Five things startups should not skimp on March 31, 2008
Posted by jeremyliew in start-up, startup, startups.14 comments
The WSJ recently noted something that developers have known for a long time, that bigger monitors increase productivity:
Researchers at the University of Utah tested how quickly people performed tasks such as editing a document and copying numbers between spreadsheets while using different computer configurations: one with an 18-inch monitor, one with a 24-inch monitor and one with two 20-inch monitors. Their finding: People using the 24-inch screen completed the tasks 52% faster than people who used the 18-inch monitor; people who used the two 20-inch monitors were 44% faster than those with the 18-inch screens.
This got me thinking about other areas where buying “cheap” can be a false economy:
1. Large monitors. As noted above.
2. Comfortable ergonomic chairs. Your team spends most of their working time sitting in these chairs. If they are not comfortable, they won’t be in those chairs, and thus they won’t be working!
3. High Quality Speaker Phones. Conference calls are a part of doing business. If the people on the other end of the line can’t hear all the speakers in the room, you risk losing the nuances of the communication.
4. Experienced Law Firms The big silicon valley law firms are constantly involved with negotiating financings, venture debt, acquisitions and other legal matters on behalf of startups. They know which terms are “market” and not worth fighting over, and which are out of the ordinary. Firms that don’t have the same volume of deal flow often want to fight every point. While their zeal on your behalf is commendable, in the end they usually end up with “market” terms but take longer to get there. That results in higher legal bills for all parties, and greater conflict between partners where it wasn’t necessary.
5. Administrative Assistance. At some point making entries into Quickbooks, figuring out which insurance plan to sign up for and finding the cheapest airfare to LA for that conference become a poor use of founder’s time.
What are some other areas that readers think startups should not skimp on?
Managing Virtual Economies March 28, 2008
Posted by jeremyliew in economics, game design, game mechanics, mmorpg, virtual goods, virtual worlds.1 comment so far
Scientific American has an overview of how some MMOGs manage their economies (found via Massively).
The article discusses the approaches of EVE Online, Entropia Universe and Second Life in trying to keep their virtual economies balanced. Getting the balance of crafting, economics and other such features right can drive behavior like specialization/division of labor, guilding etc, as Eyjólfur Guðmundsson, EVE Online’s economist, notes:
The new player who isn’t able to succeed roams around space trying to make ISK[s]. He tries to be a player-versus-player pilot and loses in battle. He needs help to succeed in the community. Players themselves have found ways to deal with this by creating corporations and alliances. It’s not just economics, but also socioeconomics in general.
For new game designers, keeping virtual economies in check is a non obvious but extremely important element of game design. While most designers spend a lot of time thinking about how to add money into a system and how to price virtual goods, some do not spend enough time thinking about how to balance these two elements. If you allow users to transfer virtual currency between each other, trade in virtual items will emerge. If the economies are unbalanced, you run the risk of side effects such as inflation in pricing of virtual goods or too many “high power” items in the wild. Both of these can make it hard for a new player to join the game after it has been ongoing for a while as they are either too poor or too weak to be able to do anything fun. While these things can be managed after they become problems, it is better to have spent some time thinking through the issues before launch.
What distinguishes a social game from a multiplayer game? March 21, 2008
Posted by jeremyliew in games, games 2.0, social games, social gaming.15 comments
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?
Nick to spend $100m on 600 games March 18, 2008
Posted by jeremyliew in advertising, casual games, games, games 2.0, gaming.2 comments
The NY Times has a story on Nickelodeon planing to spend $100m on 600 exclusive casual web games over the next two years. They certainly have a huge audience of people playing casual games across a network of sites:
With a series of customized sites for different age groups (preschoolers, tweens, teenage boys, moms), Nickelodeon calls itself the “biggest gaming network in the country.” Movie studios, video game publishers, and toy makers are among the top marketers on the sites. In the online games market, its stiffest competition comes from Yahoo Games, which had 15.5 million unique visitors in February according to the measurement firm comScore…
The N, Nickelodeon’s teenage network, has dozens of games for children aged 12 to 17. Slightly younger players are directed to Nick.com, which drew an average of 2.1 million visitors in February and is expected to add 185 games this year. The youngest players of all are welcome on the sites of Nick Jr. and Noggin, where games are meant to be played by children “on the laps of their moms,” Ms. Zarghami said.
