Inside Social Games

Zen Bound 2 Revealed for the iPad – Despite the buzz circling Apple’s new iPad, little has been actually seen regarding games on the coming platform. However, via a post from Kotaku, we’ve been able to catch a glimpse of Secret Exit’s Zen Bound 2, a “sequel and a revision” of the original iPhone application. In a nutshell, the original rendition is about attempting to wrap a rope around an oddly shaped object, with the sequel’s concept being more of the same. However, as you can see, the bigger and more powerful iPad sure does make it look better. A full gallery can be found here.

Frosmo Expands to Asia – Frosmo has seen a good deal of success with its tournament and team-based platform of the same name, in terms for social gaming. Already the company has expanded its collection of titles across Europe and into Facebook, but now the Finnish company is expanding into the Asian game market as well. Currently, the company is slated to let 10 different Asian game companies use its tournament system, and be available through 51.com, China.com, Ren Ren, and Mixi.

Platogo Gets Casual Games Facebook Ready – Though third party firms helping developers socialize their titles is nothing new, a social games platform from Austria, Platogo is looking to socially enable casual games directly for Facebook. Dubbed “Platogo Wrapper” this tool allows developers to integrate their games into Facebook withonly a few lines of code. With this new tool,  apps will be able to take advantage of Facebook friend invitations, leaderboards, achievements, and player challenges.

Game Investments Dropped 29% in 2009 – It would seem like the video game industry has seen some hefty decline due to the recession as VentureBeat reports that of 115 game startups, only $663.1 million in funding was raised during 2009 (discounting those with undisclosed amounts). That is 29% lower than the $936.8 million raised in 2008. In fact, had it not been for Zynga’s acquisition of $180 million deal from Russia’s Digital Sky Technologies, the year would have been down a depressing 48%.

Tapulous Taps Into Kings of Leon – The popular rhythm-game company for the iPhone, Tapulous, has added another new title to its collection of Tap Tap games. The new app is dubbed Kings Of Leon Revenge, and if you hadn’t guessed already, features, well, the Kings Of Leon. In addition to hosting 10 of the band’s top songs, the new game will also include a curious ”Battle Mode” that will allow users to directly compete with each other using the iPhone’s bluetooth capabilities.

Unity Games Gain a Social Platform Through dimeRocker – More and more frequently, social games empowered with Unity3D are appearing around both Facebook and the web. To that end, Overinteractive Media Inc. has announced the launch of a new social platform, specifically tailored to support Unity enabled games, dubbed dimeRocker. Through the platform, games will be able to support microtransactions, achievements, leaderboards, friend invites, challenges, and be deployable on both the Facebook and MySpace networks. Already, around 150 developers have signed up for the service’s beta stages.

Facebook App Penny Drop Teams Up with Kiva – A simple Facebook application called Penny Drop – powered by CircusPop - is out to help the working poor. The quasi, game-like app consists of players using tokens (earnable through logins every few hours and inviting friends) to drop the price of featured items by one cent until someone purchases it. However, working with Kiva, from March 11th to March 22nd, for every token used in Penny Drop, a penny will be donated to Kiva in order to help poor entrepreneurial individuals and businesses grow.

Gowalla Adds New Platforms & Branded Goods – Location-based iPhone app Gowalla has launched its social game on two new platforms this past week: The Android and Palm’s webOS. In addition to this new support, the game is also bringing branded virtual goods to the table from the Travel Channel’s show, Food Wars. With the new deal, players will be able to earn special badges and virtual items by visiting locals featured during the show.

IMVU adds Voices as a Virtual Good – Popular teen-oriented virtual world IMVU announced a curious partnership with Vivox this Thursday. Now, the virtual world will be capable of integrating voice services, but beyond being just another feature, it will also add a new source of revenue. Currently, 25 different voice styles are being offered for the cost of 990 IMVU Credits.

Sometrics Launches GameCoins.com – Social analytics firm, Sometrics announced the launch of GameCoins.com this week - the company’s first direct-to-consumer play. Game Coins will serve as a community site for gamers, allowing them meet new people as well as participate in forums and blogs that revolve around various social games and virtual worlds. More than this, however, the site, per its name, will also be an online marketplace for virtual goods and currencies. From the portal, players can make use of the Sometrics Offer Solution to complete ad offers and earn goods and currency for their MMO, virtual world, or social game of choice. The company tells us it plans to help grow the community through users discovering relevant content in searches. The idea is that by helping people play these games better, its monetization services will get even more usage.

50% of Gamers Will Earn Virtual Currency – According to a survey performed by comScore for Offerpal Media, and released at the Game Developers Conference this week, alternative payment methods enable greater monetization capabilities that one would think. Derived from comScore and Offerpal’s own monetization analytics, 53.3% of players are “very likely” to complete a marketing actions (i.e. completing a survey, watching a video, or shopping online) in order to earn virtual currency for their favorite games. Conversely, only 22.8% of those surveyed stated they’d be willing and able to buy it.

