Category Archives: Social Games

May 14, 2011 · 8:36 am

Patent trolling impacting more small developers

I wrote last week about how like.com effectively killed a competitor by suing them over a rather broad patent, scaring off their investors. While calling like.com a “patent troll” is probably a stretch of the already overused term, news yesterday of a company called Lodsys suing small iOS developers definitely justifies use of the term. Lodsys apparently has a patent that they say reads on in-app purchasing, with at least one of the patents continuing on work from as early as 1992.

There are at least three explanations for what Lodsys is doing: First, they might just want money in licensing fees from these small developers. This seems odd (why go after such small fish?), but going after smaller developers eliminates any chance that the patents will actually be litigated, so it is essentially free money. If they think the patent is weak, it’s definitely best to start off with some free money here, plus it strengthens the patent.

Lodsys also might be doing this just to get the licenses, so they can build up a portfolio of licensing contracts as ammunition for when they DO actually have to defend their patent in a lawsuit against a larger developer. Considering the licensing price is going to have to be pretty low, Lodsys probably isn’t doing it JUST for the money, so this theory is more likely than theory number one. Again, if they think the patent is weak, this approach helps strengthen it.

Perhaps most likely, Lodsys might be doing this to scare other developers and force Apple to license the patent for a much larger fee, or buy the patent outright for an even larger fee than that. Apple can’t have developers scared of in-app purchasing, and if Lodsys starts filing suits against every small developer, it will chill the marketplace pretty harshly [insert obligatory “this isn’t what patent law was meant for” comment here].

Obviously these motivations aren’t mutually exclusive, and Lodsys is definitely making an interesting move from a patent perspective by going after small developers when Apple is the obvious big fish. On the other hand, it’s just another example of how patents stifle innovation in consumer web/mobile technology. Probably won’t be long before a few Android developers receive their notices in the mail….

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Filed under Patent, Social Games

May 9, 2011 · 3:50 pm

My favorite stories that happened while I was taking finals

So I’ve been on a bit of a hiatus, a necessary absence so I could focus on law school finals. But the rest of the word kept going, and there were plenty of interesting stories

Like.com killed a competitor by suing them for patent infringement to spoil funding round:

Pretty interesting story about how Like.com saw a small startup they deemed a threat, so they sued them on a software patent at the end of their funding round. It scared off a large enough portion of the investors that the startup had to fold. The patent itself is maybe valid, or at least, it isn’t blatantly ridiculous, but the founders of the blown-up company found plenty of prior art to suggest that it shouldn’t have issued. But patent litigation is just so expensive and so time consuming, it is a huge disadvantage to be a small company sued over a patent. The inefficiency of the patent system is really on display here, but maybe if stories like this got more attention (where patent law is really killing innovation) then there would be more support for reform.

Homeland Security tries to squelch a Firefox add-on that let you access the poker sites they just took down, and Firefox declines to help:

A Firefox add-on called Mafiaafire basically ruins all of ICE/Homeland Security’s domain seizure plans by re-directing browsers around the domain names, straight to the IP addresses. Homeland Security obviously didn’t like this add-on, so they asked Mozilla to take it down. Rather than comply, Mozilla asked if it was legally obligated, and whether the add-on has any legal issues itself. The add-on has since become available for Chrome, so it wil be interesting to see if Homeland Security asks the same of Google before they bother to respond to Mozilla. Speaking of Google…

Google launched +1 and so far it is approximately 10% of a feature:

It’s hard to launch a social network, because they gain all of their power from having your friends on them, and your friends probably weren’t on something that launched yesterday. But what would you do if you did launch one? You wouldn’t want to overwhelm your potential audience for fear of scaring them away, but you don’t want to underwhelm either and make that potential audience wonder what they really get from joining. Google’s +1 is solidly in that second category for the time being. You can say +1 (“like”, essentially) to search results, and I guess see when others indicate the same, but I’m not sure what the point is. I could see the feature dramatically expanded and then MAYBE it would be something like a newsfeed on Facebook… but my friends already post articles on Facebook. I dunno, it needs work.

