zyakaira notess: Early mid year estimates had indicated $100 million for Zynga of “Farmville”, Texas Hold’em and Mafia Wars across facebook and myspace. Now this is likely to be revised up by a few percentage points for zynga alone…Now you know why Tweetmeme and Twitterfeed are so conjoined with  Twitter. Let’s hope this pans out ’socially’. Other animation/gaming players like Rock you and Zynga and Playdom all have $100m each in funding and by current engagement rates are likely to fare equally well for the PE involved in each case…long time to go before natural selection burns a few holes..

Even if the Virtual world envisaged with Dubai World comes to a nought, facebook and twitter are not doing so badly after all. Tweetmeme and Twitterfeed to name a few would have an even more significant overlap with the base ‘platform’ of twitter than the seemingly conjoined but really technology independent gaming networks and they are also on spinal tap.

<blockquote>

Facebook Games Maker Zynga To Make $100 Million This YearNicholas Carlson|May. 1, 2009, 3:12 PM |

Mark Pincuss social gaming startup Zynga, which makes multiplayer games like the popular Texas Holdem for social networks Facebook and MySpace, is growing faster than you think.We reported in January that it closed $50 million in sales during 2008. Now BusinessWeeks Sarah Lacy says the startup has “annual sales of about $100 million, according to several people close to the company.”Most of that money comes from “the 2% to 10% of users who pay $1 an hour to play premium games or buy virtual goods.”Sarah says the other hot startup in social gaming is Playdom, which generates about $50 million a year in sales.

via Facebook Games Maker Zynga To Make $100 Million This Year.

</blockquote>

I don’t do this as a major [my love is computers] or anything. I haven’t went to school for it; I taught myself. I know I’m still a novice and everything, I don’t need anyone to tell me that. So now that I know this slideshow for WordPress actually works. I can add more to it. I think is the safest way and easiest way to show my designs. If you would like to see my whole collection of designs, just click here. You might see a lot of Kurosaki Ichigo ones,Yoko ones, and Code Geass ones its because I’m a Bleach, Tengen Toppa Gurren Lagann and Code Geass  fan.

| View Show | Create Your Own

Mercury News has a nice summary of the recent flurry of activity in social gaming.

SoftBank invests with goal of faster expansion into Asian markets and in-game advertising. Articles by:

VentureBeat

Business Journal

TechCrunch

paidContent

Wow…I had completely forgotten about RockYou, a Redwood City, Calif.-based startup that started out as a widget maker but then turned social app developer and now is trying out hawking virtual goods. Sort of like the company it loves to imitate: Slide. RockYou made a splash today by raising a whopping $50 million in new funding from existing investor Softbank. That brings the total funding raised by the 4-year-old company to $119 million. My view is that if the first $69 million didn’t make RockYou into a real, profitable business, what are the odds that the new $50 million will? Not very high!

kathimerini.gr | Προβληματίζει η χρήση κοινωνικών δικτύων από παιδιά

Πρόσφατες έρευνες επισημαίνουν την αύξηση του αριθμού των παιδιών που δηλώνουν ψευδή ηλικία προκειμένου να συμμετάσχουν σε κοινωνικά δίκτυα όπως το Facebook και το MySpace, ή χρησιμοποιούν δίκτυα του web ειδικά σχεδιασμένα για αυτά.

Το Facebook και το MySpace θέτουν ως όριο ηλικίας τα 13 έτη, χωρίς όμως να διαθέτουν πρακτικούς τρόπους επαλήθευσης της ηλικίας, με αποτέλεσμα πολλά μικρά παιδιά να αποκτούν πρόσβαση. Κάποιοι επιστήμονες ανησυχούν ότι προ-εφηβική χρήση αυτών των ιστοσελίδων, που κάποιοι έχουν συνδέσει με περιστατικά εξάρτησης από το Διαδίκτυο, θα μπορούσε να καταστεί ζημιογόνα τόσο για τις κοινωνικές σχέσεις των παιδιών όσο και για τους εγκεφάλους τους.[next]

 

Digital Hollywood, a must for content licensing professionals, lands at the Loews Santa Monica Beach Hotel M 10/19-Th 10/22 and producer Victor Harwood didn’t miss a thing.  Action packed with the Variety/Content/CodeSpace/EPPS Summits, International Academy of Web Television meetup, WGA comedy writers boot camp, filmmaker screening, pitchfest, poolside cocktails, a social mobile gaming connected device multiplatform hackathon, prizes, and DJ afterparties.  1500+ will be mixing it up with blockbuster producers, showrunners, festival programmers, publicists, A-list press, web-celebs, network executives, brands, agencies, Emmy winners and VCs.  Companies including HBO, Bravo, Starz, Scripps, Fox, NBCU, CBS, Disney-ABC, MTV, FX, G4, Sony Pictures, Paramount, Miramax, MGM, Mandalay, Lionsgate, Marvel, Merv Griffin, Dick Clark, CinemaNow, Redbox, Fremantle, Reveille, Endemol, blip.tv, Evil Global Corp, EQAL, Rooftop Comedy, Demand Media, YouTube, Y!, MySpace, Mattel, Activision, Guthy-Renke and more.  From Carson Daly to Public Enemy to Justine Bateman – everyone is heading down.  With sub-$100 pricing for unemployed media execs, this is going to be the most interesting DH yet.  But if you can’t make it, you can follow along #DH09.  The guide below is just a mere sampling of the offerings, for more details visit www.digitalhollywood.com:

M 10/19

10-11
Variety Summit/Orly Adelsen, Dick Clark Productions

11-1 Palisades Ballroom 5FL
IAWTV/International Academy of Web Television Inaugural Meeting, members include Alex Albrecht, Diggnation, Justine Bateman, Easy to Assemble, Miles Beckett, EQAL, Veronica Belmont, Tekzilla, Hayden Black, Evil Global Corp., Felicia Day, The Guild/Dr. Horrible, Greg Goodfried, EQAL, Brian Seth Hurst, ATAS,  Dina Kaplan, blip.tv, Jim Louderback, Revision3, Sam Reich, DutchWestTV, Scott Roesch, Atom.com, George Ruiz, ICM,  Tim Street, French Maid TV…

12-9
CodeSpace Hollywood:  SDKs galore, check out the platforms, join a team , build an app, win prizes, dance the night away

12:15-1:30
Variety Summit/Keynote Lunch/Carson Daly, Peter Guber, Mandalay, Richard Rosenblatt, Demand Media…

1-2:15
DHI/Mike McCurry, Arts + Labs, Fremantle, Reveille, Activision…
DHII/DH Upfronts/Genius Rocket, MTVN Tribes, Technorati, Google, IBM, Microsoft Advertising…
DHIII/Ted Cohen, TAG Strategic…

1:30-2:45
Content Summit/Withoutabox, Bunnygraph, The Station, Veoh…

1:45-2:45
Variety Summit/TV Ecosystem/NBCU, Fox, FX, Reveille…

2:30-3:30
DHI/Shashi Seth, Cooliris, MTV, Discovery, YouTube, Cisco…
DHII/Story Worldwide, USA, AOL, Comcast Spotlight, Ed Moran, Deloitte…
DHIII/LBS Apps/5th Finger, Nokia, Handango, Starcom, Mobiclip…

3-4:15 Room 631
Content Summit/Comedy Writers John Hamburg, Larry Amoros, Glasgow Phillips, FOD, Break.com…

3:45-5
DHI/ICM, Starz…
DHIII/TimChang, NVP, TwitVid…

4:15-5:15
Variety Summit/Brett Ratner, X-Men, David Zucker, Scary Movie, Sony Pictures..

4:30-5-6 Room 631
Content Summit/Pitch Camp/MTV, Lionsgate, KCET, IndieGoGo, Break.com, Omelet, Aniboom…

5-6
Poolside Cocktails

6:30-9
Content Summit/DH Excellence Tribute to Sundance Doc:  We Live In Public/Ondi Timoner, Jason Calacanis..

