SGN May Own Mob Wars And What That Means For the Social Gaming Industry

Two days ago, VentureBeat released a story indicating that SGN had issued a cease-and-desist order against Mob Wars on the grounds that it was property of SGN since Mob Wars' developer David Maestri was working for SGN at the time of the release of Mob Wars. Meanwhile, Mob Wars has become one of the most popular and profitable games on Facebook.

I'm not going to dwell on the details, you can find there here. I'm more interested in how it affects the social gaming landscape. If it turns out SGN owns Mob Wars how work that affect their overall ranking by installs and active users?

Currently, SGN is the 4th largest company by installs at 46,136,580. One slot above them is Zynga with 54,106,539. Mob Wars has 4,173,000 installs. So even with the addition of Mob Wars, SGN would still remain in the 4th place slot below Slide, Rockyou, and Zynga.

As far as active users, SGN is currently 7th with 703,000 users. Adding Mob Wars' 500,000 users, will nearly double SGN's current traffic bringing them up to 5th with 1.2 million users.

It a recent post on Inside Social Games, SGN's CEO, Shervin Pishevar questioned the value of these aggregate numbers suggesting that they didn't account for user overlap between applications. I agree. I wrote a post back in May raising the same objections. I'll be exploring the topic of overlap soon, once I can figure out a way to pull together some quality data.

Regardless of its value in enlarging SGN's audience, the biggest value of Mob Wars is its revenue stream which has been estimated to be $22,000 dollars a day by Developer Analytics. Mob Wars revenue generating potential dwarfs every other app.

Seems to me, that Mob Wars is worth the fight. Feel free to mock me for stating the obvious.

How to Spot a Hit Social Game Before It's a Hit: Tips For Acquirers

Frequently, I like to check the app leaderboard over at Adonomics, the Facebook analytics service and see what games are poised to become hits.

It's a pretty straightforward process so I thought I share it with you.

First sort the leaderboard by active users rather than the useless default of total installs.

Then go to the 4th page of rankings to view apps that have 50,000 users or less. Smaller apps are where the best acquisition opportunities are.

Look for apps that have double digit active user percentages. For instance Elven Blood has a 47% active users. With total installs of 76,000 and a DAU of 36,000.

Clicking on the name (Elven Blood) reveals the DAU graph for the last 30 days. In this case, the DAU for Elven Blood has doubled in the last week. Clearly, it's got some juice.



So it might be worth acquiring. Looking at the game, it's a clone of Mob Wars reskinned with a medieval fantasy theme. Nothing innovative here, but with Mob Wars being the 5th most popular app on Facebook, its growth prospects are good. As far as I can tell the only comparable games are Zynga's Dragon Wars, and Might of Many, both Mob Wars clone with medieval fantasy reskinning. Neither are as popular.

Looking at the reviews, the users are enthusiastic, not many fake reviews as far as I can tell. There was a torrent of anger over a data loss that brought all the players back to level 1. Sounds like database scaling issues, unsurprising at this rate of growth for an indie team. Not worrying.

Then I'd ask how Elven Blood is acquiring its users, organically, or deviously? Perusing the games, nothing looks devious. No incentizived invites. Nothing spammy. They use a good call to action, " Invite friends who would be most likely to enjoy playing Elven Blood, and remember to invite daily". And it's clear that the incentive for players to invite their friends, so they can advance faster through the game by sharing the spoils of victory is compelling on its own. Good stuff.

On the monetization front, it's running google ads and social media, but more importantly it has a virtual currency tied into a CPA offer program ($uper Reward$), so they are probably making decent cash, probably over $25,000 a month based on current DAU.

Hmm, that means I'd have to offer a pretty impressive figure to bring them in, unless the scaling problem is so bad that they exhausted and desperate (doubtful).

So kids, how much would you offer for Elven Blood based on this analysis? And why, if you're ambition. Let us know in the comments.

