Android home gaming consoles are nearly arriving for the consumer market, but one at least needs a little more time in the oven to bake. It’s the GameStick, the super portable USB-stick style device that plugs into an open HDMI port on your TV to turn it into an Android-powered gaming machine, and its release schedule is being pushed back another month until August, with a retail launch to follow after that, because of a need to gather more feedback related to the GameStick UI so that it can be refined prior to wide release.

GameStick wanted to nail the user experience strikes me as a familiar refrain; another company, Leap Motion, which also achieved lots of support from the community for a novel idea, said something very similar when it delayed its own product recently. In both cases, the apprehension about getting things right the first time around is understandable, since these are products that have few if any antecedents with demonstrated success in the wider consumer market.

The GameStick delay, though another one on top of its first ship date slip, isn’t yet one that should really raise any eyebrows – projects typically underestimate how long it will take to go to market on Kickstarter. The Ouya was also delayed from its original planned launch by three weeks, owing to “demand” on the retail side. BlueStacks’ GamePop hasn’t been delayed as of yet, but it’s targeting a more open-ended end of year launch, and that gives it some flexibility to make sure the experience is just right before putting too fine a point on things.

All of these companies are venturing into relatively uncharted territory, so delays are fine; you can’t hold them to the same standards as an Apple or a Samsung, and even those giants sometimes encounter problems shipping exactly on time. One, two, or even three small delays isn’t surprising; but once the months start to fall away and you don’t hear much, that’s when it’s time to worry.

Article courtesy of TechCrunch

Kristian has been at the forefront of the rapidly transforming game industry since 2001. After serving as Electronic Arts’ executive vice president of digital, he left three months ago to focus on startups. Today, he leads seed-stage investments with Initial Capital and serves on the board of Supercell, the #1 iOS grossing game company in the world. Before that, he co-founded, ran and then sold social gaming pioneer Playfish to Electronic Arts for $400M in 2009. He was also a co-founder of mobile gaming pioneer Macrospace – today Glu Mobile (Nasdaq: GLUU) in 2001 through the successful IPO in 2007.

TechCrunch writer Kim-Mai Cutler and Benchmark Capital general partner Mitch Lasky recently wrote two insightful pieces on venture investment in games (here and here) – both expressing some degree of skepticism of venture capital models for funding game startups. I agree venture funding is not for every game startup, and certainly not every game startup makes for a great venture investment. However, I would argue the case for venture funding for games is today stronger than ever.

Here is why:

Why game startups are better off with venture investment than publisher funding

There are broadly speaking three models available for a game startup today: bootstrapping (including crowd-funding), publisher financing and venture financing. For those who can afford the risk and have cash readily available, bootstrapping always trumps the other two. It comes with maximum freedom, control and upside in a success case.

But the risks are very real and significant. Those unable to bootstrap because of the risks or ambitions of the project should in my view consider venture investment over publisher financing models.

Publishing as an idea for digital pure plays is simply turning out not to work very well. Many have tried it with very little to show for it. This is because the typical publisher value-add of financing, marketing, technology and distribution through retail channels doesn’t translate well to the digital world. It says something that not a single game in today’s iOS top-25 grossing has been “published” by a third party as far as I can tell.

While developers continue to need financing, the rest of the “publishing services” have become obsolete in four key ways:

• Publishers can’t compete with atomized marketing services by specialists: As the digital market has matured, player acquisition, telemetry, cross-promotion and other marketing services have become widely available as independent specialist services that compete on price and quality of the service. Companies like Swrve (one of our portfolio companies at Initial Capital), Chartboost, HasOffers, Nanigans, Flurry and a host of competitors are evolving their services at a blistering speed, requiring only a small set of increasingly available talent at the developer end. Doing it directly is not just cheaper and more flexible as the world changes, it also forces a more profound understanding of player flows and distribution challenges, which ultimately helps uncover product design insights.
• Publisher channel access may accelerate your success, but will not define it: Much has been made out of the advantage that big game publishers have in terms of access to Apple or Google in terms of promotions. Clearly, being featured helps generate initial downloads. However that success is short-lived if you are unable to retain your audience and acquire users independently at a profitable cost of acquisition. Plus, you won’t be re-featured unless you generate the numbers. A game investor worth their salt will be able to make the right introductions here anyway. The incremental publisher value here is small.
• Holding on to rights to extend IP has become critical to value creation: As Lasky emphasizes in his post, gaming even in the games-as-a-service world is inherently hits driven. For a game startup to become valuable over time, it needs to find ways of anchoring its success around building franchises. Ownership of intellectual property (IP) and all extension rights becomes important. Angry Birds-maker Rovio and Moshi Monsters-maker Mind Candy have shown that game originated IP is an increasingly viable base to build out a broader IP following with over 40 percent or revenue from each being attributed to non-game products. At the same time, the halo marketing effect from these non-gaming products can still contribute value to the core gaming product. Publishing deals are typically structured for the publisher to get hold of this.
• Long term margins help you hold onto key talent: Perhaps most importantly, success in games has always been about key creative talent. The more cash a game startup is able to create, the more it can afford to invest in everything from the office to culture to individual, innovative compensation models for rockstar talent. Signing away a revenue share limits these options and ultimately is likely to encourage the best talent to leave.

Venture financing from a specialist fund that understands games should therefore be seen as a compelling alternative for game startups. It provides the financing value add, typically at far more flexible terms, without any of the restrictions to value creation that lower margins or complicated IP terms can create. And you could even get good folks around the table for advice how best to build for long term success and shareholder value. It should be no surprise that today’s most promising game companies including Supercell, King, Kabam, Rovio and Kixeye are all venture-funded.

What about the case for investors – does it still make sense to invest in games?

The digital pure play market growth has recently been characterized by the rapid rise and occasionally fall of new entrants. Zynga is cited as the key example by both Cutler and Lasky. A thoughtful article by Tadgh Kelly about “Peak Mobile” further highlights the cycles any individual platform tends to go through. In a world of few game acquirers and a troubled IPO market, does the venture model therefore need a re-think?

In my view and that of Initial Capital, which is an investor in Supercell, Brainbow, Supersolid, Space Ape Games and others, the case for continued investment is strong.

Even though some VCs are shying away from games, here are five reasons why I and Initial Capital are doubling down on games:

• A continued virtually unopposed growth opportunity in digital: The next generation consoles are doing a wonderful job at distracting the big publishers away from the fastest growing parts of the game industry. That clears the water for pure digital plays to gradually build up dominance with new IP on new hardware platforms. Activision Blizzard CEO Bobby Kotick’s recent dismissive remarks about mobile, and EA’s strategy of ANDs: consoles and PC and mobile and online (which dilutes their excellent talent across too many opportunities) are cases in point. The innovators’ dilemma confronting the big guys is creating continuing unopposed growth opportunity for new and established digital pure plays alike. That is giving new players time to build up the brand and marketing advantages that big publishers have held for years on what are rapidly becoming legacy platforms.
• There are plenty of “blue water” opportunities on new platforms: Very few game play styles or categories on personal screens, like four- to seven-inch screens across mobile phones and tablets, feel mature at this point. Clash of Clans’ take on the tower defense genre, Candy Crush Saga’s interpretation of Match Three games and Hay Day’s way of approaching farm games are possibly the most mature examples out there. But who is making the category-defining racing game, the best first person shooter, sports game, real-time strategy, monster breeding or puzzle adventure game on these platforms? The console guys are hamstrung by their lack of focus.The starlets who already dominate one or two categories will have similar focus challenges due to successes to date. Seldom have there been such clearly profitable, well-defined opportunities for new startups to re-imagine these experiences for personal touch screens.
• The opportunity has gone global: The traditional gaming “Galapagos Islands” of Japan, Korea and China have been overrun by the great global equalizers of Android and iOS. This creates unprecedented opportunities to go global. Supercell’s Clash of Clans is currently the #1 game on iPad in China and #11 in Japan. For Candy Crush, the same positions are #64 in China and #4 in Japan. This is not to belittle the differences in local tastes, marketing channels and in some cases app stores or distribution mechanisms. But the opportunity to reach the other half of the game industry that these countries represent has never been more tangible.
• Unprecedented margins: Because of the margin structure and low headcount requirements of the industry, companies can become very profitable very quickly. Recent lessons from other companies that have grown too quickly are causing newer companies like Supercell to be more thoughtful. They are banking their profits, stabilizing their mid-double-digit operating margins and re-investing carefully into nurturing and expanding their talent base. This is also great news for top talent as it gets to increasingly share in the financial success both through company perks, private and public share sales and also dividends.
• The M&A and IPO markets will be back. And there’s nothing wrong with dividends either: It will just take time. Large M&A deals in games are unlikely to be on the horizon. The traditional console folks are too busy fighting each other and do not have the resources to acquire an increasingly confident set of digital pure plays. The leading pure plays on the other hand are mostly focused on ensuring their own model scales before embarking on aggressive M&A. M&A is particularly hard an industry in the middle of a disruption where talent and inspiration are more important than scale. While Zynga’s troubles may have damaged the IPO prospects for the next 18 months or so, if the new generation of companies can show sustained profitability, they will be in an incredibly strong position to consider listing later. Some will undoubtedly choose to stay private and pay out dividends in the medium-run, which is fine from a venture investors perspective. But the option will be there.