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Filed under Funding, Law, Social Games

April 6, 2011 · 11:44 am

Angry Birds’ Bing Deal missed a big opportunity

I love Angry Birds. I thought it was a legitimate game of the year competitor last year (though the more traditional gamer in me would have to give the award to either Limbo or Heavy Rain). Rovio is head of the pack of promising mobile developers right now, even though Angry Birds was their only hit in numerous attempts, simply because they are doing a lot of things right with partnerships and distribution.

About a month ago, Rovio partnered with Bing to cross promote the products. Bing made a few short videos about how the Pigs were using Bing to aid in their attempt to capture the Bird eggs. Pretty silly, but more than 200k people watched the first two of four episodes on youtube, so maybe it wasn’t a terrible deal for Bing to get their product associated with some comedy, especially since it distances the brand from the “Microsoft is an evil monopolist” image. Not sure if the videos do anything for Rovio, though.

The partnership also added a search button to the game itself, which appears after you’ve lost a level multiple times. Instead of resetting, you can push the “Bing for help” button, which launches your phone’s browser, points it to bing, and auto-searches for a walkthrough.

This is the dumb part: The first hit on Bing is to a walkthrough page with only a video, hosted by a third party, and it doesn’t even return results for the right level in the first two hits. So the Bing button is basically useless. Here’s the Bing page with the disappointing results for my attempt to get help on level 6 of the latest rendition of seasons. Only one result on the page is actually the answer I want, and it’s the last result.

This would have been a great opportunity for Rovio to completely control the user experience. They identified a problem that Rovio couldn’t control initially which negatively impacted the user experience (people would have trouble with the game and exit to go search for a walkthrough, often a tedious task when typing out the name of the game and the level on a phone browser). Rovio then took steps to improve the experience: automate a search, activated with just one click, when the user is having trouble. But they missed the last step of creating their own walkthrough on their own site, which would have guaranteed user satisfaction with the result they found (Rovio could have chosen how much to help the user that way, maybe withholding certain tips on certain levels or giving more detail on the hardest ones). Rovio would have also kept all the advertising revenue from those pages, which, while not much, would have probably been something decent if they were pointing all walkthrough traffic there. It also would have eliminated the proliferation of low-quality walkthrough sites, evidently a problem from the Bing search.

So -1 for Rovio on that deal.

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Filed under Social Games

March 16, 2011 · 11:15 am

Luxury goods, virtual goods, and the massive disparity of wealth in the world

Virtual goods are becoming a huge industry, and there’s no reason to think it’s just a fad given the penetration of technology and the internet in our lives. This year, the virtual goods market is projected to reach $2 billion dollars, more than $800 million of it coming from social games [edit: those are U.S. numbers, btw. The entire global market is much larger]. Those are pretty massive numbers, and virtual goods could very well be a $5-10 billion dollar industry by 2020.

There’s a bunch of interesting things about the virtual goods industry:

– It’s got crazy high margins. CRAZY high. Zynga, the most prevalent and dominant company making facebook games, was recently discussed as being the most profitable company ever, with a profit margin of 47% (for context, Apple and Google are around 30%, Amazon is around 5%, and the previous record might have been Chanel at 45%). [http://read.bi/fsBlIJ]. Helps when you sell things that don’t actually exist.

– That’s all we REALLY know about the industry so far. May sound a bit dismissive, but really, it’s a very young industry and the economics of it are still being examined as the market changes, as new competitors arrive, and as the industry grows to new non-facebook non-second life sectors. Part of the reason for this lack of wisdom is:

– It’s unregulated. At multiple levels, this rather large industry is controlled entirely by private funding, but many of the companies are getting big enough to sit in an awkward space of having a near-public secondary market for trading stocks. This is bound to go badly, and most people seem to think it will pretty soon: as you can see in the article linked above, the huge valuations and margins these companies are drawing is leading to a lot of investment in the companies AS IF they were public, but without the oversight or reporting requirements of public companies. Board members are the venture capitalists who invest in all manner of companies to get an edge on the industry, and the information disparity between those professionals and the everyday man who ends up invested through the secondary trading market is massive. One of these companies is bound to tank, leaving regular investors with shares of a worthless, revenue-less internet company after all the sophisticated VCs jumped ship. And that will be quickly followed by regulation.