PR works!: Scrabulous/Scrabble/Wordscraper Update

So Scrabulous finally got bounced by Facebook from markets outside the U.S, as they were at end of last month from the U.S. The details are over at Inside Facebook.

If you recall, the Agarwalla Bros positioned their underperforming game, Wordscraper as a Scrabulous alternative. That was about 3 weeks ago. The move got a lot of press in the blogosphere and some mainstream press as well.

So did the PR pay off for Wordscraper? Here's the graph:



Answer: massively. Nearly 0 to 80,000 in a couple days. Since the growth has been flat.

Scrabble showed a nearly pattern of growth and flattening. I assume that it also benefit from the flurry of stories.



Of course, alternatively, the growth could be attributed to the sudden vacuum created by the loss of Scrabulous with players seeking other places for their word tile fix.

I'm sure it was a mix of both, however I do think the PR was crucial for drawing players to Wordscraper. Players would have found Scrabble anyway, I suspect.

So should I invest in PR?

Despite this Wordscraper example, probably not. It's an unique sets of circumstances. Other apps that have gotten blogosphere press haven't seen any traffic spikes at all (especially launch announcements). If your story isn't sufficiently interesting to attract mainstream press then don't bother. I tend to think of the blogosphere as a pathway to the mainstream press, often if a blog story is interesting enough, journalists will pick it up.

The death of Scrabulous is one of those stories. For people outside of tech or games (i.e. normal people), Scrabulous is the iconic social game. Mainly, I suspect, because you didn't have to explain what it was, everybody knows what Scrabble is. Try explaining Friends for Sale to someone who hasn't seen it before and you'll see what I mean.

In any case, I predicted that neither Wordscraper, nor Scrabble would ever reach the traffic that Scrabulous had. Judging by the lack of growth on both games, looks liek I'm right.

T-Mobile Plans Its Own App Store for the Fall: Huge Opportunity for Games Companies

At least if venture lawyers are concerned.

Early last year, when I still had a company, I was looking around for representation and met with lawyers from a bunch of firms. I focused on guys who knew something about the games industry, rather than vanilla startup guys. The first question, all of them asked was, "Are you doing mobile?" Fortunately, we had a mobile component planned, so I said yes. This got them super-excited.

Venture lawyers are an excellent proxy for venture investors. Since they do deals together all the time, lawyers get a good sense of what is exciting to investors at any given time.

Last year, games on mobile must have been scorching. Of course, games on mobile has been the next big thing in games for the last five years, maybe more. However, with a couple exceptions, mobile games companies haven't seen the success everyone expected.

And for that, they all blamed the carriers for making their games available to users. This was largely true.

Apple changed that with the iPhone app store, giving users an easy way to find content, and developers an easy way to charge (or not charge) the users for that content. With games like Super Monkey Ball making 3 million bucks in a couple months. A month or so later, content from Apple's App Store has been downloaded 60 million times equal to the amount downloaded on every carrier combined in the first quarter of the year.

That put the fire under the other carriers, and T-Mobile is the first to announce their own app store for their entire range of handsets, not just smartphones.

It's Facebook vs. Myspace all over again. Like Facebook, Apple creates a successful platform, then a rival with larger reach, T-mobile/Myspace, launches their own platform.

Once again, game developers have to decide the platform on which to focus. Unless you're Zynga who can manage to be on every platform, having $29 million in the bank helps. If you're indie, my good friend Blake (of Zombies infamy) advises sticking to one platform unless you want to drive yourself insane (I paraphase).

Since details are thin on the T-mobile store, I don't expect it to rival the iPhone store. In fact, my cynical side suspects it's just a positioning move by T-mobile and we can't expect to see its app store open until next year.

Regardless, I'm with the lawyers on this one. It is a huge opportunity for game devs. Mobile is finally a gaming platform. Woo hoo!

Ad-Supported Online Gaming Pulled in $800 Million Last Year

According to the recently formed PC Gaming Alliance, online PC gaming hit 4.8 billion dollars in revenue, of that 800 million was from ad-supported games.

