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Game Center sparks light reactions from competing iPhone social network devs
Yesterday, Apple announced Game Center, a social gaming service for iPhone. Pretty much everyone with an iPhone has reason to be delighted with this development, except for companies like OpenFeint and ngmoco, which already operate social network gaming services for iPhone in OpenFeint and Plus+, respectively. Are both companies freaking out? Not in public. In a statement, OpenFeint positioned the OpenFeint X service, which allows iPhone devs to sell virtual goods, as the next step for its business. "OpenFeint X is currently built on top of OpenFeint and in the future it will also sit on Apple's Game Center social graph, achievements and leaderboards so developers and gamers don't miss a step," said OpenFeint CEO Jason Citron. "Apple is a key partner and we are delighted that they have validated the first half of the OpenFeint vision and we can now fulfill the second half: OpenFeint X and Virtual Goods based Social Games." Citron also promised to "continue to invest in OpenFeint" for the benefit of the games using the platform now and in the process of adding it. ngmoco's Simon Jeffery released a statement indicating that Plus+ is also already moving in a similar direction. "ngmoco has anticipated this move from Apple for some time, and is happy to see a cleaner developer and consumer experience on the horizon," he said. "As we demonstrated at GDC 2010, Plus+ took a strategic shift in direction a few months ago toward being a service, and less about being a set of social gaming features." Plus+ is now focusing on "empowering monetisation and discoverability mechanisms for the development community," as evident in the service's support for player-created virtual item stores in We Rule. If both OpenFeint and ngmoco are to become virtual goods platforms, they stand to benefit from Game Center -- in essence, they can allow Apple to handle all the matchmaking and friend list stuff, while they focus on building marketplaces to interact with Game Center. At least until iPhone OS 5 introduces a virtual goods marketplace. [Via TUAW]
Virtual sales boom, will top $3 billion in five years
Gamasutra reports on a new study from research firm DFC Intelligence that concludes that sales of virtual goods are on the rise. The study surveyed 5,000 gamers from Europe and North America for a two-month period in early 2010, and also sampled seven years of Live Gamer historical data. Live Gamer, a virtual world monetization company with clients that include Sony Online Entertainment and Funcom, partnered with DFC for the study. DFC reports that 88 percent of their survey base purchased virtual content, a label that includes everything from MMO microtransactions, to music, to movies and games. Sixty percent of this group said their digital purchases were in-game items. DFC says the growing trend of virtual item sales paints a bright future for MMORPGs as well as social networking platforms, predicting that total item sales for "MMOG Lite" titles will exceed $3 billion by 2015. Head on over to Gamasutra for the full article.
Man buys virtual space station for 330k real dollars
Welcome back to Joystiq's Flip This House, finding you the best deals in gaming real estate! This week, we're looking at a doozy of a fixer-upper: it's a beautiful space station called the Crystal Palace, with multiple fine amenities, including four bio-domes (full of alien species to hunt), Trade and Revival Terminals, a working auctioneer, and the universe-famous Stahlsteiner's bar. In case you haven't figured it out yet, it's a virtual place, and did we mention the asking price? 330,000 real world dollars. That's what MMO Planet Calypso (formerly Entropia Universe) player "Buzz Erik Lightyear" paid to "own" an in-game hub. As you can see above, he paid 3.3 million "Project Entropia Dollars" for the virtual real estate, and those PED were purchased with real dollars -- 330k of them. What does he get for his money? The station is one of the nicer setups in the virtual universe, and since players pay PED to shop, hunt, and hang out there, "Erik" can set tax rates on the payments, and turn fake bucks back into real cash. We're not sure how much real cash (depends on where he sets the rates, and that will affect the place's popularity as well), but it'll probably be a while before he can ... flip... this... house! [Thanks, Kreyg]
TUAW exclusive: Makers of Aurora Feint unveil new game, codenamed "VSL"
Aurora Feint was one of the iPhone's first big games, way back in the early days of the App Store. Since then, the company behind that first hit has added on a few different games in the same universe, each with their own separate features and focus, but all in the same vein of puzzle-based RPG. Today, Aurora Feint, Inc. has pulled back the curtain just slightly to reveal their very first original effort since that initial App Store release. The game is only codenamed so far -- they're calling it "VSL" -- but the developers at Aurora Feint plan to turn it into a "showcase" of what's possible with Apple's new policy of allowing free apps to provide content on demand. Above is the very first screenshot of the yet-to-be revealed game, and TUAW got a chance to talk exclusively with both Peter Relan and Jason Citron of Aurora Feint about the new game, what it'll be like, and how it'll integrate with their growing social gaming platform, OpenFeint. Click the link below to read on.