The next few years for games will be choppy. But the fundamentals for gaming investments are stronger than ever. As Lasky says, you have to be building a game company and not just a game for venture funding to make sense. And for a venture fund to consider gaming investments, you need to understand the sector.

But neither of those mean that venture investments in games aren’t alive an well. In fact, the team at Initial Capital remain as bullish on the sector as we led the seed round into Supercell. We continue to seek out the very best, most inspired design and coding teams who want to define where games will go next and help them get started with capital, advice and structure.

Article courtesy of TechCrunch

DotEEBubble is one of the most controversial startup blogs in the world and you’ve probably never heard of it. In the rah-rah world of entrepreneurs, accelerators, and incubators, it’s rare to see much talk about the problems with the government funded VC model and how the biggest players look more like scamsters than bootstrapping entrepreneurs. That’s just what this blog is – a cold, hard look at the problems that come when you throw big money at little ideas.

The blog, written by an anonymous commenter in Estonia, is a cross between a research-heavy economists report and a jeremiad against what looks to be a EU-funded startup bubble. With excitement rising about ventures throughout the EU, the site’s calm, reasoned take on Estonia’s darlings is stirring up quite a bit of controversy in the small country.

One startup that we prominently covered, Fits.me, a clothing fit “start-up” that uses robotic mannequins to show you what clothes will look like on your body, took 3,773,456 euros of government money over the past few years. The company has been in business for seven years in total and its customer implementations are either well-hidden or nonexistent. In short, the company looks like a dog. DotEEBubble writes:

The blogger who runs the site refused to be named in this piece but he took a bit of time to explain his methodology, his beliefs, and the reasons behind his thorough takedowns of what he sees as excesses in the Estonian startup market. It would be interesting to see a similar tack taken in other markets. His model could be exported but it’s clear his style and intensity can’t be matched.

John Biggs: Why are you doing this?

DotEEBubble: Many in Estonia have been trying to pitch the country as the “start up nation,” but the details paint quite a different picture. In talking with some other business people in Estonia, I started realizing a lot of this is not quite what they make it out to be. A lot of the start-up community and companies are propped up through taxpayer money, much of it from the EU.

What’s worse is that no one in the media was bothering look under the covers to realize how much of this was built through public funds. I decided to start the blog to bring some of these companies to light.

Estonia receives a massive amount of EU funding (more than 18% of the 2012 budget), and I think they’ve chosen to spend too much of it on risky startup companies and startup incubators. It reminds me of the .com days in the US in the late 90’s, when there was too much money chasing too few good ideas. The difference is that in Estonia, the money is coming from taxpayers and not private investors.