– It’s a luxury goods market that caters primarily to the middle class. Most of the users of the most successful virtual goods application to date, Farmville, were middle age women. I don’t know the income distributions of virtual goods purchasers across the whole ecosystem, but I don’t imagine they are any more well-off than the average middle-class American. Virtual goods, as I think most would agree, are a luxury good. Maybe a strict economist would point out that we don’t have enough data to know about the elasticity of the demand in the market, but something tells me the first thing most people would cut out of their budgets in a time of crisis would be their virtual tractor oil or new shirt for their avatar. The goods don’t even EXIST, it’s perhaps the most ‘luxury’ good ever. So this is an industry that makes pure luxury goods, selling to the middle class, during probably the worst recession in the history of the United States. And it’s working. Investors will pay anything to get a piece of it.

I originally titled this post as if I was going to make a critique of this pattern in human society, noting the strange disparity in wealth in the world when one society is spending billions of dollars on nonexistent goods while others die of starvation and disease and war… but I’m actually not so sure spending money on nonexistent goods is any more ridiculous than spending money on any other luxury. Is paying $400 for a handbag really much better than paying $2 for a different set of pixels? I’m not advocating either form of discretionary spending really (both seem like a borderline moral wrongs for a society with massive unemployment and legions of medically uninsured), but perhaps the virtual goods are actually better: at least they never go in the dump, and most of the virtual goods are made in America! Maybe that will reduce those unemployed and uninsured numbers by 2020.

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Filed under Misc, Social Games

March 14, 2011 · 4:43 pm

Understanding Rovio, the Amazon App Store, and too many cross promotions

Pretty much every site that reports on social games is saying, today, that Rovio is launching their next Angry Birds (Angry Birds: Rio) game on the Amazon app store.

Venturebeat noted that Rovio has an exclusive deal with Amazon for… something. Fortune is completely off-base in claiming that piracy issues on Android have something to do with it (which would make sense if Rovio wasn’t releasing their next game on Android, but they are), and PC magazine can’t get the proper nouns right in their initial post on the issue, apparently thinking Amazon and Android are synonyms when such a reality would render the story pointless. And a bunch of people retweeted all of these stories for no apparent reason. (Twitter also announced it is seeing one billion tweets a week, today, and at least 30% of them are retweeted, crappy blog posts).

First, Rovio isn’t going to give anybody an exclusive to their next big game. They did just fine making money having all of their apps on all of the major platforms, and there would be no sense to reward a game or feature that might potentially bring them money to a platform with no users (Amazon’s app store). Amazon is the first platform to go after any sort of exclusive (though it’s hard to tell what they actually got based on the “journalism” on the topic so far), but I wouldn’t expect Apple or Google to start going after exclusives anytime soon; exclusives only really make sense in the console world, and that’s because they drive console sales (at a loss for Sony and Microsoft), which then recoup money through selling 2 cent CDs for $60. The mobile platforms just take 30% off the top, and neither have shown too much interest in their games development anyway.

Second, Rovio will probably send their next app to Amazon’s portal for a week, then release it on everything else. They did that for a site with one of their previous games, and I’ve never heard of the site again. Amazon is probably hoping for a bit more success, but I’d be surprised if it works. Mobile apps already struggle with user discovery, so requiring users to go find and install another app market on their phone before installing Angry Birds: Rio is really asking a lot of a fanbase that probably isn’t completely savvy with the debates regarding the best app markets.

Third, this is too many promotions. The next game is Angry Birds, Rio (promoting an animated children’s movie), exclusively on Amazon app store. I wonder how the company behind Rio feels about Rovio releasing on a platform that surely doesn’t cater to their target audience for the movie. How many people who want this game and have an Android phone will be able to find it in that window of exclusivity?

