Avatar and 3D virtual world company IMVU announced the organization of a new advertising sales and sponsorship group designed to help its ad partners reach its audience. The company has brought in music business veteran Danny Wright as head of sales to manage this new department.

IMVU also joined the Alloy Digital Network, Alloy Media + Marketing's media content and advertising group, whose ad partners include Paramount Pictures, MGM, LG Mobile Phones, and others. The avatar company plans to work with Alloy's digital sales and production team to take advantage of ad options like banners, videos, animated environments, branded virtual goods, and in-world video sponsorships.

So far, IMVU has made most of its revenue (over $1.5 million each month) from its 35 million registered users -- the company revealed that those users contributed more than 85 percent to its revenue from the direct sale of virtual credits, which are used to purchase digital products for avatars. IMVU currently offers over 2.5 million items through its digital goods catalog.

"IMVU spent our first five years focused on growing revenue paid directly from consumers," says IMVU's VP of Marketing and Sales Jeff Titterton. "With consumer revenue ramping quickly, we are now ready to bring high-quality brands into IMVU. Partnering with Alloy and hiring Danny Wright are important elements of augmenting our core business model."

Responding to the U.S. console retail declines shown in August, online game firm Nexon (MapleStory, Combat Arms) has told Worlds in Motion that, in contrast, its August 2009 revenues were up 32% year on year.

The company revealed in a statement to this website that Nexon's U.S. division had "32 percent increase in revenues for August over last year (and 35 percent [year on year] growth in July)."

Along the way, the company's Combat Arms hit 3 million registered users, and an earlier announcement revealed that MapleStory set a new record for max concurrent users in July, surpassing 70,000.

The MMORPG had 92 million registered users worldwide at that time, including 6 million in North America. Overall territory-wide revenues were not disclosed by the firm, but it's known that U.S. sales alone in 2007 for Nexon were $30 million.

Worlds in Motion followed up with Nexon's VP of marketing Min Kim regarding the announcement, and he commented that "microtransactions through our games is the primary generator of our revenue [although] ads are being implemented in our sites and around our games."

Free-to-play games represent half of all digital goods transactions -- and take the largest share of digital revenue across all game genres, says a new study.

The results come from research firm VGMarket, which in conjunction with virtual transactions platform PlaySpan, surveyed 2,425 users from the PlaySpan Marketplace, Spare Change, and Ultimate Game Card to assess their digital goods purchases.

According to the study, 58 percent of gamers made purchases in free-to-play games over the last year, while 34 percent made purchases in MMOs over the same period of time. Nearly a quarter, or 23 percent, purchased digital goods in social networking games during that time.

Outspark Appoints Sims Alum As Game Operations Chief

A week after installing former Electronic Arts executive Owen Mahoney as its new CEO, MMO publisher Outspark has announced the appointment of another EA veteran, Niranjan Nagar, as its chief of Game Operations, where he will direct the company's technology and product development.

Nagar will focus on Outspark's free-to-play online games (Fiesta, Project Powder), managing partner integrations and worldwide publishing. Outspark's games have so far attracted 1.8 million unique users since the company launched in 2007, while its site receives 6.8 million unique visitors a month.

Previously, Nagar was tasked with growing online revenue and the player communities for The Sims 2 and The Sims 3 while serving as vice president of EA's The Sims Internet Group. Prior to that, he co-founded Singshot Media (later acquired by EA) and held executive positions at Listen.com and RealNetworks.

"Niranjan’s deep technology and management expertise as well as his track record with high-growth companies make him an excellent fit for Outspark as we focus on quickly expanding our global footprint," says CEO Mahoney. "His proven ability to build fast-moving teams is invaluable and accelerates our efforts to further establish Outspark as the premium publisher of free-to-play online games in North America and Europe."

Publisher Nexon America's Combat Arms has brought in more than three million registered users since the free-to-play online first-person shooter launched in July 2008. The company also reported a 32 percent year-over-year increase in August revenue, which Nexon attributes to "large chunks of new content" added to the game in the past year, attracting new users.