Second Life content creators warn about scam site
Numerous Second Life content creators are warning their clientele that the Web-site virtualget.net (which has been apparently been operating for a couple of months now) is a credit-card harvesting scam. Whether that's correct or not, the site appears to be using the product images and product descriptions and trademarks of numerous Second Life content creators without their permission. The original images and text appear on Linden Lab's Xstreet SL virtual goods shopping Web-site. Numerous DMCA notices are reportedly being filed by content creators at present. We attempted to contact virtualget.net (anonymously registered in Singapore) for comment, but none of their email addresses appeared to be functional -- One email address was restored to function when the majority of the site was taken down a short time ago, but we received no response. Linden Lab, who has an intellectual property stake in the matter, was not available for comment either. Users of Kaspersky protection software found the Web-site marked as a phishing site several hours ago, presumably based on user reports. Update: The operation seems to have disabled access to much of the site in the wake of numerous DMCA notices filed by content-creators. Are you a part of the most widely-known collaborative virtual environment or keeping a close eye on it? Massively's Second Life coverage keeps you in the loop.
Survey says: Nearly half of MMO gamers bought virtual stuff
One of the interesting things we at Massively find about statistics and surveys is how people react to surveys and research results about games, virtual environments and MMOGs. Unexpected results automatically attract criticism of every aspect of the report and data no matter how the results were obtained, from the political leanings of the researchers, to the way the charts are drawn. On the other hand, when the results of surveys or research agree with our expectations, people rarely question the results, again, no matter how they were obtained. Therefore, we wonder what you all might make of this report, that 12% of Americans have purchased at least one virtual item in the last item within the last 12 months, and almost half (46%) of MMO gamers/virtual world users have done so within the same period. Obviously, that would include assorted free-to-play games, so-called 'freemium' games and environments, Facebook and all-sorts. The survey was commissioned by global payment solutions provider, PlaySpan. The results are only available in summary, but we're interested in your reaction. Are the results what you expect, or not? And either way, do you dispute or accept the data? [via GigaOm]
Sweden extending taxation into the virtual
Sweden is taking aim at online tax evasion and the estimated five billion Swedish krona (SEK) in annual undeclared income by the country's citizens. (This equates to roughly USD 645 million.) While much of this is revenue from "online marketplaces, porn, and astrology sites", undeclared income from games and virtual worlds are included in that figure. In fact, the Swedish Tax Agency (Skatteverket) looked at the sales of avatars and characters in 'computer games' over a 14 month period, with a collective advertised sum of 662 million SEK (USD 85 million). No income was declared on any of these transactions so it's a safe bet they'll be scrutinizing these sales moving forward. Although the specific virtual worlds and games aren't named, GameCulture adds that the virtual property Skatteverket is looking at exchanged hands between 7000 gamers and residents. Also interesting is what GamePolitics turned up on the situation -- "even U.S. citizens could be subject to Swedish taxation on such virtual transactions, according to the Economics of Virtual Worlds blog."