Tu 10/20

7:30-8:45, Venice Room
Breakfast Briefing, Monkey Media SeamlessTV Telescopic Video Patent Licensing Program, RSVP vip@monkey.com

8:30-9:15, Room 631
Content Summit/Writers Boot Camp for Screenwriters, TV, Webisode producers with Jeffrey Gordon

9-10:15
DHII/Social Apps and Mini-Apps/Permuto, Slide, Gigya, Verve, Rocketfuel…
DHIII/ZillionTV, Origin Digital, Priority Digital, HD Cloud, Zoran, BitGravity
DHIV/Craig Alexander, Turbine, Allen DeBevoise, Machinima, Microsoft, Stormfront, IGA…

9-5
CodeSpace Hollywood/Developer Camp

9:30-10:45, Arcadia C
Content Summit/Transmedia Storytelling w Helen Ross, Mad Men on Twitter, Adam Armus, Heroes…

10:45-12
DHI/Kevin Yen, YouTube, Patrick Barry, Y! ConnectedTV, Reveille, MySpaceTV, MTV, NBCU…
DHII/MTV, msnbc.com, Wunderman, Enfatico, McCann…
DHIII/Braxton Woodham, Zannel, Gracenote, Sony Pictures, Motorola, ClipBlast!…
DHIV/Mattel, Vivendi Games, Microsoft, Vector, Tarver, ASAP Games, g-NET…
3D/Angela Gyetvan, 3ality, Andrew Fear, NVIDIA, IMAX, RealD, SMPTE…

11-12:15, Arcadia C
Content Summit/Storyteller + Producer = Creator/Writers Lie to Me, West Wing…

12:30-12:55, Arcadia C
Content Summit/Lunch/Snagfilms

12:30-1:45
DHII/Neal Tiles, G4, Eric Berger, Sony Pictures, Sab Kanaujia, NBCU, Greg Goodfried, EQAL, Shawn Gold, MySpace…
DHI/Interpublic, Guthy-Renke, Google….
DHIII/Lionsgate, Cisco, Adobe, Microsoft, Verizon, THR…
Demos/MONKEYmedia, Qtv, PeopleBrowsr, Edgecast…

1-1:20
Content Summit/Indie Go Go…

1:30-2:45
Content Summit/Doc Filmmakers – Roman Polanski: Wanted & Desired, Anvil, Who Killed the Electric Car…

2:15-3:30
DHI/Lionsgate…
DHII/Disney ABC, Oxygen, Fox, Filmaka, TVGuide.com, TheWrap, Microsoft Advertising…
DHIII/Reality/Reveille, Endemol, Merv Griffin, LATimes.com/The Envelope, AllThingsD…
DHIV/Fox, Motorola, mSpot, FLO TV, GoTV, Paramount Pictures Digital Entertainment, Fun Little Movies, Kit Carson…
DRM/James Burger, Dow Lohnes, Alan Bell, Paramount, Jack Lacy, Intertrust, Rajan Samtani, Digimarc…
VW/Electric Sheep, IMVU, Gaia, RocketOn, GMG, Sulake, Raptr…

3-4:15
Content Summit/PGA/Bollywood Hero, Level26, MTV, FilmNation…

3:50-5
DHI/Enhanced Advertising/RockYou, Starcom, Google, Bunchball…
DHII/Best Buy, RallyPoint, Rovi, OpenTV Labs…
DHIII/Google, Canoe…
DHIV/Justine Bateman, Easy to Assemble & fm78.tv, George Ruiz, ICM, Dina Kaplan, blip.tv, Babelgum…

5-6
Content Summit/Starz Animation, Aniboom, ka-chew!, ASIFA…

5-6/6:30-8
Poolside Cocktails

W 10/21

9-10:15
DHI/Alloy, Jivox, TubeMogul…
DHII/Andrew Kippen, Boxee, OpenTV, Digeo, ZeeVee, SyncTV, Motorola…
DHIII/James Burger, Dow Lohnes…
DHIV/Michael Scherotter, Microsoft, JWT, Ooyala, Gotuit…

9-5
Code Space Hollywood/Developer Camp, Awards

9:15
EPPS/B/Breaking Talent/Dancing with the Stars, People Magazine, EMI, USA Today…
EPPS/A/Chuck D, Public Enemy, Lionsgate, All Things D, Orange-FT, Ning…

10:45-12
EPPS/Small Stories/PR Writing at the Moment
DHII/Scripps, Fox Sports, MONKEYMedia, Comcast Spotlight, MGM, Rovi…
DHIII/GCs/Grant Michaelson, ABC, IFTA, WGA-West, GoTV…
DHIV/Napster, Y!Music, MemBrain, WB Records, MySpace Music, Topspin…
DHI/Roku, Zoran, Clearleap…

12

EPPS/Keynote with Marc Graboff, NBCU with Julia Boorstin, CNBC

12:30-1:45, Room 731
Content Summit/Interactive Emmys/Bravo, Hoodlum, NBCU, HBO, ABC, ATAS
DHI/Avi Savar, Big Fuel, Story Worldwide…
DHII/MTV.com, VH1.com, TV Guide Online, Sezmi, Oxygen, IFC…
DHIV/Ali Partovi, iLike, UMG, Sony Music, Gracenote, LA Times…

2-3:30, Room 731
Content Summit/Brand Integration/Break.com, Omelet, Mad Men, LadderUp, Transpond, ATAS

2:15-3:30
DHI/Metacafe…
DHII/Intel Capital, Granite Ventures, Scale Ventures…
DHIII/Mark Ely, CinemaNow, Jason Rubenstein, Redbox…
DHIV/Kevin Arnold, IODA…

3:30
EPPS/B/Getting Air Time on TV & Radio/NPR, Clear Channel, ShowBizExpress, E!, Extra, AP, BET, CBS
EPPS/A/E!, Magic Johnson, ET, Parade Magazine

3:50-5
DHI/Fox, MTV, msnbc.com, Y!…
DHIII/Marvel, Motorola, Parade…
DHIV/Flixster, HSN, Fandango…

4:30
EPPS/Landmark Theaters, Sundance Institute, Variety, LAFF

5
Poolside Cocktails

6-9, Arcadia A
Adobe Cocktails, Appetizers, Workshop, sneak peek at 2010 feature film/workflow

8:30-2
Code Space Hollywood/Afterparty with Mystery DJ

Th 10/22

9:30-10:45
DHII/Gaia…

11:05-12:20
DHIV/Marketing Hollywood/MGM, RockYou, Miramax, myYearbook
DHII/SodaHead.com, GOOM Radio…
DHIII/MTV, TurnHere, Vantrix…

12:50-2
DHI/ClipSync…
DHII/Nabbr…
DHIII/MomTV…
DHIV/MapMyFitness, Sapient Interactive…

2:15-3:30
DHIII/Rooftop Comedy, Demand Media, Fine Brothers Film, The Alchemist, BettyConfidential, Mom Life

Movies are the world’s most influential communication medium.   They catalyze conversation in countries all over the world.  Films teach history, tell stories, and make people laugh until their bellies and faces ache.  Moving pictures are for the young, old, rich, poor, educated, and the illiterate.

Etched in each moviegoer’s memory is a panoply of great scenes from tens of thousands of films.  How much fun is a dinner, cocktail, or keg party if nobody could quote a movie line?   The language of film is universal.

Unfortunately, to re-experience these moments can be painful.  Watching Humphrey Bogart kiss Ingrid Bergman or John Belushi scream “Food Fight” or Russell Crowe facing down tigers in the Coliseum is a challenge. These are moments that everyone wants to experience over and over again. But, does anyone really pop in a DVD and patiently scan for their favorite scenes? No. We search the Internet. Mostly, we don’ find what we’re looking for, and, when we do, it’s far from a cinematic experience.

THE PROBLEMS

So far, The Internet has  provided a piecemeal solution to digital video. There are plenty of video sharing sites filled with user-uploaded content, but their selection is haphazard at best. You might find “I love the smell of napalm in the morning” seven minutes into a longer clip or with abominable picture and sound. Diehard fans do will share shaky, unreliable videos of their televisions shot on camera phones.

So you might find what you are looking for but only if you’re willing to sort through a lot of garbage and put up with subpar film quality. But  people love movies so they put up the  problems.

Over 12 million people have watched the above clip from The Lion King.   I wonder how much money Elton John and Tim Rice have gotten for their work.  Neither the owners of these films nor the artists who make them receive any compensation from the display of their works. If it’s not illegal, it’s definitely unethical. This user-generated video industry combined with other public policy issues have unintentionally driven a wedge between Hollywood and the most dynamic and creative Internet companies. Content owners must benefit from Internet distribution and AnyClip wants to provide the most compelling and engaging platform to help them do so.

WHAT IS ANYCLIP

Six months ago, my co-founder Nate Westheimer and I joined an amazing group of Israeli developers who also happen to love movies. We wanted to build a Web service that would allow anyone to find any moment from any film ever made instantly. Our co-founder and lead investor Erel Margalit suggested we name the company AnyClip.

Everybody wants to relive scenes and AnyClip set out to make that possible. Creating the data and search technology to make that work presents formidable challenges. When searching for a scene from a movie, people describe moments in so many different ways: from dialogue and plot description to hazy memories of shark attacks and flying cars. This creates really engrossing and thorny computing problems. If someone searches for “dead shark,” do they want to see Roy Scheider blowing up Jaws (i.e. action on screen) or Woody Allen lamenting the “death” of his relationship with Annie Hall (i.e. dialogue)? The AnyClip platform incorporates tools to handles these issues and more.

