Gamasutra summarizes a panel discussion at ION today about designing games with gold farmers in mind. I recently noted some of the challenges of dealing with in game inflation when designing games. This panel deals with some other game design challenges when you have a virtual economy:

On the topic of the need to plan an economy before the community develops its own, Big Fish Games’ Toby Ragaini pointed to Asheron’s Call as an example: “In Asheron’s Call, they made money weigh something, so rich people couldn’t carry their money around. So players came up with their own exchange for a small, lightweight item (shards). Everyone traded based on these items.”

Habbo Hotel developer Sulake Corporation’s CTO Osma Ahvenlampi noted, “In Habbo, at first they made the currency non-tradable, but players were trading everything else. They finally decided it would make it easier for everyone concerned and made bags of gold etc. When that happened, it reduced eBay transactions because it was easier and more trusted by players to do it internally.”

Many social games developers are taking an iterative approach to their game design. In general this is a great approach. It allows developers to quickly react to what your players like about their game. However, virtual economy design is one aspect that deserves a substantial amount of design work up front. Neglecting it can create a situation where success begets failure because the economy gets out of control and ruins the “fun” for your best players.

Last week I mentioned that I’m speaking at Interplay Con on May 22nd.

Another great conference focused on social games is the Social Gaming Summit on June 13th, also in San Francisco. Lightspeed is the Platinum sponsor of this conference and we have been working closely with Charles Hudson and David Sachs to organize the event, invite speakers and so on. Here is the critical info:

What: Social Gaming Summit
Where: UCSF Mission Bay Conference Center, San Francisco, CA
When: Friday, June 13th 2008
Register Here: http://socialgamingsummit.eventbrite.com/

Charles, David and I have been discussing the agenda for the past month or so and have settled on the following five panel topics as areas where there are emerging best practices that are not widely understood.

Casual MMOs and Immersive Worlds.

Asynchronous Games on Social Networks

Building Communities and Social Interaction In and Around Games

What Makes Games Fun?

Monetization and Business Models for Social Games

User-Generated Games in Social Networks

The aim of the conference is to have practitioners talking to practitioners, sharing real life lessons learned. We’ve chosen speakers who have live experience with launched games. Speakers include:

Respected game designers and theorists including Amy Jo Kim, Ian Bogost and Nicole Lazarro,

Developers of social network games including the teams from Friends For Sale, Zombies, (fluff) Friends, SGN and Zynga,

CEOs from casual games companies like Addicting Games, Playfirst, Kongregate and Mochi Media,

Leaders of virtual worlds and MMOs like Sparkplay, Habbo Hotel, Acclaim and Puzzle Pirates and

CEOs of communities like Dogster, IMVU, Gaia, Go Pets Live, NeoPets and Stardoll.

It should be a great conference.

Readers can use the code “LSVP” at checkout to save 15%. That discount is good for general admission and student tickets.

We hope to see you there!

Bret Terrill has an interesting post using Compete stats to look at the effectiveness of the Zynga and SGN game networks in cross promoting traffic through their game bars that is worth a read.

Reader of this blog will know that I have a high degree of interest in Social Games. There are a couple of social gaming conferences coming up in the next couple of months.

The first is Interplay which is being held on May 22nd at the Kabuki Hotel in San Francisco. It specifically is focused on games being played on social networks. Some of the topics that the conference plans to address include:

How will the companies in this space turn their momentum into sustainable business models?
How will the social network platforms react if and when they do?
The virtual economies represent large opportunities, but how does one exploit them, and what role can advertising play?

I’ll be speaking at the conference so hope to meet some readers there. Click here for a 25% discount to attend Interplay.

The second is the Social Gaming Summit which Lightspeed is sponsoring and that I am helping to organize with Charles Hudson and David Sachs. It isn’t until June 13th, so I’ll post more about that next week.

Siqi Chen, CEO of Serious Business (publisher of the Friends for Sale game), pointed me to an excellent white paper on the money supply impacts on an online economy recently.