In fact, 29.7% of social gamers actually don’t have the means to buy virtual currency in the first place; at least not with cash options. Curiously, even among those that could, 34.9% stated that they were “very unlikely” to do so.

Yesterday we reported that a team of former MySpace execs, along with Austin Ventures, acquired MindJolt Games, the publisher of some 1,300 independently developed casual games. With its mostly new management, the company (which will keep the MindJolt name) appears to have a strategy of acquiring and partnering with others to build a new social gaming juggernaut.

Most of the attention around the deal seems to be on MySpace co-founder Chris DeWolfe, who is heading the team. But MindJolt has been quietly growing for some months without attracting much attention to itself, so we went to take a look at exactly what the company does.

Besides maintaining a website that gets several million visitors a month, MindJolt is also one of Facebook’s biggest apps. It comes in at number 14 on AppData, our application traffic measurement service, when measured by monthly average users. Someone visiting the Facebook app for the first time might be forgiven for feeling like they just walked into a aging pack rat’s basement: What the heck is all this stuff, anyway?

The question is impossible to answer in any concise way, besides to say that many are Flash-based casual games that you might also see on many other sites around the web. The concept of asynchronous gaming is what drives many of the biggest social games. People can just pop on to Facebook for a few minutes or more per day, and do a couple simple things, like water their plants then check out their friends’ plots in FarmVille.

But while casual games typically haven’t gotten as big and profitable as socially-driven ones on social networks, MindJolt’s massive accumulation of mostly synchronous titles means it can bring in the traffic, too. The result is an intriguing platform for the MySpace team to build on; broadly speaking, they have experience with this sort of thing, as they leveraged MySpace out of other internet properties. For more, read this great article by Jay Weintraub (a speaker at our Inside Social Apps conference in April) about DeWolfe and MySpace’s rise.

Here are a few top-listed games within MindJolt’s Facebook app:

Bubble Spinner — Bubble shooting games never get old; in fact, MindJolt also lists Bouncing Balls, a straightforward ball-blaster, among its top apps. Bubble Spinner is a bit different. The bubble “gun” is at the top of the screen, while all the bubbles are in the center, on a wheel that rotates in response to each shot.

Crazy Cabbie — This is essentially a coordination game, in which you either dodge cars or hop over them in your own bright-red taxi. It’s extremely simple, with only a couple of sound effects and no real penalty for crashing. Incidentally, this game might be modeled off the taxi scene in Dubai: desert surroundings, high speeds, and a suspiciously expensive-looking taxi.

Tower Stack — There’s even less to say about this game than Crazy Cabbie. Blocks swing down from the left side of the screen; you click on the block when it appears to be in about the right position to make it fall atop the last block. The aim is to build a never-ending tower, but there’s no physics or balancing involved.

Warzone Tower Defense — An alternate on the popular tower defense theme, Warzone offers a variety of pre-set maps that enemy waves move across. Your part is to place automatically-firing towers in strategic locations, where they can snipe off passing fighters. Like other defense games, it offers players the chance to use some real-time strategy.

We’ll stop there although, of course, the above is but a small sampling of MindJolt’s offerings. The rest fall among six major categories (action, puzzle, strategy, shooter, sports and the catch-all “other”) and include pretty much any simple game concept you can think of. There is a type of game you probably won’t find on MindJolt: one that’s exclusive to the app, and not also hosted somewhere else.

But that’s also not the point. What MindJolt has done that’s unique, and that other Flash publishers like Kongregate have not yet accomplished, is find success on a social network.

At its core, MindJolt works best with a kitchen-sink strategy in which individual games don’t matter that much. While the Zyngas of the world seem to be focusing ever more resources on a few giant hits, MindJolt can publish all the games it wants. The company isn’t losing anything if a game doesn’t succeed; after all, someone else took the time to develop it.

What MindJolt really needs is better organization and navigation for its many games, and perhaps a way of spinning off successful games if or when it develops those. That’s not listed in the press release as one of the major goals, but it does seem to fit with the new MindJolt team’s stated goals of adding virtual goods and expanding across multiple platforms.

By the way, it’s not clear what’s going to happen with other Flash gaming platform companies currently active on MindJolt. For example, Mochi Media, the Flash monetization and distribution company that was recently bought by China media giant Shanda, appears to handle the ads in some of the games, probably either through game distribution deals with MindJolt, or through separate deals with game developers who happen to be in MindJolt. See Crazy Cabbie, which we mentioned earlier, for an example.

Who’s the next acquisition target for the DeWolfe / Austin Ventures team? If they’re looking for proven social networking successes, they’ve already poached one of the few top picks available. Meanwhile, big competitors like Playdom and Zynga have been busy buying companies themselves. Expect more small developers with Facebook experience to get bought soon.

Former MySpace chief executive Chris DeWolfe has been talking to social gaming companies about a possible roll-up since last year, and now the action is starting. With financial support from Austin Ventures, he and a team of other former MySpace leaders have bought casual-social gaming company MindJolt, with some big expansions in mind.