For now, most social games are monetized through advertising. It's nice to know that there's at least $800 million dollars out there looking for games to support. I'm fairly certain that figure has been growing consistently year after year, I believe Alex St. John, CEO of casual games company, WildTangent has indicated so in one of his many talks. Regardless, I'd happily predict that the ad-supported games market will reach 1 billion dollars this year. And I'll say that despite the downturn in the online market...yep, I'm pretty brave.

Tellingly, the Asian market, where free to play games are the norm, was the main driver of growth in the PC gaming market, generating nearly half of the 10.7 billion dollar PC gaming revenue.

Sponsored Games on Facebook

Recently, I've been seeing quite a few ad-sponsored games on Facebook. Ad-sponsored games are games created and branded for a specific sponsor, as opposed to a games surrounded by banner ads. They are also different than existing games that allow a company to sponsor them for a fixed period of time, as Vampires/Werewolves did with a movie tie-in for the horror movie, Underworld.

Inside Social Games has reviewed of a couple of sponsored games recently. They weren't impressed. That's unsurprising as sponsored games are rarely well-designed. Parking Wars, an ad-sponsored game (sponsored by A&E, created by Area/Code) is the rare exception.

Sunday Startup Aphorism: Follow the Opportunity, Not the Plan.

Follow the Opportunity, Not the Plan.

This aphorism is one of the key bits of wisdom I gained while running my social games startup.

Think about this: you're on you way to work, you're rushing, you need be there by 9. You stop into Starbucks to grab your morning coffee, and you accidentally bump into a drop-dead gorgeous girl. She smiles as you fumble. She walks out. You want to follow her, make conversation, marry her...but you can't you have to wait in line for your coffee.

After you get the coffee, you rush out to the street hoping you might see her. She's gone. And you obsess over your missed opportunity all week, maybe for a lifetime.

Just because you followed the plan to get coffee, rather than the opportunity to meet the woman of your dreams.

One of the sad truths about the Internet industry is that things change faster than anyone expects. And yet we're still expected to make business plans.

Business plans are a huge waste of time. If you're a nimble company that responds to changes in the marketplace then it'll be out-of-date even as you're writing it. Do the slide deck thing if you have to.

The best opportunities occur when changes are rapid. New platforms are a goldmine, think about the Facebook or the iPhone. You can't plan for a new platform to emerge. New rules are being written and insights discovered on a daily basis. These are the times are when huge companies emerge from nowhere.

Be one of them. Forget the coffee.

Disney Believes in Mobile: Two Bits of Info

From Ypulse! Mashup (still processing my notes):

mDisney, Disney's mobile portal gets a 10% clickthrough rate on the mobile banner ads with $20 CPM.

Disney is planning to link its Pirates MMO to a mobile experience that allows the players to earn unique items for use in the online game. These items can only be earned in the mobile experience.

Smart move, especially considering the insight from yesterday's post that the hardcore gamers (most players of MMOs) are also likely to own iPhones.

Core iPhone Demographic and Hardcore Games Demographic are the Same

Obviously, the demographics of the platform should be a huge factor when you're designing games for any new platform. Let's look at the iPhone.

According to Stephen Saiz of mDisney, the core demographic for the iPhone are males 24-35. Right now, only 3% of tweens and teens have iPhones.

So don't build any games for kids.

As you might know from being a student of the traditional games industry (or if you read the title of this post), males 24-35 are the hardcore gamer demographic.

So build something violent. And charge a lot for it.

If I were a game designer for the iPhone, I'd probably build a clone of Dynasty Warriors Advance, it's a button-mashing fight game with an overhead view. Perfect for a mobile screen. Here's a video:

Is Yoville the New Habbo Hotel?

When I first look at Yoville with its 2.5D isometric view and furniture focused economy, I thought it screamed Habbo Hotel. Which is probably a good thing since Habbo Hotel pulls in about 10 million users monthly worldwide.

