When MMOs all had monthly subscriptions, comparing financial health was easy -- a simple matter of revenue numbers. But given new business models and the prevalence of alternative revenue streams in today's online games, it's now a lot more complex to compare.

Ron Williams heads up the U.S. division of CDC Games, one of the market leaders of online and mobile games in China with more than 120 million registered users. The company pioneered the "free-to-play, pay-for-merchandise" online games model in China with Yulgang, and also launched Special Force, the first free-to-play, pay for items FPS (first person shooter) in China.

Now, the company's expanding to the West with Lunia, and in an exclusive feature at Worlds in Motion sister site Gamasutra, Williams highlights the essential measures of online games' health:

"The key metrics to trend month-to-month, and more importantly the handful of metrics that can be compared across game genres, game operators, and online game business models are: the total number of unique visitors (UV) to the game's web home page each month, average marketing cost per unique visitor on a monthly basis, the total number of registered users (RU) for the game, the number of new registered users gained each month, percentage of unique visitors that convert to new registered users of the game each month, average marketing cost per registered users on a monthly basis, number of new RUs that convert to new paying users (PUs) of the game each month, the average marketing cost for new paying users on a monthly basis, and the total number of paying users for the game."

Total monthly unique visitors may be the key value indicators for sites that generate their revenue from ads. Yet ad revenues are still a relatively minor part of most gaming companies' income -- so why is it so important to understand the trend of unique visitors for a free to play, subscription, or micro-transaction based online game?

"Any web-based business with aspirations to earn revenue is, at the end of the day, following a very simple formula: find something someone wants to pay money for that can be sold online (content), get customers to look at the content, and then convert viewers of the content to content buyers.

An online game is just online content that you need to market in order to sell. The number of potential customers you can drive to the game's website either through word of mouth or through marketing spend is the key driver of sales, just like any other online business. The UV trend line is the best indicator of sales potential of a game."

You can now read the full feature, which includes Williams' thorough treatment of this complex and issue, sure to become increasingly essential as business models for online games continue to evolve.

MMO and virtual world studio Animax Entertainment has announced it developed Ty's Beanie Babies 2.0 online world, architecting the browser-based environment that's accessed with a code sold with certain Beanie Baby plushes.

Beanie Babies 2.0 users can play games, raise Beanie avatars and chat with other kids. Animax explains it built the virtual world in in Adobe Flash, AS3, with a backend developed by Tokenzone.

Animax also created somewhat under-the-radar kids' site Ty Girlz, the Beanie Baby parent's other virtual world for girls, and continues to maintain it for the company.

Ty CTO Chris Johnston commented, "Animax has constructed a compelling virtual world unique to other toy-based virtual worlds on the market. Beanie Babies 2.0 includes a unique story-driven approach akin to MMOGs that engage kids of all ages through a fun, interactive narrative that becomes more engrossing with continued play."

Online entertainment studio Pileated Pictures, developer and operator of Hasbro's Littlest Pet Shop online world, announced a major update to that product, making it accessible in nine different languages globally.

As we reported when the world was initially announced in September 2007, the Littlest Pet Shop world is accessed via codes that come with plush toys. Other enhancements recently made to the product have added more games, activities and community features for the primarily young-girl audience.

Pileated Pictures also announced the addition of an original product to its portfolio with browser-based online world Planet Cazmo, which is aimed at teens and 'tweens and has been operating in stealth mode since December. The company now claims viral enthusiasm has resulted in a significant user base for the game.

Pileated president Michael Levine explains, "Just a couple blog posts on a popular Club Penguin forum generated a wave of viral energy. Within 48 hours there were several thousand Planet Cazmo enthusiasts, "mny of whom went on to publish or participate in one of the dozens of blogs that soon surfaced to talk about the product. In short order, many more users found us through these consumer-created channels. The response has been amazing, and with virtually no promotional effort on our part. We can't wait to see what happens as we move from Beta to the official launch, and deploy our own strategic marketing plan. We're very encouraged."