San Francisco-based MindJolt, as our readers will note, has been on Facebook for years, and regularly appears on our weekly lists of apps that are gaining the most new users. The new plan is to make MindJolt an even bigger platform for independent casual game developers, helping them reach users and make money on Facebook and other social platforms.

As of today, MindJolt says it has more than 20 million monthly active users on the web. Although it has a web site, we count 19.5 million on its Facebook application — essentially an app that contains the games MindJolt also offers on its site — and 223,000 total users on the new MySpace version it recently launched. So, almost all of its users appear to be on Facebook. Overall, the site and these apps carry 1,300 casual games from 1,000 developers, according to the company.

Many developers have ported casual games on to Facebook, but the titles have not proven to be as popular nor as lucrative as the social games that developers have built from scratch. We’re interested to see what MindJolt specifically does to change this dynamic.

The three major initiatives it is working on now, from the press release:

• Increased monetization through major brand partnerships and virtual good offerings
• Expanding MindJolt’s global presence to all relevant websites and smart phone platforms
• Working closer with game developers to create tools for single player and multiplayer social games.

DeWolfe is starting a fascinating new follow-up act — he helped found MySpace, then lead it through its purchase by News Corp. and onwards for most of the decade. He left it last year under less than great circumstances as the company was struggling to compete with Facebook in terms of traffic and product development. However, as industry sources have related to us, he helped make a lot of people money, he has a big network of friends — and he’s a talented leader.

TechCrunch has a few more details what’s going on. Austin Ventures may have put more than $20 million into the entity, which was called Platform G until it bought MindJolt and the combined company will be called MindJolt.

The following MySpace folks will be joining DeWolfe; here they are, including their new titles and former News Corp. jobs.

• Chief Technology Officer Aber Whitcomb, former MySpace chief technology officer and also a MySpace founder
• Chief Operating Officer Colin Digiaro, former MySpace head of monetization, co-founder of News Corp.’ SlingShot Labs
• SVP of Business & Corporate Development Josh Yguado, former vice president of business development at Fox Networks Group.

MindJolt cofounder Richard Fields is staying with the company, leading product strategy. Although DeWolfe has never spoken publicly about his moves into social gaming, TechCrunch reports “DeWolfe has said that he intends to execute a roll up strategy, and the company is clearly gearing up to buy more gaming companies.”

While drastic fluctuations in users have never been the mark of MySpace applications, the coming core changes to the social network – including analytics – might provide some better insight into the site. MySpace applications may not be as big as Facebook’s, but developers have often reported higher revenue from them.

Nevertheless, the current method of tracking still showed some minor changes over January’s charts, with almost no games earning a negative monthly change. Of course, that doesn’t mean that a handful of titles didn’t shift about in February. In fact, even a newcomer appeared at the tail end of this month’s list.

On another note, many games on the MySpace list can often be classified as merely fun applications as opposed to “games” by traditional definitions. We track some of these applications because they have significant social game-like features.

Here are the highlights for the Top 25 MySpace Games for February, 2010:

• Unsurprisingly, the two mafia role playing games of Playdom’s Mobsters and Zynga’s Mafia Wars appear at #1 and #2 respectively. The two titles earn over 14.4 and 13.1 million installations.
• The simple concepts of Bumper Stickers and Own Your Friends from Playdom, continue to show that simplicity is the predominant preference for users on MySpace as each earn over 12.5 and 10.2 million installs.
• Another simple app, Tag Me from BitRhymes moves up from #9 to #8 to pass RockYou’s Super Pets (now dubbed RockYou Pets in the app gallery), with almost a 500,00 installation gain.
• BitRhymes app, Cheers!! also moves up one ranking to #10 to beat out the Zynga RPG, Vampires. It earns just shy of 5 million installs, but again, does not appear in the app gallery. More likely than not, this issue, that we have noted numerous times, is almost certainly hindering its growth.
• Same as January, Playdom controls ranks #13-#16 with Kiss Me (4,059,001), Sorority Life (3,566,896), Poker Palace (3,386,269), and Overdrive (2,626,783).
• Another simple app from Oxylabs Networks, PhotoBuzz sees an impressive jump, moving up from #23 to #21 with a gain of 152,316 new users. It now totals over 1.9 million installations.
• In fact, newly added to the list is another app from Oxylabs, What is your Street Reputation, which garners over 1.7 million installs. The game appears at #24 ousting Green Spot form the Top 25 and was added due to its similarity to What’s my Impression on friends from BitRhymes.

April 20 | San Francisco

As we recently announced, Inside Social Apps 2010, our first conference on the future of monetization on social platforms, is happening April 20th in San Francisco, one day before Facebook’s official “f8″ event. We’re excited to see all of the developers and entrepreneurs from around the world that are planning to attend!

In addition to the 24 confirmed speakers at Inside Social Apps 2010, including executives from all the largest developers on the Facebook Platform, we’re very excited to announce three more speakers today: Season Xu, Co-founder and COO at Five Minutes (makers of Happy Farm), Dave Etling, VP Product Development at InComm, and Jeremy Liew, Managing Director at Lightspeed Venture Partners. They will be joining our full list of speakers listed below.