Right now, Yoville gets ~1.1 million monthly users (according to Facebook). BTW, I love Facebook's new monthly user stats, I can finally do apples-to-apples comparisons. And keep in mind that they acquired 1.1 million users in just over three months. So next time someone tells you about how Facebook is a dead platform because of invite restrictions, nod in agreement. Let's agree to keep the ill-informed off the gravy train.

Yoville was recently acquired by Zynga and unlike most of their acquisitions which I thought were a waste of money (unless you just consider them as talent buys), I think Yoville could actually grow. In point of fact, Yoville is not a game as much as a chat room masquerading as a virtual world. Which is not a bad thing (see the first paragraph about Habbo Hotel's 10 million monthly users).

Yoville is a little more risque than Habbo, suggesting its older target demographic. For instance, in Yoville, you can get drunk. That would be a huge no-no in tween-friendly Habbo. It makes sense, Facebook is not a tween stronghold. If you want to appeal to college students, you better let them drink. If you've spend ten minutes hanging out with a group of college kids (even Ivy League) all they talk about is what they're currently drinking, what they drank last weekend, and what they are going to go drink when they finish their drink. That and Nietzsche (at least that what we did at the University of Chicago - at least it wasn't Ayn Rand...yeah, I'm looking at you, Cornell.).

If you have no idea what Yoville is, well that's because I'm not in a mood to describe it, so check out the video below. What impressed me about this video is the amazing amount of variation between the user's rooms. In Yoville, user decorate their own rooms with a limited set of items and tools, and yet manage to create entirely personalized spaces that exceed my expectations. Enjoy.

How Tweens Discover Videogames

I stumbled across my notes from the Ypulse! Mashup last month. For those of you targeting that lucrative Club Penguin demo, here's how kids discover videogames (courtesy of a youth marketing research agency presentation):

53% find out about games from TV
50% find out about games from their friend

Obviously, there's a cross-over between the two groups. I know Habbo Hotel, the virtual world for tweens and teens, advertises on TV somewhere, probably Europe, since I found this on Youtube:



I'd love to know their ROI on TV advertising. But the stats above indicate it's the right move.

Will Facebook Users Pay to Play? CasualCafe Thinks So.

You might be surprised to find out that my favorite game on Facebook is Spyde Solitaire. When I was a depressed college student, sucking down coke (the cola) and listening to old Smiths songs, I spent hours playing Spider Solitaire. Yes, I was emo, so kill me.

CasualCafe's Spyde Solitaire takes the Puzzle Quest model of applying a quest structure to a simple casual game (Match 3) and brings it to Spider Solitaire. It's has extremely good production values and well-thought out game design. It's very compelling.

So compelling that some people are willing to pay for the experience. In fact, they have to be, CasualCafe requires users to buy credits to play. Currently, they charge 1 credit for 10 minutes of play.

Here's their pricing tier:

50 CafeCredits for $5.75

110 CafeCredits for $12.00

250 CafeCredits for $25.00

So about a penny per minute at the $25 option, which according to founder Michael Scholz is much more popular than he expected (though he won't say how popular).

Scholz says he believes that once the dust settles, about 1-2% of players will pay for the experience. As all you old hands out there know, 1-2% is the conversion rate in the downloadable casual space. There's a lot of evidence that the same demographic (women 35+) are some of the most addicted game players of Facebook (I believe that at Interplay, Josh Williams of Alamofire indicated that Packrat's most rabid players are in this demographic). It's also one of the fastest growing demographic segments of Facebook.

Geographic breakdown also surprised Scholz. "I am also surprised by our uptake in Australia and UK, we're lucky we happened to have a paypal payment path that could support those players, because we weren't anticipating early adoption over there."

