MindJolt Makes Good on Mobile Aspirations With SGN, Looks to Create Critical Mass of Users

MindJolt, the casual-social gaming company run by former MySpace chief executive Chris DeWolfe, announces a new string of games today along with the news that the company has successfully transitioned its business model from advertising to virtual goods.

The announcement comes roughly five months after MindJolt acquired social mobile game company Social Gaming Network (SGN) and free online game network Hallpass Media. At that time, MindJolt was very clearly activating on DeWolfe’s strategy to expand off of Facebook onto mobile and open web platforms. The acquisitions also helped MindJolt bring much of its game development in-house, effectively educating the company on how monetize games through virtual goods sales as opposed to advertising.

The result, DeWolfe tells us today, is a successful pivot into a new business model with virtual goods now making up one-third of MindJolt’s revenues. Though he declines to give specific numbers, he confirms that annual revenues are in the tens-of-millions and expected to exceed the $20 million figure reported in November 2010. Since April of this year, the company has released or re-launched a handful of games on iOS, including Warp Dash, Master Shot, Dress-up – Fashion, and Mini Cafe.

In the next few months, we can expect to see seven new games out of MindJolt, the first of which DeWolfe says is coming to iOS in as few as a couple of weeks. The upcoming titles include Fluff Friends – Races, Bird’s the Word, and another game inspired by DressUp, which was a web game bought by MindJolt as part of the Hallpass Media acquisition.

The big challenge now will be tackling cross-platform releases, a task many social and mobile game developers struggle with. Currently, MindJolt is building native apps for each platform — web, Facebook, iOS and, eventually, Android — with only very light integration between games of the same franchise via Facebook Connect. The games essentially look and play the same on each platform, however, and DeWolfe says that this is helpful when it comes to promoting games cross-platform.

Another component of the cross-platform challenge is creating a critical mass of users that support the MindJolt brand. As of right now, the company says it has a pool of over 30 million mobile installs, over 70 million social platform installs on social platforms, and over 25 million unique monthly active users on the web. Moving eyeballs between these platforms is crucial in supporting new game launches — as other cross-platform developers like OMGPOP have experienced when shifting audiences between Facebook and iOS.

“We’re getting a trememndous amount of traffic and downloads from web,” DeWolfe says. “It doesn’t usually work to advertise something on the web and then have people go through the friction of the iTunes store, downloading, and then picking up their device and actually using it.” The near-identical appearance of the apps, he says, reduces the friction.

Going forward, MindJolt is also releasing its first in-house developed Facebook game today, titled Bubble Atlantis. Though still integrating the teams at SGN and Hallpass Media, DeWolfe tells us that the company is still “opportunistically” looking for game developer talent acquisitions or second-party partnerships. After successfully beefing up its mobile business, the bar is now higher for what MindJolt can do on social network game platforms and on open web.

Last Week to Pre-Order Inside Virtual Goods: The Future of Social Gaming 2012

2011 will be remembered as the year that Zynga filed for its IPO, Google launched Google+, and Facebook executed the Credits transition. With the first potential social gaming IPO, Zynga plans to raise up to $2 billion to fund its continued global expansion. Meanwhile, Google is putting its weight behind what appears to have the potential to be the most serious competitor to Facebook as a social gaming platform in North America since the demise of MySpace. And at the same time, developers are still navigating through the Facebook Credits migration, while many are also expanding substantially onto mobile platforms to increase growth and expand reach.

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Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2012. This is Inside Network’s third annual edition of the Future of Social Gaming report. It will be released on September 20, but is available for discount pre-order now.

How big is the market, and where will social gaming go in 2012? How will existing players fare as Facebook Credits shifts the social gaming landscape and continued changes to the platform? Inside Virtual Goods: The Future of Social Gaming 2012 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2012 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2012 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. Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of this strong but still rapidly changing industry.

