Is KoinUp the Future of Avatar Social Networks?

First myspace conquered the world. In its wake came Facebook. Now, even your best friend’s mom has a Facebook account.

But what’s next? For some it will be Koinup.

Koinup is the first social networking site for your virtual life. Not exclusive to Sims gamers, Second Life devotees or WoW weekend warriors, KoinUp is a place where you can give your multiple virtual world identities their own social network.

Koinup was founded in March 2007 and has thus far chosen to focus on Second life, Imvu, WoW and Sims 2 – but are not exclusive to these worlds. The most powerful feature – some sort of integration with these games – hasn’t happened yet, so Koinup instead pledges to be a place to document all your virtual world activities.

I signed up for an account and was very impressed with the ease of registration. I think it tool a minute and a half total with no frustrating or invasive queries for personal information. It was also fun to get the user name I always try and grab on new sites – without resorting to a 36 letter mutation of an English word or a numeric sequence after the handle of choice.

Koinup’s design is fairly straight forward, although not as intuitive as it could be. Where Koinup stumbles is the English language. It doesn’t have the easy colloquialism of most Web 2.0 sites. A couple snippets:

It’s very easy to use and it allow to anyone who have some ideas to tell stories.

Koinup takes your privacy very seriously. For more info, give a look to our Privacy Policy.

But the founders, Italians Pierluigi Casolari (CEO) and Edoardo Turelli (CTO), likely speak their native language better than I. Casolari pulls double duty as the site’s content creator, but there’s room for a translator or English editor on their team.

Koinup allows users to upload videos such as Machinima and tutorials, associated still images and still image series referred to as storyboards. One of the great features Koinup has incorporated is CrossPosting, or the ability to load pictures onto Flickr and other photo sharing sites from within the Koinup uploading system. At this point, CrossPosting doesn’t work with video or storyboards but perhaps that will come next.

One aspect of Koinup that stood out was the site’s emphasis on “Coolness” (their word). Obviously the idea of karma or kudos or cred has been present in social networking sites almost from day 1, but never has it been tacked on quite so blatantly. Site members themselves in addition to the media they uploaded are ranked on coolness. The coolness of media is determined using the usual vectors like views and comments, but member coolness is determined with a “unique” metric.

Members are ranked on coolness based on the popularity of their work (naturally) but also by the number of times that member has flagged offensive material in other people’s profiles.

This is a bit of a head scratcher. It’s akin to incentivizing programmers for finding bugs. Obviously peer moderation is crucial in a user created content environment, but such a direct rewarding for overzealous policing seems destined to backfire.

Ideas like Koinup are inevitable, but Koinup is in need of much refinement before it serves its audience well. I’m looking forward to the next iteration of an avatar social network – whether it’s Koinup or not – as we’re certain to hear a lot more about social networking for the metaverse.

Three questions, a couple that Koinup might answer:

1. Do people use similar avatar personalities in different worlds?
2. How many people use multiple virtual worlds concurrently?
3. Couldn’t Facebook or myspace easily incorporate avatar profiles – either on their own or as a section of your primary profile – thereby eroding the market for standalone avatar social networks?

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Kwari: Pay-to-Play Repulsion Loop and Online Gambling

Apologies for the lack of updates lately. Kid #2 is mere days away and we’re moving house in a week. Very busy.

I was catching up on my feeds today and decided to buckle down and plow through this interview with Kwari’s Marketing Director. I don’t even know where to begin with Kwari. It’s certainly not “Free to Play” as you can’t so much as fire off a round without first purchasing ammo.

Worse yet, every time you absorb a shot, money is deducted from your account. So when you start the game with nothing but an unloaded gun, you’ll quickly soak up enough bullets to deplete your account by several bucks. At this point you can choose to either stop playing altogether (to save money) or purchase ammo and health in order to stem the tide of cash flowing off your credit card. This is not a compulsion loop, it’s a repulsion loop.

