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Archive for the ‘Research’ Category

8 Types of Social Game

Posted by Tadhg | Mar 20, 2009 | Filed under Personal, Research, Simple Lifeforms, Social Games

This article describes 8 kinds of social game operating today (mostly on Facebook) and provides many examples. We hope it does a better job of explaining what is going on in social games and why we’re so very excited by social games in general.

Social games as an industry is about the conversation. We realised recently that the  conversation about social games is still waiting to be had but it can’t be forced. Social games are still very unfamiliar terrain to most, and so this article is all about grounding that conversation so that it can begin.

We hope you find it useful.

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How do Massive Multi-Player Online Games (MMOs) Make Money?

Posted by Alan O'Dea | Mar 12, 2009 | Filed under News, Research

DFC Intelligence has recently released a report on the most commercially successful massive multi-player MMOs (MMO). World Of Warcraft, the most successful MMO has an estimated annual revenue of $500m. With the top ten MMOs in the world generating estimated combined revenues of $1,875m* there is no doubt they have matured into a highly successful commercial sector presenting considerable revenue and profits for their operators. Successful MMOs clearly can realise significant profits for their operators and investors. How?

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Will the Facebook Redesign Help or Hinder Applications Developers?

Posted by Tadhg | Mar 6, 2009 | Filed under Platforms, Research

Facebook announced a couple of days ago that they’re changing user’s homepages in a couple of significant ways to bring about more of a Twitter or Friendfeed-like environment of live sharing, and they posted some screenshots of what those updates will look like. Inside Facebook has the skinny here.

I like the redesign direction that Facebook is taking and think it will continue to drive their growth. However, as with all redesigns, alterations to the Facebook design cause changes in user behaviour and that can have unintended consequences. This is an article examining Facebook from the application discovery and retention perspective and asking the question of whether the new design will be an overall positive or negative influence.

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What’s Hot, What’s Not in Game Investments

Posted by Alan O'Dea | Mar 2, 2009 | Filed under News, Research

I saw this article on VentureBeat yesterday with VC Tim Chang talking about what’s hot and what’s not in games investment. It’s a good read and I’ve reposted it up here on the Simple Lifeforms blog.

Game and virtual world investments soared to $885 million in 2008, but the picture is likely to be a mixed one this year. Games are one of the few industries still growing at retail (13 percent in January), and online games are still a hotbed of entrepreneurial activity.

But will the industry hold up in 2009? And will big investments in game companies still make sense this year? We talked about the state of game investments with Tim Chang, a principal at Norwest Venture Partners to get his take on those questions.

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Social Games Industry Overview (08/09)

Posted by Alan O'Dea | Jan 26, 2009 | Filed under News, Personal, Research, Social Games

The social game industry is quickly becoming a significant sector of the games industry and is experiencing explosive growth: $75M was invested in the top three social game companies in 2008 and the top twenty games across MySpace and Facebook recorded over 100M Daily Active Users in January 2009 alone. This article is a quick overview of the sector and we hope serves as a fact sheet for those new to it and interested in what all of the fuss is about. 

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Why Did Virtual Worlds & Social Games Investments Defy the Downturn in 2008

Posted by Alan O'Dea | Dec 8, 2008 | Filed under News, Research

I wanted to comment on why online, causal, social games and virtual world investment has remained strong throughout 2008 and address a simple question. Why are online games now so interesting to investors?

That answer is usually presented in business terms such as return of investment (RoI), EBITDA, market growth, market traction, exit strategies, proven team, killer product, great technology, or multiple returns on investment 5x, 10x, 25x, etc, in short all of the usual metrics that measure and drive a business. However any successful company that raises money has to demonstrate these business criteria so that’s less valuable to answering our question. What’s more interesting to getting to an answer and what investors are most interested in is potential.

This article presents some of the main factors that I believe are at the hearth of answering that question i.e. capital efficiency, online distribution, acquisition costs, monetisation methods, balance of payments and value chain position.

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$1.7 billion invested into Online Games and Related Entertainment in years 2007-2008

Posted by Alan O'Dea | Nov 26, 2008 | Filed under News, Research

Many investors simple don’t understand the significant differences between the traditional video game industry i.e. selling boxed products through established retail channels with publisher funding and the inherently bad financial returns that these products reward video game developers and the online model where if successful an operator/publisher can enjoy significant and sustainable financial return.

These two industries in the minds of uneducated investor’s seem to fall under that same catagory of traditional video games but could not be further apart. This is bad for online game operators as the traditional video game industry has a notorious status within the investment community and is something that they avoid.

I have always considered these two industries entirely separate and spend a lot of my time educating investors, companies and publishers about the significant differences between the two business models and the risks and rewards inherent to each.

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