What We Cover

  1. Facebook Credits and the New Monetization Landscape: Early Results - Now that the transition to Facebook Credits was completed on July 1, what are the early results that developers are reporting? We take an in depth look at metrics and trends.
  2. Will 2012 (Finally) be the Year of Mobile Social Games? – Now that mobile games monetizing through the virtual goods model are becoming a bigger market in the US and around the world, many social game developers have expanded their efforts to tap these new platforms as well.  Will 2012 finally be the year that social games take significant root on mobile?
  3. Social Game Development and Design – 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? 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 2012.
  4. Monetization Data and Payment Trends– Now that developers have proven the virtual goods model, what are ARPUs, ARPPUs, and LTVs 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.
  5. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past four 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.
  6. Facebook’s Platform Changes, and What’s In Store for the Future – Facebook has continued to change Platform communication channels and functionality over the last year, significantly altering the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? Finally, will we see another platform (like Google+) 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 2012.
  • Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2012.

More Data, More Actionable Insights

In 2011, social games continued to show what kind of value can be created on top of social networks. 2012 will be an even more important year.

Social gaming, powered by virtual goods, continues to expand. 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

About the Authors

charles-hudson-headshotCharles Hudson

Venture Partner, SoftTech VC, CEO and Co-Founder, Bionic Panda Games

Charles Hudson is a Venture Partner with SoftTech VC and the CEO and Co-Founder of Bionic Panda Games, a mobile games company based in San Francisco, CA.

Until February 2010, he was the VP of Business Development for Serious Business, a leading producer of social games. Zynga acquired Serious Business in February of 2010. Prior to Serious Business, Hudson worked at Gaia Interactive, Google, IronPort Systems, and In-Q-Tel. Hudson also founded Third Power LLC, a conference and events company that was acquired by WebMediaBrands. Charles holds an MBA and BA from Stanford University.

justin-smith-headshotJustin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first service dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s analyst services, manages Inside Network’s AppDataservice, and serves as co-editor of Inside Facebook and Inside Social Games. Inside Network was acquired by WebMediaBrands (NASDAQ:WEBM) in May 2011.

Prior to Inside Network, he was Head of Product at Watercooler, now Kabam, a leading social game developer on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006.

Justin holds a degree in Computer Systems Engineering from Stanford University, where he was a Mayfield Fellow and a recipient of the Terman Award in Engineering.

Get The Annual Membership

Get Annual Subscription (Includes Report + 3 Additional Quarterly Issues): $2,495 $1,995 USD*

OR Buy Single Report: $995 $795 USD*

* Pre-order discount ends September 19, 2011. All pre-ordered reports will be delivered on September 20, 2011.

Although the report will not be released until next Tuesday, September 20, we are offering a special pre-order discount for those who purchase now. A one year subscription is $1,995 until September 19, at which point the price will go to US $2,495. The one year subscription includes three quarterly updates on key developments in the space.

Or, you can download just this report. The pre-order price is $795 until September 19, at which point the price will go to US $995.

Understanding the iOS and Android Market in China

China is fast-becoming the second-largest market in terms of downloads for many developers including companies like Rovio, but it lags behind in terms of monetization. The country came in just behind the U.S. in page views on Google’s AdMob advertising network in July, according to statistics the network shared at an iOS developer conference in China this past weekend.

The promise is there, but how do mobile developers take advantage of it?

Over the past two weeks in Beijing and Shanghai, I’ve had the chance to talk with several mobile developers like High Noon-maker Happylatte, PapayaMobile, PopCap Games and other companies being incubated in former Google China head Kai-Fu Lee’s incubator Innovation Works.

It’s an incredibly complex and different market from the U.S., but here are a few insights into developing and marketing iOS and Android apps there:

1) Android may be the long-term bet, but iOS is showing surprising resilience in spite of lower incomes here: 

iOS has leapt up the ranks of mobile search referrals to Baidu in recent months and sends more queries to the Chinese search engine than Android does, according to a source at the search company familiar with the data. Google’s AdMob also said that close to three-fourths of the pageviews on its network in China are from iOS as compared to Android during the same presentation that the picture at the top is from. Nokia is still the biggest platform in China though.