It notes that in most games, players control the rate at which new cash is introduced into the economy. To avoid hyper-inflation, it recommends four steps:

Consumables are important in creating new Cash – If large amounts of new cash can be created without consumables, then there is no economic brake on cash creation.

Players set the prices of Consumable – This is the other side of the coin, since only player set prices can legitimately respond to changes in the money supply. Attempting to do this programmatically in such a diverse economy as a typical MMO is to invite failure. National governments have not been able to do this.

Fixed drains need to be in place – This provides a mechanism to remove a Crafter who is economically irrational from the business game, as well as to provide equilibrium in prices and money supply. Thus a regular fixed cash fee for doing business is required, and set by the game.

Variable Drains via percentage commission of the sale need to be in place – This provides a damper that mitigates wild swings in the money supply. Fictionally Sales commissions provide this damper. The percentage is set by the game, on Facility Type basis.

People building social games should read the whole thing.

In February, Gaia announced that it would be using its current virtual world user base to launch a casual MMOG. Virtual World News has an interesting interview that gives more details about the Gaia MMOG:

Beyond the virtual world background for the casual mmo, Georgeson also highlights the fact that Gaia offers more variety in its gameplay than some other MMOGs. Locations will behave differently according to the number of people present, monsters will spawn in different ways, and a wider variety of scripts, he says, create a sensation of spontaneity.

Also, there’s golf.

“One of the other things I’m particularly proud of is that a lot of MMOs have the same experience where you go or no matter what you’ve done for how many people are in the area,” said Georgeson. “It’s a big treadmill of killing monsters and getting loot. We still have that, but we also have aboveground game like golf that people can play even if there’s a battle raging around them.”

Although the kids/teens based MMOG world is getting increasingly crowded, especially as the media companies like Disney and Nickelodean launch new games, I think Gaia’s new game will likely be a success. As Virtual Worlds News notes:

Gaia Online is described as a virtual world and a forum, which makes it seem more open-ended and unformed that it actually easy. There’s actually already a fairly extensive guild system, roleplaying community, and narrative built into the world, though. It’s just not always readily apparent.

Gaia has held many scripted special events in the past that brush right up to the edge of becoming an MMOG. They already have an avid user base that has created and customized avatars, an in-world economy, and a digital goods business model. They also have an expertise in creating fun gameplay. Adding in levels, skills, quests and powerful virtual items is a small step for them to take.

I’ll be watching their launch in the summer with great interest!

Some people have asked for the introductory slides from my talk today at Web 2.0 Expo about Games 2.0. These slides were just for scene setting and the bulk of the time was spent in panel discussion and case studies for the various elements outlined in the presentation. None the less, here it is.

2008-web-2dot0-presentation-games-2dot0-ac-changes-v2

UPDATE:

Ben Vandgrift liveblogged the session. Since there is no way to link to just this post on his blog, I am quoting it here without any changes or edits (although note that my name is spelled Jeremy LIEW!)

{w2e fri session 1: games 2.0 (@11:56)}

jeremy lieu @ lightspeed venture partners

we’re talking about the future of game development and game types with web 2.0.

panelists:

lots of things have changed in the web—mostly the variability of cost. these changes are tricking to the web industry.

aaa games can cost upwards of $30M. marketing driven by print and media advertising. building is about levels, and monetization is through box sales.

changes parallel the web industry.

small agile teams can get in-browser games out quickly.

