These Creators Are Killing It On Mobile

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Mobile, unsurprisingly, is making it easier than ever to create and share content in new and interesting ways. With apps like Vine, Instagram and Snapchat that create content specifically for and by the mobile audience, there are creators that inevitably stand out and catch the attentions and imaginations of brands and their followers.

We’ve highlighted just a few folks that are generating a lot of interest in this space and have the follower count to boast it. They’re working with incredible brands of all sorts and have a captivated audience that continues to be charmed by the short-form content they specialize in, whether they are Instagram photos or videos, Vine clips, or Snapchat Stories.

Instagrammers of Note

Jared Chambers is a photographer based in Los Angeles, California with over 300,000 followers on Instagram that are fans of his stunning landscape photos. Jared perfectly captures the wildnerness with its angular natural monuments and serenity. He has previously worked with Nike as part of #ProjectFlySF in which Nike tapped numerous Instagrammers to do a run in Half Moon Bay wearing the brand’s signature shoes.

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Anthony Danielle helms popular Instagram account @takinyerphoto, capturing scenes of every day New York life, highlighting everything from architecture, to street art and the city’s fashionable. He’s never short on inspiration or photographic subjects and has already done work for Puma, the W Hotels, Evian, Armani Exchange, Kerastase, Michael Kors and others.

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Bex Finch is a 27-year-old freelance photographer and boy is she ever in demand by brands. Bex is just shy of 200,000 followers and is the creator of the popular #fromwhereistand hashtag where users take photos of their shoes. Bex has been able to travel abroad for tourism ministries in Israel and Iceland and tagged along for tours with music groups Grizzly Bear and Bon Iver.

Loading#fromwhereistand (stood) with trusty @tretorn! #tretorntales

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Viners of Note

Brittany Furlan ranks within the top 5 creators on the platform. When taking a look at her profile, it’s easy to see why. Brittany has a keen sense of comic timing and her own brand of slapstick that marries well with Vine’s 6-second limitations. Here’s a Vine she created just for Jack in the Box:

Jack and Jack are comprised of comedy duo Jack Johnson and Jack Gilinsky that are making videos on Vine that Gen Z’ers relate to and find hilarious. They have 4.5 million followers on the platform and are quickly approaching 1 billion loops.

 

Snapchatter of Note

Going viral on a social platform that prides itself in creating content that disappears takes a heap of talent to stand out in. Shaun McBride aka Shonduras accrued over 140,000 followers and was courted by brands like Taco Bell, Disney and MLS, for his adept skills at combining real photos with hand drawn overlays that are quite fantastical. We featured him previously on [a]listdaily here.

 

Why Gaming’s Explosive Growth Continues

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The Global Games Investment Review for Q3 2014 from Digi-Capital has been released, and it shows some important trends in the gaming industry. Tim Merel, managing director of Digi-Capital, noted the report’s highlights:

  • Megadeals drove $12.2 billion in games acquisitions to Q3 2014, already doubling full year 2013;
  • There were five “billion dollar” deals (Mojang, Oculus, Giant Interactive, Twitch, FunPlus);
  • American (five) and Chinese (five) buyers dominated the top 10 acquisitions to Q3 2014, a major shift from Asian buyers taking 9/10 in 2013 and 8/10 in 2014; and
  • Games investment returns skyrocketed to>11x to Q3 2014.

Digi-capital sees the total game software revenues worldwide reaching $100 billion annually by 2017, with the main driver being mobile games. The mobile game business could grow to $60 billion by 2017, which is a compound annual growth rate averaging 23.7 percent between 2011 and 2017. Meanwhile, Digi-capital sees console game revenue staying relatively flat, with the increasing sales of the latest consoles managing to offset the decline in older consoles but not exhibit much growth.

