News & Press

The job of the Vice President of the United States is one of the most vaguely defined in our political system, but it consists of two absolute necessities:

         1. Be alive in case the president dies

         2. Help the president get elected (or re-elected)

Last week Vice President Joe Biden failed miserably in his latter responsibility when he tried to rally support for Barak Obama by telling attendees of a San Francisco rally that "the Giants are going to the Superbowl!."

As we know now, the Giants will in fact be going to the Superbowl, but to the chagrin of San Francisco fans everywhere and as anyone who's ever watched an NFL game knows; the Giants play in New York (New Jersey to be precise). Old Amtrak Joe most likely confused this team with their baseball equivalent (who do in fact play in San Fran), but nonetheless the gaffe is sure to stay with him as part of his legacy as Veep.

Not just a comical punchline destined for SNL's cold open, Biden's mistake illustrates a crucial core competency to successfully bring a product to market: Know thy Audience. I don't need a focus group to tell me that people will be more receptive to the product I am offering them if they think I can understand their needs.

History is littered with examples of companies large and small that dove into new markets without a full understanding of their audience:

·   Disney almost bankrupted their new park in Paris because they didn't serve wine, a staple of the European meal.

·   Coca-Cola had to recall their 2 liter bottles from Spain because local refrigerators couldn't fit them.

·   An American airline promoted that they offered "rendezvous lounges" in Brazilian airports without realizing that in Portuguese, "rendezvous" refers to a place to have sex.

Mistakes like this can undo months of planning, be incredibly expensive and worse of all- indelibly harm a brand's reputation among a demographic. At Viximo we are constantly expanding into new markets, so it is crucial that we take the time to understand the habits of our new audience. Not all games, branding, or marketing tactics will work equally well across our portfolio. That's why we take the time to work with our publishing partners to learn about their users, examine successful games already in the area, and research behavioral and social tendencies of the region, to decide which of our various games and promotions will work best to maximize our audience's enjoyment. Doing this kind of legwork before launching in a new market ensures that we are never encouraging our audience to do something like root for the other team in a playoff game. ...

POPULAR SOCIAL GAME NOW ON YAHOO! GAMES AND YAHOO! MESSENGER

San Francisco – Nov. 9th, 2011 – Leading social games and apps platform Viximo has launched wildly successful resource management strategy game Backyard Monsters, developed by Kixeye, on Yahoo!.  The launch of the game on Yahoo! Games and Yahoo! Messenger marks a new relationship between Viximo and Yahoo!, which has 700 million worldwide unique visitors per month.

Backyard Monsters is one of the most popular games online and currently has more than 4.3 million active users on Facebook.  The game allows players to design and build towns for their monsters and challenges them to produce three types of essential resources, a town hall, facilities to make a monster army and storage buildings to hold building materials.  If they design their town correctly, players will be able to protect their buildings from invading monsters.  Backyard Monsters joins the town-builder simulation game Township, developed by Playrix, which was also recently launched by Viximo on the Yahoo! Games page and the Yahoo! Messenger client.

“Viximo’s developer partners have a unique opportunity to reach new audiences and be ahead of the curve by diversifying their distribution strategy, and our social network partners know they can count on us to be matched with the most immersive and highest monetizing social game titles,” said Dale Strang, CEO, Viximo. “Backyard Monsters is a top social game that will be a great fit for the Yahoo! audience.”

“Viximo’s platform presents a new and effective way for networks with a strong social context to integrate some of the best social gaming content in a way that will drive user adoption and monetization while providing a fun and engaging experience to our users,” said Lee Parry, director, Messenger & Mobile Communications, Yahoo!.  “We’re looking forward to adding top-quality titles such as Backyard Monsters to our millions of users on Yahoo!”

Viximo’s platform distributes leading social games to an international and fast growing portfolio of partners, matching the best social games to the world’s top social networks.  Optimizing for gameplay, virality, discovery and monetization, Viximo enables developers to quickly and easily diversify and globalize their distribution strategy. 

