Well, I’d say the Virtual Goods Summit 2008 was a huge success. There were tons of smart people representing a host of game companies, and of course, I was over-dressed.
Being such a “noob” industry, there are many issues that need to be dealt with concerning the sale of virtual goods. The major issues that I caught, included:
Fraud & Security
Cashouts & Increased Risk
Elitist Games & Stickiness
Statistics Tracking & Product Development
Time Vs Money & Valuating Currency
Primary & Secondary Markets
I really enjoyed the Session A: “Metrics for Virtual Goods Businesses: The Whirled Case Study” presentation by Andrew Chen & Daniel James. They had their $hit together, and presented some very interesting statistics they track. I learned that children that played “Puzzle Pirates” made an average of $0.20-$0.25 cents per hour. That’s $40.00 per month. Funny how it seems just low enough to disinterest the formation of sweatshops abroad, who may work to create virtual currencies if the time value of money is high enough for that game.
Some of those smart people were panelists, and some of them sure did bring their egos to the conference. It was kind of funny at one point, because I don’t think the panel moderator had much idea of what they should be talking about, so panelists started asking the audience, “what do you people want to know?”
Actually, it sounded like everyone faced the exact same issues.
One fascinating part of the conference for me was talking to an attending PayPal representative, Renata. You see, PayPal charges a minimum of $1.00 for micro transactions, and were losing big in this market and many others to newly founded micro transaction leaders rushing to fill the market gap. Imagine getting charged $1.00 to send $1.00 to a friend. That’s pretty bad pricing analysis, and I expect to see a big change come form them soon.
I won a guitar hero game and plastic guitar for the Wii on my way out of the conference. God, I love the conference organizers! Special thanks to Charles Hudson, VP of Business Development for Serious Business.
I took the gift to Best Buy yesterday, with gift receipt, and exchanged it for Mario Kart and wheels.
I have to say that I’m not so impressed. I mean, its like the same old game with worse controls.
Anyhow, I digress. If I talked to you and never got back to you, shoot me an email!
I read TechCrunch daily and you were listed in the 10 startups that demo’d at TechStars. I am not a huge gamer, but I enjoy playing card games, racing games and puzzle games. I prefer to play games that are mentally challenging and employ strategy rather than chance. I am always interested in trying new startups and giving feedback on the direction they’re headed. You have a very unique concept that could prove to make shopping entertaining - more fun than just shopping around for the lowest price. Why not use your skills to save you money to pay the bills! — Scott
Scott, I couldn’t have said it better myself. We’re working really hard for you, and will give you and the other 266 requests beta access soon. Soooon…. Just a little more patience please.
PS - I do believe your last sentence deserves a shout-out to the “OG” authors…
Nintendo’s Ad Campaign = Creativity + Web Technology + Biz Dev
Nintendo is amazing. Click on Wario’s image, (below), to see Nintendo’s new YouTube advertisement they’ve made for Wario Land. What a genius ad campaign. Watch the video through to the end. Trust me… Follow through to the Wario Land website to be uber-impressed.
We’re sorry for not giving you an update since our last post, but we’ve had to relocate our HQ from Boulder, CO to the San Francisco bay area.
Above, you’ll see the area where we’re going to setup shop and a few of the major game companies immediately neighboring us. The SF bay area has the most tech companies, private equity, and college campuses that exist in such a small proximity of each other. Your wacky idea is not wacky here, and everyone will have heard some version of it before and demand an explanation for why you think you are different.
We are actively seeking and partnering with game developers, local and non-local, and welcome your referral. Specifically, we want to meet smaller scale web game developers of every type and genre. Here are some examples of games made by the types of developers we’d like to meet:
One week ago we halted development at BuyPlayWin to focus on our demo day pitch, yesterday, which marks the culmination of TechStars. To all curious visitors to the website who asked for private beta website access: you’ll get your invite codes in the middle of September.
The founders and mentors of TechStars got to see our progression from what they saw in the beginning of the summer program. I was told that they were very pleased with the presentation and our newly built platform. I’m glad, because we owe a lot to them, especially big Dave.
BuyPlayWin will enter private beta in the middle of September. We’ll have the stuff you want, and all the fun. If you have not requested an invitation yet, please do so by sending an email to info [at] BuyPlayWin [dot] com.
Ok, so video game consoles won’t be replaced for at least 5-10 years, as Gerhard Florin, EA, said incompatible consoles made life harder for developers and consumers in a recent BBC article, but there are some killer games in development and early release that you can already play in your browser. Whether you’re a casual gamer who enjoys a 5 minute break during the day to play Bejeweled, or a hardcore clan gamer who lights his opponents up in first person shooter (fps) mayhem, you’re going to love the new generation of online gaming.