Finally, Angry Birds was one the best games of last year, across all platforms. It was clever, it was hard, and it was capable of being played for 5 minutes or 50 minutes at a time, a truly rare combination of attributes. So I’m prepared for this next game to suck, and I’m already forgiving them and looking forward to Angry Birds 2. (the other best games of last year were Heavy Rain, Limbo, and Mario Galaxy 2, btw.)

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Filed under Social Games

March 9, 2011 · 3:19 am

Zynga wants to trademark ‘Ville, and why not?

Apparently Zynga filed for a trademark in the name “ville” in Europe. [http://bit.ly/eE0fId]. Probably strikes many as extreme (Techdirt thought so), but I’m in support.

I actually wrote a paper about idea theft in the app market (I included Facebook games, since they are so similar to the things we traditionally think of as apps) for a law school seminar and, for the most part, copying on these platforms is rampant and difficult to stop. Can’t copyright or patent a game concept, and yet consumers are presented with knock-off applications hoping to make a dime on a consumer’s confusion constantly.

A trademark is one of the few routes open to a social game company hoping to prevent a copycat from taking advantage of a brand they spent money cultivating by launching a knock off meant to confuse consumers. And as I’m sure the trademark is only for things classified as electronic games, who would we worry about such a monopoly hurting? Isn’t one of the main justifications for trademark that we don’t want businesses free-riding on a brand developed by another company… which is exactly what a company launching an electronic game named “____ville” would be doing?

To further develop the point, Angy Birds had 3 or 4 knock-offs ripping off customers at any one time at it’s height. I’m sure the ripped-off consumers wouldn’t have been upset if you told them that Rovio had gotten a trademark in “[Emotion] [farm animal]” if it meant they got their money back.

 

 

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Filed under Law, Social Games

March 8, 2011 · 1:23 am

My 3 Favorite Posts on GDC 2011

I didn’t attend GDC, unfortunately, but I felt like I was there with all the coverage it got. Maybe I’m just really wishing I could have gone. Here’s a sample of my favorite articles from a range of blogs. Sidebar: It’s interesting to see the way social games are treated in these conversations. A future post will focus on that, but that’s for another time.

Social Mechanics in (Social) Games, by VP of Creative Design at Playdom [http://bit.ly/i4GaKF]

Read this and you’ll never ask somebody if a game is “single player” again. A pretty awesome, massive powerpoint covering a lot of common sociological phenomenon, but highlighted in their gaming context. Details how games are designed to pit players against one another in competition for different kinds of resources, and then, at a more complex level, how tribes appear informally in a game with clans like every MMO ever. A perspective changing approach to me, but maybe this is common sense in the world of social game design. Has a Derrida quote which is cute and worth +1000 for me, though I’m not convinced the author has any idea what it means.

Brenda Brathwaite defends social games as games through their shared history of initial rejection [http://bit.ly/g7QeAC]

Hint: My future post on how social games are discussed will focus on a dichotomy I’ll preview here; the narrative is split, either social games are “games” or they aren’t, “games” meaning some sort of experience presumably on-par with mainstream offerings like Call of Duty and WoW. Ms. Brathwaite, a VP of something at Loot Drop, thinks they are, and compares it to the early games of yore that were met with backlash in the media and legislature as ruining our youth, before eventually earning enough to lobby that same legislature to shut up (This, we call democracy). Social games have earned their fair share of bashing in a similar narrative, and Brathwaite has had enough!

Another guy defends social games by cheating in a game and showering himself with silver coins (not a joke) [http://bit.ly/gm1f53]

A very humorous story of a small social game company founder who sorta cheated his way to getting a platform to make a speech, only to be told he couldn’t have it because he cheated. Either he is great on his toes or he had a speech prepared in anticipation of his disqualification (either way, brilliant), and his short rant represents the other meme in the social games debate: social games aren’t games, but they make bank so screw the haters.

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Filed under Games, Social Games