I would not be so critical of this use of public funds if everything else was going well in Estonia, but it’s not. Estonia has the lowest GDP (per capita) in the eurozone, and its people are the second poorest among eurozone members when measured by assets held per person. There is a television show (Kodutunne) on an Estonian television channel that is similar to Extreme Makeover : Home Edition in the US. They pick out a needy family in a rural area and renovate their house. The difference is that in the Estonian version, most of these families live in homes without indoor plumbing or hot water! It’s unconscionable that there are people living in these conditions while at the same time the government is giving millions to risky startup companies. I think they need to reconsider their priorities when it comes to public spending.

It was eye-opening what we uncovered. In one case, a company set up in both Estonia and the UK at the same time, in order to take advantage of taxpayer-funded support intended for companies in each region. Another company we wrote about got millions of euros, over the course of many years, to fund robotic mannequins.

In many cases, the companies that received government money were being run by people with no experience in the field. We wrote about an incubator for gaming startups, where none of the people running the incubator had ever worked in the gaming industry! Then there was the incubator that received nearly 700,000 euros from the government to set up in a small town of 20,000 people to promote creative arts startups, which as far as we can tell was just a few women making dresses and jewelry.

We also wrote about a private equity fund with more than 100 million euros under management, that received over 100,000 euros from the government to market their fund abroad. Do they really need this kind of aid?

The main criticism is this is all being done with taxpayer money. If private investors want to spend their money on these companies, that’s fine with me. That’s how it seems to work in almost every other country.

JB: Who are you?

DEEB: There is more than one person behind the blog, though I am the primary author of most of the posts. I own a successful Estonian software company, and we built it through hard work and without government handouts. I’ve been in the tech industry for many years, so I was around to witness the dot-com crash in the US that happened a number of years ago.

None of the people behind the blog have any stake in any of the companies profiled on the blog, so we have nothing to gain or lose when these companies do well or poorly. I like to see startups in Estonia do well, which is why I mentor some companies and also give training sessions. I never accept any payment or stake in the company for it. It’s my way of giving back to the community.

JB: What can governments do to fix these sorts of problems? Should they be investing at all?

DEEB: One of the co-founders of TechStars, Brad Feld,wrote a good post about why the government should not be in the incubator business, and I agree with him.

As for the government investing in startups, I can only see it being necessary in rare cases, like in cases where there are externalities involved that benefit the public. One example would be a new type of clean energy technology that may not be profitable on its own, but with environmental benefits to society that make it worthwhile.

This isn’t what is happening in Estonia though. The companies we have profiled on our blog include a social network for household pets, and a browser-based e-book reader. The government shouldn’t be wasting money on these types of ventures. One Estonian report noted that “the largest investor in Estonian startups in 2012 was the taxpayer. They poured more money into Estonian startups than all private equity combined.”

Some will say that the reason the government is stepping in is that there is no private equity market. I disagree. Good ideas will always find funding, and there’s even an Estonian Venture Capital Association with plenty of members.

JB: What is the primary problem in the .ee environment? Is it widespread?

DEEB: Imagine opening up the newspaper every summer, and reading about how many schools will not open their doors again in September due to lack of enrollment. That’s actually what happens in Estonia.

The Estonian population is rapidly declining, through a mix of emigration, low birth rate, and low life expectancy. It ranks 228 out of 232 countries when it comes to population growth. Net emigration last year was over 6,600 people, and the majority of those were people in the 20-34 age group i.e., people in their prime working years. This may not seem like a large number, but Estonia is a small country with a population of less than 1.3 million. Last year, the total number of students in 12th grade was 7,810. Imagine if 85% of all fresh high school graduates in the US left the country the day after graduation, and that gives a better idea of the impact.

The government isn’t doing much to address the problem, though I think this is common in many countries with long-term demographic problems. It’s easier to ignore it since the impact is not immediate or sudden.

Admittedly, it’s a tough problem to solve. My theory is that a lot of the emigration is driven by quality of life issues. That’s not easy to fix, but throwing money at startup companies does not seem like the solution.

JB: Are people mad at you?

DEEB: The main criticism we receive is that the blog’s authors are anonymous, but I think this is from people eager to attack the messenger because it’s difficult to attack the message. We’re very careful with our fact checking and post links to our source material.