Early tests show our service can be a great discovery engine for films. A search for “I love you” produces countless clips from hundreds of movies. A brief visit to AnyClip can yield an iTunes download or an addition to a Netflix queue. At AnyClip, clips are dynamic and up to four minutes long. You can adjust a clip to relive exactly the joyous, daring, or inspirational moment you crave.  This sample may encourage a purchase, rental, or download of the entire film.  At minimum, it reunites the movie lover with the art and the artists who brought them such joy.  This reaffirm  loyalty and interest in the future work these artists produce.  That’s called “promotion.”  AnyClip evokes memories and channels them to enhance the values of the world’s great film libraries.

Today, we also launch a public API for our data and eventually for legally licensed content. This would allow companies like IMDB, Slide, RockYou, Netflix, Zynga, OMGPOP, Twitter, Facebook, Mahalo and – most importantly – the insanely creative and brilliant independent developers around the world to build great user experiences with movie clips on top of our movie data. AnyClip is a platform to power a renaissance of the greatest movies the world has ever known.

DISRUPTIVE BY DESIGN

If you look closely at the movie ecosystem, the only institutions that suffer from a legally available AnyClip are those that benefit from leaving the current system intact.   First and foremost are existing Internet media providers that hide behind the safe harbor provisions of the Digital Millennium Copyright Act. While nobody knows precise numbers, YouTube has served billions of movie scenes to audiences around the world.  Overseas video sharing and PTP sites — Tudou, Megavideo, PirateBay and BiTTorrent –operate outside the reach of US laws. Naturally content owners have been wary of digital distribution in light of these abuses and violations of the DMCA.

History shows Hollywood struggles with new formats and other technological innovation. They are instinctively protective of their core businesses. Thirty years ago, Universal sued Sony for creating the Betamax. Luckily, they failed and today we have a US $25 billion DVD industry. The good news is AnyClip enhances every distribution window.  Every one. We don’t compete. We complement.

And that’s important, because DVD revenue is dropping for the first time since the format’s introduction. Piracy and Internet video-on-demand from the likes of Amazon, Netflix and iTunes are changing consumption patterns. Economic realities have forced audiences to reassess their entertainment spending.

One way to stanch the bleeding in the Home Video Market is to reinvigorate the value locked in our memories. Short of innovation, the motion picture industry will continue to see declining revenue and audiences will get fewer new magical moments.  Why? Because Quentin Tarantino and Ridley Scott will be given smaller budgets. Does anybody really want to deprive Peter Jackson of the budgets required to make another Lord of the Rings?

Many powerful Hollywood people have told us that AnyClip is amazing but impossible. Some very smart industry executives are rooting for us to succeed but worry about the legal landscape. At its best, the digital rights marketplace is byzantine.  These executives are right to be concerned. For the sake of the movie industry’s wonderful and talented people, and the billions of fans around the world, we certainly hope we can find a way to work within the law to create great opportunities for all.

And this includes AnyClip.  While we will be a smaller participant in any transactions that occur between content owner and consumer, we believe this business will scale just fine. It’s the greatest content that has ever been made etched in the memories of everybody on Earth. We think “reliving movie moments” is a huge market. We are the catalyst for what will be a high-growth legal clip economy.

Our fourth co-founder is the former CEO of Sony America Mickey Schulhof. Mickey knows the pitfalls as well as the upsides of media innovation having introduced the CD and Playstation to North America. He always tells me that if it weren’t for naysayers, we wouldn’t have revolutionary companies.

“Sometimes you just have to do things, Aaron,” Mickey told me when I first described AnyClip.  It’s time for the curtains to open.

GDC Austin is in full swing and the Twitter chatter is going strong.  There were a number of exciting summits on Tuesday but the one standout was my client PlaySpan’s Monetization 2.0 Forum. Standing room only as over 220 industry executives packed the room to hear from industry trailblazers. The breadth of speakers and subjects was impressive culminating in a fantastic case study by Fernando Paiz, Executive Producer, Dungeons & Dragons Online where he discussed switching over to a hybrid monetization model and providing consumers choice in play and pay is increasing ARPUs with virtual goods as the key driver.  If you’re at the show, stop by PlaySpan’s Booth 801 to check out the eye-opening DDO Ultimate and Nonoba demos and explore ways to optimize your digital goods commerce and payments.  Read on, the following is a detailed summary of the day’s events:

2pm, Opening Remarks
Karl Mehta, CEO, PlaySpan
Karl Mehta opened the Forum with market insights from the VGMarket/PlaySpan Digital Goods Buyer Survey. The survey talked with 2425 respondents from the PlaySpan Marketplace examined individual digital goods purchases and sales behavior across multiple genres and platforms.  12% of those surveyed in US purchased virtual goods last year. The industry goal is to take that number to 25% in 2010 and deliver virtual goods and digital goods to the mainstream.  10% of 55-64y purchased virtual goods, women 25-34y making up the largest group of buyers. The survey also ranked the popularity of payment methods: PayPal #1 (50%), Credit Card #2, Ultimate Game Card #3, Cash #4, and Spare Change at #5, ahead of Google checkout and money orders.  (Survey findings will presented in detail at Engage! Expo next week.)

2:15pm, Social Gaming Panel
Moderated by Ned Sherman, CEO, Digital Media Wire
The next panel focused on social gaming trends and featured senior executives of the five major players in the viral and social space.  Moderated Ned Sherman asked the panelists to share case studies of unexpected successes and failures, how they measure success, and to tell us something we don’t know.  (On September 30, Ned Sherman will be digging in deeper at Digital Media Wire’s NY Games Conference, if you’re planning on going discount code: GDC will get you $100 off.)

John Pleasants, CEO, Playdom
Having recently joined Playdom from EA, John offered an interesting perspective on the direction of the gaming business: ”The gaming business is a $45B business growing at a rate of 10%, no other $50B business in the world is growing double-digits in this economy but two-thirds are shrinking, the traditional business, and one-third which is online is booming at over 30% globally.  The most exciting part is online social gaming.  Playdom is at the nexus of free2play, online social gaming, live services (vs software model), it’s so current and has so much momentum behind it, along with the audience here, we are shaping where the industry goes next.  Very exciting time.  What’s working well – Mobsters II came out 6-7 weeks ago on Facebook  - key metrics around virality, engagement – first game that has sequelled – Mafia category is now 3y old, long-lived.  What’s not working – Sorority Life wardrobe feature – more features doesn’t mean better game – we misread audience. Metrics watched includes DAUs, ARPUs and virality, engagement most sacred which is the highest quality measure of the quality of the game, repeats, frequency/depth of usage, time on site, 24 hours – 72 hours – 1 week after a game, you can predict what’s going to happen to a game.  We are best at monetizing games, that said monetization is not more important than growing the industry, getting people on the platforms, overly focusing on monetization is a trap.  We are a game producer and platform/publisher – we make great games, distribute them well to multiplatforms, thus we watch operational metrics, currency programs, virality, business intelligence.  Sharing, rewards, referrals are features incorporated in all games – haven’t cracked the nut on UGC yet – mass participation will grow the business – had a fashion item contest in Sorority Life with huge participation – wound up selling 12 as items in store.  Launching game with synch play, live service access through any portal.  Can’t own customers in a web world, always one click away from losing customers, must earn them through better service.  And by the way, we’re hiring!!”

Sebastien de Halleux, COO, Playfish
“Playfish is the fastest growing in the social gaming sector, 7 of the top Facebook games are from Playfish, we also top MySpace, Apple charts. Since 2000, 100+ mobile titles.  We were frustrated by retail, catalogue, portal experience, sought distribution revolution, saw Facebook platform as a distribution opportunity.  Playfish puts your friends at the center of the experience, part of the game DNA, value you get is derived from interaction with friends, similar to the fun you have with friends around a game of Monopoly.  The company is 20 months old, started in London, now has four offices including one in the Arctic Circle- organically grown to distribute 130mm games – 1B game sessions in a single month – social games are addressing latent demand and receiving enthusiasm of large audience.  Surprises – 4th largest country on Facebook is Turkey. Some countries have zero revenue, when it comes to monetization, it’s not one size fits all. Monetization question is global but propensity to purchase inside a game is equal across countries.  Most popular games – Pet Society 17mm MAU and Restaurant City 14mm MAU – both audiences larger than WOW – both less than 6m old.  Monetize with virtual goods in-game microtransactions where players buy goods for self-expression or collectibility.  Virtual Goods pioneered in Asia but now widely adopted around the world with items upwards of $40.  Sell 20mm items daily in Restaurant City – pay with attention based currency (earned by time playing) and/or real currency.  It’s not retail – try before you buy. User is put in control. This is the first time not telling the user how much the entertainment is worth – some spend hundreds of dollars because you have simply removed the ceiling, can monetize the demand curve more closely.  Quiztastic! on Facebook, based on UGC, harnesses creative power via crowdsourcing friends for relevance – many want to participate in game design process but not necessarily coders – Quiztastic! creates a socially relevant filter than creates a high quality experience.  Next trend on web will be the access method, play same game on MySpace, Facebook, Bebo, Google Android…a service accessed through preferred community site, in that respect you do own your customer. Era of destination sites is marginalized compared to reach you can get by going to users, not a product on a standalone platform.”

