Games That are Useful: Political Sentiment Quiz

In anticipation of the election next week, I decided to write about something political. Enjoy.

Games can do more than entertain, they can also harness the collective intelligence of millions of players to solve problems.

Researcher Luis von Ahn, inventor of the CAPTCHA, coined the term "useful games" to describe this type of game. For the most part, these useful games have been used to solved computing problems.

One popular example of a useful game is Google's Image Labeler, which uses a game-like interface to get people to tag images with labels that accurately describe the image.

A group of German researchers have applied a similar technique to determine media bias in the coverage of the 2008 presidential election.

Their game (on Facebook), US '08 Sentiment Quiz, asks players to determine if a given soundbite is positive, neutral or negative towards a particular candidate. A player is matched with a partner. If both players answer the same, they are awarded points. If the players disagree, neither earns anything. These matches are tested repeatedly with other sets of players until the game can confidently say whether any given comment contains a bias.

The researchers are not ready to release results yet, but it will be very interesting to find out if Fox News was more biased against Hillary Clinton or Barack Obama.

If you're interested in furthering the research, play the game here.

And if you're curious, this blog is completely biased. Go vote for Barack!

Sick Day

Sorry guys, feeling horrible...will try and get a post up tomorrow. Until then, bed and episodes of Dexter.

Want a Guaranteed Hit Game on a New Platform?

Answer: Publish Pacman.

At launch, Pacman was the top game on Facebook and remained so until the rights owner Namco sued to have it taken down.

As a widget on Myspace (before they had apps), Pacman was the most popular game widget.

And now, on Android, Pacman is the top game according to Medialets.

Alas, I couldn't find any data on Pacman for the Iphone, but I'm guessing it did pretty well.

So what accounts for the success? I think it comes down to the power of familiarity. Everybody knows Pacman, while at 94% of Americans do according to the Davie Brown Brand Awareness Index.

Think about it. If you're looking through a long list of games then you're naturally going to pick the game that you know and like. Of course, whether you play it more than once is an open question...

A Case for Cloning Games

Many people are angered by companies who clone other people's games. It considered unethical, or cheating, or lacking creative. Or simply evil.

In conversation, people often empathize with Serious Business, the creators Friends For Sale, who pioneered the extremely successful genre of friend-exchange games. They were copied by many others. They lost their dominate position of Facebook to a clone, Owned! On Myspace, they never got traction because other clones had launched earlier.

Those in the know, don't feel too bad for Serious Business, since Friends For Sale was a clone of the earlier Facebook game, Human Pets. But to their credit, Serious Business executed much better on the core game design.

Recent variations on friend-exchange games have innovated. My favorite, Harem, allows you to buy and sell members of the opposite sex to be your sex slave, which just brings to the fore the sometimes creepy sexual component of friend-exchange games.

Of course, the more recent cloning frenzy has focused around Mob Wars, the uber-successful text-based role-playing adventure game on Facebook that pulls in huge revenues. Clones of Mob Wars have often stepped out of the mobster paradigm into other genres, mainly into fantasy.

As a group, Mob Wars clones have been incredibly successful. It appears that as in casual games, players are happy to play more than one game that is nearly the same.

Players Like Clones

In casual games, cloning is the rule. Take for example, the extremely popular game, Diner Dash. It's a game that puts the player in the role of Flo, a woman trying to run a small diner. Gameplay is essentially running from place to place trying to keep control of multiple timed events.

It was a novel concept that its game publisher, Playfirst, has since turned into a multimillion dollar franchise. Well, not completely novel since its gameplay comes from the old 80s arcade game, Tapper.

Since Diner Dash was initally released, every major publisher and most indie developers has released a nearly exact clone of Diner Dash. And most have been very successful.

It turns out that players like to play the same game over and over again provided it offer slight variations.

The desire for a familiar experience isn't unique to casual games. It applies to role-playing games, first person shooting games, musics movies, television shows, books. Every form of media, in fact.

It seems that novelty is overrated.

Clones Make Sense in Big Markets

Between Myspace and Facebook, there's nearly 200 million people potentially playing social games. Even if a given game has 10 million installed users, it's very likely that most people on the social networks haven't seen it yet.

If the original game wasn't able to reach the entire market, then it's not harmful to the originator to bring the concept to players the original would have never reached. It's an unserved market.

Having said that, it's clear that clones severely affect the traction of the original if the clone enters a new platform or market before the original does. From what I've seen, the traction of the original game is barely affected by clones on the same platform.

To sum up: cloning is necessary to serve the audience. In large markets, clones enlarge the served market, rather than cannibalize it. So to not clone, would not only be stupid, it'd be a disservice to the market.

Sunday Startup: Don't Believe the Recession Hype

Note: my earlier version of this post said Sequoia raised a 26 billion fund. Clearly, that's absurd. They raised 725 million. I put 26 billion in as a placeholder so I wouldn't forget to check the actual number...and then I forgot. Doh.

First, yes there's a recession. It will probably be bad.

You've all probably heard about the Sequoia end of the world presentation.

Yes, funding has dried up for existing companies.

But there's still a crapload of money, billions in fact, in funds that HAS to be invested in new startups because its part of those fund's charter.