That new content includes Combat Arms’ "NutShot" feature, which allows players to score critical hits on their opponents with shots to the groins on their male enemies. The game also introduced a zombie-inspired Quarantine Mode and a player-versus-environment Fireteam Mode. Developer Doobic Studios has also added new maps, weapons, and playable mercenaries.

While Combat Arms is similar in gameplay to traditional first-person shooters like Counter-Strike, it also offers an item shop in which players can purchase virtual guns, equipment, mercenaries, and default primary/secondary weapons, and more using Nexon Cash, which is purchased with real money.

"This new content has helped Combat Arms’ revenues grow by double digit figures for most of 2009, which in turn helped Nexon America show 35 percent growth for July compared to 2008 and the great revenues we posted for August." says Nexon America’s Marketing VP Kim. "While it has been a struggle for the games industry in North America, we continue to expand our player base for all of our games and grow our revenues through the microtransactions business model pioneered by Nexon."

PlaySpan will provide the virtual goods marketplace for Turbine's free-to-play Dungeons and Dragons Online: Eberron Unlimited, the two companies announced today.

PlaySpan's microtransactions platform will power the game's store, now that the title has officially switched from solely subscription to a primarily-free model.

Using the platform, players will be able to shop for clothing, weapons, potions and other in-game items in the marketplace without leaving the game. PlaySpan also says it's set up the store so that it showcases items specific to individual characters' levels.

Turbine announced the change-over earlier this summer, and told Worlds In Motion sister site Gamasutra that far from being a response to low subscription revenues, the shift had been in the works for some time as an adaptation designed to suit the evolving styles of newer players.

Sony Online Entertainment president Jon Smedley was straightforward about the development of its youth-oriented online game, Free Realms: "Games for kids are hard."

Free Realms, a free-to-play MMO, launched in April this year, is now up to 5 million users, Smedley said at GDC Austin on Wednesday. It's a particularly impressive feat considering SOE's background. The studio is behind hardcore MMOs including Star Wars Galaxies, PlanetSide, and the renowned 10-year-old game EverQuest.

"These games have a life of their own, unlike any other kind of video game. At SOE, this was our heart and soul," he said. But SOE was servicing a very narrow market -- the average 33-year-old male gamer.

"As a company, we knew we had to evolve," he said. "Our goal was simple. To expand [our] audience. ... and to get a much wider female audience."

New York-based PalTalk Holdings, owner of several patents related to data sharing among connected computers, is once again targeting major video game publishers -- including Sony Online Entertainment, Turbine and Activision Blizzard -- in an infringement lawsuit related to technology used in multiplayer gaming.

Earlier this year, PalTalk settled a $90 million lawsuit against Microsoft under undisclosed terms, after alleging that Halo and the Xbox 360's multiplayer features violated its patents.

According to the Boston Globe, this concession on Microsoft's part now creates an additional challenge for other publishers in PalTalk's sights, since the settlement can now be viewed as a validation of PalTalk's patent rights.

Despite their lofty titles, Tracy Seamster of ZeniMax Online and Steve Danuser of 38 Studios are very willing to admit their own faults.

Their intent in talking before a crowd at the Game Developers Conference this week in Austin was not only to inform, but to analyze mistakes of the past, to take apart classic MMO storytelling frustrations and come to a place where MMO writing could be better understood.

The Problem

No one wants to read in MMOs. As much as writers want to think their quest prose is for the ages, reading is not a popular activity in online gaming. The genre is a bad fit for classic storytelling. The strength of the MMO genre is that it is a social medium, a communal experience with a shared narrative.

Giving players the tools to create their own story experiences within that narrative is what keeps them coming back to a game. Both directors firmly believe that MMO writers should be leveraging the strengths of both the medium and the playerbase far more than they do right now.

At GDC Austin, Mythic Entertainment executive producer Jeff Hickman delivered a talk in which he spoke frankly about mistakes the company has made, particularly in the last "interesting year" since the launch of Warhammer Online.