• Atul Bagga, VP Equity Research, Games, ThinkEquity
• Adam Caplan, VP Virtual Currency, Super Rewards / Adknowledge
  
• Renata Dionello, Chief of Staff to the CEO, eBay, and former Director of Consumer Business Development, PayPal
• Eric Eldon, Editor, Inside Facebook & Inside Social Games
• Dave Etling, VP Product Development, InComm
  
• George Garrick, CEO, Offerpal Media
• Vikas Gupta, CEO, Jambool
• Sebastien de Halleux, Founder and COO, Playfish, and VP Business Development & Strategic Partnerships, EA Interactive
• Ron Hirson, Co-founder and SVP Product, Boku
• Nick Lawler, Managing Director, Maverick Capital
• Keith Lee, Co-founder and CEO, Booyah
• Jeremy Liew, Managing Director, Lightspeed Venture Partners
  
• Vish Makhijani, COO, Zynga
• David Marcus, CEO, Zong
• Lisa Marino, CRO, RockYou
  
• Dave McClure, Investor, Founders Fund Angel and fbFund Incubator
• Rex Ng, Co-founder and CEO, 6waves
• Jason Oberfest, VP Social Applications, ngmoco
• Mark Pincus, Founder and CEO, Zynga
• Shervin Pishevar, Founder and Executive Chairman, SGN
• John Pleasants, CEO, Playdom
• Keith Rabois, VP Strategy and Business Development, Slide
• Peter Relan, Executive Chairman, CrowdStar
• Justin Smith, Founder, Inside Network
• Kavin Stewart, CEO, Lolapps
• Jay Weintraub, Founder, LeadsCon
• Season Xu, Co-founder and COO, Five Minutes

More speakers and a full agenda will be announced shortly.

Finally, a limited set of “early admission” tickets is now available through Friday at a special price of $299. This price will change after Friday, and space will be limited, so we encourage you to register now.

Inside Social Apps 2010 – April 20th in San Francisco

Three years after the Facebook Platform launched in 2007, what started out as sheep throwing and vampire biting has quickly become a profitable billion-dollar industry. Today, social games monetizing through virtual goods have quickly become one of the hottest sectors of technology and entertainment, both in the US and around the world. Where are social apps going, and who is leading the way?

Inside Network is proud to announce our first conference on the future of monetization on social platforms: Inside Social Apps 2010, happening April 20th in San Francisco, is bringing together the world’s leading entrepreneurs all in one place to discuss the future of social applications and games monetizing through virtual goods.

This will be an in-depth one day event geared toward developers on Facebook, MySpace, and the iPhone, senior executives, and investors. At Inside Social Apps 2010, founders and CEOs of the top social gaming, mobile social gaming, payments, and virtual goods infrastructure companies will be tackling the key issues facing the industry. We’re hosting it one day before Facebook’s “f8″ event in San Francisco, so this will be an excellent opportunity to learn about the key issues facing the future of the Facebook Platform and beyond before Facebook’s official event.

Register Now

A limited set of “early admission” tickets is available through Friday at a special price of $299. This price will change after Friday, and space will be very limited, so we encourage you to register early.

From all of us at Inside Network, we hope to see you on April 20th in San Francisco!

We spotted some minor fluctuations in the MySpace charts when we covered December’s numbers. It was much of the same for the number two social gaming developer platform in January. The social network saw virtually no change in rankings except for the curious case of BitRhymes’ Cheers!! and the #23-25 spots (PhotoBuzz, Bloodlines, and Green Spot).

MySpace has been working on meaningful changes to its developer platform lately, including a forthcoming analytics tool upgrade. While not as big as Facebook, it continues to be a good place for many developers to find users, gain experience and make money. We’re interested to see how MySpace’s efforts affect the rankings from here on out.

The highlights on today’s list:

• Surprisingly, Playdom’s top dog, Mobsters, gained very few new installs in the past month. It still sits at #1, but Zynga’s Mafia Wars still creeps closer with a roughly a 1.2 million install difference.
• Zynga Poker sits tight at #5, gaining less installations that last time around: 87,235 compared to a previous gain of 130,507.
• Cheers!! from BitRhymes swaps spots with Zynga’s Street Racing with the two apps coming in at #11 and #12 respectively. However, and despite nearly 5 million installations, Cheers!! has once again disappeared (at least for the time being) from MySpace’s app gallery.
• Moving forward, Playdom occupies #13-16 with Kiss Me, Sorority Life, Poker Palace, and Overdrive. Each earned around 4 million, 3.5 million, 3.4 million, and 2.6 million new installs respectively.
• The tail end of the list saw the most swip-swapping as a fairly new title (only a few months old to the Top 25), PhotoBuzz from Oxylabs moves up from #24 to #23 with 1.8 million installs. Behind it, comes the role-playing app Bloodlines from Playdom (1,666,466 installs), followed by Green Spot from GoodTree (1,666,445 installs).