Version 1.0, the company says, will launch officially during the second quarter of 2008.

If you haven't yet heard yet of the Second Skin documentary project, it's definitely something worth being piqued about, as it's an endeavor to document the drama behind stories of virtual communities. Check out the trailer:

The Pure West team behind the film describes the project:

"Second Skin introduces us to the real people who populate these online virtual worlds. Couples who have fallen in love without meeting, disabled players whose lives have been given new purpose, those struggling with addiction, Chinese gold-farming sweatshop workers, wealthy online entrepreneurs and legendary guild leaders- all living in a world that doesn't quite exist."

They're set to premiere the film at the upcoming SXSW show in Austin, where they're one of the festival flicks. Via their Facebook group, I learned that the Pure West team has started adding video updates to their blog to keep interested parties up to speed on how things go at the big debut. Good luck, guys!

Think Services (formerly CMP, also parent of Worlds in Motion) has announced that Mitch Kapor will keynote at Life 2.0 Summit Spring, a six-day virtual conference taking place in Second Life March 15-21, 2008.

Kapor is board chair of Linden Lab, creators of Second Life; chair and founder of the Open Source Applications Foundation; co-founder of the Electronic Frontier and Mozilla Foundations; and is best-known as the creator of Lotus 1-2-3, the spreadsheet that revolutionized enterprise computing in the 80s. He will speak about current work to enhance the user interface for virtual worlds, enabling even more immersive experiences in the medium.

Life 2.0 Spring will offer 7 tracks, metaverse marketing, community nurturance and involvement, 3D commerce, metrics and ROI, tools and techniques, and will dive deep to explore business applications and opportunities offered by emerging virtual world platforms. Evening sessions will provide highly-topical roundtables, and offer a forum for professionals in Higher Education, Government, Public Works, Green Technology, and Social/Humanitarian/Philanthropic work to network and share ideas.

Conference director John Jainschigg commented, "We are delighted to welcome Mr. Kapor back to Life 2.0, and eager to hear more about his current work. He was kind enough to address our audience a year ago, at the founding of this event. Much of what he looked forward to in that first keynote has come true -- the virtual worlds phenomenon has exploded, Second Life's user base and concurrency have grown 600%, and our show is tracking about the same. So it's a great time for another look forward from this master of technology and market insight."

A California-based company called Handipoints has launched an eponymous online community and "parenting tool," claiming over 140,000 users. It lets parents track and organize various tasks like chore charts and kids' weekly allowances -- and has an online avatar-based game component for kids to play that corresponds to the tasks parents set for them.

Kids can adopt and care for a cartoon cat in a virtual world, called HandiLand, and they can earn points to use in the game as they complete the real-world chores their parents can set. They can also save up their points to redeem with their parents for real-world rewards the parents have chosen.

The company says it'll continue evolving HandiLand, adding new content weekly, always with the goal of "making chores fun" and encouraging parent involvement. Currently it's free to play, but Handipoints says that eventually it will migrate to a tiered subscription model.

Handipoints CEO Viva Chu commented, "Club Penguin and Webkinz are great games and very fun to play, but these games provide no value to the parents and teach kids the wrong lessons about consumerism. Kids end up spending hours in these worlds playing mindless games in order to earn enough coins to buy clothing. Handipoints is completely different. In our game kids earn points by staying healthy and active in the real world."
. There will always be a free version of the Web site available but families will need to subscribe in order to buy certain clothing and play premium games on the site.

French virtual world company Chapatiz SA, which says it's creating a virtual world for pre-teens, has announced it has raised 350,000 euros ($532,000) in initial investment from Newfund founder François Véron and Business Angel's Dusan Stojanovic and Jean Bégo, who will become shareholders.

The company was founded in 2005 by François Barbut, Stéphan Twarog and Arno Guensherian with the aim of providing multimedia experiences to pre-teen kids, and features the company's proprietary chat application on its free community site. Having received the funding, Chapatiz now stresses its goal to "assert itself as a French reference among its global competitors and other video game giants."