As for the reason we’re all anonymous, it’s important to understand that Estonia is a small country, and all members of the startup community could easily fit in a high school auditorium. The community is too close-knit to write what we do any other way. Besides, none of us need the fame. We’d rather readers focus on the message not the messenger.

Other than the criticism about anonymity, the feedback we’ve received has been quite positive, and readers tell us that this is the first time anyone has bothered to analyze the startup community in Estonia with a critical eye. We’ve heard that many high-ranking Estonian government officials are regular readers of our blog, and it’s also required reading in some entrepreneurship courses in Estonian universities.

JB: So what do you like in Estonia?

DEEB: Estonia is a great place to first launch a new product or technology, because the country’s small size makes it easy to implement. For example, let’s say you’ve come up with a personal finance tool that requires access to the user’s spending details from their bank account. In Estonia, there are only 5 consumer banks, so it’s easy to set up those relationships since you only have to talk to 5 banks.

One cool thing in Estonia is how the government is so open and online. It makes it easy for people to track what’s going on and get information. In fact, so much data about government spending is online that if we can’t find information about government spending on a project after 5 minutes of searching, then that’s a sign that the project manager may be trying to hide their spending, and it makes us more likely to write about them.

[Image: Oleksiy Mark/Shutterstock]

Article courtesy of TechCrunch

Editor’s note: Tadhg Kelly is a veteran game designer, writer of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.

Between all the press conferences at E3 and the follow-up interviews, there’s been a lot of gaming news to chew on this week. Announcements of consoles and games all came at a terrific pace, along with a lot of he-said/she-said.

There was an amusing gaffe made by one platform chief, essentially saying “let them eat cake” to those who didn’t jive with his next-gen vision. There was a very off-color joke in a press conference. There was a dreadful reaction on Twitter to a question posed by Anita Sarkeesian about a lack of female protagonists in upcoming titles. And a stunt gone slightly wrong when one microconsole maker tried to set up an un-conference in the parking lot outside the main event.

For me, however, the signature moment was a cheer that happened during the Sony press conference. Sony, once kings turned to laughing stocks. Sony, the penitent platform holder who spent half a decade mending fences and yet still got very little respect. Now Sony, champion of used games, lending games and region-free games. Sony, hero of indies and diversity. Sony, the console maker who didn’t make too big of a deal around extra features. Sony, a full $100 cheaper than its rival.

And the crowd roared.

Change Nothing!

While the cheer was certainly a delicious moment, its broader context is significant. It wasn’t an Apple-esque cheer for some new invention, device or bold new product line. It was a cheer for the status quo, for a lack of innovation or disruption. Gamers whooped and hollered because Sony said that it was going to try to keep their world exactly as they already know it, discs and all.

Gamers are an expectant group on the whole. They are highly tribal in their loyalties, and consistently respond to both visual aplomb and brands. They buy into franchises rather than single titles, which means once their loyalty is earned it usually stays earned for long periods of time. With the right trailers and tone, the publisher that seizes the moment can ride it all the way to 100m unit sales over a decade if it gets it right.

Many gamers don’t like some kinds of change. The console war saga is one that they’ve known for a long time, and they are comfortable with. It feels as though the back-and-forth of gaming generations is eternal, and how things should be. It seems evolutionary, right, and disruptions that threaten its core dynamic are viewed very dimly. It’s always been consoles and the PC, that’s where “real games” are.

“Real gamers” don’t like iPads. “Real gamers” don’t like Facebook. “Real gamers” consider figures like Sarkeesian as pushing agendas that will ruin games. “Real gamers” consider games as more than a medium: they are a culture. And that would mostly be fine (not the sexism part) if it weren’t for two issues: (1) The escalating cost of making games driven by gamer expectations, and (2) the size of the gamer population.

The Same Old Problem

There are simply not enough “real gamers” to make the console market function well, and there haven’t been for a long time,  but “real gamers” don’t really get that. They think that “real games” are bigger than movies, and always growing, but the reality is that the market for console games has only grown incrementally over the last decade. All the explosive growth and the most interesting stories have come from “not-real” markets like mobile, social and casual games. For a long time now it’s been smartphones and Wiis that really pushed the medium forward. Core consoles, on the other hand, seem stuck.