Viximo’s global network features more than 20 social networking sites around the world, including Tuenti, VZnet, IMVU, Gaia Online, MyYearbook, Quepasa, and Orkut, Brazil’s largest social network. Viximo has a global reach of more than 170 million. ...

Read an interview with Viximo's CEO

Wondering what the opportunity is for social game developers beyond Facebook? Our CEO, Dale Strang, sat down with Gamasutra to enlighten them on the subject. Some of the highlights:

• Many developers either think the off-Facebook opportunity isn't there, or is too difficult to take advantage of.
• While Facebook may be the single dominant global player, there are a number of high-quality, regionally targeted social networks with engaged audiences across the globe.
• Understanding these markets can be a difficult task for developers (this is where Viximo comes in).

While the freemium model originated in Asia, the North American social gaming industry has so far been evolving in an inward-looking fashion, focused on consolidating products and users in America or, generally, the Western hemisphere. However, recent trends suggest that the industry will begin to see some transpacific activity; there will be a push in Silicon Valley towards moving into other markets – especially to Asia where there is an existing history of and demand for social games – and an equal level of incoming interest from Southeast Asian developers looking to expand into the U.S. market and cross pollinate their offices, products and personnel.

Zynga acquired XPD media in China and Unoh games in Japan, a clear indication that the company has plans to grow eastwards. Zynga would need to localize its games for the Asian market but with such strong partnerships, the expertise is likely to benefit them greatly. Indeed, Zynga just launched its public beta for its first international title, Zynga Texas Poker, in traditional Chinese, catering to local cultural norms by offering prizes in denominations of the lucky number 8, such as 8,888 poker chips.

Other stateside game developers are also expressing an interest in distributing to Asian social networking sites. Earlier this year, Viximo conducted a survey of the industry’s top independent social game developers, and 35% indicated that they plan to distribute their games on RenRen in the next 12 months, while 32% plan to be on Mixi.jp by next year.

Interest from Asian side has also been strong: SoftBank Japan invested $150 million in Zynga and $10 million in RockYou, while Japanese mobile and social game developer DeNA is on an investment spree in the U.S. and having acquired or invested in four American gaming companies this past year, appear to be aiming to become a household name in the U.S. gaming market, particularly in the mobile realm.

Additionally, traditional video game makers in Japan are facing with a shrinking home market demand as the social games sector explodes. Following a fiscal year net loss of $316 million, Namco Bandai is preparing to supply two games to Facebook, and it is very likely that Capcom, developer of Street Fighter and Resident Evil, will also begin to offer social versions of these games on Facebook and other U.S. based social networks. China’s social networks tend to create their own games and have otherwise closed platforms and sites that are experimenting with open platforms are often accused of promoting their own games with more viral notifications than those created by third parties; thus, they are more likely to find success distributing on American social networks that are more open and third party friendly. ...

It took a while for social gaming to become accepted as a legitimate genre by the gaming giants, but major game publishers are now embracing virtual goods and the industry is heating up with activity.  Big software players like Electronic Arts and THQ are getting their feet wet in social games through acquisitions of independent studios and by launching free-to-play versions of popular console games. Ubisoft has entered the arena already, launching games like Tick Tock, Horse Gaga and Vineyard Country on Facebook, but has not seen much success with those titles.