In fact, Sequoia has a 725 million dollar fund that they just raised.

You probably keep hearing that you won't be able to get good valuations any more because of the credit crisis.

Who's saying it? Venture Firms. Why are they saying it? Because they see an opportunity to justify taking a larger percentage for less money.

It's a brilliant negotiation tactic. But it's crap.

Venture firms still need you. Their entire purpose is to fund start-ups. While it's entirely reasonable to fund fewer startups because times are bad. It does not follow that a company that is worth funding should receive a lower valuation because of a bad economy. If one doesn't think that a company will thrive in the current economic climate that you shouldn't be investing in them. Penalizing a company merely because one can is short-sighted and greedy.

In fact, a good startup's value may actually rise. Good startups may become scarcer because of entrepreneurs throwing in the towel because of fear that they won't get funded. As result, less companies in which to invest. Yay!

The flipside is that lower-tier venture firms may not be able to raise capital so there'll be less buyers. That's what Sequoia hopes. Less competition for the good companies.

But that hasn't happened yet.

For more inspiration check out: Paul Graham and Dave McClure

The Art of Gifting, Challenges, and Notifications

My friend Hiten Shah's company, KISSmetrics has recently done a series on how popular Facebook apps use notifications effectively. It's an excellent introduction and there's some good insights.

The real value of the posts come from KISSmetrics detailed diagrams of the notification flows from popular games, mostly from Playfish. Check it out.

The Art of Gifting

The Art of Challenges

The Art of Notifications

The Rock Band Effect and the Historical Value of Musical Performance

IMAGE: My friend Alexis Ohanian performing with his band Breadpig (a band that only plays with Rock Band controllers) at San Francisco's Pier 39.

I read three interesting things this week: an old essay by Ooga Labs founder, James Currier, and a brand-new slide presentation by LoudCrowd founder Nabeel Hyatt, and a news item from Digital Media Wire. Taken together, they've lead me to some interesting thoughts about how music is emerging as a powerful virtual good.

First, the news which I call the Rock Band effect: 3.8 million music downloads for music games per month sold on Xbox Live, which according to Microsoft is 80% of all music downloads for music games.

Second, Nabeel's presentation suggests that the declining value of recorded music is due, not to piracy, but because it's a passive media in a world of active media. I think he's wrong, particularly since he's suggesting live performance is active media, which I don't buy. However, his overall point about digital media being a virtual good is one that you should all take to heart. In the presentation is a graph showing recorded music sales (passive media) declined by 10% as concert ticket sales increased by 15% in 2007.

James' essay is about the economics of creativity, specifically how the value of any creative endeavor changes according to a society's perception of that value. He uses the history of musical performance to demonstrate his point, specifically how the value of live virtuoso performance dropped in status once recorded music emerges, at which point society rewarded the talent of recording music. He's the relevant part of the essay:

People who played in the orchestra were rock stars of their day, and the conductor too. Even the conductor’s son was part of the creative elite. Royalty lavished big bucks on musicians and, I guess sometimes, fell in love with them. That was the technology of the day, and it happened to favor the particular bundle of talents my great great great grandfather had.

Fast forward to 1925 when my grandfather was trying to make it as a cellist in Boston. He got paid for playing his cello at dinner at the Chatam Inn on Cape Cod but he could barely support himself and his bride. When the kids came, he became a machinist and a fork lift driver at a brewery. His creative endeavor no longer paid the bills because radio was availble and the transition was underway in the 20’s from rewarding live music to rewarding recorded music. Later in his life, my grandfather would practice and play the cello for free.

Forward to the 1940’s when my grandfather’s sister, Florence, 20 years younger than my grandfather, loved to sing from the time she was three years old. It was in her nature and she would do it for free. She recorded 8 albums in the 1950’s which were distributed on vinyl and played on radio stations around the U.S. She’s loaded! The technology available to distribute creative endeavors richly rewarded the talent for recording music.

Forward to the 1990’s, when a friend from college who won the Julliard Prize for playing piano, tried to make it as a concert pianist. She was much more talented than my grandfather, but by the 1990’s, the economics of live music had deteriorated to $50 stipend for an hour performance. And it takes her 80 hours to prepare for that hour. She still performs every chance she gets. She’s willing to do it for free today, while my ancestor got to marry royalty 150 years ago for a similar talent.

And now, according to Nabeel's graph, the value of recorded music is dropping as the value of live performance rises (provided it's performed by someone who's talented at recording music).

The news article suggests that music downloads for music games is an incredibly success new vector of music sales.

It's seems that the value music that can be performed by others is on the rise. I'm sure Nabeel would agree, his newest project, LoudCrowd is a music-based game world (Rock Band meets Habbo Hotel).

New musical artists should be thinking about how to optimize their music to be played in a music games. According to my reading of James' analysis, then that's where the new music royalty is going to emerge.

But wait...how does this affect social games.... It doesn't directly. Though as Nabeel suggests, music is a highly valuable virtual good. Now, consider that the music one listens to is one of the key differentiator between social groups. I'm guessing a few of you can come up with a creative way to apply these insights and make some decent money. I know I have some ideas...