There aren’t good public estimates available on the actual number of consumers carrying Android and iOS devices considering that there are many “Shanzhai” or knock-off phones that are based on Android but are incompatible with the platform. Plus, many people bring phones into the country through relatives and friends abroad. The country’s largest carrier China Mobile — which doesn’t even sell the iPhonesaid it had 7.44 million iPhones on its network in its last quarterly earnings call.

Dianxin, one of the makers of a local variant of Android known as Tapas, estimates there are 12 to 15 million Android devices currently circulating in the country. Many other local mobile-focused companies like PapayaMobile say they’re building products assuming there are at least 10 million iOS and 10 million Android phones circulating in the country.

An unlocked iPhone 4 costs 4,999 renminbi here, or roughly $780, well above its American price and even farther above the discounted price with a two-year plan that most U.S. consumers choose. That is about twice what the average new Android phone from Samsung, Motorola or HTC retails for at 2300 to 2600 renminbi or $360 to $410, according to China-focused research firm ZDC. Most people buy their phones unlocked — and often at full retail price — then pick a carrier afterward.

Apple is an incredibly revered brand in China. Based on observation, it’s hard to say there is a more potent and accessible status symbol for Chinese consumers with newfound discretionary income than the iPhone. There is a reason there are fake Apple stores here. There is a reason why Apple’s newly appointed chief executive Tim Cook said in the company’s last earnings call that China brought in $3.8 billion in revenue in the most recent quarter and $8.8 billion in revenue in the fiscal year to date.

Apple has also gotten away with a lot more than many other Western consumer technology companies which have come here only to fall flat on their faces. Unlike Google, Apple maintains a favorable relationship with the Chinese government. It likely censors sensitive content from the local version of the app store to comply with the Chinese government’s restrictions. Google doesn’t support paid apps in Android Market in China and unless it censors its store (which would require substantial changes to the store’s current review process), it would be hard for it to gain mass adoption here. In that case, alternative Android app stores may thrive.

2) There are many local variants of Android, but none of them are really that big — yet.

Unlike many other Western markets, there are several custom versions of Android here that are tailored to the needs of Chinese consumers (or in less promising cases, the needs of Chinese carriers and OEMs). Because the Android market here is still so new, most Android users still have the standard version of Google’s OS.

“None of them are really big right now,” said Si Shen, the chief executive of Android mobile-social gaming network PapayaMobile.

Don’t worry about them for now. But if you are interested, the handful that come up most often in conversation are:

> Continue reading on Inside Mobile Apps.

Social Gaming Roundup: Patent Lawsuits, Virtual Goods, Game Updates, & More

Zynga LogoSegan Files Patent Lawsuit Against Zynga — Another patent lawsuit appears this week as Segan LLC, files a suit against Zynga over a “System for Viewing Content Over A Network and Method Thenrfor.” As noted by TechCrunch, the complaint centers around the association of a user to a character icon as well as how to manage character updates.

It Girl to Expand to Russia — CrowdStar is expanding its popular social title It Girl to Russia. Partnering with Russian distributor 101XP, It Girl will go live on Odnoklassniki.ru, Vkontakte.ru, and Mail.ru in the next two months. The game is also currently available on Odnoklassniki.

Exit Games to Power King’s Bounty: Legions — Earlier this week, we previewed the upcoming title, of King’s Bounty: Legions for Facebook. Only a few days later, Exit Games announced that its network engine, Photon, has been selected to power the network features of the coming game.

RockYou Makes Aktiv APAC Sales Partner – Asia Media Journal reports that social game developer and publisher RockYou has made online media sales house Aktiv an APAC sales partner. The move gives RockYou’s new ad platform distribution in the Asian market.

