In-Game Advertising: Double Fusion Gets Venture Funding

San Francisco-based in-game advertising company, Double Fusion has raised $26 million in venture capital funding.

The round was led by Norwest Venture Partners and two existing investors ponied up on the round, namely Jerusalem Venture Partners and Accel Partners. Also participating in the round were a number of strategic investors – Time Warner, Hearst Corporation, IDG Ventures Pacific and Sedona Capital (Japan).

Double Fusion sees the rapid growth of in-game advertising as being driven by the huge and ongoing shift of audiences to interactive games from other media, coupled with advertiser concerns about the engagement value of other media. In-game advertising provides advertisers with new forms of advertising in an immersive environment, offering new ways for brands to engage deeply with their most important target audiences.

The funding from this round will be used for aggressively scaling key areas of the business including its media sales, technology, and international operations to maintain its leadership in what analysts project to be one of the fastest growing worldwide media businesses.

Talking about the round, Double Fusion’s CEO, Jonathan Epstein said, “Videogames are providing a new advertising vehicle that not only delivers a highly engaged audience, but fundamentally changes the way consumers are able to interact with brands. Advertising, in turn, creates new business models for game companies that will continue to accelerate the growth of the gaming audience.”

In May, through its MSN division Microsoft acquired Massive Incorporated, another in-game advertising company. The big question is who do the latest investors in Double Fusion see as the ultimate exit acquirer…Google?

Second Life Unplugged

Writing on GigaGamez, the new member of the GigaOMpire, Wagner James Au takes a close look at the Second Life metrics being bandied about.

It’s a long winded piece filled with much exception at Clay Shirky’s rant on Valleywag.  But there are some nuggets in there.

Gotta run – spending the day in Auckland – so I’ll leave it to you to sift thro…

Social Media: The 5 Rules of Game Mechanics

Amy Jo Kim over at Shufflebrain has crystallised the 5 Rules of Game Mechanics:

1. Collecting

2. Points

3. Feedback

4. Exchanges

5. Customization

…and applied these to social media plays in an excellent presentation. I agree with Susan Wu, this is a must read.

Amy Jo concludes with a prognosis for the future…expect to see more serious applications that feel like games and more games that teach real-world skills.

Exploring the Areae between Web 2.0 and Persistent Worlds

Raph Koster brought us Ultima Online and Star Wars Galaxies.

He is now launching Areae with the aim of…taking the tired old virtual world and making it into something fresh and new…new tech that will literally change how virtual worlds are made…something anyone can jump into. Something where everyone can find something fun to do or a game to play. Something where anyone can build their won place o the virtual frontier.

Together with John Donham, Raph has “a cool world or two incubating on the backburner”.

Areae is Latin for “many places, many worlds” and Chocorisu extrapolates what Ralph is cooking in stealth mode…

Given the people involved there’s obviously a strong basis in virtual worlds, so we can immediately imagine something along the lines of Second Life. But instead of one muddled, incoherent mess of boxes with streaming video on them, something more intricate and web-like: a series of inter-connected worlds. Say I want to make my own Dungeons and Dragons themed world: I can choose to link my valley to another D&D fan’s world–and I wouldn’t necessarily be stuck next to a furry sex club just because of arbitrary geography, like in 2nd Life.Given the involvement of Cory Doctorow, one of the founders of Boing Boing who whines on and on about DRM and open source all the time, I’m guessing it’s at least a partly open system. This fits in with the web-based ethos they’re hinting at. I’m going to guess it’s an architecture whereby I can host my own virtual world and link with others. I expect they’ll make money through hosting, but open the software so others can host as well and link back and forth freely.With the various MUD and social world advisors involved, I can imagine a strong social element. Consider the explosion of the blogosphere, and community sites like Flickr and MySpace: there are huge lessons to be learnt in bringing people together. Traditionally it’s been through common goals like fighting goblins and getting to level 60. With SL there’s the goal of earning millions in fake money. MySpace there’s the implicit goal of having a shag.So, in conclusion, it’s an open-source system for making money off interactive 3D porn sites.

Hmmm, Chocorisu has some good points there, but also some crazy non sequiturs. We’ll just skip the sex-related references.

Areae is funded by Crescendo Ventures and Charles River Ventures. We can glean more sense regarding Areae from one of its investors, Susan Wu…Areae sits at the intersection between Web 2.0 and MMOGs.  If you think about it, the Web 2.0 and the Massively Multiplayer Online Gaming communities have largely been pretty siloed – gamer developers go to game industry conferences and Web 2.0 folks go to Web 2.0 conferences, and there has not been enough intermingling between the two communities. 

Susan goes on to predict what these two communities can learn from each other:

Here’s what the 2 communities can learn from each other: Game designers have been creating rich, fully immersive environments for years.   All of the design principles that I thought about when I was designing MUDs are identical to the issues facing Web designers today – how do I create more immersive environments? How do I give participants -equity- in this virtual world? How do I make users feel like real citizens in my social ecosystem? How do I create better scale around world and object creation? How can I expose building tools that were previously available only to Admins and Devs to the end users – and make them dead simple to use?   How much content should I pre-seed and what content containers do I think users are going to be more likely to want to customize and make their own? 

Yet, the Web 2.0 crowd knows a lot that the game devs don’t: how to create massively scalable, low barrier to entry, micro-chunked experiences.  How to create appealing, mass market products that are appealing to a diverse demographic.  How to iterate quickly and create production processes that give you tremendous economies of scale around innovation. 

Susan makes some profound points…points which resonate with us at Yoick – expect to hear more from us in 2007 about the intersection between the web and persistent worlds.