BTW, if you want to know if you fit into my social group or Fred Wilson's, check this old post of mine (and the comment from Fred).

Recent Fundings in the Social Gaming Industry

Ray Flame Inc., $800,000. Series A. InnoBridge Ventures. Makers of web-based (and client-based) MMOs. Their MMO, Lords of Evil is currently active.

Booyah. $4.5 million from Kleiner, Perkins and Caulfield. Formed by three games industry vets, they are in stealth, but I suspect they'll be applying game mechanics to helping people do good, something that Akoha is also trying to do. Here's their about statement: Booyahs are topnotch industry vets from a wide range of entertainment, media, and technology fields who have made it their mission to do good, to help other people do good, and to change the world.

Kirkland North. $225,000. Seed Round. Harrison Metal Capital. Runs Turf, an online Risk type game that turns real-world neighborhoods into zones to be battled over.

Game Design Lessons From Evolutionary Psychology: Social Status, Pt. 3 - Bling

IMAGE: Mattel's MyScene Bling Dolls. What every little girl aspires to?

In my last two posts, I've been talking about human's insatiable desire for status and how to leverage it in your social game design. Yesterday, I promised I'd discuss status mechanisms that appeal to women.

Here's a few ways women show status in the offline world:

Objects. In the real world, women show status primarily through objects. Particularly, accessories. Handbags, shoes, jewelry. Men do, as well, but to a lesser degree. The status value of an object is directly related to its cost. When an object costs a lot, only people with sufficient resources can acquire it. Generally, only people with high status have sufficient resources to purchase high-cost items.

Gifts. An expensive gift is an indicator of status. To afford to be able to give away resources is a huge indicator of status. It implies that I have so many resources that I can afford to give them away. Some cultures take this to the logical extreme of destroying resources, literally burning their stuff, to show others how much they possess and its correlative, how much status they have.

Physical Appearance. Beauty attracts high-status mates, and therefore in the eyes of others, particularly other women, beauty is an indicator of status. Sit with a group of women and listen to how they evaluate other women. Or better yet, watch how a normal woman will slightly wilt when a very beautiful woman enters a room.

There are more, but in my mind these loom larger than others.

By now, I'm sure your brains are spinning on way that these mechanisms can be or are already incorporated into games.

Objects. It's all about profile bling. Give your female players an opportunity to earn decorations for their profile, or avatar, or whatever way they are personally represented in your game. Expensive and/or rare objects indicate more status. You should definitely optimize for these in your virtual economy. It needs to be clear what objects are worth more. World of Warcraft does this brilliantly, by associating colors with an object to indicate its value. It's a clear, but not vulgar way of indicating value. I'd argue that you could be A LOT more vulgar about indicating value, for instance, showing the cost of an object when you mouse-over it. After all, an object does not effectively indicate status unless everyone else knows its value.

Gifts. I've written about gifting before, so I'll direct you to my previous post for a more detailed essay of the power of gifting. I would d like to see someone play with the idea of showing the gifts that someone has sent instead of focusing on gifts a person has received. I suspect, it'll increase the amount and value of gifts send if prominently displayed.

Physical Appearance. It's been noted that people tend to make their avatars more attractive then they appear in real life. Perhaps, you could charge more from features that make avatars more attractive. I believe some people may be doing this already but not systematically. It's pretty straightforward, every time a feature is chosen make that feature a little more expensive for the next person who chooses it. Regularly introduce new features to allow new players to have somethng to buy.

Beyond avatars, I'm stumped on this one. Ideas welcome in the comments.

Game Design Lessons From Evolutionary Psychology: Social Status, Pt. 2 - Leaderboards

Competing for social status is the core activity of all humans, even if we often do it in incredibly indirect ways.

Social games, by their virtue of being embedded in a social environment, offer players the opportunity to compete for social status.

How a designer chooses to display status is a massively important choice. Mainly, status is represented simply in the form of a leaderboard. A leaderboard being a list of the top-ranked players of a game, usually the top ten players.

Leaderboards have been around forever in sports, and videogames borrowed them, first in arcade games like Space Invaders where a player could enter their initials and it would display them on the game's screen for those who passed by. And for the most part, leaderboards haven't evolved much since then.

Social networks offered an innovation, a leaderboard based on your friends' performance. You could now compare your performance not only to all players, but to just your friends, as well. How well you're doing in relation to your friends is much more important than with strangers. Humans tend to compete with people in their immediate social status bracket. Humans also tend to befriend people in their social bracket or the social bracket just above, interestingly enough.

As a social game design tool, leaderboards fail in one critical way, they appeal much more to men than women. Men are driven to compete for social status. Women on the other hand, tend to pursue social status through strategic cooperation. By these standards, we'd expect leaderboards to be dominated by men.

And they are. To confirm my theory, I looked at the Top Ten All-Time Players for four Playfish titles. Here's the percentage of the players that were men.

Geo Challenge: 100%
Bowling Buddies: 80%
Who's Got the Biggest Brain: 90%
Word Challenge: 70%

I'd love to look at the top 1000 players for each game to make a more conclusive statement, but regardless it's pretty compelling evidence that men compete harder to be on top of the leaderboard.