AT&T & ngmoco Bring Mobage to Android — Last week, ngmoco and DeNA brought the Mobage social gaming platform to Android Market. This week, AT&T and ngmoco announced a new agreement stating that Mobage will act as a hub for AT&T Android users to discover and play games as well as connect with other global users.

Auction HouseBlizzard to Use Real Currency for Virtual Goods Transactions — Blizzard Entertainment announced earlier this week that its upcoming Diablo III online game will allow the sale of virtual items via both in-game and real world currencies. For real money trades, Blizzard will take a small transaction fee.

[Announcement] MyTown Expands to Japan — Earlier this week, social and mobile apps developer Booyah and YUMEMI announced a partnership that will bring the location-based iOS title of MyTown to Japan as a new product for iOS, Android, and other feature phone platforms this Fall.

[Announcement] RockYou Updates Gourmet Ranch with New Content — RockYou Playdemic released a new content update for its title, Gourmet Ranch. Over the course of the next few weeks, players will gain access to the “Fun Fair,” and with it, new limited edition ingredients, quests, and rewards.

[Announcement] iWin & Sony Pictures to Bring The $100,000 Pyramid to Facebook — Family Feud developer iWin announced a new licensing deal with Sony Pictures Entertainment that will bring TV game show The $100,000 Pyramid to Facebook later this summer.

Social Gaming Roundup: Electronic Arts, Mobage, Layoffs, & More

EAElectronic Arts at $56 ARPPU in Sports Social Games — Earlier this week, Electronic Arts released its first-quarter earnings report which notes a profit of $221 million, compared to $96 million last year. According to EA Sports president Peter Moore, these games have reached an average revenue among paying users of $56; a number greater than that of players on consoles.

Three Melons Hit by Layoffs — According to Gamasutra, Disney-owned social games studio, Three Melons has been suffering layoffs as of late. The Argentina-based studio has seen 30 layoffs thus far “and counting,” says a source from inside the company. Disney has not confirmed the number.

Google+ Prepares Social Games Launch — According to AllThingsD, Google may be announcing its social gaming plans as early as next month. Moreover, while the company is evidently approaching developers regarding their games coming to Google+, say anonymous sources, multiple other sources are stating that Google will take less than a 30 percent cut of social gaming revenue.

MobageMobage Comes to U.S. – Tokyo-based DeNA has launched its social games platform, Mobage, in the United States. Run by ngmoco, the platform is now available on Android Market with roughly 20 free games available. Read more on our sister site, Inside Mobile Apps.

[Update] Zombie Farm Goes Social — The Playforge’s Zombie Farm has received a significant social update this week. The mobile farming simulation title, with zombies, has added in several social mechanics such as visiting friends, connecting to a social community, playing games of “Zombie Tag,” and sending gifts.

PlayMob Looks to Hook Players on Virtual Goods With Charity — PlayMob is looking to user charities to get social games players into buying virtual goods, reports TechCrunch. Essentially, players will purchase the virtual goods by donating to charity. Through the service, developers can choose which goods they wish to donate with, with a minimum of 50 percent of revenue going to charity, while the charities themselves receive a reduced costs of fundraising and PlayMob earns a flat fee of 10 percent.

Zynga Game Cards Come to Middle East & North Africa — Zynga game players in both the Middle East and North Africa will now have access to Zynga Game Cards, reports VentureBeat. Through a new partnership with Zynga, Gate2Play will distribute the game cards throughout stores in the regions as well as make them available through virtual “e-PINs.”

Kontagent Partners With Quepasa — Analytics company Kontangent has announced a new partnership with Latin social network Quepasa. Through the new partnership, Kontangent will acquire exclusive rights to power Quepasa’s casual games portal, Quepasa Games, with its analytics platform kSuite.

THQ Betting More Heavily On Social Games Following Q1 FY2012 Loss — THQ was disappointed by its $38.4 million net loss posted in Q1 FY2012, but it plans to put more effort into bringing its brands to social networks in order to reach a “critical mass” of users. The studio’s next social game, MargaritavilleOnline, is due out in fall.