Lance Tokuda, CEO, RockYou
“RockYou is a virtual social app-based ad network focused on monetizing social apps and viral widgets.  With the number of page views that virtual goods generates, developers can make decent money on the side just by putting ads on remnant inventory of page views, getting $0.05 – $2 CPMs depending on the quality of the experience.  Things we did well was grow our reach, now at 211mm/month with ad network and Facebook/MySpace games.  What didn’t work was building apps to take advantage of Facebook viral channels, competitors copied and overloaded it.  Now building high quality experiences and let virals take care of themselves.  Remnant inventory advertising, branded ad sales – goal is to reach 40-50mm US, 200mm worldwide to become a must buy for brands – Did you know that 80% of ad money goes to these must buy top ten sites like Facebook, MySpace…. (Developers should check out AppSavvy too.) Biggest spenders:  ATT, Sprint, P&G, studio theatrical trailers. As for UGC, only 10% of players will actually provide UGC, very hard to retain recurring engagement, Facebook limits distribution self-expression – apps don’t own profile space anymore.  Other features like competition, exploring, leveling, and socializing are stronger than UGC on Facebook platform. Big fan of synch games. And did you know you can increase CTR 5x by simply changing icon on bookmark to red 16×16 square.”

Robert Goldberg, SVP Business Operations, Zynga
“Been at Zynga 6m.   Zynga marries best of web with best of game design, get good games out quickly and iterate to other games over time.  Biggest failure in terms of investment/time was Guild of Heroes, a deeply immersive 3D game on Facebook, but not a very social game, not appropriate for Facebook, decommissioned it.  Need to design more to social principles, experience friends in new and different ways and express yourself through games.  Farmville launched 8 weeks ago, 16mm DAU, 40mm+ MAU – caught fire – appeals to a wide audience cross age groups, genders, countries, appeals to a variety of game play – for those interested in leveling up, to those interested in expressing themselves through decorating, have fun staying connected to distant relatives.  Good games on Facebook, MySpace are about communication, self-expression and game play – combo of two create the social experience.  Farmville some items only purchasable through farm cash (real $$) not earned coins – no negative feedback yet, enough free game play to enjoy the game – haven’t spent a dollar yet and on Level 31 without spiffing coins or cash. Texas Hold Em largest synch game, something magical about finding a friend at a game.  Striving to make asynch play that closely approximates synch play.  We have a great relationship with Facebook, MySpace platforms – why not stand on the shoulders of giants.  Games running on both Facebook Connect and MySpace OpenSocial.  Game play is more about social fabric underneath rather than where you’re playing.  Hmm, tell you something you don’t know –  pink tractors outsell red tractors on Farmville!” (This hot tidbit got retweeted!)

3:05pm, MMOs & Virtual Worlds
Moderated by Nanea Reeves, SVP, EA Online
“Online monetization is currently a big topic at EA, target 7-8% free2play conversion, 5% on social networks.  Topics for the panel: business models, offerings, consumer base, and fraud.”

Cary Rosenzweig, CEO, IMVU
“IMVU is a 3D free2play virtual world that allows developers to sell credits to users rather than cashing them out directly to us. Rapidly growing, hiring engineers!  Making $1mm+/month (will have a big announcement in 3 weeks), 80% revenue from consumer (microtransactions + UGC), only 20% advertising – managed offer or banner ads.  Oh what a difference a year makes (big laughs from the audience-that’s for sure! from the panel) – one year ago $750mm in venture capital money went into advertising-based virtual worlds, then it was abandoned to launch virtual goods models.  The essence of a strong business model: fight fraud, build economy, provide a service customers will pay for.  Do the math, you have to be a massive planet to base business on advertising, if you’re a satellite, monetize directly from your customers, increase monetization per active user, monetization machines can be more successful than those with larger customers bases without a monetization machine.  Free2play metrics:  track engagement, user hours (50mm monthly), overall transaction value (understand relationship between user hours and monetization- $50mm US back and forth), conversion (user base active in economy – 51% not paying anything), repeat usage, watch retention more than acquisition, lifecycle value over 2 years, markers – did they buy or sell something, buy or sell currency, put them in buckets and move them along.  Free to paid conversion rate targeting, 5-10% in Asia, 20% is an anomally, if you’re at a 5% and go to 6% you’re up 20%, more than a trial strategy, people that play for free, engaging larger community, adds value to those that play.  In the business of UGC, like eBay market, 20,000 active users/developers out of 150,000 create 3-4000 items created each day. 2.5mm 3D items in the catalogue to customize.  Many come to IMVU to buy credits for items they want, not selling virtual goods directly. Top 10 creators earned $100,000+ last year real cash.  There will be a revolution in the west when mobile companies charge what VISA charges, trillions will go through mobile, right now mobile payments are not reasonable at 50%, must drop to 10% to tap customers can’t tap now. Fraud is surprising low, we have a good handle on it, whenever you can get cash out, there will be fraud.  We let the market decide quality, extremely long tail, top ten items 0.02% of sales, players buy to look unique for social capital.”

Joshua Hong, CEO, K2 Network-GamersFirst
“Large scale hardcore MMORPG free2play portal launched 2y ago, manage 4 MMOs from Asia.  Free2play phenomena started in Asia, all revenue comes from selling items, make very little advertising.  MMO ARPU is high, game play is long, persistence is everything, relationship is long, community customer service is key.  Social has different DNA than MMO.  Hardcore segment will grow. They start with game boy migrate to iPhone to social gaming to console to MMO.  Turkey 75mm population, 50%+ under 25y, predominently Muslim but trying to become more western, looking for more content.  MMO combined with free2play is a winning combo, global perspective, emerging marketplaces like Brazil.  Why pay for box, then subscriptions. Free2play is another pricing option, a try before you buy, large percent of sales come from all you can eat membership model packaged as item microtransactions because that’s what members want.  Make a lot of money in Turkey, Eastern Europe, not reliant on credit cards or PayPal, rather sell prepaid cards or code, works in China too, payment that’s easiest way to go.  Watch Turkey, Brazil, India, Russia – kids looking for amazing digital content, speed to market, free2play way to go. Avoid China/Turkey fraud with prepaid cards.”

Johny Mang, Live Operations & Publishing Director, EA- DICE
“Free2play games, two titles Battlefield Heroes cartoon shooter and Battle Forge free RTS game. Both PC games. Microtransaction business works for packaged goods titles too.  Some markets localized with billing instruments that are popular work above planned ARPUs – selling decorative items, emotes, items progress faster through game experience, no tangible benefit in game play.  Other markets without language perform under plan.  Free2play sells boost on Battlefield Heroes sent it to top of charts, booster packs to equip army with skills and power, designed with higher conversion rates into the game.  Game design influences conversion rate, if items give functional advantage, smaller user base higher conversion than buying decoratives, how well positioned to monetized geography, conversion rates 5-10% very good, some markets will rate lower.  Korea homogenous market – clear demographic and established payment instruments different than Europe.  Looking at game economies where vast majority of players wont ever become customers, whatever opportunity to monetize free-riding audience I welcome, taking away illusion of ad market, may not sustain 80% of revenues, but if it brings in 20% it’s very welcome – offer reward programs or advertising, it’s welcome, microtransactions innovate in advertising space to give back to audience through ads, tie ad campaigns to virtual item rewards adds different flavor to frontal bombardment of content they’re not interested in.  Maximum potential starts with localization on billing, content.  What will happen to $20-30mm game production business model 3-4y from now.  Give consumers/audiences the tools to get what they want.”

Tom Hale, Chief Product Officer, Linden Lab/Second Life
“Second Life is a 3D virtual world that is similar to MMO, it’s a game for creating and selling things and making money, 189th economy in the world.  Making $80mm-100mm via hosting services (letting 3D content persist e.g. renting an island), virtual currency transaction fees, and premium subscription. Make some money in-game advertising for events, self-referential. How to work with advertisers to provide them and us a value, to integrate brand well into game where doesn’t ruin immersive experience.  Cash going into games from offers where you have to fill out survey – different than game advertising.  Help content creators grow their brands, mechanisms to promote, try product, rating/ranking not as useful because of charting, gets lost in the long tail.  Top merchant on Second Life is a sweater maker $1mm/year, has employees, outsourced in China – word of mouth – everyone knows she makes the best skirts.  Will see more interchange between virtual worlds and games, see that a bit with offgame trading services already, metaverse economy bigger than any one.”