This is disheartening news, but it goes along with the general view of analysts in the game industry. We haven’t heard much about this lately, but if you think back about a year or so many game company execs were excited by the prospects of new consoles. Of course, everyone who had a stake in the success of new consoles was inclined to be as positive as possible, because for the most part new console purchases are about the customer’s belief that over time, the number of cool games this new hardware lets them play will be worth the cost of the hardware.

Still, one year in to the latest generation of consoles, it’s not entirely clear where we will end up overall. Sales of both the PS4 and the Xbox One continue to outpace their predecessors, yet sales of software for those consoles is still soft. Part of that can be attributed to tracking issues, because an increasing percentage of games (10 to 15 percent according to some publishers) are being sold digitally rather than in retail stores. Yet tracking of digital sales is getting better, and we don’t see a huge surge in sales there.

Publishers are getting by with increasing amounts of DLC for all titles, driving up the revenue (and, effectively, becoming a price increase that you can elect to take or not). Still, the increasing quantity of DLC has a downside as well — it keeps players engaged with a game for far longer, thus reducing the desire to buy the latest version of the game. This is clearly illustrated by Sterne Agee’s projection that the upcoming Call of Duty: Advanced Warfare will sell only 17 million copies, 15 percent less than the 20 million unit sales of last year’s Call of Duty: Ghosts. Which, in turn, is less than the sales of the previous version of Call of Duty.

This slide in the sales of the latest version of the top franchise for Activision has worrisome implications for all publishers. It’s not that Activision isn’t putting enough resource into it — the company now has three studios working on the franchise, giving each one three years to produce the latest version. The issue really is a result of two factors: The drive to give the top franchises a yearly major release (essentially, a new game), and the now obligatory DLC that appears every month or two. Those factors, combined with the increasing importance of multiplayer play, mean that players have less desire to shell out $60 for a new game that may or may not be as much fun as the older version they are currently playing.

It’s no wonder, then, the game publishers are turning towards faster growing markets. Even Blizzard, famously focused on PCs, has been finding success first on consoles (with Diablo III) and on tablets (with Hearthstone doing amazingly well for them). Now Blizzard’s opened up to possibilities on mobile, so we can probably expect more mobile ventures in the future. It will be interesting to see how well Activision does the Skylanders: Trap Team on tablets, which marks the first time the franchise has exactly the same content on tablets as it does on consoles — and at the same price point, too.

Mobile is clearly the best overall growth market for games on a global basis, and any major game company is going to want to have a piece of that action. The Digi-Capital report shows how important games are to the overall mobile app ecosystem, with games reponsible for by far the largest revenue share out of all types of apps — 74 percent of app revenues come from games. More than that, games handily beat even social networking apps for the amount of time spent, with 32 percent of all time spent on smartphone apps being devoted to games, with social networking coming in second at 24 percent. On tablets, the amount of time devoted to games is a staggering 67 percent. It’s easy to see why some people are calling tablets “the new gaming console.”

Digi-Capital also noted the record mergers and acquisitions (M&A) of this year, which has totaled $12.2 billion so far, already twice the amount for all of 2013. Interestingly, China and the USA had equal amounts of this activity (5 out of the top ten deals), compared to last year when China dominated with 9 out of the top 10 deals. Still, Asia is the biggest driver of mobile revenue growth, and Digi-Capital projects that Asia and Europe combined could be more than 80 percent of the total revenue for mobile and online games combined.

There are two very clear messages in this report: Mobile games are going to be the leading segment of the industry very soon, and Asia is the region with the highest growth potential. Any major player’s strategy has to be measured against those two factors, and companies that lack a major effort in both of those areas will likely be falling behind the competition.

ZAM Network And The Future Of MMOs

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The community that has built up around games has become larger, more vocal, and more valuable to publishers in the past decade. The tools of social media, forums, livestreaming, and video have made it possible to share knowledge and passion with fans of games worldwide. Aside from company sites, there’s a healthy set of third-party sites where fans can gather around favorite games, and one of the biggest is ZAM Network: “The largest collection of massively multi-player online gaming information on the web” as they style themselves.