On the console side, Microsoft is estimated to have earned over $600 million through virtual goods on Xbox Live, and Playstation is looking to social games to breathe life into its barren Home virtual world. We expect that these companies will inject huge amounts of production and marketing dollars to support these new ventures, especially as they compete with Zynga and Playdom, and many are heralding this as the inevitable end of the independent game studio. However, we believe that the “little guy” will actually continue to thrive in the social gaming sphere, particularly because the big players’ strategies will be lacking in three critical areas:

1. User Acquisition

Software gaming giants are used to traditional distribution models of in-store purchases or direct downloads. In contrast, social games have a very different purchase funnel: purchase intention is flexible and highly influenced by viral factors; commitment cannot be guaranteed because the games are free to play; and conversion to a paying user involves providing just the right kind of incentive at just the right time. Moving a player through the funnel and monetizing their activity require an intimate understanding of how social game mechanics tie in with their respective distribution platforms, and over the past year, social game studios have invested a lot of money and energy into learning these nuances. The big software developers who are just entering the space will pump marketing dollars into the social game sphere, but without knowledge of how to properly monetize users, their user acquisition costs will end up exceeding the lifetime value of the user. Instead, smaller social game developers will have a treasure trove of knowledge about how to aggressively monetize a smaller audience, and will succeed in cultivating a more profitable user base, through better game design and improved use of the social graph and viral notifications.

2. Distribution

Major game publishers entering the social space will play it safe and look to follow Zynga’s lead by distributing on Facebook – we have already seen Ubisoft launch three Facebook games. Facebook is attractive to game publishers because of its ability to deliver large audiences and because it is the only place where they can leverage their marketing budget, as no other platform has an advertising platform that they can utilize so effectively. But as described earlier, Facebook is oversaturated – there are over 550,000 active apps on the platform – and the big software players will fail to take advantage of the opportunity represented by so many other distribution channels because they will be so focused on Facebook. Instead, smaller developers will innovate in the way their games are distributed and see greater success this way.

3. Content

The online gaming industry operates like the Hollywood studio model: find a formula that works and create one mega hit that recoups all costs; after all, a large share of the gaming industry’s software revenues are generated just by the Grand Theft Auto franchise. Major game companies will take a similar cookie-cutter approach to social gaming and this will be a big flaw in their strategy. It’s no secret that current social games are all variations of the same theme – the numerous lawsuits between social game companies point to the lack of creativity – and users are starting to get worn out with the simplistic, repetitive game play dynamics of first generation of social games. And while the big players will be improve production values through larger budgets (including leading the march towards 3D social games), true innovation will be hard to come by in their offerings since many social gaming hits have come from acquired IP. As Zynga’s and Playfish’s acquisition spree slows down, its growth and innovation will also stagnate.

Instead, smaller, independent game developers will lead the process of improving game design and understanding how to convert players to payers during different trigger points within the game. They will also lead the way with game play innovation and making social games more social by adding text and voice chat functionalities between avatars, combined activities, tournaments and shared goals, and more interactivity between individual user environments.

Like our predictions for the future? Let us know what you think in the comments. ...

We’ve been saying this for a while: while Facebook is the biggest player in the market, it has now come to be synonymous with a cluttered marketplace, incredibly high user acquisition costs, and minimal access to viral notifications. The site has amassed half a billion users, but the growth of new social gamers on the site is steadily slowing down, with the drop off becoming exacerbated by increasingly stringent viral notification polities. In March 2010, Facebook reduced the effectiveness of notifications and 18 of the site’s top 25 games saw a loss in MAUs, including Farmville, which was dropped by over 4.5 million users over two months. In September 2010, Facebook came down harder on notifications by shutting down all feed items about games for anyone not playing games on Facebook. The impact of this change is yet to be seen but although Facebook needs social games to keep the site engaging, it is clear that it will remain focused on being a general social networking site and is unlikely to ever put the needs of game developers, such as improving discoverability of games through viral channels, at the forefront of the site’s functionality. Developers are realizing this and starting to look for other distribution options.

So what are these alternative distribution outlets?

Social Networks

While it is massive, Facebook comprises less than 30% of the worldwide social networking audience, and there are still millions of users beyond Facebook that can be monetized.