Right now, CasualCafe only has about 10,000 monthly users. I'm surprised it's that high. Asking Facebook users to pay for something is a hard sell when every other game is free. But of course, as many free to play developers have said to me, it's only a very small slice of players that make a game profitable like 1-2%, in fact. The rest of us are cheap bastards. :)

Hopefully, Michael will release more data once he has it. CasualCafe's experience will be very instructive for the rest of us.

CasualCafe is self-funded for now. Michael was Director of Technology at SkillJam, a skill-based casual games portal, before it was acquired for $200 million. Guess he had some stock.

The Sunday Startup Aphorism

Because I can't be bothered to write on Sundays (there's some start-up work ethic for you), I offer you the first of many aphorisms (if I decide to continue this "feature"):

This one comes to you courtesy of David Mamet via my good friend, Kevin Li, who is leaving the Bay Area at the end of the month to return to Canada. He currently works for NeoEdge Networks, the in-game ad company. He's an amazing biz dev guy, and he's always saying this:

ABC

Always
Be
Closing

Enjoy Alec Baldwin's explanation below:

MSNBC.com has an Awesome Article About Social Gaming.

Yesterday, Winda Benedetti, MSNBC.COM's Citizen Gamer columnist wrote an article about social games. It does a great job of explaining social games to the mainstream reader, so if you're have a problem explaining to your mom what you do for a living, send her over to Winda's article.

Of course, I'm super biased, since she quoted me three times in the article.

But since I'm only half an egomaniac (which just makes me a maniac), I'll pull a quote from Blake Commagere instead of myself:

Trying to figure out what kind of gameplay is going to be fun in this new setting is one of them(problems), Commagere says. Plus, he and others point out that Facebook and MySpace are constantly evolving and changing.

“By virtue of the fact that those Web sites aren’t done you’re never going to be done either,” he says.

The constant changes to the platform are really a huge burden on developers, especially the indie guys who work from their bedroom. Though, I doubt that'll change anytime soon.

Playfish Experiments with New Subscription Pricing Model

In January of this year, Playfish, a UK-based social games company launched their first game, Who's Got the Biggest Brain?. It rapidly grew, becoming one of the most successful on Facebook, currently played by over 280,000 players daily.

Three weeks ago they introduced a Pro Player's Club. For an annual fee of 9.99 dollars, members of the Pro Players' club get access to special features, such as additional mini-games, a performance graph, and no advertising.

Two weeks ago, I was on a panel with Kristian Segrestale, CEO of Playfish, and I asked him about the Pro Player club. He said that it was too early to gauge the success of the Pro Player Club, and that Playfish was looking at it as an experiment.

Playfish's Pro Player Club is the first attempt of a social games company to monetize via a subscription service (that I'm aware of). I doubt it'll be the last. Runescape, the immensely popular Shockwave-based free MMO has for years relied on a free-to-play model monetized by offering premium feature to subscribers.

Another Interesting Monetization Experiment

A few months ago, Zynga introduced an interesting monetization experiment, selling power packs to players of Triumph, their Civilization-lite game. For five dollars, you could get additional resources for use in the game. I'm not sure how successful it was, I have not seen it expanded to other Zynga games.

Oh, and One More Thing about Playfish

Playfish is now cross-promoting their games via a bar on the top of their games. Another smart move that was inevitable, and something that Zynga and SGN have been doing for months.

And since I wrote this post two weeks ago and forgot about it, I should mention that Playfish also released a new game called Pet Society which I'll talk about soonish.

Fewer Americans Buy Virtual Goods, but Once they Do...

...they buy a lot more. That's according to OGPlanet, an importer of Korean online free-to-play games. Here's the full quote snapped from Venturebeat last week.

So far, things are going pretty good, the company says. “The percentage of buyers of [virtual goods] is a lot lower than in Asia,” it tells VentureWire, which reports that the company is profitable and has raised an undisclosed third round of funding from DFJ Athena.

“[B]ut another significant difference with Asia is once [Americans] become a buyer, they buy a lot more than Asian buyers.” Ah, yes. American consumerism kicking into action.