China bans gold farming
Gold farmers! They're everywhere, right? We get spammed by them, we run into them farming Dire Maul, we put them on ignore. Lazy people with too much disposable income buy gold from them in a show of crass consumerism. Blizzard has done their best to stamp out gold-farming services, but litigation is difficult due to the fact that most of the major gold-farming companies are based in China or other parts of Asia. They've instead opted to try to control and stop gold farmers from being able to complete transactions via other methods. This time, though, it looks like Blizzard may have an unlikely ally in, of all things, the Chinese government. They announced today that the trading of virtual goods for real money is now illegal in China. This ruling reaches farther than just gold farming, though. It also bans the sale of prepaid time cards for MMOs or other online games, as well as numerous technicalities we're sure to hear about in the weeks to come. To give you an idea of how much an economic impact this will have on China, gold farming alone generates nearly one billion dollars a year worldwide, with China's specific numbers growing at a reported rate of 20% per year. It's estimated that 80 to 85 percent of gold farmers reside in China, so this ruling is massive and, to be frank, pretty troubling.From a gamer's perspective, yes, it'll be nice to worry about this kind of service a little less, but from a human perspective this places hundreds of thousands of Chinese people in one of two kinds of serious trouble: the first is financial hardship from the "honest" gold-farming companies that will close down after this ban, and the second is legal issues from the companies who don't close down because they can't afford not to do what they've been doing.It's not my intention to defend gold farming as an industry, because I used to have to deal with its more nefarious effects every day -- compromised accounts stripped of gold and gear, keyloggers, disruptive spam, all of that. But life isn't easy for many Chinese people working jobs like this. Many gold farming centers are much cleaner and safer, in relative terms, than other places in China where one on the bottom rung of the financial ladder might seek work, so while I appreciate the change as only a white first-world male can, I worry about what will happen to the underprivileged working-class Chinese people behind the spam ads and dead gnomes when this law starts getting enforced. NOTE: Comments are now disabled for this post.
New legislation in China outlaws gold farming
Gold farmers. We know you hate them... We know. And we've mentioned the associated gold spam as being the bane of many MMO players' existence a number of times in the past. But is the situation ever going to change? Perhaps, given the new legislation coming out of China this week. Of course while all gold farmers certainly aren't based in China, a substantial percentage of gold farming operations are in fact run from the country. Such operations may now find themselves under greater scrutiny by the Chinese authorities; the government has now established its first official rule on the use of virtual currency in China. Essentially, it states that virtual currency cannot leave the sphere of influence of its issuer. (Exact wording: "The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services.") If the law is actually obeyed and enforced, it would curb all manner of black market activities in China connected with the virtual.
A closer look at revenues in free-to-play MMOs
The free-to-play business model in the MMO industry is one that lets users play a game for free in hopes that a percentage of that userbase will opt to embrace microtransactions, allowing F2P game operators to potentially bring in more revenue per month than they would maintain through subscription fees. We periodically see announcements of yearly revenue from some of the larger companies, but these figures are typically announcements of average revenue per paying user (ARPPU), emphasis on 'paying'. But how much money are free-to-play MMOs really making? This is the subject of an article at Gamasutra written by Paul Hyman titled, 'What Are The Rewards Of 'Free-To-Play' MMOs?" Hyman catches up with Raph Koster (Metaplace), Daniel James from Three Rings Design (Puzzle Pirates), and Jeremy Liew from Lightspeed Venture Partners (a funding source for F2P MMOs) to discuss the microtransaction model.
MapleStory announces over 92 million users worldwide, 4 year anniversary
We often marvel at the sheer numbers of subscribers and users some MMOs and virtual worlds are able to reach. You can look at a title like World of Warcraft, with over 11 million subscribers and just picture a massive green tidal wave made of dollar bills sweeping over Blizzard HQ. Every month. But WoW's millions of customers, while impressive, pales in comparison with what Nexon announced this week with MapleStory: 92 million users worldwide, with 6 million users in North America alone. Sure, comparing success stories of a subscription title with a free-to-play game is a bit like comparing apples and oranges. Each of those 92 million "Maplers" probably isn't dropping $15 each month to play, but the fact remains that many of those users are paying real money for their virtual goods. The numbers we ran for MapleStory's virtual items sales in the US, roughly one year ago, had 5.9 million US users spending USD 29.3 million on these goods.