Note: MySpace currently just provides the number of total users of an app. We track these numbers every month to spot changes — we don’t currently have a good way to track daily or monthly active users.

2009 will be remembered as the year that casual gaming stormed social platforms and changed the way millions of people socialized with friends online. With an up-to-$400 million acquisition of Playfish by Electronic Arts, hundreds of millions of dollars in venture investments, and some of the highest engagement numbers that online entertainment has ever seen, social games are now impacting businesses across the media landscape. It’s become clear that there are substantial opportunities for social game developers with virtual goods revenue models, but the market is still evolving rapidly.

Get the Annual Membership Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 OR Buy Single Report: $995

That’s why I’m excited to release today a new exclusive original research report with co-author Charles Hudson in our Inside Virtual Goods series that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2010.

How big is the market, and where will social gaming go in 2010? How will existing players fare as Facebook shifts the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The Future of Social Gaming 2010 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2010 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2010 gives you an inside view of the future at this critical juncture in the intersection of social networking and online games. The big picture? We estimate that the US virtual goods market will reach $1.6 billion in 2010, and that social gaming market will contribute $835 million of that total this year.

We have compiled months of original research from dozens of top executives and entrepreneurs from all parts of the social gaming ecosystem to produce eye-opening source data and analysis that is not available anywhere else. At over 140 pages, Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of what’s shaping up to be a very fundamentally strong and profitable industry.

What We Cover

1. Emerging Social Game Development and Studio Models – There is an emerging consensus around how social game developers are choosing to organize themselves for game development. How do small, medium, and large developers organize their teams? What do development cycle times for original titles and “expansion packs” look like? What is the role of testing and metrics in the development process?
2. Social Game Design and Mechanics – The emergence of a few key game genres with proven mechanics and monetization have spawned dozens of fast followers. Understand how publishers are continuing to innovate as we head into 2010.
3. Monetization Data and Payment Trends – Now that developers have proven the virtual goods model, what are ARPUs really like for different game genres? What is the lifetime value of users, and how long do players stick around? We take an in depth look at monetization methods and rates, and shed light on where payments are headed in the coming quarters. One more note on monetization – you may be wondering about everything you’ve heard about offers and alternative payments for virtual goods. We cover:
   • The offers ‘scandal’ and what will it mean going into 2010
   • Changes that advertisers and payments companies have – and haven’t – made
   • How both direct and alternate payment methods are most likely to grow or contract in the coming year.
4. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past two and a half years, so have the ways that developers acquire and retain new users. How have user acquisition costs changed, and what do Facebook’s changes spell for the future of the marketing funnel? We take an in depth look at data and trends.
5. Facebook’s Platform Changes, Credits, and What’s In Store for the Future – Just when social game developers were settling in, Facebook announced major adjustments that will dramatically alter the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? In addition, as Facebook rolls out its much-discussed Credits currency, how will monetization and the payments landscape be affected? Finally, will we see another dominant platform emerge? Our overview covers these developments, their impact on the industry, and what else is in store.

What you get

In addition to our deep dive into key aspects of the social gaming ecosystem, the report also offers extended coverage on:

• A brief history on the evolution and growth of this space in the US, including a description of all key players and how they rose to the top.
• Total social gaming market size estimates for 2010, including estimates on the “big three” developers.
• Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2010.

See the full table of contents below:

Table of Contents

Appendix of Related Companies includes: 51.com, 6Waves, Activision, AddictingGames, AdNectar, AdParlor, Amazon, AOL, Apple, Atari / Cryptic Studios, BigFish Games, BigPoint, Blizzard, Boku, Boomerang Networks, Crowdstar, DeNA, DoubleDing, Digital Sky Technologies, Electronic Arts, Facebook, Firecue, Friendster, Gambit, Gameloft, Glu, GMG Entertainment, Google, GratisPay, Gree, Green Patch, gWallet, hi5, InComm, Kaixin001, Kongregate, Live Gamer, LOLapps, Microsoft, Mixi, MSN, MySpace, Nexon, ngmoco, Offerpal Media, OpenFeint, Orkut, PayPal, Peanut Labs, Playdom, Playfirst, Playfish, PlaySpan / Spare Change, Pogo, PopCap Games, QZone, Real Networks, RenRen / Xiaonei, RockYou, Serious Business, SGN, Shanda, Social Hour, Social Reach, SocialGold / Jambool, SponsorPay, Super Rewards / Adknowledge, SupersonicAds, Target, Tatto Media, Tencent, The9, TokenAds, TrialPay, Twitter, Ubisoft, Viacom, VKontakte, Yahoo, Zong, Zynga

More Data, More Actionable Insights

In 2009, social games began to show what kind of value can be created on top of social networks. 2010 will be an even more important year.