There are three game companies in particular that have beta games in various testing phases that you can sign up for right now, but spots are limited so you better move fast.
Good luck gaming!
1. Two Fish Inc, EDGERACERS
From the Quick Start Guide: Edgeracers - the community-based online racing experience! Edgeracers is all about having fun with friends old and new, growing your collection of highly-customizable cars, and competing with the community to become the best racer with the hottest set of wheels!
This is how parent company, Eximion, describes Kalydo as The brand new Kalydo technology allows gamers to play stunning 3D games in their browser. After installation of the Kalydo player people can play all Kalydo Powered games online. Players can continue playing, any time and anywhere in the world. Your game progress and achievements are automatically saved online (persistent webgaming).
3. Id Software Inc, QUAKE LIVE
Joystiq has a great write-up on Quake Live: As much as years of consuming have taught us to love purchasing goods and services, we have to admit that we still love free stuff just a skosh more. If you share in our gratis glee, you may be interested to hear that id, developer of web-based Quake III port Quake Live(formerly known as Quake Zero) is currently accepting sign-ups for the beta program.
I know this is late and that most of the other teams immediately posted their part of this general TechStars writeup in the Boulder County Business Report, but I’ll include the blurb about us anyway. Thanks to article author, Ryan Dionne.
Startups learn ropes from crew of seasoned advisers
By Ryan Dionne
July 18, 2008
BOULDER -The popularity of the TechStars LLC program, in its second year, has substantially increased.
The summer program offers 10 startup software or Web-related companies $5,000 per founder up to $15,000 and provides a space to work as well as a plethora of mentors to aid the businesses.
Last year 302 companies applied for the 10 positions. This year the number increased to 393, said David Cohen, executive director of the program. This year five women are involved in TechStars compared to none the first year.
“It feels like the companies are slightly more mature in their thinking,” Cohen said regarding this year’s crop.
Of last year’s companies, nine are still operating, seven of those received funding beyond the initial TechStars funding. One is profitable and didn’t accept funding. While one is operating but not profitable nor did it accept funding.
Now, nearly two months into the program, companies are taking advantage of the TechStars leadership and downtown Boulder work space to develop their vision as they approach the end of the program - Aug. 22.
BuyPlayWin
Combine online shopping with online gaming and a slice of gambling, and that’s what co-founders Aziz Grieser and Peter Zhang and their team at BuyPlayWin created.
Grieser and his team plan to develop relationships with online retailers like Amazon.com Inc. and sell the partner products through BuyPlayWin’s Web site, www.buyplaywin.com, when they launch a private beta version sometime after August.
But the fun factor comes from the chance to get the product for free by playing a host of games - including things like poker, Tetris and Pac-Man.
Whoever wins - whether it’s high score, biggest earnings or more - receives a refund for the MP3 player. The shoppers who lose merely have to pay for the product.
At first, the company plans to offer movie tickets to keep the site simple and garner support. From there, Grieser said the possibilities are endless.
BuyPlayWin is an exciting and venture-backed startup, located one street away from the Pearl street shopping area of downtown Boulder, and we have two exciting openings for a thrilling summer internship. Note, both internships are flexible and can be full-time or part-time.
1. “Devvy” General Web Developer - Gamer/Coder: These are our flexible guidelines for this position:
Experience with web related technologies including HTML, PHP/JSP, JavaScript, CSS, and MySQL DB systems.
Game hosting and playing experience a plus (LAN and Web game parties).
Quick learner, ability to learn new technologies and deliver on a fast-paced schedule.
Ability to work in a cooperative and team environment, as well as, the ability to work independently.
2. “Bizzy” General Business & Marketing: These are our flexible guidelines for this position:
Experience with sales, marketing research, professional writing and correspondence.
Internet technology research
Scheduling and contact management (must be professional and comfortable speaking on behalf of key people)
Project management assistance
Produce and continuously improve the quality and value of our online experience through data-driven analysis, optimization, and experimentation.
Quick learner and deliver on a fast-paced schedule.
Ability to work in a cooperative and team environment, as well as, the ability to work independently.
Additional Desired Qualifications: statistics (significance testing, linear regression, etc.), experimental design, excel (high level of proficiency), attention to detail, ability to multi-task, familiarity with the web and online communities
Creative, but without wasting time.
Common sense and good judgment.
Future potential for the right candidate.
