Hatchlings Games

Web Gaming 2.0 Revolution

$1 Billion Invested in 35 Virtual World Companies in the Past 12 months

I subscribe to Virtual World Weekly. For those involved in virtual worlds, social networking, massively multiplayer games or the web industry, I recommend that you do too. I pasted this week’s industry disclosure (yes thats right, every month there’s something fact-driven that you can show to potential investors) here:

$1 BILLION INVESTED IN 35 VIRTUAL WORLDS COMPANIES IN THE PAST 12 MONTHS

33 Companies Raise $196.8 Million, Two Companies Acquired for $810 Million

We have just released the data from a comprehensive study of accountable transactions that venture capital, technology and media firms have invested more than $1 billion dollars in 35 virtual worlds companies in the past 12 months, from October 2006 to October 2007.

Of the $1 billion, $196.8 Million was invested in 33 companies. Significant investors in the space include Redpoint Ventures, Charles River Ventures, Intel, and Rustic Canyon Partners. Media companies are also making sizable investments, including Disney, CBS, Time Warner, and GE/NBC Universal’s Peacock Equity Fund. The remaining $810 million went to two acquisitions: Walt Disney’s $700 million acquisition of Club Penguin and Intel’s $110 million acquisition of 3D virtual worlds graphics technology company Havok.

“Investors are not just venture capital firms, but also include major technology, media and entertainment companies,” said Christopher Sherman, Executive Director of Virtual Worlds Management. “The amount of money invested in this period of time is staggering. We don’t see any slowing in the market adoption of virtual worlds technologies and expect investment in the space to continue. In fact the market is growing significantly, with the rate of adoption of virtual worlds increasing as the technology matures and has more to offer both consumers and enterprise customers.”

Investment spanned the entire virtual worlds value chain, including technology platform companies, virtual worlds developers, service providers and tools providers. Business models of the companies raising capital vary, ranging from advertising and subscriptions to virtual item sales, to enterprise software licensing, hosting and services. The investment numbers and the future of the industry will be discussed in depth at the Virtual Worlds Conference and Expo.

Virtual Worlds Companies Funded from October 2006 to October 2007
Each company links to a full article about their funding

Source: Virtual Worlds Management

Granted, 70% of the 1 billion comes from Disney’s acquisition of Club Penguin. Those other $300 million private equity investments will one day grow into $300 billion. I am sure there are at least ten times more deals that are stealth or smaller. Will our own Quasr get investment? We are looking for a suitable investor, if you know any, please drop a comment or e-mail and we will give you a commission or maybe even recruit you into the team.

Areae’s Raph Koster blogged about the term virtual world again. This time provoked by Christian Renaud of Cisco. Personally, I/we have something to say about virtual world categories too.

The web itself is the best example of one. Among all internet protocols formed, the web (www & http) is by far the most popular and useful. The web itself is a virtual world. I think with MetaPlace, Raph and Areae hits it right on. I won’t be surprise if they eventually captures the biggest market.

I am curious whether they have a business model that can lock their MetaPlaces’ (virtual worlds built on MetaPlace) intellectual property. Let’s say someone makes WoW with MetaPlace and 9 million subscribers pay $15 bucks per month, will MetaPlace earn a cent? How do they ensure that? Are they going to “lock” virtual world makers to their payment system?

October 5, 2007 Posted by | Virtual Worlds, Web 2.0 | , , , | 2 Comments

World of WarCraft vs Habbo Hotel

Habbo Hotel vs WoWDuring this year’s Austin Game Developer’s Conference (the leading MMO developer conference) we saw (or read, like I have) mind battles between MMORPG developers and the web social web world developers. One of the aftermaths of is this in the form of Gamesutra Question of the Week: World of WarCraft vs. Habbo Hotel. The exact question is:

“Following the Austin Game Developers Conference last week, how important do you think online worlds such as Habbo and web-based social gaming in general is to the future of online games, compared to existing game biz successes like World Of Warcraft? What can WoW learn from Habbo, and vice versa?”