While the Wii managed to sell to lots of people outside the gamer fold, the core consoles managed about 75 million to 80 million sales each over a seven-year period. Accounting for dual ownership (people who bought both systems) and replacements, the overall core market’s size is probably about 140 million gamers, much the same as it was in the PlayStation 2 era. Of those, maybe half are active enough to buy three to five games per year, and of that half, maybe a third are active enough to buy one or more games per month.

That means the real market for console games is maybe 70 million (split across two systems). Remembering what I said about gamers buying into franchises, less active gamers tend to make a lot of repeat purchases. They buy into the super-AAA games over multiple years (Grand Theft Auto, Call of Duty, FIFA, Madden, Mario, Zelda, The Sims, Diablo, Pokemon, The Elder Scrolls, Final Fantasy, The Need for Speed, Halo, etc.) and not touch newer would-be franchises unless more active gamers keep telling them to. This means the market for mere AAA games is smaller, closer to 20 million to 25 million players. And below AAA used to what we’d call mid-tier games, but they’re mostly dead now. Why?

Mid-tier games just stopped making sense. At a $1 million typical cost level of original PlayStation games, publishers could field lots of games and rely on a few hits paying for all the others. This meant that many games were mid-tier, a few became AAA and the idea of a super-AAA category didn’t really exist. However with the sixth generation (PlayStation 2, the original Xbox) development costs multiplied by a factor of four, and with the seventh generation (PlayStation 3, Xbox 360) they did so again. Publishers could no longer afford to play the field and had to be very choosy in what they funded, and yet many of their games didn’t pan out. The market did not grow along with the costs, and so the mid-tier game died. So did many publishers.

With the next generation, the same is already starting to happen for AAA games, only the stakes look even higher. Costs will rise once more, but the market is still much the same as it was. We live in an age when a console game can sell 3.4 million copies and still fail to make a financial impact for its publisher. That’s a team of 700-1,000 developers slaving away on a 15 hour experience that people pay $50 to own. And still, at best, it’s breaking even. As costs continue to rise does that mean that the sales target for all big-budget console games become 5 or 6 million copies? Yep.

Enjoy The Exuberance

Sony may feel reborn, and along with its rebirth comes a sense of rejuvenation in the games industry. It may seem as though the forces threatening “real games” have been pushed back, and that these are happy times. Publishers will commission new games, developers smart enough to have gotten an early start gain enormous buzz from the press and inflated sales, and everybody hopes to build a marketing story.

Yet this exuberance is irrational, a temporary respite from the longer problems that the console industry faces. For all the excitement surrounding the eighth generation, not enough has changed about how it operates, and its core market’s unwillingness to be disrupted means that it continues to battle its own stasis. It means that successful publishers are likely to see a big shakeout in the next couple of years. Companies like Ubisoft, Take Two and even mighty Electronic Arts are going to feel extreme pressure to succeed at every instance of going to market. Soon the only viable market for console games will only be super-AAA, and they know it.

E3 may have proved a very exciting week, but the quiet news about iPhones getting game controllers is probably more significant. While the “real gamer” can comfort himself in feeling that games have not been ruined by outside forces, and that because games are bigger than movies that means everything will be fine, the reality is that change is coming to games whether he likes it or not. The only question that remains for the companies involved is which side of that change they want to be on.

Article courtesy of TechCrunch

Back in March, I wrote about how Heyzap was introducing advertising to its mobile gaming platform. Now co-founder Jude Gomila says the company has become a significant player in mobile advertising.

Specifically, Gomila sent along the chart showing the growth in publishers running Heyzap ads and the corresponding growth in ad impressions over the past six months. You can’t tell exactly where things stand now, because there’s no Y-axis to the chart. However, Gomila did note that Heyzap ads are now running in 800 games (it was 350 in March), and that number is also growing quickly. He also said that the publishers advertising with Heyzap include big names like Zynga and DeNA.