Pluses: HTML / website production, familiarity with business calculations like NPV, viral growth models, statistal analysis (regressions), powerpoint and the ability to communicate data-rich ideas to a data-hungry audience.
These are our inflexible guidelines for both positions:
Never, ever, says, “this is not in my job description”, but instead says, “I am part of the team. Anything could be in my job description”.
We believe that BuyPlayWin is a fresh and unique customer experience, joining several industries together for the first time. This is the second of a 3 part series of posts that give our perspective on each industry.
E-commerce
Web 2.0 Advertising
Gaming.
Lately, we’ve heard a recurring message from social network websites and some of their investors:
Show me the money dammit!
It’s clear that there’s going to be some sort of collapse to the social bubble; not everyone can survive, at least among the big guys. There are simply too many competitors for web advertising dollars. Ok, the pie is growing and will continue to grow, but new social website growth is vastly outperforming new advertiser budget growth, which is the direct result of new technologies becoming freely available to anyone. We simply can’t think of new social websites as being medium to big companies anymore, but instead, we have to include every new blog that is created, each day, small business or individual. Look at what Michael Arrington, (TechCrunch), has to say about Yahoo’s current predicament. Microsoft takeover deals, Google safety lines, angry shareholders, and ever-thinning ranks of Yahoo executives have the blogosphere speculating whether Yahoo will survive, or fall (some have already decided one way or the other). Remember, every popularly read blog entry about Yahoo, (like this one will be one day), takes another potential advertiser dollar away from Yahoo.
So, is social advertising to blame for Yahoo’s predicament? We don’t think so.
Again, we’ll reference Michael Arrington and TechCrunch. TechCrunch earns $240,000 from advertisements per month for the 1.25 million users that read the techno-blog each month. Think of some of the very popular folk’s blogs you follow, and the amount of money that person is making from everyone reading their thoughts. Need help? For quick estimates, take Michael’s $240,000 monthly revenue, divide by 1.25 million users per month, and you get a little over $0.19 cents per reader. That’s a higher number than most blog writers will be able to achieve, but it’ll give you a rough estimate of any blog’s revenue potential if you track the monthly unique views with Compete.com (not arguing over which count statistic is most accurate here). Let’s look at one popular blogger, Fred Wilson of Union Square Ventures. Fred has two blogs: http://fredwilson.vc/and http://avc.blogs.com/a_vc/ We’ll just focus on the first, since we can’t get accurate stats for the second. Compete.com, http://fredwilson.vc/
Monthly People Count: 15,391 and growing by 12% each month.
Our math: 15,391 X $0.19 = $2,955.07 per month
Remember, this site is much less popular than his other blog, which actually has advertisements. Can you see that Fred is easily paying his monthly bills, including rent, just by writing a blog?
So, why is Yahoo hurting so badly? We think it’s a result of being stretched to thin with no clear focus.
Yahoo has so many different businesses they’ve acquired over too short a time. Why? When you think of Yahoo, what phrase comes to mind? Don’t feel bad, we don’t know either. People have been saying that Yahoo is confused about what they are for years. The simple fact is that Yahoo is competing closely with many small battles, involving hundreds of competitors in some cases. This has the impact of diluting their overall advertisement worth in the eyes of advertisers, who now have more precisely targeted options.
At the Snap Summit in San Francisco, everyone was using the “social graph” to target ads, which is more like traditional targeted advertising. Facebook and other social networks constantly fret over how to make money for themselves and for their partner businesses. You can see the type of thinking occurring in these closed and open discussions in this Inside Facebook article, titled “Show Me The Monetization: Turning Apps Into Dollars.” In an attempt to diversify their revenue from just social network advertising dollars to include actual e-commerce, Facebook recently announced Radical Buy, offering a 15% fixed commissions to product resellers on Facebook, who opt to sell out their friends. Think of it as an online Amway. Community is where online has always been at, there’s nothing really new there.
Some of our team can remember the first BBS systems, and it was all about finding people you were interested in chatting with (at 300 characters a second). Then, later CompuServe and AOL were all about finding groups of people, too. UseNet, which some of us got into heavily in the early 90’s was also the same way: find a group that has people with the same interests. There are millions of community sites now, using stuff like phpbb or phpforum set up with from just a few to thousands of users. What kind of makes MySpace & Facebook more interesting these days is that like CompuServe or AOL, you could find lots of groups in one place. Of course, CompuServe isn’t around anymore, and AOL is barely.
The main lesson to learn from Yahoo is the same lesson to learn from any other social network focused business: do something unique, stay focused on it, and do it best.