Social gaming, powered by virtual goods, is this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

• A detailed overview of the current state of the industry
• Specific estimates on market size by segment
• Diagnosis of key opportunities and issues by segment

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495

OR Buy Single Report: $995

The annual membership, which includes the report and three additional quarterly updates, is USD $2,495. Alternatively, you can just download this report for USD $995.

2009 will be remembered as the year that casual gaming stormed social platforms and changed the way millions of people socialized with friends online. With an up-to-$400 million acquisition of Playfish by Electronic Arts, hundreds of millions of dollars in venture investments, and some of the highest engagement numbers that online entertainment has ever seen, social games are now impacting businesses across the media landscape. It’s become clear that there are substantial opportunities for social game developers with virtual goods revenue models, but the market is still evolving rapidly.

Get the Annual Membership Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD* OR Buy Single Report: $995 $795 USD* * Pre-order discount ends January 25, 2010. All pre-ordered reports will be delivered on January 26, 2010.

That’s why we’re excited to announce a new exclusive original research report with co-author Charles Hudson in our Inside Virtual Goods series that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2010. It will be released on Tuesday, January 26, but is available for discount pre-order for the next 7 days.

How big is the market, and where will social gaming go in 2010? How will existing players fare as Facebook shifts the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The Future of Social Gaming 2010 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2010 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2010 gives you an inside view of the future at this critical juncture in the intersection of social networking and online games.

We have compiled months of original research from dozens of top executives and entrepreneurs from all parts of the social gaming ecosystem to produce eye-opening source data and analysis that is not available anywhere else. At over 80 pages, Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of what’s shaping up to be a very fundamentally strong and profitable industry.

What We Cover

1. Emerging Social Game Development and Studio Models – There is an emerging consensus around how social game developers are choosing to organize themselves for game development. How do small, medium, and large developers organize their teams? What do development cycle times for original titles and “expansion packs” look like? What is the role of testing and metrics in the development process?
2. Social Game Design and Mechanics – The emergence of a few key game genres with proven mechanics and monetization have spawned dozens of fast followers. Understand how publishers are continuing to innovate as we head into 2010.
3. Monetization Data and Payment Trends – Now that developers have proven the virtual goods model, what are ARPUs really like for different game genres? What is the lifetime value of users, and how long do players stick around? We take an in depth look at monetization methods and rates, and shed light on where payments are headed in the coming quarters. One more note on monetization – you may be wondering about everything you’ve heard about offers and alternative payments for virtual goods. We cover:
   • The offers ‘scandal’ and what will it mean going into 2010
   • Changes that advertisers and payments companies have – and haven’t – made
   • How both direct and alternate payment methods are most likely to grow or contract in the coming year.
4. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past two and a half years, so have the ways that developers acquire and retain new users. How have user acquisition costs changed, and what do Facebook’s changes spell for the future of the marketing funnel? We take an in depth look at data and trends.
5. Facebook’s Platform Changes, Credits, and What’s In Store for the Future – Just when social game developers were settling in, Facebook announced major adjustments that will dramatically alter the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? In addition, as Facebook rolls out its much-discussed Credits currency, how will monetization and the payments landscape be affected? Finally, will we see another dominant platform emerge? Our overview covers these developments, their impact on the industry, and what else is in store.

What you get

In addition to our deep dive into key aspects of the social gaming ecosystem, the report also offers extended coverage on:

• A brief history on the evolution and growth of this space in the US, including a description of all key players and how they rose to the top.
• Total social gaming market size estimates for 2010, including estimates on the “big three” developers.
• Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2010.

See the full table of contents below:

Table of Contents

Section I: Overview

1. The Evolution of Social Gaming

• What is Social Gaming?
• Why do Social Games Work?
• A Brief History of the Major Eras in Social Gaming
  • Era I – The Virality Era
  • Era II – The Emergence of Paid Distribution
  • Era III – Rise of the Big 3 and the Network Model

2. Social Game Development and Design Processes

• Studio Composition
  • Small Developers
  • Medium and Large Developers
• Platform Services
• Development Cycle Time
  • Expansion Packs
  • True Serial
• Developing Franchise Titles
• Role of Testing and Metrics
• Multi-platform Development

3. Social Game Design and Game Mechanics

• Emergence of Key Genres
• Fast Followers vs Innovators
• Templates / Engines
• Intellectual Property
• Barriers to Entry

4. Monetization

1. How do social games monetize?
   • Virtual Goods
     1. Functional Virtual Goods
     2. Decorative Virtual Goods
     3. Consumables
   • Advertising
     1. Sponsorships
     2. White Label Games
     3. Branded Virtual Goods
2. Monetization Rates
   • How do social game developers manage their businesses?
     1. Social RPGs
     2. Farm Games
     3. Pet Games
     4. Aquarium Games
     5. Poker Games
     6. Flirting Games
     7. Arcade Games
   • Monetization rates of key social game genres
   • How has monetization changed over the last year?
3. Consumer Demographics
4. Payments Breakdown
   • Understanding Offers and the Offer Controversy
     1. The Offer Controversy
     2. Offers in Social Games
     3. Increased Competition
   • Mobile and Alternative Direct Payments
     1. Large Payment Platforms
     2. Direct Payments vs Offers
     3. Direct Payments Breakdown in Social Games
   • Direct Payments
     1. Mobile Payments
     2. Pre-Paid Cards
     3. New Payment Providers
5. Lifetime Value of Social Game Players (LTV) – What do we know?
   • How long do players stick around?
   • When in their lifecycle do users monetize best?
   • Seasonality and monetization lifecycles in social games
   • Banner advertising’s role