Evidently, OGPlanet is profitable, which bodes well for all you kids trying to make your millions on virtual items.

Tips on Managing a Virtual Economy - A Very Through Review of Kids-Focused Flash MMO, Moshi Monsters

Managing game economies is an interest of mine, I even moderated a panel on Managing Game Economies at Interplay a few months ago.

Combine that with a review of the kid's MMO created by MindCandy, my friend Michael Smith's company, and for me it's a must read.

T-machine, a former employee of Michael's over at MindCandy in the Perplex City days, wrote up a through analysis of the game design and game economy problems in Moshi Monsters. It's long but definitely worth a read, here's an excerpt about the economy:

I suspect that the economy of MoshiMonsters is far too illiquid right now to allow for this in any meangingful way. Mind Candy really needs to achieve a couple of things:

1. Devalue the currency. Even Rich players don’t hang on to much currency. This has been largely driven by the source/sink economy with near unlimited sinks and very very limited sources. For instance, the amount of new + limited availability purchaseables made available for purchase each day exceeded the possible MAXIMUM rate of earning by a factor of 10 or so. No-one has had any opportunities to liquify their assets, nor to counter the source/sink imbalance
2. Increase the volume of coinage. The currency - Rox - are currently too coarse-grained to be useful for purchases. A Rich player has literally hundreds of them. Even if other things are done, players need to be using currency that they routinely possess in the thousands, where a rich player has at least tens of thousands, preferably hundreds.
3. Provide exit points / liquification opportunities. Thanks to the above two problems, before they can allow player-trading either Mind Candy is going to have to wait a long time for there to be enough currency with a low enough value, or … they’re going to have to provide ways for players to liquify assets into coinage.

A shop was added recently to allow players to sell their goods and generate Rox. However, the lack of trading possibilities - and hence the lack of ability for players to arbitrage on anything except raw price - combined with the *probably* non-fluctuating prices in that shop mean it’s going to be largely ineffective / punitive as a liquidation mechanism.

Read the whole thing here:

http://t-machine.org/index.php/2008/08/08/moshi-monsters-review/

Iphone Game, Super Monkey Ball, Makes $3 Million

According to the WSJ (via Techcrunch), Sega's Iphone game, Super Monkey Ball, made $3 million in the first month from the Iphone App store. $3 million a month is a revenue rate that crushes any social game company. What's even more impressive is that this one game accounted for 10% of all App store revenue.

Right now, people are still accustomed to paying for content on mobile. Take advantage of it while you can. I'm 100% sure that a year from now, most Iphone apps will be free, the most popular apps will be games, and that the mobile ad infrastructure will be 100x better than it is now because of it. Ultimately, I think when all the dust clears, mobile CPMs will end up A LOT higher than social networking CPMs.

If I was a pureplay game dev, I'd be building games for the Iphone right now (while you can still make money) and release them later on Facebook for free.

Of course, the best move is having mobile games that interact with your Facebook games in some way. Keep your player engaged when they are at home and on the go.

Check out a video of Super Monkey Ball below:

How to Launch a New Platform

On Friday, I alluded to the importance of hits to drive the success of a platform. It occurred to me in the shower this morning that VCs undervalue this insight.

If you listen to any VC, or any smart investor, they'll tell you that you don't want to create content. It's too risky. Who knows what people are going to like. They call this content risk.

Instead, they advise building a platform. Let other take on the risk of creating content. The platform builder reaps the benefit of the hits and avoids the losses of the losers. I've always thought this made a lot of sense.

Then it occurred to me, as a platform builder, you're completely reliant on others to create a hit for you. Without that hit, be it an amazing game or a killer app, then no consumer is actually going to want to use your platform.

So in fact, you're not avoiding content risk at all, the downside (not having a hit) is still there. The odds are better if twenty teams are working to create a hit for your platform vs. just your own team. However, it is not guaranteed that any of you will create a hit, so the risk doesn't magically go away because you're a platform.