Social Gaming Roundup: EA’s Origin Platform, CivWorld, Google+, & More

OriginEA Reveals More About Origin — At EA’s Summer Showcase event yesterday, the company revealed new features for its upcoming Origin social gaming network. The main highlight is cross-platform interaction for Facebook, iOS, and Android where users can import Facebook and Twitter friends and host universal leaderboards. Players can also launch games from within Origin and keep tabs on friends’ current games.

Also at the showcase, Electronic Arts Interactive Senior VP Chip Lange demoed features for the upcoming FIFA 12 on iOS, which will allow users to link up two iPhone 4 devices as controllers, and then link those to an iPad via Bluetooth. The iPad can then transmit the game to a big screen TV. Scrabble is getting a similar multi-platform play experience, allowing users on Android, iPhone, Facebook, and iPad to play live games.

Zynga Sales to Reach $500 Million for Facebook – According to GreenCast Capital Management as reported by Bloomberg, social game developer Zynga is expected to generate $500 million in revenue for Facebook this year. The company is stated to pay $100 million in advertising, and the 30% of virtual goods revenue from Zynga games is expected to total around $400 million.

Civ WorldSid Meier Talks CivWorld — Game designer Sid Meier spoke extensively with Gamasutra about the just-launched CivWorld on Facebook. Meier echoes many of the thoughts other traditional game developers have shared with regard to making social games: Find the fun first, then count on monetization from it.

PopCap May Bring Bejeweled Blitz to Google+ — As we’ve noted before, the Google+ source code suggests that social games may be in the platform’s future. According to Fusible.com, PopCap Games may play a role in that. The company has registered two new domain names including playbejeweledblitzplus.com and playbejeweledblitzplus.net. The logic behind the assumption is that all desktop versions of PopCap games are suffixed with the word “Deluxe.”

[Announcement] King.com Launches New Titles — Cross-platform social games developer King.com has announced two new titles this week for both mobile and Facebook. For the former, the iOS game of Miner Speed comes to Android, and for the latter, the company has released Mahjong Saga.

Outspark Launches New Digital Distribution Platform — Free-to-play online games publisher Outspark has announced the launch of a new digital distribution platform called Flint this week, says VentureBeat. The new platform is intended to help third party developers more easily distribute their free-to-play MMOGs and browser-based titles.

eBay’s $240 Million Acquisition of Zong Will Increase PayPal’s Virtual Currency Capabilities

In what may help PayPal deepen its strength in supporting mobile payments for virtual goods, eBay bought Zong for $240 million in cash.

Zong specializes in mobile carrier billing, where users can put charges on their monthly phone bills, and the company has relationships with more than 250 mobile carriers in 45 different countries. So this could help PayPal serve consumers in emerging markets, where people may not have easy access to credit.

The acquisition also comes at a time when smartphones have overtaken feature phones as the majority of mobile device purchases in the U.S. Yet Apple controls billing for digital goods on its platform while Google strongly encourages the use of Checkout in Android Market, which could limit Zong’s potential in terms of smartphone billing revenue in developed markets.

“Most of e-commerce will shortly become m-commerce,” wrote Zong’s CEO David Marcus in a blog post on the acquisition. “I am so excited by the unique combination of PayPal’s 8 million merchants, brand power, risk management expertise, and financial stability, with Zong’s Carrier DNA, its largest direct carrier payments network, product innovation, and best-in-class carrier billing technology.”

> Continue reading on Inside Mobile Apps.

Social Gaming Roundup: Bungie Aerospace, FamilyVille, Funding, & More

Bungie AerospaceBungie Aerospace to Help Smaller Mobile & Social Game Developers — Halo developer Bungie Studios has launched a new initiative called Bungie Aerospace, reports Kotaku. Through Aerospace, Bungie will provide small social and mobile game developers with strategic help in the forms of funding, testing, and publicizing indie games.