A company called Transmutable has launched a product called Tomorrow Space, which it says bridges virtual world functionality with web browsers for biz events. The idea is it'll be easier for companies to use "virtual event hall" functionality using only a browser URL rather than a virtual world app requiring an install.

The company also says its services are ideal for enterprise collaboration because they can be customized and maintained by web developers rather than virtual world consultants, and can integrate YouTube and Amazon Associates with Tomorrow Space event halls. To invite others to events, organizers need only link participants, adds Transmutable.

A cursory glance at the site reveals that there are two Java-based virtual event halls currently available for rent (requiring a Java 3D install, actually), and users can rent one for $5.99 a day. The halls don't look too fancy at this point either -- pretty bare bones with blocks and board -- but the site promises that they're customizable, and that it'll add more soon.

When in an online world, how often do you gender-bend? That's to say, if you're male, do you find you regularly pick a female avatar, or vice-versa, like many do?

Psychologists at Nottingham Trent University recently conducted a study of online gamers, and published a paper in the journal of Cyberpsychology and Behavior titled "Gender Swapping and Socializing in Cyberspace" with their results. As the name suggests, the psychologists were interested in the choices players made regarding their character or avatar gender in the online world.

As reported by the Guardian, 70 percent of the female survey respondents said they choose male characters in online games that let them customize their character design -- to keep male avatars from hitting on them, or because they think they'll be treated more fairly as men. As for the men, 54 percent admitted to playing females in games, citing a desire to flirt or to explore another element of their personality as primary reasons.

Seems logical, given another finding of the study -- 40 percent of the study's participants reportedly said that online games helped them escape from real-world troubles, and assuming as different an identity as possible makes sense as part of that.

Study co-author Professor Mark Griffiths, of the university's International Gambling Research Unit, noted, "People do find it interesting to manipulate characteristics like gender to see what reaction they get."

[Via The Guardian]

Publisher-supported real money trading company Live Gamer has announced a new partnership with Game Center Group to provide live support, CRM, consultation, and knowledge management specialization for its marketplace operations.

The company says Game Center Group will add "knowledgebase management, cutting-edge CRM tool know-how... and years of industry experience to Live Gamer's already prominent team of veterans" with a secure support portal where users can search knowledgebases, submit tickets or chat with a live agent.

Formed by Massive in-game-ad firm founder Mitch Davis, currently at Brash Entertainment, and Sony Pictures Digital vet Andy Schneider, Live Gamer has already found support from a slate of MMO and virtual world operators including Funcom GMBH, Sony Online Entertainment, 10Tacle Studios, Acclaim, GoPets and Ping0 Interactive.

The company also recently announced an agreement with Sony Online Entertainment to incorporate the technology from SOE's Station Exchange platform for the purchase and sale of virtual items used with EverQuest II, forming a new independent service called Live Gamer Exchange.

Said Game Center founder D. Scott Mattson, "We are thrilled to have the opportunity to work with the talented team at Live Gamer. Live Gamer's leading technology and real money trading marketplace solution, paired with our CRM hosting solution and cutting-edge approach to support will ensure that Live Gamer's publisher partners and their gamers get a great experience every time."

Casual developer Three Rings (Puzzle Pirates, Bang Howdy) revealed that it raised $3.5 million in a venture capital funding round last summer.

Three Rings CEO Daniel James confirmed the figure to VentureBeat; $3 million was provided by True Ventures, with Chance Technologies and existing investors Amicus Capital and Mercury Capital Partners participating, along with angel investors.

CDC Games, one of China's more formidable drivers of the free-to-play, microtransactions-driven online game, has revealed some of its performance metrics, most notably for Lunia in North America. Currently, CDC claims a total of 136.6 million users in China, a year-over-year increase of 7.6 percent.