So as a platform builder you're dependent on attracting great content creators. For a new platform that's not easy. Most people do not want to pour resources into building something for a platform that could easily fail.

To solve this problem, platform builders often have to create a hit themselves to validate the platform. When Nintendo entered the console market, they bundled the NES with Super Mario Bros.

Or you can license a hit from another platform. Atari was initially bundled with Combat and sold decently. Soon after it was bundled with superhit Pacman, licensed from Namco. The version sold and branded for Sears was bundled with Space Invaders, another superhit licensed from Taito. These games had already seen massive success in the arcades.

Or you can acquire hits. This has been the Zynga/SGN approach in building out their social gaming networks.

Or you can offer money, like Kongregate does. Kongregate offers money to developers in the form of contests and publishing deals.

Or you can leverage existing relationships. Boonty uses its existing relationships with casual game developers to encourage them to create games for its new Cafe.com platform.

Once you're an Apple or a Google, all you have to do is announce that you have a new platform and developers flock to you. We should all be so lucky.

I'm sure there's more that didn't occur to me between rinse and repeat, so as always comments are welcome.

Conduit Lab's Secret Project, LoudCrowd, Finally Revealed

My good friend Dan Kaplan wormed his way into the alpha and has a report over at Venturebeat. Here's his summary:

"Right now, LoudCrowd’s experience centers around a rhythm-based dancing game that is like a far simpler version of Dance Dance Revolution — a Dance Dance Revolution for the casual gaming set. The key to the game is pressing arrow keys at the right time. I won points when I brought out my skills and won more points when fellow dancers chose me as a partner."

Check out the whole article.

Platforms are Driven By Hits - Kongregate's Brilliant Move

First of all, I should have wrote this post over a year ago when Kongregate first did their deal with Desktop Tower Defense.   

Here's the history: Back in Feb/March 07, Kongregate has just launched.  At the GDC 2007, CEO Jim Greer was asked how many users Kongregate had, he deflected the question by saying "Well, we just got dugg this morning so we should see a big traffic increase."  I believe at the time, they had less than 6000 monthly uniques, but I can't get any historical data more than a year old so I'm relying on memory.

By the end of April, Desktop Tower Defense 1.2 had become Kongregate's highest rated game with 9 million plays.  Kongregate was still limping along trafficwise.  

The Kongregate struck a deal with Paul Preece, creator of Desktop Tower Defense to sponsor the next version of the game on Paul's site which was getting ~1 million unique visitors at the time.  For those who are curious, Paul says he earned 100k in the first year from 40 million game loads, which he translates to a $2 CPM.  I'm guessing The Kongregate deal was half of that.

Desktop Tower Defense 1.5 was launched on June 22nd and included a Kongregate logo on the load screen as well as a Kongregate logo directly on the gameplay area.  Traffic to Kongregate increased drastically from what I remember (and it may be faulty), but again I can't see earlier than July 07 so I can't tell how steep the curve.  I remember watching it at the time, grinding my teeth in jealous appreciation of Jim Greer's brilliance.  The current version of DTD (1.5) on Kongregate has been played nearly 4 million times, Kongregate's 2nd most played game of all time.

I think DTD was Kongregate's tipping point.  Feel free to disagree or just mock me in the comments.  

Virtual Goods Summit 2008 Announced for Oct.10th

After last year's very successful Virtual Goods Summit, Charles Hudson decided to do it again this year.  It's definitely going to be bigger.  Since last year, the default monetization option for social games companies has become virtual goods.   Advertising just isn't cutting it.

Here's the link.  You can sign up for early bird pricing. $349.00.

http://vgsummit2008.eventbrite.com/

Social Gaming Summit Videos Now Online

All six panels. I wasn't on any of the panels, but you'll probably enjoy them anyway. :)

Watch as Blake Commagere of Zombies mocks the telecom industry in the panel Asynchronous Games on Social Networks.

lol. That guy is so going to kill me for that.