Speaking passionately about the future of the MMO space, Hickman began by saying "a variation on this has been heard by EA people and Mythic people quite a bit." He began by acknowledging the difficulties Warhammer Online: Age of Reckoning, for which he was executive producer, has faced: "It's been an interesting year for Warhammer."

His general premises of the market were not atypical, but his adamance about them was notable. Says Hickman of the future of games, "If you're not online, you're not going to be here. In the future, gaming is about social applications: Facebook, MySpace, and about bringing people together in a lot of different ways."

Hickman sees digital distribution as the inevitable future of games, even in the console space (though probably not this generation.) "The era of boxed products is ending. I'm not saying you won't see boxes on the shelf in the future. I think they'll be around for a long time to come. But it'll not be the primary way to do things, it'll be the 'other' way."

iPhone games publisher ngmoco announced today that it has hired MySpace executive Jason Oberfest to its executive team. Oberfest will head ngmoco's planned expansion into social web application development.

Oberfest previously served as Senior Vice President of Business Development and General Manager for MySpace's open platform for social web games and applications.

As ngmoco's new Vice President of Social Applications, Oberfest will bring ngmoco's franchises to the web and social networks. Oberfest will also work to develop and port social games to the iPhone and mobile devices.

"It's clear that, like the iPhone, social gaming is an essential facet of a next generation games company and Jason will bring a valuable perspective and incredible horsepower to an important segment of our business as we look to expand strategically to the social web," said ngmoco CEO Neil Young.

ngmoco emerged as a creative force on the iPhone and iPod Touch platforms with original titles like Topple, WordFu, and the Rolando series. The company has issued no details regarding which, if any, of its existing franchises will be coming to the web and social networks in the future.

[The preceding article by Danny Cowan originally appeared on Worlds in Motion sister site Gamasutra.]

Veteran comics scribe and DC Universe Online writer Marv Wolfman teamed up with his Sony Online Entertainment compatriots to deliver ruminations on the nature of writing for heroes and, more especially, villains in a fascinating talk on the craft of writing for games at GDC Austin.

Wolfman has been writing for comics since the 1960s. Writing for upcoming PC and PlayStation 3 MMO DC Universe Online presented him with a challenge he's rarely faced before, he says.

"When I had to write sections for the villain parts, [the team] didn't see half of what I wrote, because I realized -- they're a player, they have to win. I stopped thinking about whether the character is a hero or villain -- I started to think about the player."

The important distinction, Wolfman says, isn't whether the character is good or evil. "It's not hero versus villain, it's protagonist versus antagonist -- the protagonist might not be the good guy; he's just the star."

The latest issue of Gamasutra sister publication Game Developer magazine includes a postmortem of KingsIsle Entertainment's Wizard101, written by the studio's James Nance.

Wizard101, a youth-oriented fantasy MMO, was the first game from Texas-based independent developer KingsIsle, founded by the former Wolfpack team behind Shadowbane.

The following excerpts from Game Developer magazine's recent postmortem, published in the September 2009 issue, illustrate how KingsIsle grappled with business models and focused on iteration to successfully launch the online game.

Prototype and Iterative Design

As so many studios have found, KingsIsle determined iteration to be an endlessly useful design method. And with a mechanic based in part on the concept of a collectible card game, it made all the more sense for the team to work out a physical prototype first:

NCsoft says that with 400,000 preorders, its MMO Aion is set to trump rival major MMOs launching this year -- promising "the biggest MMO release in recent years" when the title launches next week.

Developed in Korea, Aion is better-tailored to Western tastes than other Eastern imports, NCsoft asserts. s currently up and running on around 225 servers across South Korea, Taiwan, China, and Japan. The game generated 40.6 billion won ($32.7 million) in revenues for NCsoft's most recent fiscal quarter, excluding royalties -- a strong start.

The publisher has never made a secret of its large-scale ambitions for Aion in the West; CFO Jaeho Lee has said it "could be the second [most] successful MMO in the U.S. market next to World of Warcraft."