In the six months since the program launched, ad revenue has grown to the point that it already makes up the majority of its revenue. As a result, Heyzap is looking to expand its team beyond the current 25-person workforce.

“This does change our priorities,” Gomila said. “We want to offer full monetization tools for game developers. There’s also opportunity for a lot more automation.”

Gomila refers to Heyzap’s ad program as its “game discovery network” — basically, when publishers pay to promote their games, Heyzap will start recommending that game through interstitial units that pop up in the games. Those recommendations are also based on the gaming data that users share on Heyzap’s social platform, so Gomila said the discovery network and the social tools “go hand-in-hand.”

He argued that this is a much better approach for the mobile gaming ecosystem, because Heyzap can recommend games that users are actually likely to enjoy.

“We think most mobile ads suck,” he said.

Article courtesy of TechCrunch

It was a big week in gadgets, and thus, a big TC Gadgets podcast it shall be. This week, we discuss developments at E3, including Xbox One and PS4 pricing, the death of Nokia’s Symbian OS, and of course, WWDC.

Will you buy a PS4 or an Xbox One? Does despair fill you from nose to navel when you remember the good old days of Symbian? Is the new iOS 7 design repelling, attractive, or some bizarre combination of the two? John Biggs, Matt Burns, Jordan Crook, Darrell Etherington, and Natasha Lomas touch on all of this and more.

Enjoy!

We invite you to enjoy our weekly podcasts every Friday at 3pm Eastern and noon Pacific.

Click here to download an MP3 of this show.
You can subscribe to the show via RSS.
Subscribe in iTunes

Intro Music by Rick Barr.

Article courtesy of TechCrunch

Here’s an example of a company using Optimizely‘s A/B testing tools for a high-profile game launch.

The startup, which recently raised a $28 million Series A, is releasing a case study today about how Electronic Arts used Optimizely to boost preorders for the new version of SimCity. Prior to the SimCity launch (and before all of that launch’s attendant problems) EA division Maxis was trying to drive online pre-orders by offering a discount, and it was promoting the deal in a large banner on the pre-order page (as seen below) and in ads — but it wasn’t seeing the improvement that it expected.

So it turned to Optimizely to test out different ideas about how to lay out the preorder page, each one corresponding “with a hypothesis the team had set beforehand regarding placement, color, and display of the promotional offer.” They also had a version that removed the promotional offer altogether. Since Maxis wanted to find an answer quickly, it ran these tests with 100 percent of its site traffic, and it found a surprising result — the preorder page with no offer whatsoever drove 43.4 percent more purchases than the others.

That seems pretty counterintuitive. One explanation offered in the case study is that the offer was pushing the actual call-to-action (namely, the preorder button) down the page. Whatever the reason, that approach clearly seemed to work, and it’s the one that Maxis adopted for its preorders.

Ultimately, SimCity launched on March 6. In May, EA announced that it had sold 1.6 million copies, and about half of them were digital downloads.

“Optimizely helped us learn a lot about our users – what’s working and what’s not – so we could make changes on our site to optimize our conversion percentages,” said Mike Burk, senior online product manager at Maxis, in the press release. “In the end, this translated to higher revenue for us.”

You can read the case study here.

Article courtesy of TechCrunch

Facebook has removed 25 job listings from its careers pages. It looks to have made hires in technical recruiting as well finding a Director of Financial Operations.

Listings removed from Facebook’s careers page:

• Community Manager (Menlo Park)
• Partner Engineer, Gaming (London)
• Director, Financial Operations (Menlo Park)
• Financial Analyst, FP&A – HR (Menlo Park)
• Trust & Safety Manager, EMEA (London)
• People Operations (HR) Partner Lead (Menlo Park)
• People Services Organization (PSO) Ops Program Coordinator – Contractor (Austin)
• Recruiting Events Program Manager (Contract) (Dublin)
• Sourcer, Diversity – NYC (New York)
• Technical Recruiter – Contract (Menlo Park)
• Technical Sourcer – Contract (Menlo Park)
• University Recruiter – Contractor (Menlo Park)
• Research Manager, Growth and Analytics (Menlo Park)
• UX Research Tools Engineer (Menlo Park)
• Editorial Specialist, Global Business Marketing – Contract (Menlo Park)
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Article courtesy of Inside Facebook

King, the decade-old gaming company that staged a surprising revival through the iPhone and its hit Candy Crush Saga, is abandoning advertising as a source of revenue.