You might be saying, so what if men like leaderboards more, why is that bad? It's not bad, but it's not optimal. We want women to be as motivated to play our games as men. In fact, we want them more. Social games live and die on virality. And women are more likely to spread games to others, then men.

Tomorrow, I'll discuss some alternatives to leaderboards that display status and appeal to women. Until then, I just wanted to tell you, dear reader, that you're currently #2 on my list of top ten readers. All you need to do is come back every day for the next month, and you could be #1.

Game Design Lessons From Evolutionary Psychology: Social Status, Pt. 1

Anyone who's talked to me for more than 30 seconds already knows outside of social games, my main area of interest is evolutionary psychology, the application of Darwinian evolutionary theory to understanding human social behavior.

Fortunately, there's a lot of crossover between the two fields, especially with game design. Here's the first of some insights that might be useful to you.

Humans are obsessed with social status. Higher status equals better mating opportunities for males. Mating with high status males, means more foods and resources for females. Before anyone accuses me of sexism, I'll simply state that this pattern holds true for all known human societies from ancient to modern, so don't blame me, blame human evolution.

In social networks, it's (very) roughly represented by the number of friends on has. A rough estimate, because there's no way of knowing where a person stands in relative social status to other in that group of friends.

This need was quickly met by developers and led to some of the most popular apps on Facebook. Top Friends let people knew who your top friends were, as did Entourage. Friend Wheel showed connections between friends.

Then a wave of ranking apps appeared: Who's the Hottest?, Sexy Friends, and Compare People. These apps allowed people to determine their social status in their friend group and one Facebook as a whole. Unfortunately for these apps, social status doesn't change rapidly and so there isn't much need to return to these apps once you've determined your social status.

Then, Friend Exchange games like Friends For Sale! and Owned! created an explicit connection between a numerical value and social status. These games literally told you what you were worth in relation to your friends and the Facebook community. Best yet, these values always increased so you could watch your perceived social status increase and you could bestow that status on to your friends.

The status values created by the friend exchange games were artificial, and more and more reflected the game environment rather than real life. As a social status indicator, they became less valuable, but nonetheless satisfying for validation.

At the moment, I think there's a huge opportunity for another game/app to emerge that caters to human's obsession with social status. Something that innovates on the friend exchange model and more accurately reflects offline social status. If people can compete for status in a game that gives them real social benefits in their offline community, it will mint money.

Or you can just clone Who's the Hottest? and call it The Coolest Person Contest. Oh wait, that's been done (very successfully).

On Monday, I'll talk about how games traditionally use social status, so hold your comments about leaderboards and Warcraft armor until then.

CPA Offers: A Safe Harbor in an Advertising Recession?

Many, if not most, of the successful social games are using CPA offers tied to in-game virtual currency to monetize, in addition to advertising.

However, while advertising spending is expected to slow in a recession, particularly brand advertising, performance-based CPA offers are expected to do well.

Or STRENGTHEN. According to a good friend of mine who works for a company that provides the CPA offer inventory to companies such as SuperRewards and Offerpal, the last two months have been his company's BEST EVER.

That bodes well for social games companies. We have a core revenue stream that not only will survive a recession, but possibly improve. Awesome.

However, there is a flipside. Daniel James, CEO of Three Rings (maker of social gaming worlds, Puzzle Pirates and Whirled) mentioned in his presentation that his cost per acquisition using CPA offers had dropped over the last few months as he experimented with different advertising techniques. He could buy the same amount of CPA traffic for half the price, which he attributed to a softness in the ad market.

So a provider of CPA offers sees his best months ever and a buyer of CPA offers is seeing cheaper inventory. One possible explanation: increased volume of CPA inventory so that even as the price of CPA drops, the amount makes up for it.

Other explanation welcome in the comments.

My Thoughts on the Virtual Goods Summit

Mea Culpa: I'll be perfectly honest, I only managed to sit through one full session(Daniel James and Andrew Chen's case study on Using Metrics). Not that they were bad sessions, in fact, most of them were very informative. Real data was offered. Unfortunately, as at most conferences, I spend most of my time in the lobby chatting with people. To be fair, I learn a lot of things I can't share on this blog that way, so it doesn't benefit any of you. Sorry about that.

Having said that, I did notice a few things:

• A LOT of payment infrastructure companies were in attendance. You can always tell an industry is maturing when a tidal wave of infrastructure companies descend. It means money is being made, or at least people think money is being made. To be fair, payment is a huge problem. For some reason, I always find it amusing that we haven't mastered the point where money actually is being received from the consumer. You'd think it's be the most important thing to get right.
• As an industry, games still rock. We have an amazing amount of brilliant, friendly, open people in this industry.

Best quote(remember this):

“If you broaden past vanity items and talk about status, because really it’s about status and showing personalization, how you then do that through virtual goods or branded goods is a part of that, but always come back to status.” -- Sean Ryan, Meez

Best Datapoints

Andrew Trader, Zynga: Yoville(virtual world on Facebook), earns in the neighborhood of $4,000-$5,000 a day in revenues across CPMs and micropayments. It's about 50/50 male/female and 2/3 international." NOTE: 2/3 international (question: does that apply to revenues or userbase?)