I can’t wait to know what people are saying on it.

September 17, 2007 Posted by | Game Design, Web, Web 2.0, Web Gaming 2.0 | Leave a comment

Installing mongrel on Debian / Ubuntu

While installing mongrel on Debian / Ubuntu, you might encounter the following error:

Building native extensions. This could take a while…
extconf.rb:1:in `require’: no such file to load — mkmf (LoadError) from extconf.rb:1

This can be fixed by getting the ruby1.8-dev package using apt-get [replace ruby1.[x] with the version you are using].

sudo apt-get install ruby1.8-dev

Continue installing mongrel, mongrel_cluster, etc.

April 24, 2007 Posted by | Programming, Web 2.0 | 2 Comments

Top 10 links to inspire the internet entrepreneur in you

1. Steve Jobs Stanford Commencement Speech 2005

Watch the Legend speak wisely about life. Listen to this yourself, with your friends, family and colleagues.

2. Web 2.0: The Machine is Us

The Internet has changed the world and made many folks millions of dollars. Especially the folks from the Web. First, understand what the new Web is with this superb introduction of the cultural implications of the Information Technology, the Internet, the Web and Web 2.0.

3. What is Web 2.0?

The original article on the million dollar question.

4. Book: The World is Flat by Thomas Friedman

Read this especially if you are in a developing country. Take advantage of the flat world. If you do not understand the flat world, you do not understand the world as it is today.

5. The Banality of Heroism

Heroism is for everyone. YOU are destined and born with the responsibility to be a Hero.

6. Venture Voice

A very informative and inspiring podcast site.

The Venture Voice start-up show is a must-listen.

7. TEDTalks

The annual Technology, Design and Entertainment (TED) forum gather world leaders and opinion shapers. The presentations are recorded and shared on the site as TEDTalks. The presentation are short , very high quality and have immense value.

8. TechCrunch Blog

Keep up to date with the industry and what others are doing!

9. Book: Getting Real by 37 Signals

Getting Real is a very, very good book about building web software and entrepreneurship in general. Do yourself a favor and read the whole book in one-sitting. They have a free e-book edition.

10. Powerpoint 101

When you get that million-dollar idea, you should immediately prepare powerpoint slides of the pitch before doing anything else. Guy Kawasaki teaches you how to do so.


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March 29, 2007 Posted by | Entrepreneurship, Web 2.0 | 4 Comments

iinovate interviews Google CEO Eric Schmidt

Very interview with Google CEO, Eric Schmidt.

Part 1:

Part 2:

Now go change the world!

March 28, 2007 Posted by | Entrepreneurship, Web 2.0 | Leave a comment

Creating Passionate Users

This is a link to a superb article about user communities, particularly on the relationship between building a User Community and its return of investment (ROI).

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March 25, 2007 Posted by | Entrepreneurship, Web 2.0 | Leave a comment

Web Gaming 2.0: Trading Card Concept on the Web

Edit (May 2007): Quasr.com is now on Alpha Testing. Join us!


This article is the first of many; where everyone in the world can join us as we experiment with the concept of Web Gaming 2.0.Financial realities of Hatchlings Games have pushed us into a scenario where we must maximize Quasr’s chance of success. We should not leave anything to chance. The opportunity on the web and games are so great that the convergence of the two is probably too alluring for any entrepreneur and/or game designer to ignore [read insane competition].

Not leaving anything to chance might sound ironic since our game is based on user generated content; that is, we are already giving our users chances to screw up our game. After some soul searching, reflection and deep conversations, both Zie Aun and Slade came to the same conclusion – that we must trust our users if we aim to be successful in this user-centered future.

At this point, there is a big hoo-ha on the business & design world about the future of content. Pundits and web & game industry leaders insists that majority of content should be user created. Early adopters of such radical concept (i.e. Wikipedia, Flickr, YouTube, MySpace, etc) have seen tremendous financial & branding success. Due to technological and an ongoing cultural shift, customers are now simultaneously the producer and consumer of content.