One of the more interesting aspects of this game is how it will avoid being classed as a game of chance (i.e. gambling) and legislated out of existence. Cue giant speech about why they’re a skill-based game:

Al King: It’s absolutely about player skill, and that’s a very important point for us in many ways. With all the changes in legislation as far as poker-related websites are concerned, it was very important to us that we got rid of any elements of chance or randomness and make it a skill-based game. We’ve already been classified as… well, we haven’t been classified as a skill-based activity because there is no such category in the UK where VAT (Value Added Tax, a form of tax applied to all purchased goods levied by most or all European governments) but we haven’t been classified as ‘gambling’ which does have it’s own form of status over there, and that’s a big achievement for us. We’ve also been classified by the banks for credit card use as ‘non-gambling’, so we’re fine in the UK and in the key European territories. When it comes to the USA we basically have to take our case on a state-by-state basis and say ‘Here’s what we are, here’s what we do, we’re being gracious, transparent and responsible about the whole thing.’ Fundamentally we are skill-based, we’re not gambling, but we are subject to the same laws that cover gambling, and so we just need to be patient about the speed we can roll out in North America, but we’re hopeful that we can get running in some key states in the first half of ‘08.

Ironically, after all that, a few paragraphs down Mr. King discusses one of Kwari’s unique features – something called a “Cash Bomb”:

Al King: There’s also another feature – which we know we won’t have ready for launch, but we want to implement it asap – called the ‘Cash Bomb’. It might look a bit like the Pill, we’re not sure yet, but we do know that it will hang around in the game world and maybe move around like a little sentient robot and players will shoot it. The reason why is that after a number of shots, it will explode and all the cash in it will go to the player who scored the shot – it might be $10, $100, or $1000, maybe more. The cash bomb will be completely funded by the shots the players fire into it. So you might be running around the map looking for someone to shoot, and you run across the Bomb, and you reckon ‘It’s only going to cost me a few cents’, so you fire a few rounds into it. And most of the time, nothing will happen, but every now and again someone will get lucky and the bomb will explode, and whoever got it will see coins and bills all floating towards them and their in-game account will go up by a nice chunk.

Hate to nitpick here, but that sounds exactly like a slot machine to me. Not much skill involved in running by, randomly shooting (aka inserting quarters) and hoping the bomb explodes and showers you with cash.

It will be interesting to see where Kwari winds up as a lot of what they’re doing appears antithetical to free to play or even game design principles in general.

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NCsoft To Bring Free to Play Games to PS3

From this post on NCsoft’s Dev Corner, Richard Garriot discusses NCsoft’s plan to build free to play console games.

PS3 NCsoft games would incorporate “traditional subscription models, micropayment systems and free-to-play games with membership options,” according to the CEO.

Elsewhere in the post, Garriot indicates we might see the first NCsoft PlayStation 3 game by Christmas of next year (2008) – a product that sounds likely to be a re-use of one of their existing IPs, i.e. City of Heroes, Guild Wars or Dungeon Runners. He notes that original IP console games will take 2-3 years (i.e. 2009/2010).

Garriot also suggests that NCsoft intends to start a new studio to handle console development, but more likely is that the work will be farmed out to existing studios, not a new one.

“…We are also looking at specific projects that we may house in other studios. This includes our Austin offices or our other currently existing studios. Console game development won’t just be at one single location,” he added.

Garriot hints that Xbox 360/XBLA is not NCsoft’s first choice for their F2P products due to the restrictive nature of Microsoft’s Live infrastructure. Aspects of my earlier post, The Economics of a Free To Play Console Game, may be relevant here as I examined the feasibility of doing a F2P XBLA game.

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The Five Most Popular Game Communities

Actiontrip has just posted a 2 pager on what it believes are the five most popular game communities, presumably in the world. Although the list isn’t ranked and doesn’t include any of the bigger Asian success stories, it has some interesting numbers.

Here are some highlights.

On CounterStrike:

Last we checked, the CS community had just over 174,665 active servers, with approximately 276,552 gamers playing online at the time we did our research (so just over 2 players per server, eh? – Ed). If the statistics on Steam are to be believed, this should translate into roughly 9.423 billion (yes, that’s the correct amount) minutes of play time per month.

On Runescape:

Recent research indicated that 13.1% of all PC gamers have played Runescape at some point throughout June 2007, with the average RuneScape player spending 673 minutes per week within the game. After this RuneScape became the 5th most played PC game just behind Blizzard’s World of Warcraft and games like Halo: Combat Evolved, Halo 2 and, of course, The Sims.

On Halo:

The most recent update showed that almost 12,706 players were online in Halo 2 at the time when we checked. Also, around 261,820 unique players were registered, with 688,136 matches logged (data from the last 24 Hours).

The lack of Asian representation likely stems from the all-North American sources used for the article: NPD, Steam, Bungie.net, Google Trends and Nielsen Media Research.

