s social games division revenues grew by 1.6 percent.

Nabeel Hyatt Leaves Zynga — Conduit labs co-founder Nabeel Hyatt has left his position as the head of Zynga’s Boston studio. Hyatt joined the company when Zynga bought Conduit in 2010.  Fareed Mosavat is replacing Hyatt.

Disney Interactive reports drop in revenue, bigger year-on-year loss – Disney’s Interactive Media division earned $279 in revenue million during the holiday quarter ending on Dec. 31, 20 percent less than the $349 million it earned in the same period a year ago. Losses were up to $28 million from $15 million the previous year. In related news, Joystiq is reporting that Alex Seropian has left his position as head of game development at the studio.

One Piece social game hits 2 million users in 17 days — Industry watcher Serkan Toto is reporting that Namco Bandai’s One Piece social game on the Mobage network has hit 2 million registered users just 17 days after launching. In other Mobage news, Andriasang is reporting the network will soon be getting a social game based on the popular Japanese character Doraemon.

The Sims Social wins Social Networking Game of the Year Award – EA’s The Sims Social has won the Academy of Interactive Arts & Sciences’ award for for Best Social Game of the Year at the 15th Annual Interactive Achievement Awards. EA beat Digital Chocolate, Zynga, Disney, and Spry Fox to win the award.

[Launch] Snooki’s Match Game Hits Facebook – Reality TV star Nicole Polizzi has released her first Facebook game. Called Snooki’s Match Game, the title monetizes through advertising. The game was developed by Apps Genius Corp.

[Launch] Akamon Entertainment launches Chinchón — Spanish-based Akamon Entertainment has launched its first Facebook Game, Chinchón. The game is based on a traditional Spanish card game.

[Launch] Popcap Launches Solitaire Blitz — EA PopCap is officially launching its newest game, Solitaire Blitz. The game is going into a gradual beta launch and will be available to all Facebook users by March.

Blogging Inside Social Apps: Emerging International Opportunities for Mobile and Social Developers

We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference.

Following a short afternoon break, we resumed with “Emerging International Opportunities for Mobile and Social Developers” moderated by AJ Glasser. She is joined by GREE’s VP Marketing, Social Games Sho Masuda, Popcap Games’ VP of Worldwide Publishing Dennis Ryan, Vostu’s Chief Scientist Mario Schlosser, and 6waves Lolapps’ Chief Product Officer Arjun Sethi.

The following is a paraphrased transcript of the discussion.

AJ: We’ll start by discussing the different regions that you’re seeing the most growth in. Where are the largest growth opportunities in your opinion?

Dennis: For us it’s where we’re investing. Three years ago our business outside the Americas was about 10 percent of our business and now it’s about 30 percent, particularly China and Japan. Not to see that other markets have less opportunities, but that’s were we chose to invest.

Arjun: We’ve always monetized in China and Japan. We recently went onto Tencent in China. On Facebook we’ve had a lot of luck in European countries, but Facebook is also growing in Japan. On Android and iOS we’ve see growth in China and Japan – downloads in China and revenues in Japan.

Mario: We’ve seen a lot of growth in Latin America.

Sho: For GREE we’ve seen new users coming from the US and the UK. We’ve seen growth in Korea and China. In terms of market revenues, the US is very important to us, but we’re focusing on a lot of regions.

AJ: So as developers are expanding internationally, how do you approach localization and forming a cultural relationship in each region?

Dennis: We take a country specific approach because we’re trying to build our brands as multi-platform experience. They’re on mobile, console, PC and mac and we try to invest where we can execute that strategy in its entirety.

Sho: We think of localization as making the content meaningful to a region, not just changing the language. We just signed a partnership with five companies. With our new platform, we know its difficult to launch in the Asian market. As a platform we need to provide solutions to help developers penetrate that market.

AJ: How do you choose North American partners?

Sho: We’re working with 2nd parties, like our acquisition of OpenFeint. we’re always looking for a partnership that will benefit both us and them.