This year marks the fifteenth anniversary of ZAM Network, and the site has grown to over 9 million unique users and 400 million pageviews per month. The ZAM Network offers a wide variety of information, both in-game and out-of-game, on its dozens of different web sites that include Wowhead, LolKing, and DestinyDB. Users can find everything from maps, databases, and walk-throughs to game interface add-ons and customizations for many of the most popular games out there, including World of Warcraft, League of Legends, Team Fortress 2, and Day Z, just to mention a few.

The [a]listdaily spoke with ZAM Network’s president Cody Bye, and the director of content Micheal Bailey, about the ZAM Network, its future, and the changing game market. What follows is an edited transcript of their remarks.

[a]listdaily: How did ZAM get started, and how did it get to where it is today?

Cody Bye: ZAM started fifteen years ago, and neither of us where actually there at the time. It started as a fan community site by a few individuals, named after one of their user names on the site. In 1999, when this all started, there wasn’t anything on line that was incredibly in depth. There were some forums and some written-out guides, but nothing really intense. So this individual Allakhazam started up a web site where moderators could go in and submit information about EverQuest into a database, and people could use a search engine to find information about EverQuest. That grew bigger, to where people could download a client that would observe how people were playing the game, and pull in information out of that. It became the de facto place for people playing EverQuest to find information. It became hugely popular, and kind of exploded from there.

Cody Bye

From that start, ZAM has metamorphosed along the way. The next biggest point in our growth was acquiring additional web sites, one notable one was EQInterface and WoWInterface, where we have add-ons for EverQuest and World of Warcraft. The next big step was the purchase of Thoughtbot and then Wowhead after that. Thoughtbot was the next step in databases for MMOs, and was the default place where WoW players looked for information on how to play World of Warcraft. We’ve just kind of progressed from there.

[a]listdaily: How has the MMO player community changed in recent years?

Cody Bye: I think the biggest thing that I’ve seen, having started in my teens playing EverQuest, is that so many games are incorporating more and more of the things that made MMOs compelling in the first place. A lot of people are moving to more quick session based games like League of Legends or Destiny, but they want those games with more persistence than a Call of Duty or a Counter-Strike. Those games obviously still have very compelling user bases, but I think a lot of people who may have initially started playing MMOs played them for that persistent element. You know, ‘every time I play I’m getting stronger, better gear, having a better social experience.’ The original games that were out there, the Quake 3‘s and the Unreal Tournaments, didn’t really have that. Now you see more and more of those MMO elements incorporated. The EA Sports games have a huge amount of persistence in them. Maybe the genre of EverQuest or World of Warcraft wasn’t your cup of tea, but if you wanted to have that persistent, social experience now there’s a variety of games that are incorporating those persistent elements.

[a]listdaily: Is the subscription still a viable option for new MMOs?

Micheal Bailey: In 2011 if you ever asked somebody about a game coming up that was free-to-play, they would immediately dismiss it as crap. “Free to play game? It’s crap, something that’s imported from another country.” That would be the end of it, nobody would want to play it. But now, when you’re looking at subscriptions, it’s “Oh, I guess they don’t want people to play their game because I have all these games I can play for free.” Between 2011 and 2013, we completely flipped between free-to-play games being crap and now they’re the standard. The only subscription game that has survived is World of Warcraft, and that’s pretty much it.

Micheal Bailey

[a]listdaily: Will World of Warcraft ever go free-to-play?

Cody Bye: Internally they probably have a threshold, I can imagine they have a number where they say it’s no longer viable for us to continue to have a subscription service. It’s my belief that once they flip that free-to-play switch they’ll have a huge influx of people that are willing to come back and try it for free. That being said, from a business perspective there’s a reason why almost every utility like cable or phone has a subscription service, because you always know how much you’re going to make each month. With free-to-play gaming it’s much more difficult to determine. With World of Warcraft it might be a little easier to determine, now that they’ve got some metrics by doing Hearthstone and Heroes of the Storm. Without those metrics, going free-to-play is still a risk for them. I think as long as it’s still a risk they won’t do it, but when they hit that threshold number they probably will very seriously consider it. I don’t know how long in advance they will message it, I’m guessing a pretty long time, but I don’t foresee that happening for a long time.