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F2P Jobs: Runescape Developer Hiring Website and UI Designer

I don’t imagine we have too many artists reading f2p.biz, but if you are that guy or girl you might want to check out Jagex’s latest job posting. Seems they’re looking for a designer in Cambridge to do the following:

We are looking for a talented web designer to join and help create websites that will be viewed by millions of people each year.

With over 1.1 million paying subscribers to our online game, RuneScape and a further 6 million other active players visiting the website regularly, you will be responsible for designing the site they visit to play our ever-popular game.

Seems like a cool opportunity for a designer who wants to be on the cutting edge. If we had you at hello, go ahead and send your resume here. Tell them F2P sent you.

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The Secret Growth Driver Behind Hit Casual MMOs

At last month’s Casual Games Conference in Seattle, I spent about 30 minutes chatting with Daniel James, CEO of Three Rings. Daniel told me an interesting story about how Puzzle Pirates, the hit Java MMO, has accelerated user base growth.

Puzzle Pirates utilizes few other distribution portals outside of http://www.puzzlepirates.com. But one site Daniel has had phenomenal success with has been Miniclip.com, the browser-based games portal.

In Daniel’s experience, a stunning 1 million out of Puzzle Pirates’ 3 million players have come via Miniclip alone.

Because Miniclip users are younger, they don’t monetize as well as other players. Daniel’s estimation was 1% monetization for Miniclip users vs 5% among the rest of the Puzzle Pirates user base. However, according to Daniel a secondary wave of word-of-mouthers join Puzzle Pirates shortly after each wave of new Miniclip users and the conversion rate among this secondary wave is much better.

I bring this up now because of this very recent Ypulse article, which contends that Miniclip has been the primary growth catalyst for games like Club Penguin and Runescape as well. A degree of influence not surprising given the “explosive growth” of the Miniclip.com site itself, as illustrated on this chart.

Here are some quotes from the Ypulse article:

Without Miniclip, it is likely that there is no Club Penguin phenomenon. The product launched in October 2005 and was able to eke out a base of about 25,000 users. A few months later, the game was posted on Miniclip and experienced explosive growth. By September, the product had over 2.6 million users. Runescape’s user base saw a similar, if slightly less dramatic, increase from a niche game to a multi-million user success.

With a core demographic of 10-24 year olds, Miniclip has built a portal with the power to instantly launch a youth brand. What network TV was for The Transformers, so Miniclip has been for Club Penguin. Great products can travel virally, but the task is a lot easier if the starting point is 30 million exposures.

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Neopets is Hunting for an Executive Producer

US-CA-Glendale-Executive Producer, Neopets

Here’s an opportunity that doesn’t come around every day. Neopets is looking for an EP.

The Neopets Executive Producer reports to a VP and interacts with the longest list of Director types I’ve ever seen included in a job description. I quote:

This position will interact closely with:

-Director, Technical Development

-Director, Multimedia Applications Development

-Director, Casual Game Development

-Director, Marketing and Operations

-Director, Promotions Marketing

-Director, Fraud Management

-Design Director, Neopets Creative Resources

-Director, Consumer Products

-Director, Research Analysis

But as we all know, the market for talent is tight. So I wasn’t surprised to see a relatively light set of prerequisites:

EDUCATION/EXPERIENCE:

-BA in a related field or equivalent experience. MA a plus.

-3+ years working as a Product Manager, Producer or Associate Producer on multi-player on-line games or similar position.

-2+ years experience with project budgetary processes.

And after listing off 23 bullet points under the KNOWLEDGE/SKILLS section, I always find it odd when companies throw in a line like this:

-Proficiency in the following software or systems:

-Microsoft Office, Visio, MS Project, Outlook

In any case, it’s late at night and I’m being overly critical. If you’re interested in this opportunity, email Mia Burgess (mia.burgess@mtvstaff.com) or go straight to the top by tracking down Kyra Reppen, SVP & GM of Neopets.

 

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Sony Online Saying All The Right Things

From a Gamasutra interview with Nicholas Beliaeff, Sony Online San Diego studio head… here are a few quotes:

On reducing barriers to entry:

We’ve got a lot of streaming going on, and we’ve reduced the barrier to entry for players. There’s no big download, and no credit card required. We’re really excited about that.

On multi-platform development:

For us as a company moving forward, all of our MMOs in development have a console component.

On min specs:

Whenever you’re making a game and are proud of it, you want as many people as possible to play that game. In the PC world, the lower the machine spec you can get, the bigger potential audience you have, and the more chance you have for people to look at your work.