AJ: What are some mistakes you’ve seen developers make when they take a game into an international market?

Arjun: Taking the approach that if a game is success on Facebook, you can just take the game into another country and just slap it in. It doesn’t work.

AJ: What about Plants vs. Zombies on Renren?

Dennis: I think we got 50% of that right. In China we decided to take a long term view — we build a studio there. That was right. Another thing we got right was we knew we needed to build a different game, so maybe we got more like 2/3 right. The game on Renren is more competitive and its got different monetization. That’s a start, but in the end it didn’t work on Renren. We and Renren both did a great job launching it and it started with 500,000 DAU but its deteriorated since launch, so at some level we know it’s not working. We haven’t given up.

AJ: What about your experience entering the US with games that were popular in Brazil and on Orkut?

Mario: It depends on the game. Our recent games have done better on Facebook. When you expand to a different country, I would almost look at the city level rather than a country level. 95 percent of viralization works on a city by city basis. In the US now, we don’t have a massive audience, so it’s hard to scale it. When we went into Argentina and Mexico we were able to jumpstart the audience by engaging local bloggers. The stuff we’re launching now we can put more hooks into.

AJ: Everyone is talking about Japan and its massive ARPU like its a golden fleece. What are some mistakes people make when getting into Japan?

Sho: To be honest, it’s hard to say, because everyone’s objective will be very different. Just because you’re not in the top 25 grossing apps doesn’t mean your not doing well. I think there are 3 pieces of advice for someone looking at Japan. One, even if your not thinking about penetrating the East Asian market, think ahead and be ready for future localization. Two, do your due diligence and research. See what similar titles and your competitors are doing. If they’re doing well, you could do well too. Three, start fast. Thanks to Google you can reach market outside the US very easily. You can out to small groups of audiences in a region and see if it’s working. If it is, then you can expand. Speed is important — if you’re not doing it someone else will take it.

AJ: Do you set goals by ARPU rate by region? Do you assume you’ve failed if you’re not monetizing at the peak ARPU rate for a specific country?

Arjun: No. For example, if you just look at the US market and you don’t hit the average ARPU, it doesn’t mean you’ve failed. You have to look at what type of game it is. When you talk about Asia you’re looking at Korea, Japan and China. If you’re not hitting the average ARPU it could depend on the the kind of game your making. Casual and hardcore games have very different ARPU. A game in Korea can make up to $1 million a month just in Korea and just from the Korea app store. That’s why we acquired a studio called Smartron5 just to make games in China.

Sho: It’s dangerous just to look at ARPU and say if it doesn’t hit your focus it’s a failure. It’s more important to look at engagement and retention. How does your DAU compare to your download rate? Engagement is the most important factor.

Mario: You can even see very different ARPU with the same demographics on different platforms. In Brazil there’s a lot of friction around Facebook credits. Even with the same game and the same demographics a game can monetize four times higher on Orkut than on Facebook in Brazil.

Dennis: Its not sufficient to focus purely on ARPU and monetization – you have to go by country and by genre. For example for our Facebook game Bejeweled Blitz the monetization rate is pretty similar in the UK, US and Canada, but in Australia it will sometime monetizes 20 – 40 percent higher. In Japan it’s not unreasonable to expect a 5x monetization rate.

AJ: Is that the same game in Japan?

Dennis: Same brand, different game.

AJ: What the challenges of introducing a brand to a new country?

Dennis: For English speaking countries it’s not as much of a challenge. For the Asian markets it will need to be re-implemented and rethought. You have to believe in the core brand. We give our Chinese and Japanese offices the leeway to do that. Even if the mechanics and monetization are different its still the same core brand.

AJ: What was your experience with Ravenwood Fair?

Arjun: When we first took the game to China we gave our partner the leeway to change the game to local tastes. We did see some high engagement and monetization for the beginning but it began to drop off after a week, which means we probably didn’t do a good job. When we looked at Tencent we looked at game from the the ground up.