Along with IPO, Zynga May Be Working on New Title Called FamilyVille — Fusible has come across what may be Zynga’s next title, FamilyVille. The post highlights a shifting of domain ownership for familyville.com from its original owner to Rob Holmes of IPCybercrime, the company that acquired cityville.com for Zynga last year. Additional clues come in the form of switches in the domain to a name server in which other Zynga domains sit.

RixtyRixty Announces Wild Weekly Giveaway — Cash-based payment platform Rixty has announced a new summer promotion dubbed the Wild Weekly Giveaway. Users can visit the promotion’s page and enter for free to win $50 in Rixty virtual currency as well as “special bonus items” from various game publishers. Drawings will be held weekly until September 2nd with 25 winners announced on Rixty’s Facebook page every Friday.

Heyday Games Acquired by eGames — In acquisition news, casual games publisher eGames has acquired social games developer Heyday Games this week, making eGames one of very few publicly-traded social game companies. As part of the acquisition, Heyday CEO Gene Mauro will join eGames as its president and COO, while former Heyday chief creative officer F.J. Lennon will be charged with the development of future games.

Civ WorldLive Gamer to Run Monetization for Sid Meier’s Civilization World — 2K Games is slated to release the long-awaited Sid Meier’s Civilization World to Facebook in the immediate future. Monetization solutions provider Live Gamer has announced that it will power the upcoming game’s virtual goods monetization.

TeePee Games Partners with HitPoint — Social, mobile, and online Flash games discovery platform TeePee Games has announced its new partnership with developer HitPoint this week to make the developer’s titles available one the former’s platform.

“Social Games [Aren't] Actually Social” — In a Gamelab 2011 speech covered by Gamasutra, multi-user dungeon co-creator Richard Bartle states the popular, if wrong-headed, argument that social games aren’t social. He also says they’re not fun.

Social Point Raises €2.4 million – Barcelona-based game developer Social Point announced a €2.4 million ($3.4 million) round of funding, TechCrunch reports. We’ve been watching the developer’s titles get a bump to traffic for the past two weeks.

Friendster Relaunches With Focus On Social Gaming — Social game developers can now migrate their offerings to the newly-relaunched social networking site, as spotted by Gamasutra. Like Tagged, the emphasis on games is hard to miss.

Tictacti Secures Funding To Take On Heyzap In Game AggregationTechCrunch says the new white label solution is looking to challenge existing mobile/web/IPTV game aggregators Mochi Media and heyzap with a $500,000 round of fudning led by Kima Ventures. This brings the start-up’s total funding to $1.6 million.

Blizzard’s New Trial Mode for World of Warcraft Experiments With Free-to-Play ModelPC Gamer breaks down the new trial version of massively multiplayer role-playing game, World of Warcraft, which is another tentative step on the part of Blizzard toward a free-to-play model. Should the developer actually commit to the model, it could significantly impact the current free-to-play market.

EVE Microtransaction Leak Leads To Player Revolt That Could Cost $1 million — In other MMO news out of Develop, a leaked memo from Eve Online developer CCP that hinted at a forthcoming microtransaction model for the game has caused a player revolt that could cost CCP up to $1 million in lost subscriber revenues.

Inside Virtual Goods: Spending and Usage Patterns of the Social Gaming Audience 2011, Is Here

If 2010 is remembered as the year that games on social networks became a billion dollar business, 2011 is quickly becoming the year that the industry is starting to mature. Facebook is mandating Credits effective July 1st, creating massive changes in the monetization ecosystem, last year’s hit games are fighting for their lives, and new developers and games are climbing the leaderboards. At the same time, larger players are consolidating smaller studios and teams, and large media companies and traditional game developers continue to plot their social gaming strategies.

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

That’s why we’re excited to announce today the release of a new original study in our Inside Virtual Goods series by co-authors Justin Smith and Charles Hudson that is exclusively focused on spending and usage patterns in the social gaming market, entitled Inside Virtual Goods: Spending and Usage Patterns of the Social Gaming Audience 2011. The second annual installment of this report.