5. Customer Acquisition and Marketing

• The Rise, Fall, and Re-rise of Viral Acquisition
• Cross Promotion
• Paid Acquisition
  • Facebook Ads
  • Third-party Facebook Platform Ad Networks
• Network Strategy and Economies of Scale

6. 2010 Market Size and Top Developers Revenue Estimates

• 2010 Social Gaming Market Size
• Top Developer Revenue Estimates
  • Zynga
  • Playfish
  • Playdom
  • Crowdstar

Section II: The Future

1. Facebook Platform Changes and the Relationship Between Facebook and Application Developers

• Impact of Platform Changes
• Developers and Advertising Spend

2. What does the emergence of the big 3 mean for small and medium sized developers?

• Marketing and Customer Acquisition
• The CrowdStar Example
• Can an independent developer dominate a category?

3. Facebook Credits, Offers, and the Changing Monetization Landscape

• Impact of Facebook Credits
• Offers and Performance Advertising
• Role of Alternative Payment Systems

4. Off-Network Games with Facebook Connect

• Intersection of Social and Mobile
• Open Internet – Farmville.com and Facebook Connect

5. Will Another Platform Other Than Facebook Emerge?

• MySpace
• Twitter
• Global Social Networks
• Global Portals
• Search Engine Application Platforms

6. Investment Landscape

• Venture Capital
• M&A and IPO Landscape

7. Competitive Response in the Broader Media and Games Industry

• Casual game developers
• Console Games Companies
• Casual MMOs and Virtual Worlds
• Diversified Media Companies

More Data, More Actionable Insights

In 2009, social games began to show what kind of value can be created on top of social networks. 2010 will be an even more important year.

Social gaming, powered by virtual goods, is this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

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• Diagnosis of key opportunities and issues by segment

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Social Gamers Aide Haiti: With the horrid earthquake that struck Haiti a few days ago, the island nation has been in dire need of help. But while international aide has been arriving throughout the week, it looks like everyday people that aren’t in the Red Cross are contributing as well. In light of their recent charitable causes, Zynga is offering “limited edition social goods” within its top games of FarmVille, Mafia Wars, and Zynga Poker. All proceeds will go directly to helping out Haitian citizens in their time of need.

Items include “white corn that will not wither if left unatteneded for a week” (FarmVille), a “Haitian drum” (Mafia Wars), and “a special chip package” that will give the user a rare, premium item (Zynga Poker).

[image via Kotaku]

Virtual Currencies Exchangeable for Real Money in Korea: Legalities on whether virtual goods and currencies can be dubbed “real” have been vague, at best, worldwide, but it’s apparent value has surfaced from time to time. Well, at least in South Korea, it no longer is: The nation’s supreme court has stated that virtual currency is, in fact, equal to real money. The case was based around the exchange of Lineage II’s virtual currency, Adeena, for real money. This means, that the sale of virtual currency is being considered the same as a currency exchange and is completely legal within the country.

The full story can be found here.

MySpace Hires Sean Percival: In an attempt to grow more social and reinvigorate the network, MySpace has hired Sean Percival as their new Director of Content Socialization. Having been one of the social networks first 3,000 members, he has been a consultant to the company for some time and is author to the book MySpace Marketing: Creating a Social Network to Boom Your Business. Other merits to Percival’s resume include his blog Lalawag as well as experience from Mahalo, Docstoc, and Tsavo.

Farm Anthology Compiles the Sea of Farming Games: With the deluge of farming games in circulation around… well… everywhere (Facebook, iPhone, etc.), it can be tough to keep track of them all. A new website by the name of Farm Anthology has done most of the foot work for us. The site contains a pretty thorough collection of all of 2009’s farm titles as well as app links, screenshots, developer names, number of users, and how they are being monetized.

Gowalla API Coming Soon: According to TechCrunch, location-based social networking is taking off quite a bit with apps such as Foursquare averaging more than a check-in a second. Already, Foursquare has released an API for the technology (back in November), but now competitor Gowalla is looking to do the same. A post on their blog states that the first version of the API is “nearly complete” and that an official announcement will be coming in the “very near future.”

iVdopia Brings Social Ads to the iPhone: Video-based mobile ad network, iVdopia, focuses most on the iPhone for its advertisements, but according to co-founder Srikanth Kakani, “People don’t buy stuff yet on mobile. They do a lot more than before, but we think the best way to capture people via mobile advertising is to get them to perform smaller actions, like becoming fans of Facebook sites or tweeting on Twitter.” That’s right, in order to become both viral and social, the network is introducing Talk2Me ads to the iPhone that allow them to be shared via Facebook and Twitter. Furthermore, users can respond to them using old fashioned calling, SMS, or email.