AJ: Do you see any trends or behaviors by region? What genres are popular in different regions?

Arjun: Worldwide, everyone plays puzzle games. Games like mahjong and poker are pretty popular worldwide with the exception of some countries. Some genres go across the spectrum, but other games wouldn’t be as great in specific countries and regions.

Mario: We had a poker game. It had crappy retention and we were quizzing users about why they weren’t playing and they said they had no idea how to play poker. People didn’t know the rules and it didn’t work out. The games are the real brands. We try to put Vostu in front of people’s faces, but it’s hard to get people in love with the manufacturer of a game – its the actual game they care about.

Sho: There’s definitely certain categories that do well. In Japan RPG and card battle games are always popular, but it’s dangerous to assume that category will always be popular in that region. You should look at your content and assets and do a test. It’s not wise to limit yourself.

Audience Question: What do you see as the potential in India?

Arjun: One of the things that india has a problem with is payment models and methods. Right now it’s controlled by the carriers. Some will charge 80% of the cost of a transaction, so the margins aren’t there. It’s also really cash focused economy, a pay-as-you go economy. It’s not credit card focused. I think it could be there in 8 to 10 years. I think you could look at the evolution of China and see something similar in India eventually, but I wouldn’t be excited to jump in there.

Exclusive: Nexon Brings KartRider to Facebook

After a tentative start on Facebook that includes MapleStory Adventures, Zombie Misfits and Wonder Cruise, Korean free-to-play giant Nexon is ready to launch its popular KartRider franchise on the platform.

KartRider is an online multiplayer racing game that has racked up over 270 million registered since its 2004 launch. Players control a single kart and can race against human and computer controlled opponents in various gameplay modes. Nexon Mobile released an iOS version last year that topped 1 million downloads in a little over a week; the company reports that the game is now at over 6.7 million downloads. The Facebook version, KartRider Dash, is due out in March.

Nexon has taken its time finding footing on Facebook. Aside from launching MapleStory Adventures in 2011, the Korean publisher experimented with different ways to engage with the platform throughout the last year — including investing in developers A Bit Lucky and 6waves Lolapps and co-developing or publishing new IP for the platform. Results have been mixed with MapleStory Adventures performing well while Zombie Misfits struggled to find an audience and Wonder Cruise has yet to really set sail. Speaking to Inside Social Games, Nexon EVP of Social Games Aron Koh acknowledges the learning curve — but says “we can do better than what we’re doing now.”

“We’re still learning how to approach players on Facebook and [other] platforms besides our core PC business,” Koh says. “It’s been challenging. It’s not easy to push out multiple updates to get the metrics up. But we’re very conservative when it comes to acquiring new users. We spent very, very little on [MapleStory Adventures] and we could see that the IP was popular and that was the main factor in acquiring users. It was a very good experience and we’re very happy with how our original IP translated to the platform.”

Aside from the appeal of the franchise itself, KartRider has a shot at defining the racing genre on Facebook. Leading car game Car Town only has a nominal, asynchronous racing game; Title Town Racing never made it big; and BMW xDrive Challenge is an advergame first and a racing game second. At one point, it looked like EA might bring its Need for Speed franchise back to Facebook (in fact, it still might); but so far, there isn’t one racing game that’s made it big on the platform. Meanwhile, over on Google+, mobile developer Gameloft proves that a rich 3D racing experience is not only possible on a social network, it’s probably a good way for a developer to distinguish itself from all the citybuilders and the puzzle games.

“One thing I’m very interested to see from our own [studio] and from other companies is more synchronous games on Facebook,” Koh says. “There a couple of synchronous games out there, but it’s very limited. As a company we’re interested to see more players jumping into that arena.”

Nexon raised $1.17 billion in its initial public offering late last year.