Craig Alexander, VP Product Development, Turbine
“15y developer of traditional core MMO games: Asheron’s Call, Lord of the Rings, Dungeons and Dragons Online.  DDO went from being subscription-based, now 2 weeks into free2play microtransaction model, great being a part of the big monetization transition going on: core games last to make the transition.  Went with hybrid monetization model because of high fixed cost of running MMO, desire to grow revenue and offer flexibility and choice to consumer – not everyone wants to pay subscription, leaving out a significant part of the market with paywall barrier, hardcore will pay more than the subscription price – moved from mandatory subscription to optional subscription bundled with dual currency, its a balance of time vs. money, if you put enough time into game, you can play for free, or you can pay your way through convenience and consumable items.  Surprised that paid subscriptions have gone up since going hybrid, currencies are way up too, contrary to what DDO modeled would happen. DDO building own content, democratization of the design process, merchandising what players want to consume, big volume transactions are infrequent with dual currency. PC Retail is in serious decline, 3-4 years off but console going away as well.” (more on DDO below, see Fernando Paiz)

John Bates, BD Strategic Marketing, Entropia Universe
“MindArc are the creators of the Entropia Universe MMO virtual worlds game, virtual currency is backed with US dollars, approved as a bank in Sweden.  Currently one world in the universe, Planet Calypso, growing to multiple worlds in the platform.  In-game wallet – we don’t take money til item is used, e.g. when bullets are used up and players needs to replace – the fact that sooner or later the player has to fix or replace drives economy.  2008 $450mm US exchanged in universe.  Advertisers increase loot pool.  MMOs were the original social networks – very social.”

3:55pm, Monetization Demo
Chris Benjaminsen, Co-Founder, Nonoba
“Partnering with PlaySpan to provide micropayment solution for flash games. Nonoba.com is a casual community of UGC flash games, a showcase for GameRise turnkey solution for developers seeking to build a game community, completely customizable flash games platform, community APIs deep integration into any social network or community, high scores, achievements, ranking, translation, build multiplayer flash games with SDK, hosted in the cloud, free to distribute anywhere. Currently there are 235 games built by 100+ indie developers in 21 languages as well as commercial clients licensing the technology directly, open infrastructure for everybody, system running for 2y+, teamed up with PlaySpan to help developers to make a living at it with microtransactions, payment APIs offering integration, content management, accounts, permissions, wallets.  Worked with PlaySpan to develop Ultimate Pay. PlaySpan already has 85 providers, huge audience, money in the ecosystem, they are experts in handling payments, excellent fraud protection.  Demo for Ultimate Pay at www.nonoba.com.”

4:15pm, Platforms
Moderator Charles Hudson, VP BD, Serious Business
“Facebook is launching an integrated payment system. Feels like the history of electricity, for first hundred years electricity was used solely for lighting, no one imagined anything else, had to screw washing machine into light socket.  Then they figured there must be a better way.  It’s the moment in time we’re in right now.”

Ramu Yalamanchi, Chief Product Officer, hi5
“We’re a social entertainment platform with a games channel and virtual currency, 60mm worldwide. Very global, monetize games in surprising markets through currency and localization support, 40 currencies, 50 languages, many small ad markets actually quite good in virtual goods monetization.  Items in games drive monetization, current view is premium model payment path, collecting through offers or stored valued cards, will start to see hybrid of advertising and direct payment, creativity paying people for attention, segment those willing to pay and those willing to give time.  2008 launched open platform, metrics measures success dollars for DAU, MAU, adoption on the platform.  A successful game is 100,000-1mm DAUs in 6 weeks.  Monetization – hi5 markets similar to Facebook, MySpace $MAU, $DAU, lower across all markets 30-50% but still better than advertising.  Top requests are for real-time, 3D support, and distribution to bigger audience, go from zero to hero with friends.  Regarding fraud, individual attacks not so coordinated, spam been a problem a long time, handle coins for developers so they don’t need to worry about it, there is no cash out component, still need to pay attention to in-game fraud.  If you give people a way to open their wallet, they will, be it stored value cards.  Favorite game is Organized Crime on hi5, of course”

Danielle Deibler, Engineering Manager, Adobe
“Adobe makes tools to build content including Flash Runtime which a lot of social game developers use on the PC side.  Seeking to integrate Flash platform for secure payments, trust factor is important, working with PayPal, Visa, PlaySpan, don’t want platform lock-in like Apple.  Half of web flash game developers monetizing via advertising, many convert over with mochi coins virtual goods systems out there, 20% starting to introduce virtual goods in last 6m, multiple monetization methods in-game ads turned off if buy virtual goods, subscription is not popular for flash, might change with casual MMOs using flash for browser-based games.  Get in, talk on Facebook, get out quick.  Don’t build WOW for casual where it takes 6 hours.  Feature requested most is 3D support, gaps in mobile, tv, global.  Go with payment aggregator so you can concentrate on game play mechanics.  Favorite game is Shadow Complex and Hello Kitty, US beta.”

Damon Hougland, Senior Director, PayPal Platform
“11/3-4 PayPal Developer Conference. Fraud prevention, focus on total end to end experience- in-game and beyond the game.  In 190 countries today but it doesn’t seem like that’s enough, pride on fraud control, Paypal does it better than anyone. Games coming to set top boxes, aggregation, escrowed digital goods – customer wallets/$ come first.  Fraudsters love the SDK as new tool to automate, fraudsters talk to each other, but Paypal is very good at tracking down the large networks, lots of experience from eBay, it’s a main preoccupation.  Favorite game? My kids love Lego Star Wars.”

Jason Citron, Founder and CEO, Aurora Feint
“Social gaming platform for iPhone, it’s like Facebook/XBLA for iPhone, millions of users, thousands of developers, hundred active games in app stores from SDK, provide hosted services like leaderboards, chat rooms, multiplayers, acheivements, and provide visibility in app store with OpenFeint, social cross-promotion technology, by engaging in a game friends are notified of achievements. Only in-app purchases allowed in $.99 apps on iPhone, cuts off free2play upsell, so single purchase apps is where it’s at, iTunes model for ten years, price trending toward $1, 10-15 apps on phone, average spend is $80.  Short bursting game sessions not much attention or focus, play for about 30 seconds and leave, leverage social interaction with friends, invite friends to play. Most requested feature is multiplayer with social cross-promotion.  Huge piracy issue on iPhone and iPod Touch. Make money with Apple Affiliate Sales, sell more games via social cross promotion: instead of Apple 30%/Developer 70% its Apple 25%/OpenFeint 5%/Developer 70%, it’s a great program! Favorite game is Shadow Complex for XBLA.”

5:05, Transitioning Dungeons & Dragons Online (DDO)
Fernando Paiz, Executive Producer, Turbine
The highlight of the day came at the end when Fernando Paiz delivered a compelling presentation on the effects of offering hybrid monetization:  ”Our challenge was imagining what it means to transition an existing premium fantasy MMO in a North American market from a box retail subscription model to a hybrid microtransaction/subscription model to get a flexible monetization platform without scaring away customers or ruining what’s fun in the game.  Turbine had been in business for 15 years old, Asheron’s Call around 10y with big franchises like Dungeons and Dragons Online and Lord of the Rings, constantly innovating with game design and alternate business models. Subscription models are hard to make work. North America slowly more accepting of microtransactions.  Launched DDO Storm Age in Febraury 2006. Delivered a fun role-playing dungeon crawl experience, action combat and integrated voice chat.  Light on the content expectations, limited advancement, no solos, and it was a hard subscription sell, people willing to pay for the box but not sure it was worth $15/month.  Since 9.09.09 launch worked on additional features, accessibility, level cap increases, solo difficulty, small party play.  When undertook relaunch we were trying to define what is the nextgen business model that would support large populations and has an ecommerce system reusable for Turbine.  Release needed to feel meaty, worthy of a AAA launch, took level cap to 96 levels of advancement, polished combat, store game-changing, adding value to subscription plan.  Central to the release was to give a choice on how to play the game, and how to pay for the game.  Many might be willing to pay $50 for  box and $50 goods but not able to justify a subscription of $15/month. Wanted to give the customer flexibility to pay as much as they want to. (A revolutionary concept!!) Guiding principles: don’t do it halfway, present fundamental choices time v money, rent unlimited access with subscription plan or buy a la carte depending on how many hours you’re going to play.  Had a healthy subscriber base that we wanted to preserve revenue, had good game mechanics, weren’t starting from scratch, goal of game is to quest for super sword of awesomeness, not willing to give easy button on that and sell it as high end loot, however there are several things you need to unlock that you can buy.  Got push back for charging for a dungeon but its a handcrafted adventure, developing new content is expensive, want to charge for it.  There are tiers of customers – free – no credit card needed for first 4 levels which are free, limits in place to counteract goldfarmers, fraud and spammers, then there are premium and VIP customers. Had to upgrade payment system and decided to partner with PlaySpan. Turbine handling the billing and game integration and PlaySpan handling front end and back end of web-driven in-game store hosted on their proven microtransaction platform on their servers, skinned for DDO.  Learned it’s important not to skimp on testing, 4 weeks is too short, need 10w, observe usability sessions, where are users going to get stuck.  For DDO, the game stayed the same, players never need to use the store but its always ever-present, and seamlessly integrated. A third of the content is free, prompted when its time to buy.  Critics warned hybrid model might cause confusion, we’ll lose all our subscribers, can’t charge for features that have been in the game for years – none of this proved true.  Quite the opposite.  Eventhough it has only be a week from switching the paid subscription model to the free2play microtransactions/subscriptions hybrid, the results have surprised everyone. Paid subs actually increased since launch (9.1-9.9-9.14), 22% of players have discovered the store including those with free points, 70% put things in cart have checked out, experiencing reduced acquisition costs with 3x CTR on banner ads for the game, now 24th overall ranking and #8 in North America MMOs in XFire ranking, was at 104 in overall ranking #33 in MMO list, trending up in play hours, passing Conan, Warhammer.  So far so good! Items selling – heal potions, experience boosts, resurrection cakes, new cast, additional character slots, catalogue of 400 items, conditioning of free players in buying the loot and gear for characters. To prevent fraud, disallowing real money transactions. Always fine-tuning, where do we go from here and how do we adjust.  Hired people to work the store, merchandise the items.  If it helps us acquire more users we’ll make more things free.  Exploring a lower cost subscription with no points, also exploring offering a subscription with a lot of points for more  as well as product bundles. The DDO case proves players will spend on virtual goods in a subscription game.  Giving players choice to opt-in removed a key barrier, and without a ceiling some paid higher than original subscription!”