Most of the studies on player spending and usage patterns in social games over the last year have actually been conducted by industry vendors. Inside Virtual Goods: Spending and Usage Patterns of the Social Gaming Audience 2011 is our exclusive independent look at the virtual goods spending and behavior patterns of social game players on Facebook — data you won’t find anywhere else.

About the Report

Inside Virtual Goods: Spending and Usage Patterns of the Social Gaming Audience 2011 gives you an inside view of the market at this critical juncture in the intersection of social networking and online games.

We have surveyed nearly 2,000 players of social games on Facebook from around the world and across the demographic spectrum. Inside Virtual Goods: Spending and Usage Patterns of the Social Gaming Audience 2011 is the most in-depth independent survey of player behavior and spending patterns in the social gaming market.

What We Cover

  1. Spending Habits and Payment Methods in Top Games – It’s easy to compare games based on audience numbers, but which games monetize better? What payment methods do players use most often in top games? How is the shift to Credits affecting player behavior? We investigate how spending patterns compare across top social games.
  2. Frequency of Play and Methods of Game Discovery - As Facebook has cut down on developer access to viral channels, designing an engaging and viral game is becoming both increasingly important and challenging. We investigate which games people play most frequently, and which methods of social game discovery are most effective for top games.
  3. Demographic Differences by Region, Age, and Gender – While the social gaming market is increasingly global, the audience is also becoming increasingly diverse by age and gender. How do different segments of the audience differ in terms of spending and usage patterns inside social games? We take an in depth look.
  4. Brand Recall for Social Games – How important are brands, and how well can users identify developers of top games? We investigate brand recall amongst social game players.

See the full table of contents below:

Table of Contents

I. Methodology and Respondents

1. Introduction
  • About Inside Virtual Goods
  • About the Authors
  • Survey Objectives
2. Research Methodology
  • Target Population
  • Respondent Acquisition Method
  • Survey Structure
  • Potential for Bias
3. Survey Respondents
  • Description of Total Respondent Population
  • Total Number of Respondents
  • Overall Breakdown

II. Overall Results

4. Favorite Game
  • Distribution of Favorite Game
  • Frequency of Play
  • Favorite Game Discovery
  • With Whom Do You Play?
  • Spending on Favorite Game
5. Payments
  • Frequency of Payment Methods
  • Consumer Perception of Facebook Credits
6. Play Patterns, Spending, and Brand Recall for Top Games
  • Frequency of Play in Top Games
  • Spending in Top Games
  • Aided Brand Recall for Top Games

7. Mobile Platform and Game Adoption by Social Game Players

  • Smart Device Ownership
  • Mobile Games Played by Active Social Games Players
  • In-Game Mobile Purchase Activity by Active Social Gamers

III. Demographic Differences in Usage Patterns and Monetization


8. Regional Differences

  • Game Discovery and Spending
  • Favorite Game
  • Payment Types
9. Age and Gender Differences
  • Who are the Social Gaming “Whales”?
  • Spend Across Games

Appendix

  • Survey Questions

More Data, More Actionable Insights

In 2009 and 2010, social games began to show what kind of value can be created on top of social networks. 2011 will be an even more important year as the industry continues to mature.

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 one year subscription includes three quarterly updates on key developments in the space, including future editions of our annual reports, Inside Virtual Goods: The US Virtual Goods Market 2010-2011 and Inside Virtual Goods: The Future of Social Gaming 2011.

Or, you can download just this report. The price is US $995.

About the Authors

justin-smith-headshotJustin Smith

Founder, Inside Network

Justin Smith is the founder of Inside Network, the first service dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Justin leads Inside Network’s analyst services, manages Inside Network’s AppData service, and serves as co-editor of Inside Facebook and Inside Social Games. Inside Network was acquired by WebMediaBrands (NASDAQ:WEBM) in May 2011.