Social gaming news roundup: Crytek’s GFace, Harmonix and Square Enix

Zynga’s Reynolds, Nexon’s Kim appointed to ISAS board – Zynga’s chief game designer Bryan Reynolds and Nexon America’s co-founder Min Kim have been appointed to the Academy of Interactive Arts and Sciences’ board of directors.

Harmonix working on Facebook Game – Boston-based Harmonix, best known for its Rock Band and Dance Central franchises is working on a Facebook. Shacknews reported the news based on an updated resume for the company’s lead designer Brian Chan. There is currently a Dance Central Facebook app called Dance Central 2 Challenge. It has 2000 MAU.

Square Enix adds Facebook to FFXIII-2 – Andriasang is reporting that the Japanese version of Final Fantasy XIII-2 has been patched to add Facebook support to the game, allowing a player to post information about their game to their wall.

Crytek unveils GFace, a PC-mobile social game network — PC game maker Crytek has created a PC to mobile social gaming network. The GFace network is currently in beta and focuses on cross-platform, multiplayer gameplay.

Final Fantasy Brigade now has 1 million players – Square Enix’s first mobile social game Final Fantasy Brigade is proving to be extremely popular. The game, which is available on DeNA’s Mobage network, now has over 1 million users according to Andriasang.

Monster Hunter coming to Mobage – Capcom’s ultra-popular Monster Hunter series is coming to DeNA’s Mobage Platform. The game will be a collectible card-battle game and will be called Minna to Monhan Card Master, according to Andriasang. It will launch on both smartphones and feature phones on Feb. 21.

Japan’s social game market to double value by 2016 – The Nomura Research Institute has predicted that the Japanese social gaming market will be worth $5.1 billion dollars by 2016 according to industry watcher Serkan Toto, who translated the report.

Nintendo will allow devs to offer microtransactions - Nintendo president Satoru Iwata has said his company will now allow third part developers on its Nintendo Network to offer microtransactions. Iwata revealed the information at Nintendo’s third quarter financial results briefing on Jan. 27.

DeNA, GREE continue legal slugging match — DeNA and GREE are continuing to play out their rivalry in the Japanese courts. In November, GREE sued DeNA, claiming the company was pressuring developers to sign exclusive contracts. According to Serkan Toto, DeNA is now suing for damages related to GREE’s actions.

[Launch] NASA releases new Facebook Game – NASA has released a multiplayer Facebook game called Space Race Blastoff that tests users knowledge of the space program.

[Launch] ESPN Return Man comes to Facebook - ESPN.com’s popular casual arcade game ESPN Return Man is now available on Facebook. The game was a collaboration between ESPN and Disney Social Games, and is the third collaborative release between the two studios. Our full review of the game can be found here.

[Launch] Microsoft Research launches new Facebook game - Microsoft Research has released its second Facebook, Doubloon Dash, in order to study the reactions of real people engaging in game theory like interactions.

GameHouse focused on social, but isn’t betting on real-money Facebook gambling yet

Seattle-based casual game developer GameHouse is still working to make the transition from a downloadable gaming company to a freemium social game leader. In September, the company’s CEO Matt Hulett told Inside Social Games his goal was to break into the top 10 social game developers by daily active users on Facebook.

According to AppData, GameHouse is currently the No. 27 most popular game developer on the platform according to DAU, an increase over the No. 33 spot the company held when Hulett announced his plans. GameHouse now has 821,150 DAU on Facebook and the number has been slowly but steadily increasing. To support the transition, GameHouse recently announced it was doubling the headcount at its Facebook-focused Canadian studio.

Located in Victoria, British Columbia, GameHouse Canada started life as Backstage Technologies, a financial services company that pivoted into Facebook games in 2007. Its game Scratch and Win was one of the first games to integrate with the Facebook API and monetize through the free-to-play model. GameHouse’s parent company RealNetworks bought Backstage in September 2010 to bolster its social game talent, but it’s only now that the company has moved into a much larger downtown office is it ready to push forward with an aggressive expansion plan that will see it grow from 25 to 45 people in the next couple of months, according to Alex Mendelev, GameHouse Canada’s general manager and head of studios.