Bigpoint.com Surpasses 100M Registered Users: One of the world’s largest online game portal sites with social networking features, Bigpoint.com, has reached a new plateau this week, stating that it now has well over 100 million registered users worldwide with an exceptional portion of those numbers stemming from Germany. In fact, the site states that it grows by roughly 250,000 users a day. Having partnered with PlaySpan over half a year ago to bring in new monetization methods, such as the Ultimate Game Card, it is certainly doing well.

OpenFeint Releases iPhone App: For all those trying to find quality OpenFeint enabled iPhone games, the search just got a little bit easier. At the tail end of last week, Aurora Feint’s social platform for iPhone developers finally got an OpenFeint app in the app store that can search the list games using the platform as well as access all of your friends, challenges, achievements, and so on. The only comment we have is… what took you so long?!

Apple App Submissions Get Faster: 2009 got Apple a number of complaints about the speed of their app submission process from iPhone developers. Well, according to Tuaw.com the site to submit and check app sales, iTunes Connect was down between December 23 – 28, and apparently, developer emails to Apple have been quite happy since then. By the looks of things, improvements have been made to the submission process as apps are receiving notices of approval that are ranging from four days to less than 10 hours!

Asian Social Network Gree Finds New Success: Forbes has named Yoshikazu Tanaka, of Japan, Asia’s “youngest self-made billionaire.” His social networking site, Gree, has earned a whopping $1.6 billion, and the man is only 32. With stock having doubled since 2009, and $170 million worth of shares sold since December 2008, the envy of the region is currently ranked #18 among Japan’s 40 Richest. To top things off, Gree may be getting even bigger, having announced the new “Gree Connect” platform, which will launch in April, 2010.

Foursquare Goes to Harvard: Looks like location-based app developer Foursquare is going back to school as it has, this week, made a partnership with none other than Harvard University. Okay, not really going to school, but with the app, Harvard and Foursquare will help students to actually explore the campus, view notes from the school paper, and read a myriad of tips about various campus locations from a special Harvard-themed, Foursquare website.

Pirates Pillage Apple: According to 247wallst.com Apple’s booming App Store may not be as well off as it could be. Apparently, the company has lost over $450 million to piracy since the Store’s inception back in July, 2008. Of the 3 billion downloaded applications, an estimated 13% – 21% are paid apps leading to quarterly revenue between $60 and $110 million. Unfortunately, reports of pirated games and applications on the iPhone is well over 100,000 and growing rapidly.

GCREST Expands to North America: GCREST, an online entertainment company from Tokyo, Japan, opened its doors in San Francisco this Thursday. As the developer of the popular social MMO, TinierMe, the company is looking to expand its presence in America based on strong user demand, according to VP of Global Operations, Masuru Ohnogi. Currently, American teens represent over 50% of the player base behind TinierMe.

It’s a new year and a new decade but we’re seeing a lot of the classics on MySpace’s top 25 based on the last month. Over the past year, we saw little fluctuation on the list. Will this year prove different? Will we see more activity from the social network? December was a pretty good month already, with most apps posting solid gains, relatively speaking.

Note that MySpace does not provide monthly active user counts so the way we generate this list is by tracking top games every month, then comparing the numbers for each game month over month. This is different from Facebook, which reports monthly active users — the number of unique people who have used an app at least once in the past 30 days. MySpace’s numbers are harder to parse but they do provide some view into what is happening on its platform.

Here are the highlights for the Top 25 MySpace Games from December 1, ending today:

• While the two top mafia games hold their ground, Zynga’s Mafia Wars gains a good 40,000 more new installs than the Playdom title, Mobsters. Nonetheless, the top five applications are still dominated by Playdom three to two.
• BitRhymes also comes up as a major blip on the radar, with its app Tag Me jumping up from #11 to #8 surpassing the time old RPGs of Vampires and Street Racing with roughly 5.2 million installations.
• Also worth noting is BitRhymes’ other title, the drinking game Cheers!! While it sits at #12 with just over 4.5 million installs, after three or so months of being off it finally appears back in the app gallery! What happened?
• Sorority Life continues to prove more popular than Poker Palace with about 150,000 more installs this past month. However, the card game did earn more new users than it did last Top 25 with 52,053 compared to a previous gain of 20,798.
• Another surprise on the charts came, once again, from BitRhymes as their title What’s My Impression on friends takes a huge leap from #22 to #18 with over 230,000 new users. The current number of users is tallied at 2,068,832.
• Lastly, Grong’s app, What My Friends Think About Me, falls off the charts to make way for a new, interesting title from Oxylabs Networks called PhotoBuzz; a game that lets users animate their friends’ photos with hugs, kisses, and other colorful stuff. This title comes in at #24 with a little over 1.6 million installations, just above Playdom RPG Bloodlines.