5:45-7pm, Cocktails
The evening ended as guests mixed it up at the afterparty.

If my now-client PlaySpan has anything to do with the monetization of Facebook and MySpace, it’s sure to be a banner year for social in 2010.  PlaySpan first caught my attention when it won TiECON last May and CEO Karl Mehta’s young son Arjun made an impressive presentation at SD Forum’s Teen Tech Titans on how he started the wildly popular publisher-sponsored in-game commerce network when he was just 9 years old.  Having already raised $24mm in venture capital with 100+ employees serving over 100mm+ gamers worldwide, PlaySpan is a major monetization force prepared to vault the economies of social networks, virtual worlds and online games into the stratosphere.  They are hosting an incredible monetization forum at GDC Austin next Tuesday, 9/15. Looking at the speaker list, expect it to be similar to the phenomenal Social Gaming Summit held last June which tweeps are still buzzing about.   If you’re already registered for GDC Austin, then attendance at PlaySpan’s conference is FREE.  What an awesome way to kick off GDC.  With over 200 high profile industry players in the audience, the networking should be fantastic.  RSVP at corp.playspan.com/gdc, tweet along at #agdc #gdcaustin, and throughout the show stop by PlaySpan’s Booth 801 for some awesome demos.  Here’s the guide:

Tuesday, 9/15
GDC Austin, Austin Convention Center
Level 4, Forum 18CD

2pm, Opening Remarks
Karl Mehta, CEO, PlaySpan

2:15pm, Social Gaming Panel
John Pleasants, CEO, Playdom
Sebastien de Halleux, COO, Playfish
Jason Oberfest, SVP Business Development, MySpace
Lance Tokuda, CEO, RockYou
Ned Sherman, CEO, Digital Media Wire

3:05pm, MMOs & Virtual Worlds
Cary Rosenzweig, CEO, IMVU
Joshua Hong, CEO, K2 Network-GamersFirst
Johnny Mang, Live Operations Director EA- DICE (Battlefield Heroes)
Tom Hale, Chief Product Officer, Linden Lab (Second Life)
Craig Alexander, VP Product Development, Turbine
Nanae Reeves, SVP, EA Online

3:55pm, Monetization Demo

4:15pm, Platforms
Ramu Yalamanchi, Chief Product Officer, hi5
Danielle Deibler, Engineering Manager, Adobe
Damon Hougland, Senior Director, PayPal Platform
Peter Relan, Founder and Chairman, Aurora Feint
Charles Hudson, VP Business Development, Serious Business

5:05, Transitioning Dungeons & Dragons Online (DDO)
from Subscription to Hybrid Model (Subs + Free2Play)
Fernando Paiz, Executive Producer, Turbine

5:45-7pm, Cocktails

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From 3rd Power LLC, the producers of the iGames Summit 2009 and Virtual Goods Summit 2009, comes the Social Gaming Summit 2009, tomorrow at the Hotel Nikko, 222 Mason, San Francisco.  And what a blast it will be. It’s going to be an awesome crowd with over 450 expected including EA, GigaOm, socialDeck, Viximo, VentureWire, Friendster, IAC, Atari, Gaia Interactive, Gazillion, PlayFirst, iWin, Booyah, Fremantle, USVP, RealNetworks, Disney Interactive Media Group, Sierra Ventures, Superfan.com, Hands-On Mobile, TripAdvisor, Draper Fisher Jurvetson, Sony, Blackberry Partners Fund, SVB Capital, Flixster, IMVU, twofish, Financial Times, Examiner, SJ Mercury, Interwest, GirlGamer.com, Meebo, Gigya, Slide, SmallWorlds.com, WSJ, Adobe, MyYearbook and Tencent America.  Twitter hashtag is #sgs09.  The following is the guide.

8:30-9:20am
Breakfast

9:20am
Opening Remarks with Charles Hudson, 3rd Power LLC

9:30am
Industry Insights with Justin Smith, Inside Social Games

10-10:50am
Building Social Games at Scale with Mark Pincus, Zynga, Dan Yue, Playdom, Sebastien de Halleux, Playfish, Jeremy Liew, Lightspeed Venture Partners

11-11:50am
Social Games – A Platform Perspective with Jason Oberfest, MySpace, Gareth Davis, Facebook, Andrew Sheppard, hi5, Joe Chen, Xiaonei (Oak Pacific Interactive), Michael Arrington, TechCrunch

12-1:15pm
Lunch

1:15-2pm
Monetization Infrastructure with Erikka Arone, Zong, Adam Caplan, Super Rewards, Rob Goldberg, GMG Entertainment, Renata Dionello, PayPal, Charles Hudson, 3rd Power LLC

2-2:45pm
Customer Acquisition and Retention with James Currier, WonderHill, Jia Shen, RockYou, Anu Shukla, Offerpal, Greg Tseng, Tagged, Sean Ryan

2:45-3:15pm
Snacks

3:15-4pm
Viral Metrics with Siqi Chen, Serious Business
Getting the Most Out of Your IP:  Extend or Be Cloned with David King, (Lil) Green Patch

4-4:45pm
Social Games in the Wild:  Living Outside of Social Networks with Andrew Busey, Challenge Games, Jim Greer, Kongregate, Daniel James, Three Rings, Matt Mihaly, Sparkplay Media, Jeremy Liew, Lightspeed Venture Partners

4:45pm
Closing Remarks with Charles Hudson, 3rd Power LLC

5pm
Drinks

Following the event are two awesome after-parties.  One from 7-10pm with the Richter Scales at The Ambassador, 673 Geary/Jones-Leavenworth.  Sponsored by PeanutLabsMedia and AllPass.  And the other sponsoed by boxee at  Mezzanine, 444 Jessie Street @ Mint (bw 5th/6th, Market/Mission).  Giveaways galore include boxee tees, pogoplugs and tune-up software.  RSVP at boxee dev challenge:

6pm  
Dance Party with DJ Reverend Underpants

7-9pm
Tekzilla’s Veronica Belmont, Chris Pirillo, Cali Lewis, and Ryan Block present the winners of the boxee dev challenge and features of the upcoming beta

9-10pm
Mixer

300 brand marketers from around the world gathered at the Hotel Nikko to share best practices on social media marketing to youth, and the biggest names in the business were mixing in the crowd talking openly about their hits and misses:  MTV, MySpace, Disney.  In great contrast to TWTRCON, which took place the day before in the same space, at Ypulse, all the talk was Facebook, with little mention of Twitter.   74% of GenY 18-24y does not tweet.

Campus Case Studies
Day One began with case studies of guerrilla marketing on campus.  There were hilarious Ask a Ninja recruiting videos for George Mason, “What’s  YourSmoothestLine campaign” for Pentel, MTVU putting the i in HP, Campus Media chalking for State Farm, an early Disney social network that kept alive a show with no stars and no marketing budget, Spring Break parties for Rockstar energy drink, and MySpaceRecords refresh of UOPX as Rockstar U.  Key points made:  

Relevance = Engagement  
Peer to peer marketing is the most effective, low cost way to create brand awareness.  Make the student portion of the work fun, and they’ll be marketing from the heart.  Keep it real, maintain brand authenticity, evangelism occurs when you match the brand to passion.  Allow the kids to speak the brand in their own language, will resonate more, carries more weight.  Messages that are pushed out are pushed back.  Detractors become promoters when a connection is made and complaints are acted upon.  Ensure ROI by setting clear goals with a rewards program, incentive pay, prizes like a cameo with friends or an industry job.  360 engagement is an effective way to season bridge a show without budget since film/TV marketing spend is all upfront.  