Prior to Inside Network, he was Head of Product at Watercooler, now Kabam, a leading social game developer on the Facebook Platform. Prior to Watercooler, Justin was an early employee at Xfire, the largest social utility for gamers, which was sold to Viacom in 2006.

Justin holds a degree in Computer Systems Engineering from Stanford University, where he was a Mayfield Fellow and a recipient of the Terman Award in Engineering.

charles-hudson-headshotCharles Hudson

Venture Partner, SoftTech VC, CEO and Co-Founder, Bionic Panda Games

Charles Hudson is a Venture Partner with SoftTech VC and the CEO and Co-Founder of Bionic Panda Games, a mobile games company based in San Francisco, CA.

Until February 2010, he was the VP of Business Development for Serious Business, a leading producer of social games. Zynga acquired Serious Business in February of 2010. Prior to Serious Business, Hudson worked at Gaia Interactive, Google, IronPort Systems, and In-Q-Tel. Hudson also founded Third Power LLC, a conference and events company that was acquired by WebMediaBrands. Charles holds an MBA and BA from Stanford University.

Social Gaming Roundup: E3, Zynga, Health, & More

ZyngaZynga Getting Better About Domain Name Secrecy — Zynga has previously dropped clues on upcoming releases with trademark applications and domain registrations, however, as spotted by Fusible, the company is getting more secretive about both. As an example, Empires & Allies didn’t have a trademark filing until the day of announcement in the U.S. Additionally, in order to help remain incognito with domain registrations that show up on GoDaddy, the company is registering under @yahoo.com email extensions instead of @zynga.com.

EA Adds to Its Social Games Lineup — Electronic Arts made some social game announcements at E3 this week, showing off a Facebook version of one of its most popular franchises with The Sims Social, which we highlighted earlier this week. EA is also teaming up with Hasbro to bring yet another title to Facebook in the form of RISK: Factions. The social strategy game is currently in closed beta, but EA did display an amusing trailer at E3, spoofing that of Blizzard Entertainment’s StarCraft II.

City of MightPlaydom Prepares for War with City of Might — Social developer Playdom revealed its own entry into Facebook’s rapidly swelling strategy genre with City of Might, announced at E3. The upcoming game as described by Games.com is a combination of a city builder and strategy game in which users collect resources to build structures and units in order to invade the cities of other players.

[image via Games.com]

2010 Digital Revenue Equates to $5.9 Billion — The Entertainment Software Association, chief organizing body of E3, released a study that states that the primary driver of the game industry’s growth is digital. According to the report, digitally downloaded games, add-on content, mobile apps, subscriptions, and social games made up 24% of all game-based sales in 2010, equaling $5.9 billion in revenue.

Majesco Expands Socially — Video game publisher Majesco Entertainment announced several acquisitions from Quick Hit Inc. in order to expand Majesco’s social games reach. Additionally, Quick Hit founder and CEO Jeffrey Anderson will join Majesco as its senior vice president of social games.

Moshi MonstersMoshi Monsters Exceeds 50 Million Users — Mind Candy announced that its social virtual world for kids, Moshi Monsters, broke the 50 million registered user mark. According to the announcement, 15 million of those users are in North America.

Businesses Seek to Use Social Games to Improve Health — According to The Wall Street Journal, Keas Inc. and Redbrick Health Corp. are hoping to help companies cut health-care costs by improving employee health through social gaming.  Through their respective social gaming services, they hope to use social mechanics to coax workers into eating properly and exercising through the use of mechanics such as prizes, incentives, achievements, and so on.

Zynga to Limit Shares for IPO — According to the New York Post, Zynga is planning to limit the number of shares in its initial public offering. The number of shares is being estimated at 10 percent or less.

Zynga Opens Dublin, Ireland Office — In more Zynga news, the company has officially opened its largest European office and multilingual operations centre in Dublin, Ireland. The office is said to include customer support, community management, and support functions (e.g. IT, human resources, etc.).

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