Games are heading towards the same direction too. It is getting harder to start a company, creating games for gamers for a living; but that forces us to think, to start our engine of innovation. We must constantly be thinking outside the box, to innovate and be a leader. Industry leaders (game designers, producers, studio heads) have been discussing emergent gameplay design (few years), planning for user generated content (more recent), and creating successful immersive worlds. The above together with the success of game MODs, MMOGs (i.e. WOW), web game worlds (i.e. Neopets) and even 100% user generated virtual world (i.e. Second Life) are pushing games towards the same direction as web 2.0 services.

The main platform for distributing such user generated content is the web. User created content requires a widespread and easy to use distribution platform. The web is such a platform. Services like blogs, YouTube, Flickr, and Digg wouldn’t be possible without the web. These websites are successful because they are disruptive. They maximized the web to beat their competitors, which are all traditional content publishers and distributors.

Trading card concept

Trading card games, a genre pioneered by Wizards of the Coast’s Magic: the Gathering (M:tG) has all the basic ingredients of an addictive game: good gameplay (pacing set by tempo, strategic depth, and control-decontrol) and game mechanics (goal-reward / collectability).

If the game is popular enough, it can be extremely profitable for the game developer. Trading card game players are driven by their primal urge to collect, compete and achieve. Pokemon and Yu-gi-Oh are two extremely popular trading card games since the release of M:tG. All three games are still making money for the developers.

The problems game developers face with physical trading card games were usually:

  1. Content creation; the design and illustration of few hundred cards per set, and the cost that goes into it
  2. Printing cost for those shiny cards.
  3. Marketing; as with most game genres, established brands are hard to compete against, even monopolizing.
  4. Distribution; the need to setup distribution channels all around the world.

Web 2.0

Go Digital: eliminate printing cost

By creating an online game (as a downloadable client), Quasr would have solve problem number 2 and in a way number 4. There would be no need for us to print cards. The cost equation for card has changed from the number of cards printed in volumes to the number of cards a person owns.

The more card a player owns, the more profitable Quasr is. The profit margin for a single player increases every time he buys a new card. The server cost remains a constant for that one player.

The Web: the most distributable platform

Having the online game as a downloadable client still doesn’t solve problem #1, #3 and it only partially solves problem #4. To further the solution for distribution, we place the game completely on the most distributable platform – the web.

Without having to download a separate client and asset files, we dramatically increase the chances for site visitors to click on “play”. “Play” wins vs. “Download”. Granting each account a sub-domain (e.g. http://johntan.quasr.com), we increase the desire of players to virally (via links / RSS) spread the game.

User created content

A web 2.0 site trusts its users. It allows users to create, edit and moderate content. The developers of the site are also its users. There is very little distinction between the developers of the site and its users; both are the producer and user of its content. The developers become platform creators or service providers. The concept of internet services can be extended to trading card games.

Quasr too will feature user created content: we allows users to create card and art based on certain rules. We give the players a set of basic cards that they can add abilities and stats to, obviously based on some card-modifying rules. Residents of Quasr can even draw custom art for a card, but they first have to let the community vote for style & quality.

Conclusion

Quasr.com is now up for Alpha Testing, so go and try it. It is still very crude (just like this article) and does not have the user-created features yet. As of now we are still struggling with designing the best gameplay

I hope someone finds an inspiration from here. If you do please leave a comment and start a dialogue with us. We need your feedback. We cannot take this on alone; fortunately we are joined by great game designers such as Raph Koster with Areae. Do join us as we experiment with this, to bring games and immersive worlds to the web.


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January 1, 2007 Posted by | Entrepreneurship, Game Design, Game Industry, Quasr, Trading Card Game, Web, Web 2.0, Web Gaming 2.0 | 5 Comments