Inside Social Games had a chance to visit the company’s new offices and speak with Mendelev about the company’s plans in the social gaming space.

Inside Social Games: What can you tell me about GameHouse’s larger Facebook strategy? Earlier this year GameHouse’s CEO Matt Hulett said the goal was to be in the top 10 by DAU within six months?

Alex Mendelev, general manager and head of studios, Gamehouse Canada (pictured right): I think our strategy on Facebook is not necessarily take all the users from our other platforms and bring them to Facebook. I think our strategy is to operate our businesses that run really well. Our casual, downloadable business continues to function really well and we will continue to grow that business in its own way. Social is a giant opportunity to capitalize on. Backstage has been doing it for a long time and at this point we have two studios hitting directly into that market with good numbers and growth to show. Backstage primarily contributes to the social game area of the effort.

ISG: So will you be focusing on new IP or porting existing hits? Are you worried about cannibalizing a casual game’s existing audience by bring it onto Facebook? 

Mendelev: I think regardless of what we do, there are new platforms and new, exciting experiences that people want to partake of. Whether you’re on one platform or another, as new platforms come in, users will want to try them. Some of them will stick and want to play games there and some of them won’t. I think our approach is more to give people a place to play, regardless of what platform they’re on. In that regard, we’re very well positioned with casual downloadable, mobile and iOS and social.

ISG: There’s certainly a precedent for games from casual game portals to find success on Facebook. 

Mendelev:  We’ve seen some great results from some of the titles we’ve had as GameHouse for a long time, such as Collapse, and bringing them to Facebook. Collapse is kind of a classic GameHouse game and it’s shown great results so far and is continuing to grow. Some of the recent titles we’re really excited about are Bayou Blast.

ISG: What is GameHouse Canada working on right now?

Mendelev:  We’re working on a slots game and we’re going to release it early this year.

ISG: With your history working on slots and games of chance, how do you feel you would be positioned if Facebook does make real-money gambling available on the platform?

Mendelev:  It’s really hard to say because Facebook is very good at pivoting very quickly around things. Just because there was an announcement that certain kinds of business would be open doesn’t mean it will happen soon if at all. We’ve learned to kind of temper our expectations in terms of what’s actually going to happen in the platform, so we not actively considering it.

ISG: But if something were to come up?

Mendelev:  We’re always open to looking at new opportunities and consider that as part of our strategy but we haven’t made a decision to move in that direction. It’s really hard to make that decision before Facebook.

ISG: Gambling companies have shown an interest in the platform with some large social game investments like Double Down Interactive and Playtika. What do you think of that?

Mendelev:  I would say that with gambling companies moving into Facebook, they’re recognizing that Facebook is a large revenue opportunity and they’re actively investing in that space. We’re already in that space, so it makes sense for us to continue to invest in the space. If you look at GameHouse as a whole and our entire social gaming effort we have lots of games coming out and they’ll be across multiple genres.

Spil Games positions itself as an alternative platform for social games with 170 million monthly unique visitors

Games portal and publisher Spil Games wants to be an alternative for social game developers looking to expand off of Facebook, where rising advertising costs have cut into profits.

Speaking to Inside Social Games, Spil Games’ CEO Peter Driessen (pictured) explains that the portal — which consists of several games sites — spent the last several months adding social features that enable developers to use engagement-driving gameplay mechanics like friend invites or gifting within their games. The result is continued year-on-year growth for the portal; monthly unique users grew by 30 percent between March and December 2011. The portal now has 170 million monthly unique visitors. Based on internal research, Spil reports that average user time spent on a site within the portal is around 85 minutes with average revenue per paying user hitting $60 in some markets. Though Driessen declined to get more specific than that, additional data sent to us by Spil Games indicates that those same markets saw conversion rates of around 4 percent.