[a]listdaily: What does the future hold for the ZAM Network?

Micheal Bailey: We have a lot of perspectives on the management team, a lot of different backgrounds. We know that the sites that we built for the games that they represent are perfect for those games, but a game that releases this year like Elder Scrolls Online is not going to get the same site as a game from the past. It’s going to get a different experience, and we tailor those experiences to remain current and get the best experience for the user.

We know that people want to create their own fun, and that’s possible in a web site. When you go there you feel like this is your home page, in a sense. I go to Reddit every day, and that’s one of my home pages. That kind of experience can exist in any field, where you can create your own experience and really have it all, be with your friends and see what everyone’s doing without leaving that area. That’s what games do, and that’s totally doable in a site. There’s mobile stuff that needs to work into all this — mobile has turned into small PCs in a sense. There’s an interesting blend of how you deliver the content, and now we want to focus on how we allow them to create their own fun, and that’s what we’re doing right now.

Five Questions With JennXPenn

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Jenn McAllister is well-known in the YouTube sphere as JennXPenn and at only 18 has already worked with the likes of Hulu Plus, Sears and Old Navy, doing brand integrations on YouTube. “For me it’s not really about the brand as much as its about the video,” said Jenn to [a]listdaily.  “I only do brand integrations I actually like or things I actually use or would tell other people to use. I want it to be more genuine.”

Jenn doesn’t just only have over 1.5 million subscribers on YouTube, she’s also got a sizeable following on her Instagram as well, with 1.2 million followers there. We talked to Jenn about her recent campaign with OurTime.org, what’s great about being a YouTuber and what’s brewing in her future.

What is the most fun thing about being a YouTuber?

Well for me, I think , obviously the most fun thing is making the videos. I like being in front of the camera as much as I like editing the videos. Something that came out of this that I didn’t even realize is the events that we get to go to like Vidcon and Playlist— those are always so much fun even though there’s not many events throughout the year, but when we get the chance to do them, they’re really fun to go to.

What is it like meeting your fans in real life How crazy is it?

It’s so crazy because on the Internet it’s hard to realize that behind the number, there’s actually a real person there. When you go to to these kind of events, it kind of just puts a face to the number and it makes everything so real. It’s really cool and everyone is so nice and supportive and you get to meet them and see what they have to say.

So you got to work on a really great cause recently, which is encouraging people to vote. How was that?

It was really fun. I like being able to entertain people, but at the same time, it’s good to talk about more serious issues.  I’ve talked about things on my channel like bullying, anxiety and loving yourself for who you are. Getting to with with Our Time and talk about voting which is also really important was a really fun thing to do.

If you could work with anyone — a brand, person or other YouTubers — what would be your dream team?

I like Vitamin Water a lot, I think it would be cool to work with them, but it just depends on who’s in the space and who’s willing to work with YouTubers. Since it’s such a new thing, it’s all just coming into place right now.

What’s next for you?

We’re working on a lot of things right now so everything’s in talks or in the works. Some projects that are close to being finished or being announced are that I am working on a [gaming] app which is going to be really exciting and also a podcast.

 

A Massive Hit Game Is An Existential Threat

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There are so many game developers struggling just to make a living, and moving from one game to the next, that it may seem crazy to worry about the rare case when a game company has a huge hit. Yet there are dangers inherent in a massive success, and some companies don’t seem to be aware of them.