Daniel James, Three Rings: "Puzzle Pirates (casual MMO) earns $4 per registered user annually. Top 10% of users account for 50% of revenue".

John Hwang, Rockyou: "$20-30 revenue per thousand active daily user on Speed Racing (Facebook social game)." I assume that's per day.

David King, (lil) Green Patch(Facebook gifting game):"very limited percentage of users want to pay, so it avgs out to less than penny per user." Makes sense to me, since the design (lil) Green Patch is not optimized to encourage virtual currency sales.

Daniel James, Three Rings: "CPA leads are not worth it." Reason: unqualified leads don't convert.

Final Thought

Everybody is still quoting Susan Wu's estimated value of the virtual goods marketplace from last year as gospel. That value: $1.5 billion annually worldwide. Keep in mind that value includes secondary market sales of MMO items. Most people quoting that numbers have nothing to do with secondary MMO markets, but focus on decorative virtual goods for virtual worlds or Facebook apps.

I think it's about time somebody created a new estimate of the virtual goods market.

How to Build a Successful Social Game: Design for Play With Strangers

One of the fallacies associated with social games is that they need to be designed for play among friends.

If you look at the games that have succeeded on Facebook, most are single-player games. If they do have interaction with friends, it's indirectly through leaderboards.

For game that have more direct interaction, such as Texas Holdem Poker (full real-time interaction) and Mob Wars (direct turn-based interaction- by attacking other players), gameplay revolves around interaction with strangers.

And yet, in order to be viral, games need players to invite their friends to play. Mob Wars is the prime example of this, a game where you complete jobs to earn points so you can battle others, but need to invite friends into your mob to advance through the game. It's a very good model: competition is focused on strangers, and cooperation is focused on friends. Find ways to emulate it.

But I Thought Facebook Was All About Interacting With Friends?

It used to be. Not any more. A long while ago, I designed a game around the assumption that people on Facebook only befriend people they know. In the game, players were challenged to find a picture of their friend in a grid of photos. With each level, the amount of stranger's photos in the grid increased so finding a friend's photo would get more difficult. Basically, Where's Waldo with your friends as Waldo.

We started playtesting the game and quickly realized it was never going to work. People couldn't recognize their friends' photos. In fact, some people didn't even recognize their friend's names!

When you have hundreds of friends, it turns out that you don't even know who many of them are.

The point I'm failing to make here is this: Facebook is a platform for interaction with friends AND STRANGERS.

If you're only building for interactions between friends, then you're not leveraging a significant chunk of the interactions on Facebook.

Finally, if you're foolishly planning to build a real-time game, than keep this in mind:

Real-time games designed to be played with friends will not have critical mass due to lack of density. -- Wade Tinney, Large Animal Games.

I nominate that for the 3rd law of social game design (if only because it sounds like something out of my college physics class.)

Sunday Startup Lesson: To Blog or Not to Blog?

According to my talks with recently funded entrepreneurs, VCs always advise them to start a blog. I'm assuming the rationale is that by blogging you can assert your expertise in your space and start getting traffic to your future product. Not bad aspirations.

Except most entrepreneur-bloggers blog about the same thing: being an entrepreneur. Yawn.

I made that mistake. I didn't start actively blogging about social games until February when I could sense that my company was going to fail. Suddenly, I realized all the knowledge I'd been accumulating was going to go to waste. That depressed me. I decided to give away my secrets. And people responded instantly. It probably helped that mine was the first blog exclusively focused on social games.

Do I get value from blogging? Definitely, lots of really smart people reach out to me and share their ideas. I really enjoy that. However, if I was actively running a company right now, I doubt that I'd have enough time to provide valuable commentary. Most entrepreneurs stop posting as soon as they have REAL work to do.

A friend emailed me recently to ask for advice on how to start a blog. Here's what I told him, based on my experience.

• Don't use Blogger. wordpress or typepad are much better.
• Focus on a niche.
• Post on a regular schedule. No less than once a week. It's harder than you think.
  
• Write 5 posts before you post the first one. That way you won't be under pressure to keep to a schedule.
• To start, brainstorm about 20-25 topics to write on. If you have a hard time coming up with that many, drill deeper into a topic and get into the details.
• Don't bother covering news. Others do it better. And it's f**king exhausting.
• When desperate for content, link to other blogs.
• Post comments on other blogs discussing similar issues and refer to your posts on that topic.
• If you write something awesome, new research data etcetera, ask other bloggers to link to you.

SO SHOULD I BLOG OR WHAT?

If you have to choose between blogging and REAL work, do the real work. Unless you're looking to start raising money in the next six months and have few investors contacts, then it could be very helpful to establish yourself, but if you go that route, be sure to be insightful.

But if you already have money, then work on the product. Unless the intended audience for your product is in Silicon Valley or Madison Avenue, then they don't read blogs. One caveat: journalists definitely read blogs (free PR!), but there are less time-consuming ways to reach them.

When in doubt, build the product!

Monitoring Status Messages: Growing Gifts Brilliant Innovation

I was talking to Brian Balfour yesterday, CEO of Viximo, a virtual goods infrastructure provider, and he told me a feature of Growing Gifts that I thought was genius.