The company also owns Neopets, a virtual pet Web site. The investment will add scores of new games to each site in the coming year…
MTV Networks acquired three sites to strengthen its gaming brand in 2005 and 2006. Of the three, Addicting Games is by far the most popular, averaging 9.4 million unique visitors in February, a 50 percent increase over the same month last year, according to comScore.
paidContent.org has more details:
Among the initiatives included in the investment :
— the launch, planned for September, of ad-free subscription service myNoggin, being offered with cable companies Charter, Cox and Insight and through direct subscription online.
— The transition of Neopets to NeoStudios, which will focus on creating new virtual worlds and further developing existing ones. The first new launch is slated for the end of 2008 with “a goal” of launching a new one every other year.
— The branding of Shockwave as “the” games destination for families. Somehow that includes new opportunities for “prominent integrated advertising.”
— AddictingGames is getting into the casual MMOG business with AddictingWorlds.
— The planned early 2008 launch of The-Ngames.com, dubbed “the first major casual gaming site to focus solely on teen girls.”
— A subscription product for Nickelodeon called the Nick Gaming Club, “a safe gaming environment.”
— 3D Slimeball. Now there’s the Nick we all know and love. Actually, it’s one of the multiplayer games for Nick.com. Nictropolis also gets multiplayer games.
The idea seems to be grab them as young as possible and keep them moving to various age-appropriate options.
From the sounds of the article, Nickelodeon primarily plans to primarily monetize through both subscription and advertising. Given their existing advertiser relationships and their huge reach, they should be able to help establish some standard advertising units in the casual games industry. That will be great for the industry. New forms of advertising are hard, and standard ad units lift all boats.
Games as a hit driven business March 17, 2008
Posted by jeremyliew in business models, facebook, games, games 2.0, social games, social gaming, social networks.10 comments
The games business has always been hit driven, and the move online hasn’t changed that. World of Warcraft alone commands 62% market share of all MMOGs. In the casual games business, the top 20 games constitute 75% of total industry revenue. As more games have launched onto Facebook, we still see a hit driven business. There is an order of magnitude change in the number of daily actives in just the top 25 games on Facebook:
Game, Daily Actives (‘000s)
Scrabulous, 697
Friends for Sale, 672
Texas Holdem Poker, 581
Compare people, 393
Lil Green Patch, 338
Speed Racing, 260
(fluff)Friends, 240
MindJolt, 189
Vampires, 156
PetrolHead, 144
Who Has The Biggest Brain, 135
Scramble, 126
Jetman, 121
My Heroes Ability, 96
Mesmo TV, 93
Have You Ever???, 86
Zombies, 85
Blackjack, 83
WereWolves, 79
Slayers, 77
Parking Wars, 68
Scratch and Win, 67
Fight Club, 64
Hotties For Sale, 59
WarBook, 56
The graph below makes this point even more dramatically, showing a strong power law distribution for the 2190 games on Facebook:
Game 100 has 6,000 daily actives, game 500 has 150 daily actives, game 1000 has 23, game 1500 has 6 and games 2000 and up have no daily actives at all.
In an environment with as long a tail as this, companies need to take a portfolio approach to their games. Zynga has taken the approach to cross promoting their new games on launch, to good effect:
Although Zynga’s games also show a power law distribution as well, all but one of their games has made it to the top 100 in daily actives.
Social Games Network has built its portfolio through a combination of cross promotion and acquisition.
Their power curve is not as pronounced because they have bought some successful games to fill out their portfolio.
The difference between SGN and Zynga is really one hit game, Texas Holdem Poker.
Social games companies that learn how to repeatably create and launch hit games will become very valuable.
Lightspeed Venture Partners Blog 