Going forward, they’ll be relying solely on virtual currency. (But really, it’s not like they need advertising at this point.)

“We’ve grown very fast over the last year. The business model has changed because the majority of our revenue growth has come from micro-transactions around the Saga games,” said chief marketing officer Alex Dale. “It makes sense for us to reallocate the resources we had previously committed to advertising business.”

The company has been around for about a decade and managed a destination site called King.com that launched hundreds of arcade-style games. Although they were a bit late to social gaming, they parlayed some of their best performing work onto the Facebook platform about two years ago.

But their real success didn’t come until the last six months or so when they brought Candy Crush Saga to iOS. It’s now a regular at the top of the grossing charts and took the company to 70 million daily active players (or more than Zynga). Now King is seeing 26 billion monthly game plays a month, up from 1 billion plays per month a year ago.

While the company hasn’t commented on revenue, game developers with similarly ranked games like Finland’s Supercell have said they’re pulling in $2.4 million per day. But Supercell has two top grossing games, not one like King.

The company sent an e-mail earlier this week to advertising partners saying:

“King’s #1 focus around delivering an uninterrupted entertainment experience for our network of loyal players across web, tablet and mobile has unfortunately led to the difficult decision of removing advertising as a core element of King’s overall strategy. The executive team has decided to withdraw completely from the advertising business thus, removing all advertising elements within every King game worldwide effective immediately.”

The changes mean that a few people are parting ways with the company, Dale said. But they’re reallocating the rest to different roles internally.

“A couple of mainly commercial people will leave as a result of this,” Dale said. “But they’ll get generous support and they’ve done well in attracting major brands. So we’ll help them as in generous as manner as possible.”

Article courtesy of TechCrunch

Apple’s developer bits are generally the bigger picture story that comes out of WWDC, and some details are slowly emerging about those 1,500 or so new APIs Apple has added for devs to take advantage of. Some of the better news is around new gaming technologies, which should result in much improved experiences for both gamers and the people creating the games they play.

iOS 7 will introduce support for “Made for iPhone, iPod and iPad” (MFi) program-compatible game controller hardware (via 9to5Mac), which means developers will finally be able to access system-level tools for building in support for a wide range of devices from accessory manufacturers. The new API supports both controller sheaths that hold the iPhone or device itself, and standalone controllers that would more closely resemble your traditional gamepad.

New images found by Touch Arcade from the iOS 7 developer’s guide shows that controllers will be able to offer support for configurations of two joysticks, a directional pad, and up to six buttons at least, so that it should be able to replicate the setup of traditional controllers like the PlayStation DualShock or Super Nintendo gamepad pretty easily. For retro titles and core games alike, this should be a tremendous addition to the arsenal, and you can expect third-party hardware accessory makers like Griffin, Belkin, etc., as well as startups on Kickstarter, to be all over this. There are third-party controllers already out there, but they’ve always required devs to integrate an external SDK to get games working with them, that’s not going to be the case anymore.

Retro games should also get a nice boost from SpriteKit, Apple’s new framework for developing more simple, 2D style games and creating interesting physics effects like the one shown in the video below. Sprite Kit looks to be pretty powerful, but has the disadvantage of not reaching outside of Apple’s ecosystem, or of supporting older devices. Still, Apple has a very fast-adopting user base for new versions of iOS, and there are a lot of dev shops that focus only on iOS, so we could see some very cool stuff built with this new, simpler Unity-type engine on Apple’s devices.

Other new gaming features include turn-based multiplayer game modes, ladder rankings for high score leaderboards and more. But the game controller element alone could have a huge impact on iOS and its role in the mobile gaming market, and it’s quite likely that Nintendo and Sony should be watching very closely to see how the ecosystem around that feature develops.

Article courtesy of TechCrunch