• What Makes Games Fun? - http://www.youtube.com/watch? v=aoPvzMUYeXU
• Casual MMOs and Immersive Worlds - http://www.youtube.com/watch? v=NHoK19DRnT4
• Asynchronous Games on Social Networks - http://www.youtube.com/watch? v=3zIXY1upwTI
• User Generated Games in Social Networks and Virtual Worlds - http://www.youtube.com/watch? v=sDU7iRGEznk
• Building Communities and Social Interaction In and Around Games - http://www.youtube.com/watch? v=P2J7NPpAUiU
• Monetization and Business Models for Social Games - http://www.youtube.com/watch? v=JVEIbb0O_vc

A Primer on Monetizing Social Games

My friend Peter Vogel, senior marketing at Memolink/CPA Storm recently (as is last month) wrote a very good summary of the techniques that social games are using to monetize. It even has some numbers. Mostly notably, is the claim that there's a few social game developers making over a million bucks a year. It's true. In the social games industry, it's an open secret. Some companies, Like Zynga, are making 1 million dollars a month, according to Roman Nouzareth, CEO of Boonty/Cafe.com who heard it from a little birdie and is not an official number provided by Zynga (a statement he made during our panel discussion at Casual Connect - you should have been there).

Here's a snippet to whet your appetite.

Much more potent, though, is to use CPA offers to monetize an app’s virtual currency. This is the most inherently social of all of the models. Many apps have a virtual economies where users can earn and spend points (or other virtual currency). Users trade in the “points” to send a virtual piece of sushi to friend or “buy” a pink tutu for their virtual elephant on (fluff)Friends. Sometimes they just want to have the most “points” of all their friends. Developers have long used virtual economies to motivate users to perform viral actions like inviting friends to install the app, but CPA offers give users a chance to earn extra virtual currency. Users might complete a short survey, fill out a lead form, or even sign up for a service like Netflix. In exchange for completing an offer, they earn more of app’s virtual currency. Often times these interactions are real-time, so users can earn the virtual currency immediately, without even having to leave the app.

Scrabulous did not relaunch as Wordscraper Despite What You May Have Read

The buzz around the blogosphere (today I'll use that evil term) is that Scrabulous, the Scrabble clone built by Rajat and Jayant Agarwalla, was replaced by a brand new game called Wordscraper.

Except Wordscraper isn't new, it's been around since late February, and has had barely any traffic to speak of (under 1000 DAU) until today, due to a PR blast.  But hey, we bloggers aren't known for doing research.  Of course, neither are mainstream journalists.  To be fair, it's tough trying to be the first one to break a story, which is why I don't do it.

A lot of people are covering this story.  It'll be an interesting test of whether PR can create a hit from a game that could not grow on its own.  I don't think it will.  Rajat and Jayant are passionate about letting the game speak for itself, and have thus far, eschewed using the viral channels available on Facebook.  Unless they cahnge that philosophy, I think Wordscraper is doomed.  Beyond that, without any virality built into the game, I think even with viral channel use (or abuse) it still is unlikely to succeed.  Though I hope it does, I personally like Rajat and Jayant and want to see them succeed.  Even more, I'd like to see innovative game design rise to the top.

Some, like Erick Schonfeld of Techcrunch think it might have good chance of unseating the official version of Scrabble.  I think he's dead wrong.  

The official version of Scrabble already has 63,000 DAU, it'll keep growing.  The vast majority of people could care less what version of Scrabble they're playing, as long as they get to play Scrabble. However, I suspect the offical Scrabble Facebook app's growth isn't organic.  I would be astonished to find out that EA or Hasbro isn't spending a ton of money promoting it on Facebook.  They'd be stupid not to be.

The only question in my mind about the official Scrabble app is whether it can reach more than 500,000 daily active users ( a place Scrabulous was well-abovesince the beginning of the year).  I'll bet any of my readers, 100 dollars that the official Scrabble app won't even top 300,000 users by the end of September.  Any takers?