Disney
For Disney ABC’s Greek, campus kids were invited to upload videos to VirtualRush.com to win a walk-on role in the show.  UGC was used in 6 webisodes that played on iTunes, and the winner was hired at Disney.  At the close of the campaign the 20,000 fans aggregated were redirected to Disney’s community site.   One year later, embeds, apps, FB Connect and Twitter integrations are being experimented with on other properties.  Prizes now include a cameo with friends, and distribution of UGC webisodes extend to YouTube channel and  possibly Hulu.  There are deeper on-air integrations and at Disney they are working more cross-platform to drive each others priorities.  I asked Vicky Collier, VP Digital Media, Disney ABC Television Group, if a community of 20,000 engaged fans would be considered a success today, and she responded that “there is always an attempt to balance the numbers against the expense and the kind of show, so in some cases 20,000 would be a success and in others not a success.”  For Disney URock, the goal was to unify brand and cross-pollinate the platforms of Walt Disney Records, Disney Online, Walt Disney Internet Group to leverage the fandom that exists around Disney properties.  Allow fans to create custom content more organic to the platform.  Artists covering other artists on YouTube (Marie Digby), Happy U Year invited kids to make videos that showed up on tv shows as interstitials.  Nick’s iCarly, UGC is built into the conceit of the entire show.  Looking at best practices, objective is to drive traffic back to Disney.com as the hub site and core destination.  Moving kids from passive consumers to participants, using music as the driver, pick a song, download it, video yourself rocking out, check with parents, upload it.  Some kids even added CGI.  Key to success was that it was time compressed, just 3 weeks long. Then panel announced the launch of URock2 with new graphics, sandbox, toolsets and a mobile component.  Featured artists Selena Gomez, Demi Lovato, Michael Musso.  Marketed to moms means no embeddable function, no pesonally ID info, no addresss, clear rules of engagement.  Disney embracing more campaigns around fandom and UGC, amazing middle ground to nurture. Engagement metrics:  PPV page viewed per visitor, uptick in inquires.  

Rockstar
For Rockstar energy drink, Youth Marketing Connection integrated brand with relevant activities on campus, online, and at Spring Break, in 2009 recruited 75 reps with 900+ FB friends who fit the brand, reps were given VIP status, rewarded with celebrity meet and greets, free products, and incentive pay for reporting monthly FB monthly activity e.g. 6-8 photos, 3-4 events/parties, 8-9 mentions, achieved 320,000 cans in hands and 24mm+ impressions overall.  Make it fun, engaging, relevant, and authentic.  Incent behaviors that achieve desired results.  Kids will take a stake in programming when they can make it their own.  Brands also help them lead their own community.

Pentel
Alloy Media & Marketing specializes in the 13-24y demo with media properties like Gossip Girl, online properties like Teen.com (23mm monthly uniques) and social media marketing campaigns, promotions and events for consumer product and entertainment brands.  To create awareness on campus for Pentel pens, Alloy launched the YourSmoothestLine campaign with the intent for its hilarious videos to virally spread the message.  Kids were asked, “What’s your smoothest line?” Answers ranged from “Are you tired, because you’ve been running through my mind all night” to “Is your dad a baker, because you’re a cutie pie”  FB app created by RockYou beat industry CTRs (.08% – .25%) with a whopping .5% CTR.  Marketers like to try different things every year, challenge is in leveraging fans and content aggregated when the campaign ends.

MySpace Records/University of Phoenix
For UOPX, MySpaceTV achieved a CTR 2.46% in their campaign to create tangible campus life around the University of Phoenix, an online school, by inviting nascent pop star Kate Voegele to talk to her peers about life on the road and how to finish school while pursuing your dreams.  Discovered by Tom Anderson, MySpace co-founder, when she was selling 500 tracks a week, Kate Voegele has now sold 300,000 albums and 900,000 tracks with no radio hit, no cover of Spin, no headlining SXSW, no SNL performance  yet.  Thanks to the exposure from the UOPX campaign she has gained 43,000 MySpace friends, 2B impressions on myspace.com/kateontour, and is topping the charts on Billboard and iTunes.  UOPX couldn’t be happier.  Attendance is up, alumni, faculty and students have an inspirational role model to rally around, and UOPX is becoming known as Rockstar U.  

MTV/HP
For HP, it was all about getting street cred with creatives and challenging Apple’s dominance.  No small task for MTVU to transform young digital artists into HP evangelists, but fame is a great motivator and a contest to appear on a reality show, www.engineroom.com was how they deputized the core to carry the message. 60,000 submissions were received worldwide and showcased at CES and Sundance.  In the end HP hired some of the kids.  Ross Martin, SVP Content Development & Production, MTV360 was on hand to explain “Have the audience talk to the audience.”  Whether its the www.bestfilmoncampus.com, www.bestmusiconcampus.com where you can spend $70,000 on a creative spot vs. $300,000, or whattheflip.mtv.com  campaign, where Cisco had 100 student filmmakers capture the moments in their lives on a Flip.  Peer to peer marketing is the most compelling way to deliver the brand.

UNDERSTANDING THE DEMOGRAPHICS
Who are the Millennials?  The definition is unclear, some say born 1980, 1981 or 1982 through 2000, or through today.  Pretty much everyone who came after Gen Xers, those latchkey 70s kids, who grew up in a hit-driven culture dominated by the Battle of the Network Stars and Saturday morning cartoon lineup.  No cable, no DVRs, no voicemail, no PCs, no web, no mobile, no nothing but being babysat by the tv, radio, record player and cassette.  The Boomers are the ones with the 8-track history and BW tvs.  The Millennials are considered the youth who are web/mobile natives because they grew up with the personal computer.   So when some marketers talk about targeting Millennials, they are mostly talking about 14-28y slackerface, sooner text than talk kids.  But of course there is a huge difference between a 14y and a 28y.  And there is much slicing and dicing the demo into attitudinal segments, as well as expanding the demo to everyone breathing.   

CASUAL GAMING – Addicting Games
Day Two began with a look at casual gaming.  Kate Connally, VP AddictingGames delivered the keynote.  According to comScore, in 2007 there were 67mm causal gamers and in 2008 that number shot up to 86mm.  Driving demand is simplicity, accessibility, relevance, low cost of development and distribution.  What the sitcom is to tv, casual games are to the web, snackable.  Casual is the overall gamer 8y-60y.  There are those who kill time while on a conference call, those who recharge with a quick self-esteem boost, the game enthusiasts, the guilty pleasurists.  Tweens like the virtual me who leads a parallel life in a fantasy world.   Teens  want to enhance the real me, establish own identity, seek social currency to feel cool and popular and hang out with real friends online.  Tweens are not on FB, MySpace.  Teens, perhaps as a result of the drivers license, teens spend less time on games and more time social networking.  Girls more social, want character to relate to.  Guys more competitive, want more action.  Can’t just reskin a game blue for boy, pink for girl.  Both multitask while they play:  IM, watch TV, phone, surf.  Both want to personalize the game experience, take game and turn it into something new, social, personal and original.  Makes games more appealing by layering in interesting storylines, a greater range of characters, scoring options to compete against friends, build in multi-tasking, games to play while on phone, pause function, high replay value, relevant to real world like Hero on the Hudson.  The shared public experience creates buzz.  Make easy entry and exit points.  Build in community, collaboration and creativity. Addicting Games primary revenue source is advergaming with brands integrating from the start of game development.  YouGotGame development contests invite play, vote, share with friends, upfronts paid to winners to license games for site.  Addicting Games Showdown runs from 6/3 – 6/27.  Awards show featuring the best in games will do a simucast web/primetime event on Nickelodeon Saturday, June 27, from 8 to 10 p.m. ET/PT.  Addicting Games iPhone app out soon.