(really want this slide .. don’t want to record it here.)

web games are multiplayer—not ai driven. no level design. &c.

some numbers:

halo3 $30M, yielded $700M.

powerchallenge < $8m. 1M players.

friends for sale < $1m. 7m players.

marketing:

$30M marketing dollars, 10M copies sold, 90% through retail.

the rest—facebook.

aaa game sales declines over time.

social games are backward—they grow over time.

one of the critical issues for multiplayer games online is asynchronous play.

online gaming revenue: $3.8B 2006, $5.3B in 2007, more in 2008, and growing.

panelists:

seqi chen (serious business)

johann christiansen (power challenge)

shervin pishevar (social games network)

mark pincus (zynger)

warbook—developed in two months by two people.

there have been improvements in play since launch, since it’s server hosted. just launched a sequel.

johann started in 2001, started text-based, added graphics over time.

how import are graphics, given their expense?

not important in management games.

launching early with a text-based game: profitable from the first year. management games develop a loyal user base.

variablized content?

mark: launched scramble as a live game, competition in real time. maxed out at 20K daily active users. spent three months reworking the game to be asynchronous. several tries before it reached a tipping point. thought asynchronous was a bad idea initially.

they come back to an asynchronous play because it’s your turn. there is a social obligation. the live game, though, represents 1/3 of daily users.

seqi: not turn based, but is asynchronous. (friends for sale). success about creating a game where social relationships are embedded into the game.

there is some value in unstructured asynchronicity.

johann: the social aspects of games are critical.

shervin: (gaming graph v. social graph). the emotional connection between people who know each other is quite valuable.

(think about a word scramble type game with continuous scoring.)

a very high accept rate on invitation is key to viral growth.

ghost racer: example of something too hard, yielding a high dropoff rate. ideally, a game should be easy, spreadable, with incentives for invitation.

six or seven months to 1M daily actives for popular web games. the important metrics are how things are being used. example: buying drinks for someone at the table at texas holdem. 250,000 drinks bought a day, for this little side feature.

(some discussion about funding of ventures.)

?: how to do something additional to viral.

mark: games are not naturally viral. other mechanisms have to be employed, and repeat usage has to be focused on. the ad rates you can buy traffic from are ridiculously low. networks from zynga are open to any new game developers.

shervin: ad-sharing is critical to cross-promotion. gaming bars, who’s playing what. one-click to go play. an independent channel from facebook. combined reach through SGN is 100M users.

seqi: (re crosspromotion) since they have one app, not so much cross-promotion. forced virality v. virality via game mechanic.

?: what are people willing to pay for?

digital goods, personal branding

?: real-money trading? digital goods?

shervin: a discussion on selling warbook gold. freegifts = largest virtual goods e-tailer.

mark: there is a direct line relationship between engagement and monetization.

?: social gaming and mobile phones?

they’re on the way.

?: $ for 1000 players / day? rate?

difficult answer. 4% monetized. few people getting north of 10%.

?: demographic information?

ffs: 60% female. 50% 20-25. 4th largest norway, big in saudi arabia.

power challenge: 90% male, 18-19 avg age.

texttwirl, etc: 60% women

warbook: 70% male

scramble: female and u.s.

texas holdem: make and foreign.

?:how important are incentives, like hint points?

word scavenger hunt.

Apologies for having gone dark on the blog for the last two weeks - I was out on vacation. However, I’m back in the saddle now, in time for the Web 2.0 expo this week. I’ll be around the conference at Moscone West much of the week, and in particular am speaking on “Games 2.0” on Friday at 11am.

I’ll give some of my thoughts on how the games industry is undergoing the same forces of change that led to web 2.0, and discuss this with an illustrious panel of entrepreneurs working in this area: Siqi Chen of Serious Business (Friends for Sale), Mark Pincus of Zynga Games, Shervin Pishevar of Social Games Network and Johan Christensen of Power Challenge.

It should be a great session, both for people in the games industry, and for those in the web industry. There is much to learn from game mechanics that are more broadly applicable to social media sites. I hope to see you there!

CNN , the Times of London and others have been covering Miss Bimbo recently, which Jezebel describes as:

essentially an online competition in which each registered player is given a “Bimbo” all her own to take care of — sort of like those Tamagotchi pets, but, well, not. According to Miss Bimbo rules, the goal of the game is to make your Bimbo the ” the hottest of hot Bimbos,” which involves dating “that famous hottie,” becoming a “socialite and skyrocket[ing] to the top of fame and popularity,” and even resorting “to meds or plastic surgery”, because girls should “Stop at nothing to become the reigning bimbo!” According to CNN, “Breast implants sell at 11,500 bimbo dollars and net the buyer 2,000 bimbo attitudes, making her more popular on the site.”