Most virtual gifts are bought for the purpose of birthdays, holidays or other special events. Since those events happen infrequently, how do you encourage you users to buy more gifts?

Growing Gifts set up a system to monitor your friends' status messages for negative keywords (crappy, sucks, sad) that might indicate that your friend was having a bad day. Growing Gifts sends you a message suggesting you send your unhappy friend a gift to cheer them up.

Brilliant. Selling is all about your call to action. Buy a gift to make you friend feel better is a damn good one. "Show them you care" is another one. First one to guess who's call to action that is in the comments gets a shoutout in my blog next week.

Oberon Media Gets 20 Million Investment; and US AND European Games Investment Compilations

Oberon Media, a casual games distribution company, just announced a 20 million dollars investment from Infinity I-China Fund for expansion into the Chinese market.

According to the Infinity I-China Fund, the Chinese games market has $2B in annual sales and 50 million users. I've heard it was bigger.

And if you're looking for funding, keep in mine that the credit crisis isn't affecting the Japanese, Chinese, or oil-rich Gulf states. Perhaps, it's time to look abroad for funding. Anyone know any overseas early-stage funds? Seriously, put them in the comments.

Nearly complete compilations of game company fundings.

Last week, two bloggers released compilations of games company fundings. One focused on the US, and one focused on Europe. Even I did a brief list of recent fundings.

Note: I'm postphoning my How to Make a Successful Game post until next week. Since the Virtual Goods Summit is Friday, I want to spend the rest of the week focused on virtual goods issues.

Does Mob Wars Use Forced Invites?

I know I promised a How to Make a Successful Game post today, but it'll have to wait until tomorrow, because...

Forced Invites Are Back!

So in my regular perusal of the most active apps on Facebook, I noticed some quiz apps with over a million monthly users.

The one with the most users is called the Their/They're/There Quiz. It's a simple quiz with 20 questions testing your grammar knowledge. Nothing special.

Except of course, they require you to invite 12 friends before they allow you to see the results of your quiz.

That's pretty much the behavior that caused the whole forced invites policy to be enacted on Facebook.

And yet, this company Quiz Monster has released a bunch of forced invite quizzes acquiring millions of users and thousands of dollars without Facebook having done anything about it.

The fact is, Facebook sucks at policing its platform.

Of course, the real question (and the one that's in the headline) is:

Does Mob Wars (and its Clones) Have A Forced Invite System?

If you don't know about Mob Wars, you've probably never read my blog before. Mob Wars is an incredibly successful mob-oriented role-playing game on Facebook that by some estimates earns 22,000 dollars a day.

As you progress through Mob Wars, you reach a point where you can no longer complete game tasks unless you invite friends to join your mob.

So to clarify, you can't proceed unless you invite friends. Sounds suspiciously similar to a forced invite quiz. However, in a quiz, the forced invite roadblock only appears once. In Mob Wars, the roadblocks appears throughout the game, each time demanding you invite more friends to proceed. All told, to progress through the game, you're required to invite ~20+ friends.

It strikes me that this behavior isn't any different than the roadblock asking people to invite friends before seeing the results of a quiz. And possibly worse.

Sure, in Mob Wars, you're not required to progress further in the game, you can just quit, or start over. But then again, the same thing applies to quizzes. I mean, you're not obligated to get the quiz results.

The key difference is that it take a bit longer to hit that roadblock in Mob Wars, than in a quiz.

So if these behaviors are the same, shouldn't Facebook ban games like Mob Wars? Or if they aren't going to ban games like Mob Wars, then should they allow "roadblock" quizzes?

The fact is the key viral driver in Mob Wars is a forced invite system and have no delusions, it is the key to Mob Wars amazing growth.

So should Facebook do something about it? Let us know in the comments.

Rockyou is NOW a Social Games Company! Except It's Not.

Last week, Valleywag, my favorite investigative journalism site, broke the story that Rockyou, the social widget maker, aka creators of super-popular Superwall and Hug Me, was planning on becoming the EA of social games.

Here's the quote Valleywag attributed it to Rockyou CEO, Lance Tokuda: "We want to be like the Electronic Arts of social networks, and build games for social networks.".

In our little world of social games, it's pretty big news when an extremely well-funded company with an expertise in social media declares its intention to become the leading social games company.

There is some compelling evidence, Rockyou acquired the Facebook games Speed Racing and Petrolhead awhile ago, and has a couple of the top games on Myspace.

So naturally, I contacted a friend over Rockyou to get the scoop.

The Scoop

Evidently, Lance's quote was taken out of context. They are not becoming a social games company. Social games are just one part of their portfolio of properties.

In my mind, their entry into social games was entirely opportunistic. When the Myspace platform became viable, they quickly cloned the top games on Facebook and released them on Myspace to great success. (Coincidentally, cloning is the topic of tomorrow's post.)

I'm not judging, I would have done the same thing if I had the resources.

So what's Rockyou's main focus if not social games?

According to Rockyou, it's their ad network. For some time, Rockyou has been building out a ad network that runs on social media properties (i.e. Facebook and Myspace apps). Social media advertising is a crowded space, there's at least eight other companies doing the same thing. None of their competitors have Rockyou's massive userbase. It's a nice advantage, having guaranteed inventory to sell to advertisers.