WoW's apparently unshakable market dominance has presented a challenge for many publishers who've tried to launch major MMOs in the West only to achieve mixed results at best.

Titles like Funcom's Age of Conan and Electronic Arts' Warhammer Online launched to very strong initial commercial reception with heartening early user figures, but never dented WoW's userbase -- and later merged servers and laid off staff when launch spikes bled off in the weeks and months post-release.

At GDC Austin on Thursday, Dave Georgeson, senior producer for Gaia Interactive's free-to-play casual MMO zOMG, said there are three keys to a successful online game: Make it fun for everyone, get users to want to buy, and make it easy for users to buy.

"I know that's not rocket science, but if you don't get it at a fundamental level, you just won't succeed," he said, adding that online games must be both "accessible and engaging... one or the other is not nearly as sticky."

Make The Game Fun

Part of making a game fun for users, Georgeson said, is knowing your audience. Gaia Online formed in the first half of the decade as an online gathering place for artists and fans of anime. Gaia recognized this core niche and built a business around it.

"The first thing you need to do is identify your audience, then own it," he said. "...If you don't do that, you're missing a very critical step. Get that core right and then figure out the other things. Good things happen when you nail the niche."

Social game developer Playfish has added a fifth studio to its portfolio, its second establishment in the city of San Francisco. The new development office will be focused on original social games for Facebook, MySpace, Bebo, iPhone and Android.

Founded in 2007, the venture capital-backed Playfish has had a business development office in San Francisco in 2008, and also has development studios in London, San Francisco, Beijing and Tromso, Norway.

It's had breakout success with its social network games Pet Society, Word Challenge and more recently, Country Story, among others, and claims over 135 million installs of its games in total across social and mobile platforms. It says it has 50 million monthly active users across all nine of its titles, who altogether play over 1 billion sessions per month.

The company says it now wants to hire more Bay Area talent in the programming, art and engineering disciplines to "bolster its leadership position" in the social gaming sector.

"Playfish and the Bay Area are both known for their cultures of excellence, attracting the best and brightest talent and a San Francisco studio enables us to benefit from the region’s skilled workforce," says Playfish CEO and co-founder Kristian Segerstrale, CEO and Co-founder of Playfish.

"Through our new team in San Francisco we plan to extend Playfish’s creative and collaborative culture and find new sources of inspiration in our mission to change the way the world plays games."

[The preceding article by Leigh Alexander originally appeared on Worlds in Motion sister site Gamasutra.]

Thursday morning's GDC Austin keynote was met with a large crowd as Blizzard Entertainment's J. Allen Brack and Frank Pearce took the stage to offer a detailed look into the inner workings of the genre-dominating World of Warcraft.

Introduced by BioWare's Rich Vogel, the two men completed a three-part series run by GDCA on the inner workings of the gaming powerhouse.

Vogel introduced the two with word that they'd be focusing on the company's operations, and Brack began by separating the "universe" of World of Warcraft (its design, production, and implementation) from the in-game universe of barbarian shamanism and magical power. He admitted that the company tends to hold things fairly close to the vest, but today their intent was to share some of the 'behind the scenes' elements rarely considered by company outsiders.

World of Warcraft was launched on a foundation of 10 years of Warcraft RTS games. Brack noted the first appearance of the yellow exclamation point in the Warcraft III title, and the RPG-focused elements of the Orc Campaign in the Frozen Throne expansion.

The World of Warcraft team, which split from Warcraft III, was actually working on a squad-based RTS called Nomad prior to their shift in focus. The game featured haunting alien imagery, but it was something that they ultimately couldn't find a voice for. After months of pre-production struggle, they set aside Nomad and began work on WoW; "What would we do if we wanted to start a project today?" was the question they asked. The answer: an MMO.

BioWare Austin technical director Bill Dalton delivered a look at how interdependencies can lead to problems in development on games -- with the studio's Star Wars: The Old Republic MMO as a perfectly complex test case.