The big business of selling virtual goods
It doesn't seem like it was that long ago that the entire concept of people spending real money on virtual items and currency was just bizarre. The first mentions of such a thing this writer ever came across were back in 2003, when Julian Dibbell told the story of Black Snow Interactive, rumored to have been operating virtual sweatshops operating in Mexico. Fast forward to 2009 and the notion of shelling out real world cash for the ephemeral has become commonplace. Moreover, these formerly arcane business models centering around virtual trading have ballooned into a huge business, much to the chagrin of many game companies and their players. However, not all companies attempt to fight this ever-increasing gravity of real money trading (RMT) that now permeates the MMO and virtual worlds industry, and some seek to make it an aspect of their business that they control rather than something they need to curb. Indeed, the profits of many (legitimate) businesses are largely derived from sales of virtual goods, as Rory Maher explains at paidContent.org in his article titled "From Pet Penguins to Flame Throwers: The Biggest Sellers In The Virtual World".Maher looks at three companies doing well for themselves in the virtual goods game, and what they're selling that's proven so popular. He points out Tencent, a Chinese IM provider that incorporates microtransactions into the service, allowing users to spend their "QQ" currency to enhance and customize their IM interactions, even buying virtual pets that exist on their desktop and run around inside their instant messages.
Live Gamer's Andy Schneider on legitimizing RMT in games and virtual worlds
Most mentions of real money trading (RMT) in massively multiplayer online games and virtual worlds conjure up images of virtual sweatshops and the resulting blitz of gold spam. Despite how loudly many protest against the idea of RMT in games, the fact remains that there is a market for this and people spend a lot of real world money on virtual goods every year. Live Gamer is a company that aims to legitimize real money trading, creating a way for players to spend their cash without the risks inherent in dealing with shady gold and item sellers. It also ensures that money spent on virtual goods is going back into the pockets of the game companies. While services such as Live Gamer don't end the debate on whether or not RMT should be permitted in the first place, it's clearly here to stay, and some game publishers are getting proactive about real money trading.
GDC09: Applied RMT Design with GoPets and Live Gamer
Massively sat in on a GDC 2009 session this week titled Applied RMT Design which was part of the Worlds in Motion Summit. Andrew Schneider, Founder and President of Live Gamer and Erik Bethke, CEO of GoPets, Ltd. presented a case study on balancing a game's primary and secondary markets, using GoPets as an example of how it can be done. The market for virtual goods in massively multiplayer online games and virtual worlds is worth billions. Not all of this is grey market, and more games are now being designed with microtransactions in mind. Live Gamer aims to bring greater legitimacy to microtransactions through a regulated secondary market providing benefits to companies as well as the players themselves. Thus far they've worked with EverQuest II, Vanguard, and GoPets, with Acclaim's 9 Dragons on the way. Bethke and Schneider kick off their talk by explaining the fact that RMT in MMOs is inevitable, explaining how developers can be proactive about incorporating RMT into their titles rather than having it exist outside of the game. Live Gamer works with developers to create a legitimate system for trading virtual items for real money, one that's safe and secure. Of course, legitimizing RMT can also stir up controversy. %Gallery-48454%
GDC09: Raph Koster kicks off Worlds in Motion Summit
Game Developers Conference (GDC) 2009 has begun and Massively is in the trenches to report on all the big announcements for the massively multiplayer online gaming industry, plus we have some great interviews lined up all week as well. Our GDC 2009 coverage begins with today's Worlds in Motion Summit, kicked off by Raph Koster, MMO and virtual worlds luminary. Koster's speech is short, essentially a quick review of the virtual worlds trends he's observed over the past year. It's important to see things in perspective, Koster points out, mentioning that virtual worlds have recently turned 30, and are now a far cry from their MUD origins. Hardcore, geeky stuff Koster says, and we've come a long way since then. "We've kind of arrived, haven't we?" Koster asks. "One half of American adults are gamers today, which is an incredible step."
Statistics point to China's growing significance in MMO industry
We've been mentioning a bit about some of the regulatory issues in China affecting massively multiplayer online games, particularly as they concern some Western game companies. However, a number of gamers in the West have wondered something along the lines of, "What does this have to do with me?" Well, in terms of Western markets directly, not much. But China is significant for the MMO industry seen as a whole.China will be the world's largest MMO market moving forward and as broadband speeds and penetration increase, the numbers of online gamers will keep rising. The current regulatory changes put forth by China's General Administration of Press and Publication (GAPP) stands to have a major impact on how online games are operated in this market, ranging from implementation of a "fatigue system" (where play time is limited each day) to censorship of game content. The country has over 55.5 million online gamers, with a total market for virtual transactions between USD 1.4 billion and 1.9 billion (RMB 10-13 billion), according to 2008 statistics released by the China Internet Network Information Center (as reported in English by JLM Pacific Epoch).