Some people might question the wisdom of placing a big bet on an ad network when it looks like online ad budgets will be slashed in the near future. Particularly, social media advertising where the clickthrough rate is notoriously bad. At the Ypulse conference a couple months ago, Rockyou claimed a clickthrough rate of .002% which was double the average social media clickthrough rate of .001%, but still very, very low.

500 pageviews and no clicks

A couple days ago, behavioral ad targeting network, Jellycloud shut itself down. In the article on Venturebeat, Matt Marshall cites social network clickthrough rates as a core reason:

Jellycloud were commanding a mere 50 cents per a thousand ads shown (CPM), not enough for Jellycloud to make a business from. There were few click-throughs, with some users on Facebook generating 500 page views or so during a single session, but never clicking on ads.

Jellycloud won't be the last ad network to fail. However, I also think it's inevitable that one (or three) of the social media ad networks gets acquired. Perhaps, that's Rockyou's ultimate plan to get acquired for their ad network. Looking at the last round of ad network acquisitions, it's possible to foresee a $500 million acquistion for the top social media ad network. For Rockyou that'd be a 10x return to investors. Not bad at all.

Meanwhile, I'm 100% certain that we'll see Rockyou acquiring more properties to bolster its traffic numbers. Remember the core truth of advertising, advertisers like to buy in bulk. The more users that you have the more money you get.

So kids, build up you traffic and maybe Uncle Rockyou will come and buy you. And you might want to optimize for pageviews. :)

Two Conferences Coming Up in San Fran: Virtual Goods Summit (Oct.10) and SNAP Summit (Oct.28)

I used to hate conferences, I thought of them as a big waste of money to hear things I already knew.

However, I was wrong. Some of my current best friends are people I met at conferences in the last year. And A LOT of the insights and data that I rely on for my posts come from notes taken while listening to panels.

So here's two conferences in which you might be interested:

AND DISCOUNT CODES!

Virtual Goods Summit: October 10th.

Why you should go: Lots of great panelists sharing lots of great data about virtual goods for your amazing business plan. Honestly, virtual goods is among the hottest things in games and the Valley in general, I have no doubt it'll be valuable to attend.

The Panelists:

• Andrew Chen, Futuristic Play
• Daniel James, Three Rings
• Karl Mehta, Playspan
• Amy Jo Kim, Shufflebrain
• David King, Lil Green Patch
  
• David Perry, Acclaim
• Andrew Schneider, Live Gamer
• Nabeel Hyatt, Conduit Labs
• Sean Ryan, Meez
• Lee Clancy, IMVU
• Adam Caplan, Super Rewards
• Shervin Pishevar, SGN
• Brian Balfour, Viximo
• Anu Shukla, OfferPal Media
• Lee Crawford, TwoFish
• Matt Mihaly, Sparkplay Media
• Tim Pechmann, GMG Entertainment
• Paul Thind, Habbo
• Gene Hoffmann, Vindicia
• Andrew Trader, Zynga
• Susan Wu, Ohai

Discount code: http://vgsummit2008-bret.eventbrite.com/?discount=BRET

SNAP Summit: October 28th.

Why you should go: Offerpal talking about how to successful integrate virtual currency into your app. Knowing the SNAP organizers, I can guarantee it'll be more than just a sales pitch for Offerpal. And Mark Pincus, CEO of Zynga will be talking as well. They've opened up their agenda for suggestions, so if they're some aspect of developing for a social network you want to hear more about, let them know here. If you want to hear me speak, there's your chance. :)

Discount code: http://snapsummit3.eventbrite.com/?discount=BretFriend

Sunday Startup Lesson: Be a Suckup

In my freetime, I do things like read biographies of Henry Kissinger, Lyndon Johnson, and Andrew Carnegie. These books tend to epitomize the word tome, i.e. long ass book. Since I've read them, you don't have to.

While reading, I'm always looking for hints on how these men rose to power, their secrets to success.

It turns out there's a simple answer: Suck up to powerful older men.

All three, Kissinger, Carnegie, and Johnson, all were master flatterers who ingratiate themselves with powerful older men who could help then advance their careers.

All three cultivated powerful mentors that provided them with the opportunities that led to their success. If you take nothing else away from this article, remember: find a mentor.

Kissinger was the most systematic about this. While a Harvard grad student he created a journal called Confluence and asked important figures in public policy to write articles for him. Nearly everyone he asked was happy to write for a journal associated with Harvard. Kissinger would glowing praise each submission. Over the years, Kissinger kept in touch with many of them, and received letter of recommendation, job offers, and introductions for these people for the rest of his career.

Johnson targeted men who were his father's age. Johnson would install himself as a honorary son, leveraging the paternal feelings that he would deliberately engender in old men. He is unequivocally considered the most effective Senate leader ever because of his ability to convince old men, *cough*, I mean Senators to vote as he saw fit.

Carnegie took the path of hard work to make certain that he was noticed. However, he made certain people knew that he was working hard by advertising it. He didn't simply wait to be noticed. As a result, he was trusted by his superiors and given insider trading opportunities that made him wealthy by the age of twenty-five.