The point Spil Games is trying to make is that there are other platforms out there for social games besides Facebook and Google+. The more closely these platforms resemble the social network, the easier it is for developers to adapt their games for release. The real challenge comes from finding which platforms will reach with the demographics that sync up with a game. Though Spil is mostly female- and teen-oriented, the company has seen success with a family demographic and a budding male demographic based largely in Germany — where the higher ARPPU and conversion rates are.

“The users we have are growing as local [social] networks are declining,” Driessen says. “So we’re at the right point of time to make ourselves a success and go above 200 million users this year.”

According to Driessen, a good game live on Spil Games’ network with a team handling community management and post-launch support can gross at least $5 million annually. That’s not a lot for established social game developers, but smaller independent developers would be lucky to see that much in a year from a single title on Facebook given the current platform environment. As of press time, we don’t know how well that stacks up against what individual games can earn on Google+.

“We do the marketing and a revenue share and that’s the way it is [on Spil],” says Driessen. “On Facebook, you have to buy the marketing and that’s why some developers don’t make any money. If [we see] a social game that we really believe in, we give it a good place on our portal and really market it. Also, we do the localization and community management for these developers so they don’t have to spend resources.”

Social gaming news roundup: Amazon, Tagged and DeNA

Tagged sunsetting hi5’s gaming network – Social network Tagged has revealed what it will be doing with hi5, the rival social network it acquired in December. According to an interview on TechCrunch, the company will be sunsetting hi5’s gaming platform and replacing it with games developed by the Tagged team.

Zynga to release fourth quarter results on Valentines Day – Zynga has announced it will hold its first earnings call as a public company on Tuesday, February 14th. The company will discuss its financial results for the full year of 2011 and its fourth quarter. The call is scheduled for 2:00 pm pacific, after the close of the stock market.

Amazon still hiring for mobile, social gaming - Amazon is ramping up its hiring of game developers for both mobile and social games, according to job postings spotted by Xconomy. The company’s a2z arm has positions open for mobile game developers, and in Seattle the company is recruiting specifically for social game positions. Last May Amazon posted a job for a game designer to lead the company in creating mobile and social games, which lead to the hiring of game industry vet Jonathan Tweet. While Amazon has been working on its gaming project for a number of months, so far no details have emerged.

Social game school opening in Japan – Japan is getting a school specifically designed to help developers create social games according to Japanese industry watcher Serkan Toto. The aptly named Social Game Academy will open in April in Tokyo’s trendy Roppongi Hills district.

The Sims Social is surprisingly sexy – According to some fun statistics released by EA, since the Sims Social debuted on Facebook, more than 11 million dirty jokes have been told and more than 70 million love confessions have been made. EA also noted that Sims in the game ‘woohoo’ more than 680,000 times a day.

Konami releasing Star Wars social game – Siliconera is reporting Konami will be releasing a social game based on the Star Wars franchise, but only in Japan. The game will be called Star Wars Collection and will be on GREE’s mobile social network.

Virgin Gaming platform now has 1 million members – According to Virgin, the company’s foray into a social gaming with its VirginGaming.com platform has paid off. The service has gathered more than 1 million members since it launched in June 2010.

Google+ now allowing nicknames and online handles – Google+ has added support for alternate nicknames to its service. While it will still require users to register their real names, alternate names will now appear alongside a user’s name.

DeNA partnering with Mixi to open virtual shopping mall - Mobile social games company DeNA has signed a partnership with Japanese social network Mixi to open an online shopping mall on the Mixi platform. Penn Olson is reporting the virtual mall will open in late march.

Andreessen Horowitz looking for $1.5 billion more for VC funds – The New York Times is reporting that Marc Andreessen is raising $1.5 billion to fuel two new funds at his high-profile venture capital firm Andreessen Horowitz. The firm currently holds stakes in a number of well known social and mobile companies such as Zynga and Instagram.

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