Why do people buy virtual goods in MMOs?
Massively multiplayer online gamers spend hours -- so many hours -- working towards obtaining virtual gear. Epic armor sets, mounts, player housing, faction ships... the list goes on, and will continue to go on. Our collective fascination with these intangibles ensures our desire for them -- and for those things beyond a player's reach solely within the virtual realm, real world cash makes all things possible. This is the research focus of Ph.D. student Vili Lehdonvirta of the Helsinki Institute for Information Technology, who breaks down our buyer's impulse according to three criteria: Functional attributes, such as speed, hitpoints, teleportation. Hedonic attributes, or how the virtual gear looks or sounds, its provenance or its connection to the background fiction of the setting, and of course customizability. Social attributes, particularly the prestige accorded with ownership of a rare item. Have a look at his "Virtual item sales as a revenue model: identifying attributes that drive purchase decisions" for a thorough analysis of why many of us are so inclined to obtain something that's ultimately ephemeral, which goes beyond the simpler "useful vs. decorative" angle.
China's virtual goods taxation sparks price increases and controversy
China's State Administration of Taxation recently imposed a 20 percent income tax rate on profits made from virtual currency and virtual items, sparking price increases for virtual goods. While this tax rate (if actually enforced) clearly impacts the virtual space, it also affects transactions happening outside of MMO servers and virtual world grids. The taxation policy could ultimately extend to the virtual currencies linked to the largest IM providers in China such as Tencent, drastically increasing the percentage of the population affected by the new laws. Despite this, the positive benefits of eliminating gray and black markets for virtual items and currency may outweigh the drawbacks for gamers and users of the various digital services in China. Questions remain about what will and will not be taxed in the virtual space, but it's clear that individuals who gain virtual income are expected to declare their profits and pay taxes on this, and do so within seven days of having earned the profit, according to Shanghai Daily.Taxpayers who can provide proof of the value of this property or the value of the transaction are taxed at 20 percent on their profits, while those who cannot provide sufficient verification are taxed at three percent of the total transaction value. But how many people are affected by this new system?
Dutch court convicts 2 minors of stealing virtual items
Should the theft of virtual items be punishable by law? This varies from country to country, but today's ruling in a Dutch court emphasizes that virtual crime is actual crime under their country's laws, regardless of whether the individuals involved are minors. Associated Press reports: "These virtual goods are goods (under Dutch law) so this is theft," the court said Tuesday in a summary of its ruling. The court did not reveal the identities of the minors, but they are 15-years-old and 14-years-old, respectively. They apparently coerced a younger boy into giving them a 'virtual amulet and virtual mask' in RuneScape. The offenders have both been sentenced to community service -- 200 hours for the 15-year-old, and 160 hours for the 14-year-old. Do you feel this is too steep a penalty for virtual extortion, or not steep enough? Should it matter if the items or currency involved are real or virtual?Update: It's been communicated to us by our readers in Holland that the crime in question was not, in fact, a virtual one, but involved actual violence. The victim in question, according to this source, "was kicked and threatened with a knife." The original Associated Press source omitted this detail, which obviously changes the tone of the discussion below. To clarify, this was real world violence inflicted over virtual items, hence the community service sentences for both of the offending minors.
What rights should we have to our virtual goods?
Are you aware of your property rights as they pertain to the virtual goods in your favorite MMO? Are you aware of the laws in your country as they pertain to virtual goods? Heck, do you even read the EULA?It seems like these lawyer-speak agreements are becoming more prevalent lately, as we impatiently click the 'agree' button in anticipation of playing the latest MMO. In fact, even older games are reinstating their EULA on the loading screens, forcing players to click through before entering their world. The reason for this basically boils down to inevitable litigation as gaming grows in popularity.