The Key to Effective Flattery

Ask for someone's else opinion. Tell them how smart they are.

This works because rich and powerful people always attribute their success to their intellect and/or hard work. Though, oftentimes, their success was due to luck.

I'm not going to explicitly tell you how to translate this advice into startup world. I'll simply say that there's a lot of VCs who are probably a lot older than you. Good luck.

And yes, flattery works exceptionally well on bloggers.

Female Online Gamer Demographics

I missed Comscore's press release outlining the demographic breakdown of female gamers a couple weeks ago, so I'll assume so did you. Without further ado.

Online Gaming Site Visitation by Age Segments August 2008 vs. August 2007 Total U.S. – Home/Work/University Locations Source: comScore Media Metrix
Demographic Segments	Unique Visitors (000)
	Aug-07	Aug-08	% Change
Total Females: Online Gaming Category	33,888	42,884	27%
Females: 12-17	3,030	4,710	55%
Females: 18-24	3,781	5,090	35%
Females: 25-34	5,724	6,543	14%
Females: 35-44	7,990	8,839	11%
Females: 45-54	6,366	7,359	16%
Females: 55-64	3,100	4,418	43%

Comscore's explanation of the marked increase of female gamers from last year:

"Contributing to strong growth in the category among younger girls is the increasing popularity of fashion and dress-up sites, such as Stardoll.com, DressUpGames.com, and I-Dressup.com, and virtual worlds such as Neopets and Gaiaonline.com. Meanwhile, the growth among older females is in part due to partnerships between women’s content portals and casual game sites, such as iVillage.com’s partnership with Pogo.com games."

All told, Comscore counts around 43 million female online gamers in the U.S. There's no indication in the press release of their methodology, but I'm going to guess that they're not counting gamers on Facebook or Myspace. If they did, I'd speculate that they'd see another 10 million or so females who play games regularly.

Reader Mail: The Popularity of Superpoke Was Just Luck

More and more, readers are writing to me to express their opinions and ask for mine regarding different aspects of the social gaming space. I think this is awesome, so keep sending those emails.

Being excessively voluble, I write wordy screeds in reply. Hmm, looking at that previous sentence, it appears I must have swallowed a dictionary for breakfast. Being excessively lazy, I've decided to repurpose my responses rather than writing a new post from scratch. Enjoy the sharing.

One of my reader made the offhand comment that Superpoke's success was due to luck. Here's my response, cleaned up for publication.

Superpoke's Success

I think Superpoke's success was anything, but luck. Here's a few reasons why Superpoke succeeded:

1. It was an extension of a feature of Facebook that was already extremely popular. As I've said many times, Facebook is a communication platform. Pokng was an already understood communication tool. Slide didn't need to teach people about its product, people got it instantly.

2. Slide had extensive experience with the social networking audience due to their popular Myspace widgets. As a result they understood the audience, unlike most developers who then (and still) develop applications for themselves. Unfortunately, for most of my readers, you're not normal, deal with it. You are building things for the people you hated in high school. If that realization strikes you cold, then you better get out of the consumer space.

3. Slide wasn't afraid to excessively leverage the viral mechanisms in Facebook. that's the polite way to say that they spammed the hell of out of people. They weren't alone. Unfortunately, many indie developers weren't willing to leverage those channels, both because they found it unethical and because they figured that if they wouldn't accept invites, why would any other else. It's the same logic that kept some developers from using advertising.

4. Slide had the money and manpower to run a data-driven company. Max Levchin is smart enough to know he's not normal and uses collected data to improve Slide's products. So should you - my friend Andrew Chen will tell you how.

5. Slide was one of the first developers on the platform, and was able to take advantage of it. Yes, life is unfair, some companies get preferential treatment. Move out to San Francisco, make some powerful friends and maybe you can get in early on the next platform launch.

Hope that was informative, and please keep those emails coming. I need something to entertain myself, now that I can't afford to leave the house.

Looking for a Job in a Recession? Social Games Companies are Still Hiring.

The economy is a little scary at the moment. For all you fellow entrepreneurs, I share you fears about whether or not you're going to be able to raise money. Fortunately, it looks like games company are a bright spot, with top-tier venture firms like Kleiner Perkins expanding their exposure to games. (Thanks Andrew!)

Which if you're not already working on a games startup, you may want to consider working for one. All of them are looking for great people, especially developers. Always developers.

In fact, Zynga, the best-funded social games company (29 million in funding) asked me if I'd be willing to post some jobs that were looking to fill. I am.

If you visit my site you'll now see a listing of recent job postings in the social gaming space. At the end of this post, I'll list them so your RSS readers won't have to visit my site.

If you do decide to continue on you own, great! I hope that you raise enough money, so that I can post your job listing on my site.

Until then, here's some job that are available:

• PRODUCER/DESIGNER (TORONTO) - ZYNGA
• WEB DEVELOPERS - ZYNGA
• ONLINE MARKETING MANAGER - ZYNGA
• FLEX DEVELOPER - ZYNGA
• 2D GRAPHIC DESIGNER - ZYNGA