What can success do that’s harmful The seductive power of a successful game can harm a company’s long-term prospects in a number of ways. The drive to produce new products can decline. Companies often spend wildly or go on massive hiring sprees. Executives can start believing their own press releases and miss danger signs or market signals. Sometimes audience tastes or technology changes rapidly, and a hit product can become a dud with amazing speed.

Of course, a highly successful game throws off massive profits, which is a good thing… isn’t it? Not always. If a game’s success is not sustainable in the long run, early profits may be squandered on expensive luxuries that are not investments in the company’s long-term health. Companies can burn brightly and then fizzle out when tastes change.

A company that’s likely to survive and grow for a long time will usually do so by having more than one reliable hit. Yes, some games can seem to an unstoppable hit — until the success stops, or sometimes just fades away. Take World of Warcraft, for example. That game has been at the top of the MMORPG market for many, many years. At its peak in 2010 the game had 12 million subscribers, but that number is now under 7 million. You can bet that this year’s Warlords of Draenor expansion will boost that number, but it seems very likely that the boost will wear off in a few months (as previous expansion boosts have) and subscriber numbers will go back to a slow and steady decline.

At this point it seems hard to imagine that Blizzard can find a way to revitalize World of Warcraft and once again start growing the subscriber base from year to year. Perhaps fully going to a free-to-play model might do that, but there’s no particular reason to think it might. Has the game somehow become a bad game Not at all. It’s just that the marketplace has changed, and gamers have many more options than before, including many excellent free-to-play MMORPGs. Fortunately Blizzard has other games that are doing well (Diablo III and Hearthstone), and some strong prospects in the works (like Heroes of the Storm).

Valve is a company that is not in any immediate danger, but they’ve had some serious hits in their time. They must have a lot of cash tucked away from the amazing success of Steam, which continues to reach new heights of subscribers (now in the neighborhood of 75 million). The continuing river of cash from Steam has, apparently, reduced the company’s drive to get new games out the door. Where’s the next Half-Life game There’s really no hurry. Besides, DOTA 2 is doing a terrific business.

There is a danger here for Valve. What if Steam starts, well, losing steam? There is competition out there, and it’s good to remember that the overall PC market has been in decline for the last two years (though it’s started growing again, but not in ways that benefit Valve). Valve could not replace its revenue from new games in any short time frame. And just because some products can taper off gradually, giving a company years to adapt, it doesn’t always happen that way. Just ask Blackberry how fast a product can go from #1 in the market to barely selling.

The news today that Rovio is laying off 130 workers clearly shows the danger of a hit product. Rovio created Angry Birds after more than fifty games that never had much success… and then they hit the jackpot. The company expanded rapidly, and made statements about becoming the next Disney or Pixar. A couple of years and many brand extensions later, the fact is that Rovio has yet to produce another hit, and now has to cut back because it staffed up in anticipation of continued growth.

There are companies who have figured out that they must make the transition away from depending on a single hit. Mojang, for instance, where the strategy for founder Markus Persson was to sell the company to Microsoft for $2.5 billion. Wooga has completely revised its product development process to try and come up with a regular supply of titles that perform well, and staffed accordingly. Zynga has essentially torn up its previous list of products in development and is generating a broad slate of titles designed for reliable revenue.

Other companies like Supercell have been slow to staff up in response to major hits, which is a prudent response to the reality that someday the market may turn against you… and there’s no guarantee that future titles will do anywhere near the same business as Clash of Clans.

An example of a successful one-hit wonder is Riot Games. Their League of Legends game is a massive hit, bringing in somewhere close to $1 billion in revenue this year, according to estimates. The team at Riot continues to work hard on the game, with regular releases of new content and the best eSports league in the world. But Riot has yet, in Riot president Marc Merrill’s phrase, “to make the ‘s’ in Riot Games mean something.” The company is entirely dependent on League of Legends for revenue. That’s all well and good while the game is growing rapidly, but at some point they will have reached all the readily addressable market of potential League of Legends players. They may keep that market enthralled for years… or perhaps some technological shift, or a competitor, might make the audience dwindle away.