When it comes to game development, says Dalton, "For any game these days, we have very large teams. For MMOs, in particular, we have a lot of stuff going on. Everything everybody does is challenging. Producing the art, source code... So what do we do? I think it helps to understand what the different customers you have, as a technical worker on the game, are."


Different disciplines do not perceive the game in remotely the same way, says Dalton, and it's important to think about how they do. "The writer looks at the game as a setting. The game is essentially a story vehicle; the writers are writing the story. The first people involved with hatching our game are the writers and the concept artists. The point is -- they don't really care if the server's up or down."

At GDC Austin, CCP's Petur Johannes Oskarsson discussed EVE Online, the company's complex MMO with a passionate player base all coexisting on a single server, and the government that has arisen in the game to address player concerns.

Oskarsson revealed that the company plans to be at 340,000 subscribers at the end of the year -- and he passionately argued for the necessity of having them all on a single server. In a no-shard setting, he says, "You get emergent behavior -- you get people who want to run a bank, you get people who want to form a police force, you get people who want to be the ones the police force chases."


The company produced a marketing trailer, which Oskarsson played to illustrate the importance of the concept. Says Oskarsson, "The single shard -- that's where the magic happens. If you shard your community you significantly cut down on the possible connections and emergent behavior."

But when you get that many people together, they're more than just players. "The people who are playing in EVE form a society, and they have social institutions."

The social gaming space is a new beast. Sebastian de Halleaux, COO of Pet Society developer Playfish, used his GDC Austin keynote to liken companies who integrate their games with networks like Facebook and MySpace as the small agile mammals scurrying around the feet of dinosaurs.

Playfish does a lot of things differently than packaged game retailers. The company began in 2007 with the launch of the Facebook trivia game, Who Has The Biggest Brain. de Halleaux said Playfish had no means of marketing the game, but they passed it around to their friends.

The game quickly grew to 100,000 users. The company continued to add games including Geo Challenge, Bowling Buddies, Restaurant City, and its most popular title, Pet Society. In 20 months, de Halleaux said, the company was hosting 50 million active users, growing at a rate of 1 million users every day. There are 1 billion game sessions every month, he said.

Playfish hasn't spent "a single marketing dollar," de Halleaux said. "We don't market the game. Friends drive distribution. ... Friends are a tremendous distribution source, and we want everyone to think about this when designing their game." He added, "The game becomes better as you invite people you know inside the game."

After just over two years open, NCsoft's free-to-play MMO Dungeon Runners -- its first foray into that business model in the West -- is set to shut down.

The game "just isn't cutting the mustard," writes producer and lead programmer Stephen Nichols on the game's official site. "If she were a ship, she'd be taking on water. Yeah, she's been taking on water for a long time now. Are my cryptic references too hard to decipher? The game just isn't profitable."

The first signs of trouble for Dungeon Runners actually arose late last summer, when staff cuts and layoffs hit NCsoft as it reorganized and consolidated its Western operations.

The game was developed and run out of the publisher's hard-hit Austin office, and the Dungeon Runners team in particular was scaled back when the company decided to abandon its plans to port the game client to additional platforms.

Following last month's launch of its urban action MMO CrimeCraft, developer Vogster Entertainment has announced a "resource reallocation" that will see the company lay off an unspecified number workers as it transitions CrimeCraft's staff "from launch team to live team."

Vogster is headquartered in New Jersey, and has production and development staff in Chicago, Moscow, and Kiev; the locations affected by the restructuring efforts were not specified.

In the past year, the company has also developed Nintendo DS RTS Robocalypse and PSP brawler Unbound Saga, and is preparing more Robocalypse titles for iPhone and Wii. In a statement, development VP Daniel Prousline said the company's shifting priorities in the wake of CrimeCraft's release were a significant factor in its recent decisions.

"Vogster has seen a number of releases this year. As an independent developer, we need to be very strategic in our use of available resources and shift from already launched titles to support the ongoing development and growth of CrimeCraft," Prousline said.

Vogster plans to announce further CrimeCraft content releases in the near future. The company refers to its recent online action game not as an MMO, but rather as a Persistent World Next-gen Shooter -- a PWNS.