Unsurprisingly, most commentators are horrified and worry that this online game is providing bad role models for young girls.

This reminds me of the furor that the Coolest Girl in School mobile game produced in Australia for similar reasons. As Gaming Today noted:

Emerging as a rpg for teens, the game sets a stage for girls where “stealing, sexual dalliances, drug use and gossiping pave the path to teenage empowerment”. In the game, the objective is to “lie, bitch and flirt your way to the top of the high school ladder”, and the developer, Champagne for the Ladies, is billing their new game as the young woman’s answer to Grand Theft Auto. In the game, the player is encouraged to “experiment with fashion, drugs, sexuality, cutting class and spreading rumors” in an effort to win.

Champagne for the Ladies states that in the game “teachers exist to be manipulated,” a “looming parent signals potential social death,” new clothes are “procured by stealing from the mall”, and “bribery is an exit strategy for sticky situations”.

Game Set Watch has a good overview of the gameplay.

One of the keys to the viral appeal of these games is the comparison to Grand Theft Auto. The appeal of these “game of new stimulation” (one of the four types of fun) is correlated with the “bad” fun of stomping on a sandcastle, as Bateman notes:

… one of the reasons the recent Grand Theft Auto games are so successful at tapping into this side of ilinx is that they are not wholly realistic… The tone of the games is realistic in a certain sense, and certainly they are drawing upon mimicry, but there is an unreal quality. This is expressed in part by the shrewd choice of a non-photorealistic art style, and also by the presence of ‘game-like’ elements in the game world, such as “power up” tokens. This is real, but it is also a game. That empowers the player to, for instance, go on a murderous killing rampage, and laugh as they do it. I do not believe there is anything morally wrong with this, and the unreal quality of the game facilitates this freedom to misbehave.

The joy of ilinx is reckless abandon… it can be the vertigo of speed, or of wanton destruction; it need not be violent, but it is always irrepressible - the temporary abolishment of conscious thought.

(I hope) people playing these games enjoy the satire and understand that these are fun and no more role models than Homer Simpson.

The vast majority of games that we see are of the first three types of fun: competition, chance and simulation. It will be interesting to see if we see more games of new stimulation which derive their fun from crazy behavior. It will also be interesting to see if these games can hold on to players over time as these new stimulations become less novel with increased gameplay.

Last week I asked what distinguishes a social game from a multiplayer game and suggested that for social games, social context has an impact on gameplay and enjoyment. Parking Wars is a great example of a truly social game on Facebook

When I asked readers for suggestions of social games, a few people suggested Friends For Sale. I agree that FFS is social; social context has a big impact on what players do. I’m not sure that it is a game though in that there is no “win” endstate, but that may be just quibbling with definitions.

The NY Times highlighted another great example of a social game last Friday when Brad Stone wrote a profile of GoCrossCampus:

This winter, the armies of Yale invaded Massachusetts and conquered Harvard. Cornell’s troops turned Dartmouth’s militia into a vassal force. Columbia allied itself with Yale and occupied Long Island, before getting routed by the Princeton-Cornell alliance.

The historic rivalries of the Ivy League have reached the Internet.

Eleven thousand Ivy League students and alumni have played out these scenarios as part of an online computer game called GoCrossCampus, or GXC. The game, a riff on classic territorial-conquest board games like Risk, may be the next Internet phenomenon to emerge from the computers of college students.

Techcrunch notes another company, Kirkland North, with a similar model.

Both games rely heavily on social context (namely school, department, and residence loyalties) to provide a framework for alliances, gameplay and motivation. It appears that both have also been able to draw a significant proportion of the students on various campuses into games, spreading virally.

I really like the approach that all three companies have taken to building social games, both on social networks and on a standalone basis.