On Free to Play:

If you look at some of the free to play games like Club Penguin and RuneScape, it’s a huge market. If you look at the actual numbers of people playing RuneScape, there may actually be more people playing RuneScape than there are playing World of Warcraft.

Interestingly, Nicholas and I met in 2001 when I was pitching a product of mine to him and Trip Hawkins at 3DO.

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Top 10 Revenue Models for Free To Play Games

The following 10 revenue models allow some or all of their associated game or virtual world to be played for free. The ordering is quite unscientific and I’m sure I’ve missed something obvious or messed up a detail. I leave it to the internet to correct me.

1. Virtual Item Sales
A well familiar revenue model first established in Korea and now the dominant model in Asia. Nexon – makers of KartRider, MapleStory, Audition and more – are widely seen as the leaders in this area, doing $230M of gross revenue in 2005 (the most recent year for which they’ve released figures), with 85% of that revenue coming from virtual item sales.

Virtual item sales is the practice of allowing users to purchase functional, decorative, or functional & decorative in-game items for use in and out of gameplay. A virtual item system usually uses two currencies – an attention currency (users earn virtual money via in-game activities) and a real money-based currency (users buy virtual money using real money). Typically, 5-15% of users opt for the latter currency and the influx of real world money is what provides the virtual item sales revenue stream.

What’s so compelling about virtual item sales is the unlimited ARPU (average revenue per user). According to Daniel James, CEO of Three Rings, some hardcore Puzzle Pirates users have poured more than $10,000 apiece into the game via virtual item purchases. To reach that contribution level via a World of Warcraft-style $15/month subscription would take a user 55 years.

While extremely shaky sources peg the overall size of the virtual item sales market at $1.5-2B this year, without an NPD-esque measurement organization there’s no way to verify that number.

2. Subscription Tiers
Runescape, the Java MMO from Jagex, is one of the leaders in the tiered subscription space. A tiered subscription model allows users to play the core game for free, but those that desire access to elite weapons or other game content, must pay a small ($5/month) subscription fee. Over 1 million of Runescape‘s 6+ million users have opted into the tiered subscription program, grossing $60M annually for Jagex.

Dungeon Runners, an NCsoft free to play MMO, offers a similar $5/month subscription package that affords players access to the elite items, a bank and the ability to stack potions. It also gives subscribers server queue priority.

3. Advertising
Several different forms of game-related advertising revenue streams have popped up in recent years. Firms such as Massive, IGA and Double Fusion do big business in in-game advertising for clients such as EA, Activision, THQ and Microsoft. Game ad agencies typically serve up static ads (ads that ship with a product and never change) or dynamic (ads that are updated in real time via the net) within game products that are contextually appropriate for advertising (i.e. sports, racing, or contemporary shooters).

The size of this conventional in-game advertising market is currently pegged at $100-200M, according to well-placed industry sources. However, the number and quality of games with dynamic advertising enabled is escalating dramatically. So much so that Yankee Group predicts the in-game ad market will reach $732M by 2010.

But other, more emergent forms of in-game advertising have been at the forefront of enabling free to play. Examples include:

• Google Adsense PPC ads (see recent post on Maid Marian, grossing $800K/year from Google Ads alone)
• Sponsored item sales (Habbo Hotel)
• In-game video ads (Real Networks)

4. Real Estate or “Land Use Fees”
Second Life is the biggest legitimate player utilizing this revenue model whereby virtual land is sold leased to individuals. Monthly lease fees range from $5 to $195, depending on the size of land in question. Users may also purchase their own island for a one time fee of $1,675 in addition to a monthly fee of $295.

Approximately 70% of Second Life’s revenue comes from land sales and maintenance fees. Of course the virtual land ownership revenue model doesn’t come without headache, as the Bragg vs Linden suit has proven.

Entropia Universe uses land auctions as a revenue stream, but a recent headline-making $100,000 land sale has been called into question as the successful bidder is an employee of Entropia‘s developer, MindArk.

5. Merchandise
In what’s become a phenomenon of Furby proportions, Webkinz plush toys and their associated Webkinz World have taken the pre-teen set by storm. Users purchase a $15 Webkinz plush toy at retail and enter a secret code to activate the associated virtual character in Webkinz World. Beyond the retail plush toy purchase, there are no additional fees for playing in Webkinz World.

Two million Webkinz toys have been sold since April 2005, with more than 1 million of those users registering their pet online. That’s more than US$20M in retail sales in just 24 months. Products such as Bratz/Be-Bratz are quickly jumping on this bandwagon.