Habbo Gets Virtually Mobile

Sulake Corporation are reported to be running a mobile pilot in their home country of Finland for their virtual community product, Habbo Hotel.

  Billed as the fastest growing tech company in the Nordic region by Deloittes recently, Sulake plans to launch its mobile services globally in Q1 07. Habbo’s more than one million users will be able to send and receive Habbo messages over WAP and i-Mode to friend lists. There will also be mobile news and competitions and the ability to download games, wallpapers and ringtones. More importantly, users will be able to make Habbo credit purchases and Habbo Club subscription purchases.

Here are some stats on Sulake, courtesy of Mobile Monday:-

The long-term objectives of Sulake call for the company to become a provider of world-class interactive entertainment with brand extensions in animation/TV, publications, consumer products and broad portfolio of consumer properties addressing different target audiences.

Sulake Corporation was founded in May 2000. It is owned by advertising agency Taivas Group, teleoperator Elisa, venture investors 3i Group Plc, Benchmark Capital, and Movida Group, a Japanese joint venture of SoftBank BB, SoftBank Group and Asian Groove. Also management and personnel are owners.

Sulake has 290 full time employees in 19 countries and about 300 moderators and community managers.

The average age of Habbo players is 15. The division between boys and girls is 51-49.

More than two thirds of Habbo income comes from users, the rest comes from advertising.

Blending Games with Web 2.0: Red 5 Alive with VC Funding

Southern California based Red 5 Studios is reported to have raised $18.5 million in funding from VCs, Benchmark and Sierra.

Formed by Blizzard World of Warcraft developers, Red 5 aims to blend games with Web 2.0 social networking.

Their first title is being financed and will be distributed by Webzen and the $18.5 million will go towards back-end infrastructure.

Realtime Worlds set to expand: $31 million venture funding

Dundee, Scotland-based Realtime Worlds has received $31 million in funding from New Enterprise Associates, a tier one VC firm.

 Realtime developed such games franchises as Grand Theft Auto.They anticipate releasing their first title, Crackdown, for the XBox 360 in 2007 and this will be published by Microsoft Game Studios.

David Jones, CEO of Realtime expressed his excitement for partnering with NEA and sees this union as opening up “a bigger world …in terms of talent acquisition and resource development.”

Tencent: Virtual Bank of China

 

The Asia Times has a piece titled China’s virtual currency threatens yuan, in which is discusses the growing concern from the likes of China’s central bank over the popularity of Tencent’s QQ virtual currency and its potential effect on the value of the countr’y real world currency, the yuan.

“The QQ coin is challenging the status of the renminbi (yuan) as the only legitimate currency in China” says Yang Tao, a public prosecutor.

Tencent has over 220 million users of its instant messaging service and QQ coins can be purchased for 1 yuan per coin via bank, QQ card or telephone.  They are apparently used for everything from buying online games and software to blackmarket trading and online gambling.

The central bank is worried about a future in which the popularity of virtual money grows to the point where it jumps from virtual to real goods.

What’s the concern? China should embrace this development rather than trying to squash it. It is an inevitable and logical progression and those country’s that work it into how they operate will remain more relevant than those who don’t — nation states needs to evolve or they will increasingly become irrelevant.

As Wagner James Au says…at a fundamental level, all money is virtual. At root, its worth depends on the value a group invests in it, whether it’s made of paper, metal or binary code.

He also points out that this is the beginnings of a future international trend – all three next gen consoles – Xbox 360, Nintendo Wii and SOny PS3 – include microcurrency systems, and like the QQ, are designed for purchasing games and other products from their online networks. But with tens of millions of players who find value in these virtual currencies, what’s to stop them from using it for purchasing other goods and services from each other? And given the volatility of real money, should they be stopped?

Shawn Fanning Ruptures Warcraft

Shawn Fanning, the founder of Napster, is in beta with Rupture, which Heather Green at Businessweek describes as a virtual social community for gamers.

Funded by well known Silicon Valley angel, Ron Conway, and Joi Ito, chairman of Six Apart Japan and a board member of Technorati, Rupture “api’s” into a MMOG and compiles data (stats on individual and guild rankings) on characters and resources and publishes this on a personalized site. Starting with World of Warcraft, the service will also allow guilds to organize their playing, allow players to chat in groups and download add ons and game demos.

This is a smart move in building up a social network and meta layer of data, which is what will be of value to Rupture.

 Matt Marshall agrees —

Experts say this is a promising area, because millions of gamers have formed communities with each other through playing, but their interactions have been limited by the confines of proprietary software. Why not open up these interactions to the full richness of the Web, let gamers flirt with each other, communicate offline or any number of other things?

Susan Wu, an associate at Charles River Ventures, notes that rupturing the MMOG walled garden will lead to tension, but there are a number of startups focused on doing just this and besides, there are tons of plugins setting a precedent for building a meta layer on top of an MMOG like World of Warcraft.

This will be an interesting one to watch.

Massively Multiplayer Online Character Mashup

Paul Fabretti’s posed a valid question – is there any significant reason why something like Habbo characters, created by a Habbo Hotel user, could not at some point in the near future be integrated into something like Second Life?

One key reason that this form of mashup may not occur any time is the metaphor break it would cause. Can you imagine a Second Life spiff with a virtual working p…s running around free in World of Warcraft – instant “what the f..k!” moment.

Online, as with offline, communities have a theme or metaphor – sometimes by design and sometimes more organic in nature. Messing with them through such mashups could be disastrous, then again…they could be a real blast!

If the theme is mashup – it could work.