TASTEMAKERS & TRENDSETTERS – The Lost Generation
AARP’s Lost Generation YouTube video sums it up: http://www.youtube.com/watch?v=42E2fAWM6rA. 30 years from now I will not be celebrating my 10 year divorce, family will matter more than work, moving from an aspirational culture to an inclusive one, a society of worshipping heroes to a place where everyone is one, aspirational buying didn’t buy us happiness, seeking energy, inspiration, meaning, value, we wont change from being a western consumption culture, but it will become more sustainable and less wasteful, we live in a playlist culture, identity builder, kids are unique but part of a group, “I’m as unique and different as my friends,” everyone tries to be different and ends up looking the same, social graphs are fragmenting, small quanitities of diverse interests, brand stands in landfill as much as on the streets, fans forgive mistakes when transparent, this is the time to experiment, be upfront about failure, makes you more nimble, the dynamism of risk more living breathing to youth, conversation shifting away from hierarchy, dig to the truth, spin with whimsy, have an engaging back story, share, spread, mashup, integrate diverse ideas, kaleidoscopic culture, campaign is gone, relationship is everything, fans evangelize, build brand equity, cultivate relationship, shift from GenX cool as my own, to cool to share, how does fizzy soda get interesting, its about the story not the brand, what value are you adding to their lives, deliver entertainment, utility, fun, consider target needs, can fulfill them for time, money, brands can get in through those routes, brands seek out loyalists online and ask them what they want, do a twittersearch, google search – what is the brands perception online, be what you say you are, in a crowded marketplace give them things to improve their day and option to opt in or opt out, make info available but don’t push, demo is breaking into smaller groups, brands that resonate recognize that we dont like film, we like eco docs, recognize when someone is paying attention to me, most trusted brand – Apple, who else is doing a good job online Converse, Nike reaching out to culture (skaters) around shoes, cover niche groups/events, retribalizing continually – redoing it, learning, be flexible, nimble, dance with culture, don’t dictate, get as granular as possible, talk to people in environments where they live, recognize micro trend vs macro trend, macro trend is slower, its the soup we all experience, tune in with self, micro trends are fast moving trends annointed by media like pet rocks, hugging, used to medicate ADD, now its our culture, now its amplified as a trend, twitter skews older, creates moment to moment companionship that is addicting, easy in, easy out, more at cultureoffuture.com, undercurrent.com, trendcentral.com, intellig.com, influxinsights.com

LUNCH – Best Practices
At the table were Alloy, Microsoft, Undercurrent,Prospect Park record label, WhatKidsAreSaying.com, Colombia’s YouthMarketing.Info, and others.  We discussed best time to tweet for an entertainment brand.  Alloy confidently said best time was M 4:30pm EST, next best times, TT 4:30pm EST. Other discussion around how to measure sm engagement RT, impressions, wall posts, video response (weighted more).  Best tools:  Radian6, ScoutLabs, Cotweet.  What is everyone on:  FB, Flickr, YouTube, Twitter (but not for kids, must be 13y+ to be on Twitter).  Make ads to entertain, that are real, funny, authentic, connect with music, passion for causes, community.  Tell truth with irreverent humor.  Friends are the trusted advisor.  Ning vs. FB, skinning Ning is compelling for hub.  LA Count Dept of Public Health launching on June 13th teen focused social marketing platform about obesity.  Check it out at:  Werefedup.com 

 SOCIAL MOBILE – Nokia, Loopt, MocoSpace, Kajeet
 Nokia one of the world’s 5th most recognized brands according to Interbrand now has an apps and media entertainment marketplace at store.ovi.com with the SDK at publish.ovi.com.  Today over 1B people around the world use Nokia phones and last year about 450 million phones were sold.  90% on time on smartphones not spent on voice, rather surfing, games, music, messaging.  Geolocation will deliver value but the industry needs to make privacy controls easier in order for the masses to opt in, should be able to change privacy settings per action, not dig around on page 7.  Mobile offers much relevance.  In Star Trek, Nokia in the dashboard gave a great vision of the near future.  There was product placement in the movie, and the movie in the device.  The character/story has a halo effect on the Nokia brand and the entertainment brand with free themes, free wallpaper, free ringtones, free games, could still be on the device six months from now.  Fragmentation is the biggest challenge in mobile, outside of iPhone, you’re on a device/carrier/platform, and its still easier to throw up a website than it is to throw up a short code.  So the market has a long way to go to grow.  But there are powerful applications.  MocoSpace has a partnership with Def Jam Records who throws up unfinished tracks on site for fans to finish.  Loopt offers young urban pros 18-24y out on the town the chance to locate friends and family and find things to do nearby.   Dependant on the time of day, contextual ads are useful at influencing last minute decisions on where to go.  Kajeet, a startup with $74mm Series B funding from Draper Fisher, recognizing that kids get the first phones between 8y and 10y offers no-contract $20 disposable phones to tweens.  Kajeet markets to the mom, must earn moms trust, moms have dashboard to turn off picture mail, block phone numbers.  And Kajeet even promotes peer to peer marketing with a mom direct sales program with a referral fee of $25 per activation.  Some moms are earning $1500/year.  Relevance drives deep engagement.  Movie studios promoting the right property, ringtones, wallpaper, text/email to email have an open rate north of 50%.  Open rate on email is typically only 2.5%.  The sessions ended with great Q&A with input from Alice Lankester of Photobucket. 

TWEENS ONLINE – Yoursphere 
At the break it was time to check out the sponsors and learn about Yoursphere, a social network for tweens.  Because of COPPA, most social networks are only for 13y+.  But  Yoursphere was specifically designed with the tween in mind.  Catering to moms, the site verifies all IDs via drivers license or SSN prior to account set up, thus blocking criminals from participating.  This way your kid is socializing only with kids their own age, not adults pretending to be kids.  In this sanctity of this safe space, your kid is then rewarded for creative expression and positive interactions with friends. Cyberbullies get terminated.  The company spokesperson, the founder’s 10 year old enthusiastically took me on a tour of the site.  ”You build spheres around an interest like the Raiders and are rewarded with points you can use to win prizes like an iPhone or the Wii.”  His eyes were glowing, “I almost have enough points for an iPhone!”  His mom, Mary Kay Hoal, told me of other social networks where the entire economy is based upon the buying and selling of hot photos, and owning profiles of other kids.  Gasp!  It sounded horrifying.  Kids these days are very entrepreneurial and want to show off their films, stories, music, analyses, inventions. Hey, they even want to sell them.  I suggested monetizing YourSphere around the buying and selling of the kids original content and merchandise, tapping into the allowance economy.   She replied, they are doing well with selling branded spheres to kid-friendly advertisers because engagement is so high, but is looking into ecommerce as well.

TEENS ONLINE – MyYearbook
There couldn’t have been a better transition to the MyYearbook presentation, this time by Geoff Cook.  Recently I interviewed Geoff’s sister Catherine at SDForum’s TeenTech and was impressed with the amount of money they were making in lunch money, their virtual currency.  In just the past 6m+, they experienced revenue in the tens of millions with 10mm members 13y+.  ”Branded actions spread product message like wildfire” explained Geoff.  ”My Yearbook offers more engagement at a fraction of the cost of other social networks.  We offer 300% – 400% more engagement for the same level of spend as the other networks.  MyYearbook owns all the apps and can build in deep engagement for brands through game widgets, custom battles, featured gifts, shout out.  The better metric is cost per interaction, friends comments, widgets, gifts given.  MyYearbook can integrate the feature set around the currency.  The kids earn lunch money for engaging with sponsor, so with incentive for interaction, the eyeballs are near guaranteed.  Who would resist casting a spell on your friends especially if you’re going to earn money doing it.”  Then Geoff offered recession-busting pricing to drive down CPM.  His VP Advertising Bill Alena said they could offer game demo widgets per install at $.75 – $1.  Close to the CPC we’ve all been seeking.  As for safety, they assured me that 30 of their 100 employees are dedicated to trolling the site to takedown accounts that violate the TOS, and have won all sorts of industry safety awards.

I WANT MY MTV!
The conference concluded with a near mobbing of Ross Martin of MTV360 who had returned to the stage to discuss fiscal responsibility with SmartyPig and others, when he answered a question with “MTV does not age up.”  Then he was asked why MTV had forsaken music programming and the generation that made the brand, and the chanting of “I Want My MTV” got louder and louder.  In an attempt to align with the audience, he cried out, “Even the back of my business card says I know you want more music programming.” (Actually the back of his business card says: “Card”) “We are starting to bring you 24 hours a week of music programming on AMTV.  MTVMusic.com has music videos.”  I guess what we really meant is that music sucks, we want the videos when Adam Curry was VJ.  That said, the audience seemed appeased until the next question, “How can you justify superficial programming like the Hills when you tout MTV as a vehicle for social change.”  And Ross made yet another great recovery by talking about Lady Gaga, that the definition of glamour was changing, no longer about the red carpet but about expressing who you are, and luxury brands need to reassess messaging with this value shift, we know what excess leads to, we want tools to create a better world, kids want to be part of the conversation, “Right now if you’re not getting into trouble, you’re doing something wrong.”

BEST OF SCHWAG
And that was it.  Couldn’t stay for Guy Kawasaki’s giveaways as I was off to CONNECTIONS, but I did have a chance to check out the awesome schwag on the side bar including a tongue wagging marshmallow lolly from Mindspark, Premise Warhol tees, Fuze mochas, SurveyU red cap, MyYearbook black tote, HeyJosh CD, and a big bag of Disney goodies including a mouse (not Mickey), thumb drive, Pixie Hollow/Club Penguin stickers, URock 2 CD, a ToonTown gift card and lunch.

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