[The preceding article by Chris Remo originally appeared on Worlds in Motion sister site Gamasutra.]

Social gaming company Playdom is establishing a new office in San Francisco, the Mountain View-based company told Gamasutra today.

Playdom, which focuses on games for social networking sites like Facebook and has recently begun releasing iPhone games, is particularly well-known for its ongoing Mobsters series as well as Bumper Stickers, each of which has surpassed 10 million users.

The company has nearly doubled in size to 110 employees over the last two months, with the company characterizing its growth as "explosive."

"Playdom has been on a hiring spree," the studio told Gamasutra in a statement. "The new location will allow Playdom to continue to attract top San Francisco talent and offer more flexibility to employees who currently live in the City."

The office will be located on Townsend Street in San Francisco's SOMA district, a popular location for tech firms.

[The preceding article by Chris Remo originally appeared on Worlds in Motion sister site Gamasutra.]

In his GDC Austin talk on Friday, Zynga's Brian Reynolds, a founder of Firaxis and Big Huge Games, talked about making Facebook and MySpace games, to discuss why social gaming was a major draw for him.

He started by noting that the mainstream console AAA game space is struggling a bit, but added, "If you're working on Call Of Duty 6, you're probably fine".

If you're trying to talk publishers into making your dream game, he said, "it's pretty hard, even if you're a pretty experienced guy like me." (In addition to co-founding Firaxis, Reynolds' company Big Huge Games was bought by THQ and eventually sold off to 38 Studios in early 2009, with Reynolds departing just afterwards.)

In Reynolds' chart, he also pointed out the increasing budgets for bigger games. For example, Civilization II could be made for around half a million dollars, but these days you have to ask for $15-30 million "just to get into the door."

Even then, it might take three or four years to make a really big game, whereas FarmVille has a five-week development cycle, and most social network games cost $100,000-$300,000 to make. As a result of this social gaming boom, Zynga now has around 30 million daily active users playing its games.

In our latest employment-tastic round-up, we highlight some of the notable jobs posted in big sister site Gamasutra's industry-leading game jobs section this week, including positions from BlackRock Studio, NetDevil, and more.

Each position posted by employers will appear on the main Gamasutra job board, and appear in the site's daily and weekly newsletters, reaching our readers directly.

It will also be cross-posted for free across its network of submarket sites, which includes content sites focused on online worlds, cellphone games, 'serious games', independent games and more.

Some of the notable jobs posted this week include:

BioWare Austin: Gameplay Programmer
"BioWare is hard at work on the epic fantasy RPG Dragon Age; and Star Wars: The Old Republic, our massively multiplayer online game being developed at BioWare Austin. BioWare Austin is looking for Gameplay Programmers for our Austin team. Both full-time and contract positions are available."

LucasArts: Director of Technology
"LucasArts, a Lucasfilm Ltd. company, is a leading developer and publisher of interactive entertainment software worldwide for video game console systems, computers and the Internet. Based in San Francisco, Calif., as well as on the Internet at www.lucasarts.com, LucasArts was created in 1982 by George Lucas to provide an interactive element to his vision of a state-of-the-art, multifaceted entertainment company."

A coin toss seems like a simple little game, Metaplace president and industry veteran Raph Koster said in a GDC Austin presentation on Friday.

But an astounding number of factors determine whether a coin toss lands heads or tails: the upwards force behind the flip, the lateral force, the weight distribution between each side of the coin, precession, surface irregularity, and so on.

"This is a lot of math for a really stupid game," he said.

So if a "stupid game" is so chock-full of math, imagine how complicated an MMORPG, or chess, is as a game. "We learn how games work, like flipping a coin, by using the scientific method as gamers" -- observation, hypothesis, experiment, and conclusion, Koster said.

Unraveling a problem like flipping a coin, or designing an MMORPG quest, is where the challenge lies in the search for fun. Koster explained how breaking a game down to the molecular level can help game designers get closer to the core of "fun."