CDC says it's been aiming at revenue diversification with its five latest games operating in China: Special Force, , Shaiya, MIR III, EVE Online and Shine Online, which currently account for 80 percent of its revenue.

As for Lunia, which it launched in North America on February 22nd, 2008, CDC says players have averaged more than 205,000 hours altogether, with the average player putting in about six hours per week. Since launch, CDC says registered users have grown 158 percent, with peak and average concurrent user figures up 151 and 140 percent, respectively.

Explains CDC USA general manager Ron Williams, "Our first marketing campaign for Lunia began on February 26. This campaign accounted for more than 22,000 registrations on our U.S. game portal, www.12foottall.com, during the first eight days of the ad campaign. Since the Beta launch on January 28, 2008 and subsequent commercial launch on February 15, our U.S. game portal 12FootTall has signed up over 42,000 subscribers. Currently, more than 35 percent of the visitors to 12FootTall convert to subscribers. We see this as a testament to the ground-breaking design of the portal, and relevance to today's online game players. Based on these metrics, we are very pleased with our initial results for both the 12FootTall game portal and the Lunia game.”

Williams added, “With more than two years of content updates already built into our release pipeline for Lunia, we are excited about the game’s potential to be a top online game in North America this year. We look forward to continuing to build our base of Lunia players and portal subscribers as well as leveraging the portal as the platform for launching additional new games in the U.S.”

Financial consulting firm Deloitte and Touche has announced it has partnered with BrandGames to develop an online simulation, called The Virtual Team Challenge for High Schools, that lets teens experiment with ethical and financial situations to gain experience with business best practices.

According to the announcement, more than 5,500 students from about 100 high schools nationwide are participating in the program, which is running through March 24. The simulation tasks student teams with planning events and raising virtual cash for the United Way, and the winning team makes a real-life donation and gains a grant for their school.

Deloitte says it's interested in grooming teen talent pools for the business community, as well as spreading interest about the fields of accounting and business consultancy. BrandGames advised them on making the biz prep programs "more effective and relevant to the 'video game generation.'"

Said BrandGames EVP of marketing Jim Wexler, "Deloitte had a vision for this--and we've been helping brands and companies use games as part of both their consumer-facing and internal communications for years, so our toolset was a perfect fit."

Indian consumer site GameGuru has an interesting look at Kreeda's Dance Mela, a Bollywood-themed dance and music online social world. We first heard about Kreeda in Summer of 2007, when IDG Ventures and Softbank's Bodhi both invested in the company ahead of Dance Mela's beta launch.

GameGuru discovers how users can make their own dance rooms and lounges or simply cruise those others have made, noting that Dance Mela "is becoming something like a Second Life for Indians."

The author of the article suggests that Indian culture has been less receptive in general to games, with the general opinion being that they're not appropriate for adults. But Dance Mela is doing well so far and garnering a lot of interest, he says, because of the social element and the personalization options for avatars.

[Dance Mela - A World of Video Games, Dance And Fun | GameGuru]

Millions of Us CCO Douglas Gayeton announced he's leaving the company. Gayeton says he wants to focus full-time on promoting and supporting "Molotov Alva and His Search for the Creator: A Second Life Odyssey," his documentary film set to premiere at SXSW in March.

Gayeton says "Molotov Alva" was the first machinima ever to be screened at Cannes. HBO acquired the film in late 2007, and will air the piece later this spring. The film was acquired by HBO in late 2007 and will be appearing at several film festivals in 2008, beginning with SXSW in Austin in mid-March, and has attracted mounting attention as HBO prepares to air the piece late this spring.

Millions of Us CEO Reuben Steiger commented on Gayeton's departure, "Douglas has helped us significantly broaden our in-house production capabilities as we help drive the convergence between virtual worlds and the entertainment industry; his contribution has left us well-positioned to take advantage of several promising opportunities. We wish him the best and will be closely following the success of 'Molotov Alva' and the similarly innovative work that will surely follow."