Other social networks are beginning to see the power of social games in helping them monetize user activity and providing a reason for users to keep returning to the site. MySpace is inviting game developers to work in its offices and collaborate closely to integrate social games; Hi5 is aiming to become a social game destination site; and niche social networks like Black Planet and QuePasa are making aggressive efforts with social games by working with Viximo.

For their part, some developers have also gained tremendous success by distributing their games entirely off Facebook; Vostu, the largest social game developer in Brazil, has more than 10 million active users playing its suite of games on Orkut. All of these moves point to an overall industry change that is afoot – social games will soon no longer be synonymous with Facebook, but become a standard feature on all social networks.Destination Social Gaming Sites

Despite having access to an audience the size of Facebook, social gaming companies like Zynga are feeling the pressure to diversify their distribution. The company has signed a 5-year deal with Facebook to use Facebook Credits, but is still pushing players towards Farmville.com, partnering with Google for additional distribution and is moving ahead with plans for Zynga Live, an independent platform where users will likely be able to play and socially interact between all of Zynga’s games through one platform. While these alternative distribution outlets for Zynga may complement its Facebook presence rather than compete with it, there is certainly a clear move to creating a destination gaming site that focuses on attracting casual gamers who want to play social games, not social networkers who might also be interested in harvesting a crop or raising a pet fish while they upload photos and comment on Walls.

Non-Zynga developers will also experiment with destination social gaming sites, mostly in an attempt to consolidate their players into one effective platform. Bigpoint, creator of Farmerama, is already seeing success with the dedicated Farmerama.com website, and with smaller players banding together to help cross-promote their games through tools like Applifier, it is possible that these same players might pool resources to create, and cross-promote, a destination site containing all their games.

Finally, Google’s recent acquisition spree has almost certainly confirmed its goal of launching a destination Google Games, and media companies are also making moves to incorporate more social games on their websites. MTV Networks, whose games sites (such as AddictingGames.com, Shockwave.com, Nickelodeon gaming sites and Neopets) are the number one destination for online gaming, recently entered the social gaming market through the acquisition of game developer Social Express. This raises the possibility that the company’s growth strategy involves harnessing the loyalty of its repeat users through social games that aggregate to create a social network-enabled destination gaming site.

A warning to destination sites, though: implementing Facebook Connect might be a tempting way to add a social quality to a gaming site and tap into the power of a user’s social graph on Facebook. But while Connect may seem to offer a best-of-both-worlds solution, some developers and site operators may find that it thwarts their efforts and siphons users away from their destination sites. Creating a destination site by leveraging the power of another social network makes the experience less about the site, and more about Facebook, defeating the purpose of going it alone.

Mobile

While the transition of social games to mobile might take longer for developers, and be tougher to accomplish due to very different technology and user experience requirements, the mobile platform will certainly represent an area of future growth for social games.

According to a recent study by Frank N. Magid Associates, over 5 million Americans are buying in-game goods on mobile platforms – to the tune of $168 million. It is becoming evident that successful monetization of mobile gaming mirrors successful monetization for web gaming—it does not lie in app sales or advertising, but in the free-to-play business model where players download the game for free, and pay to get ahead or enhance their in-game experience.

Mobile analytics firm Flurry also recently released data indicating that iPhone games, now enabled for in-app purchase of virtual goods, were generating an average of over $14 per user in June 2010, vs. $1 the previous year (before virtual goods could be sold within games). This exponential increase is only a precursor to the amount of growth that is coming to the platform as smart phone penetration increases and big players from the gaming and mobile industries start to enter the space. Zynga has already launched Farmville on the iPhone and iPad to resounding success; mobile achievement and leader-board provider OpenFeint is partnering with four game developers to develop a scalable mobile virtual goods platform; while simultaneously game studios, including Playdom and Zynga, are hiring mobile product leaders.  With Microsoft, Google and RIM also in the market for a slice of mobile gaming pie, the market is ripe for an explosion of virtual goods being distributed on the mobile platform.

Like our predictions for the future? Let us know what you think in the comments. ...