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.

Today we announced a $4m investment in Serious Business. Their social game, Friends For Sale, has become a top ten app on Facebook since it launched in November. I am very excited about working with Siqi and Alex and the rest of the team.

While there are a lot of games on the social network platforms now, many have game mechanics that have been ported from another medium. I think Siqi and Alex have developed the first game dynamic that is native to social networks. As I’ve mentioned before, social games differ from merely multiplayer games in that social context has an impact on the game play and enjoyment. I believe that the Serious Business team has a deep understanding of how to create these social games, and we’ll see more such games coming from them in the future.

Venturebeat has a good description of the first game:

Here’s how it works. You join Friends For Sale and receive a starter war chest of several thousand dollars of the company’s virtual currency, as well as a valuation of how much you’re worth. Then you see a list of all your Facebook friends who have added the application, along with their selling price, and you can start buying them up. Price is determined like in any market, by bidders — so if you’re competing against others to buy a particular friend, you’ll have to keep raising your bid in order to maintain ownership.

When you sell a friend, you get to keep half the profit. The other half goes to the person getting bought. You can also make money by doing things like inviting more friends to the application. You earn $2,000 for every four hours that you’re logged in, and $1,000 for every friend you invite. And when somebody buys you, your value increases.

What’s the point of owning a friend, besides making virtual money on their eventual sale? Well, you can buy them gifts, or you can use them to “poke” other friends.

So really, this game is a mask for deeper social intentions. Let’s say you’re a high school student and you want to show a classmate that you have a romantic interest them — buy them and give them a gift on Friends For Sale. Or lets say you want to attract the interest of a prominent entrepreneur and angel investor like early Googler Georges Harik. Buy him, if you can afford it: He’s my most expensive Facebook friend, worth more than half a million dollars in the app’s virtual currency (pictured, above; thankfully, he’s already an investor in VentureBeat).

Other coverage is in Techcrunch, and Inside Facebook.

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.

There are a couple of nice wrap-up articles on the Easter themed special events in MMOGs and Virtual worlds that took place over the weekend.

Massively surveys MMOG events in World of Warcraft, Lineage 2, Final Fantasty XI, Lord of the Rings Online and Second Life, noting:

Seasonal events are often the most popular in-game events in many of today’s MMOs. But each game’s designers have to find a way to slip these real world celebrations into the lore and mechanics of their persistent worlds.

Izzy Neis covers Easter events in kids online worlds, including Club Penguin, Buildabearville, Moshi Monsters and Nicktropolis. She says:

Perhaps I’m just picky, but I honestly think you cannot have a healthy, uber-strong sense of citizenship in your youth-based virtual worlds WITHOUT acknowledging real world excitement. I am consistently impressed by the thriving movement of the community in Club Penguin– they’re very good about giving their users the tools to play, instead of dictating to the users the play. Kids are actually forming their own civilization under the eyes of the moderators & site runners

My friends at Gaia tell me that they see a massive bump in usage during their theme events. As an example, last years invasion of vampires into Gaia on Halloween brought the site down several times during the event.

I think this idea of creating special events around real world events is incredibly powerful. It introduces the shared social context that the players and users of the MMOG/Virtual world which helps shape and condition responses to events. Facebook gifting spikes around the holidays for exactly the same reason; users import conventions and context from the real world.

I’m interested to hear anecdotes and specific data that readers can share about the success of tying in world events to real world events.

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.

Venturebeat reports that some game companies are planning on launching teaser games into Facebook primarily to promote the sale of their “full” games at retail:

Unlike the one-off casual games you’ll generally find on the internet, Gnosis makes theme packages like Candie’s Factory, which is billed as an action / puzzle game. The plan is to split off individual mini-games and place them on Facebook to gain brand recognition for the retail product.

“We’re trying to build up an audience on Facebook where you can develop the brand association, so when you see that same brand at retail, you’re already familiar with it,” says Threewave’s CEO, Dan Irish. “I think for this year, the retail proposition is still the most important.”…

Threewave’s ideas do seem to be in line with Electronic Arts ‘ plans. EA has a stealth division called Blueprint that is reportedly creating “brand extensions” for its games to be distributed on social networks.

This reminds me of the old saying that if all you have is a hammer, then everything looks like a nail. I am excited about the innovation that is happening in social games where the gameplay occurs within Facebook itself (and other social networks). I think we’ll see far more innovation coming from startups who are focused on these new opportunities than from established game developers who may have trouble with the innovators dilemma in dealing with disruptive technologies, in this case, social games.

As I’ve spent more time looking at the games on Facebook, I’ve been trying to detangle the difference between a social game and a game on a social network. In response to my post on the top developers of Facebook games one commenter asked:

1. Andrew - February 13, 2008[Edit]

I’m all for the development of games on the Facebook Platform, and can even see the value and revenue model working…..but does it really need to be branded ‘Social Gaming’? The idea of playing multiplayer games isn’t exactly new, and even on a web model, Yahoo and MSN Games have existed for years….

Something about this didn’t sit right with me. Scrabulous feels like a social game to me, qualitatively different from multiplayer games on the web. But what is it that makes Scrabulous on Facebook a social game, but Chess at Pogo simply a multiplayer game? I think the difference is that social context has an impact on the game play and enjoyment.

Playing Scrabulous against my wife puts the game into context in a way that playing with a stranger that I met in the Yahoo games lobby simply doesn’t have. If I’m losing against a stranger, I might just abandon the game - not an option against my wife. If I’m taking too long to move, I’ll hear about it from my wife in a way that will cause me to play- not true for a stranger. The bragging rights on the win will be more meaningful and last much longer when I’m playing my wife. And finally, the act of playing itself has the subtext “I’m thinking of you” that is absent when playing against a stranger, where the game is the only concern.

That being said, many of the games on Facebook lack this social context. Warbook and Texas Hold’em, their success notwithstanding, are more like multiplayer games that happen to sit on top of a social networks - the social context is not a key element to the game itself.

One game that has strong social context is Parking Wars. Ian Bogost has a great discussion of the social context of Parking Wars over at Gamasutra:

In Parking Wars, each player gets a street with several spaces as well as a handful of cars, which come in different colors. Play involves virtually parking these cars on the streets of one’s Facebook friends. Each car earns money by remaining parked on the street over time, but the player can only cash out a car’s value by moving it to another space. Players level up at specific dollar figures, earning new cars as they do so.

Some spaces have special rules, like “red cars only,” or “no parking allowed.” It’s possible to park illegally in these spaces, but if their owners catch you they can choose to issue a ticket, which tows the player from the space and forfeits the money earned to the space’s owner.

When possible, it’s best to park legally. However, in practice this isn’t easy, since many players vie for the limited resources of their friends’ collective parking lots, just like we do with our coworkers at the office. Moreover, very occasionally the signs on spaces change, so no one’s guaranteed to be safe.

Playing Parking Wars is an exercise in predicting friends’ schedules. A colleague in Europe is likely to be sleeping during the evening in the States, and thus his street might offer safe haven at that hour.

And just as some meter-maids don’t get around to patrolling real streets, so some players of Parking Wars don’t get around to patrolling their virtual one. Of course, such players might just be busy, or they might even be baiting their colleagues so that they can later issue a whirlwind of unexpected tickets.

The social context - knowing which of your friends are diligent about ticketing and which are not, and who might be too busy (or sleepy!) to be ticketing at a particular time, are key elements of the gameplay.

MindJolt, Jetman and Diveman are all games that use the “challenge” dynamic as their social context to drive repeat play.

I’m looking forward to seeing more games involving explicit social context get launched over time. What games do readers think have social context as part of their gameplay, thereby making them social games?