Another successful merchandise-based revenue model is collectible card games, or CCGs. Neopets launched a CCG in 2003 and just this week MapleStory became the latest free to play game to go this route, announcing a partnership with Wizards of the Coast. Consumers purchase real-world MapleStory collectible cards that come with codes redeemable for exclusive in-game content in the MapleStory MMORPG.

6. Auctions & Player Trades
In June 2005, Sony set up Station Exchange on select Everquest II servers. Station Exchange facilitates player to player trade of in-game items – including the provision of an escrow service – in return for a 10% closing fee as well as listing fees ranging from $1 (items and coins) to $10 (characters).

While Station Exchange recorded only $274K in net revenue in its first year of limited release, it was enough for Sony Online President John Smedley to declare it the future of RMT. Read the SOE Station Exchange whitepaper for more.

Entropia Universe – a world in which virtual items actually decay with use and require real money to repair or replace – utilizes first party auctions as their primary revenue stream. This means that instead of merely facilitating player to player auctions and taking a cut (a la Station Exchange’s eBay model), Entropia auctions items directly to their players.

Entropia items sell for ludicrous sums, with rare weapons auctions closing at $26,000, land auctions for (allegedly) $100,000. The May 2007 auction of five in-game banking licenses brought in $404,000, total. Ironically, Entropia takes no fees for player-to-player auctions.

In the wake of this success, watch for third party virtual item auction houses such as Dan Kelly’s Sparter.com to offer developers and publishers a cut to ensure the (exclusive?) cooperation of their products.

7. Expansion Packs
The best known example of expansion packs as a primary revenue model is the Arenanet product, Guild Wars. Likened by Richard Garriott to a series of fantasy novels, Guild Wars relies not on monthly subscription fees for its revenue, but on the sale of successive expansion packs for $29.99.

The game’s creators argue that the thin-pipe origins of their technology allow their game to be run far more economically than competing titles, enabling this no-subscription free model.

Over 3 million people have purchased the previous three Guild Wars products (Guild Wars, Guild Wars: Factions and Guild Wars: Nightfall) with those numbers set to surge again with the release of Guild Wars: Eye of the North on August 31, 2007.

8. Event or Tournament Fees
Netamin’s free to play, ad-supported Ulimate Baseball Online uses event fees as an additional revenue stream. UBO‘s Pay to Play tournaments cost $5 per player to enter and offer cash prizes up to $4,500.

Shot Online, a free to play/virtual item sales golf MMO, also charges users to enter tournaments.

Third parties such as Valve’s Tournament.com and Groove Game’s Skillground.com are getting into the pay to play tournament scene as well. These sites charge charging entry fees for game tournaments for games such as Half-Life 2 and Counter-Strike.

9. TrialPay
At the recent Virtual Goods Summit and again at the Seattle Casual Games Conference, I bumped into representatives from TrialPay. TrialPay is a third party facility that allows customers to pay for products (i.e. games) by trying or buying from advertisers.

What this means is that when you go to pay for a casual game or purchase virtual currency, you can instead select from a demographically targeted list of special offers. Trying or buying one of these offers – from merchants such as Avis, Geico, Vonage, etc – allows you to get your game purchase for free, as the offer merchant has paid the game provider for acquiring a new customer on their behalf.

TrialPay claims that this allows game developers to earn more per user, as some offers pay game developers upwards of $50 per user (as opposed to the $20 a casual game might normally charge).

Someone from TrialPay can jump in and give me a more relevant example of their system’s use in the game space, but all I could find was a casual games company called Dreamquest Games.

10. Donations
Clocking in at last on the list is of alternate revenue streams is player donations. Raph Koster recently blogged about meeting up with the Kingdom of Loathing guys at ComicCon in San Diego. Raph reported that while KoL‘s revenue is “definitely indie,” their primary revenue stream of player donations is a sustainable one.

According to Wired, the donation revenue has allowed creator Zack Johnson to quit his day job and hire six employees to help improve and maintain the product.

That’s what Maid Marian founder Gene Endrody would call a “lifestyle business,” but I suspect most of us wouldn’t scoff at it or any of the above revenue models.

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Nexon Teams With Wizards of the Coast to Release MapleStory Card Game

Worlds In Motion – Nexon Teams With Wizards of the Coast to Release MapleStory Card Game

File this one under “Nexon Taking Over the World”. Great partnership and it sounds like MapleStory’s CCG>Online integration is well thought out. So everyone who buys a pack of cards gets a virtual item or experience of some sort.

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