If Riot waits until the audience begins to fade to start working on another game, that’s too late to keep revenues at the same level. The company may be forced to cut back sharply, or make big acquisitions, or some other dramatic move. A safer strategy to keep revenues up is to invest in some other games, similar or not, and start to see if the company can build up some other franchises. Of course, Riot is backed but the goliath that is Tencent, so there’s plenty of runway ahead – potentially.

At this point, though, it’s fair to wonder if Riot is ever interested in becoming a diversified publisher at all, or whether it will just focus on League of Legends and continue to size itself appropriately to the current state of that game’s fortunes. That’s a perfectly acceptable strategy so long as the investors are happy with it, and Riot’s only investor now is Tencent.

The massive success of Riot is similar to Wargaming, which has catapulted to enormous size on World of Tanks. However, Wargaming has always had plans for more games, and while World of Warplanes is still small in comparison to World of Tanks, it’s growing. The company will be releasing World of Warships soon, and World of Tanks Blitz on mobile seems to be doing quite well. The company doesn’t have a broad array of hits yet, but it’s clearly working on producing a portfolio of successful products.

A one-hit wonder can survive for a long time on its hit, if the company is properly sized. Tetris is still going strong after twenty-five years, but that game isn’t supporting hundreds of employees, either. Nor is Tetris trying to be the basis of a company rivaling Disney. It’s all about properly aligning the company with its goals and its products. Transforming a company from a one-hit wonder into a long-term, sustainable game publisher with a diverse portfolio of products is not an easy task.

The real caution sign here is for investors. Sure, a one-hit wonder may go public after posting astonishing sales figures… but before you buy that stock, think about whether the company has a sustainable strategy for product development that can keep regular moneymakers arriving. Or, at least, that the company isn’t overspending on things that won’t help it create that diverse portfolio.

Yes, the games industry is a hit-driven business. But are the top revenue producers for Activision or Electronic Arts the same as when those companies began Not at all. Both companies have several strong, proven brands that generate reliable profits year after year. Both companies are always investing in developing new evergreen brands that can join the pantheon of profitable products. Both EA and Activision know very well that the market is always changing, and to stand still is to lose ground.

Don’t feel bad for the one-hit wonders – they have one more hit than most game developers. Just be wary about investing in them. And if you happen to be in a company that has a hit game, think about what that means for the company’s future before you start spending all that money that’s pouring in.

What Is A View On Vine Worth?

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Influencers build audiences with great content, interesting stories and an authentic connection to the people who follow. As marketer it is our duty to connect brands to these audiences on mobile. A great mobile platform for short form content is Vine.

We’ve run dozens of campaigns on YouTube where creators integrate the brand’s messaging into the video and based on the complexity of the campaign, the customization of the content, and the high-touch nature of influencer campaigns, we value a video view on YouTube at $.10 when the video is chosen by the audience to be watched; not a paid media placement. In cases where the campaign is very niche that value will increase to $.12 or $.15.

But if a Vine loop in comparison is just six seconds, how much is a Vine loop worth

A reach out to Twitter reveals they don’t have any hard benchmarks on the value of a Vine loop. When a statistically sound study is published, or when Twitter reveals the value of a loop we’ll take that information into account. For now we took our own path to determine the value of a Vine loop.

Determining the Value of Online Video

One creative director at Ayzenberg mentioned that it takes 4-5 loops of a Vine to understand the message and that’s an interesting point, so we compared VIne to existing video ad models below to help determine what the cost of a view might be.

  • 30 Second Spots: These are sold across programming to develop reach and frequency for advertisers. Let’s call this 100 percent of cost for a TV spot.
  • 15 Second Spots: These are sold at a premium in many cases. Half the length of the ad is sold for 50 to 70 percent of the cost of a 30 second spot. These ads tell a full story and are used by media buyers to extend reach and frequency for lower cost than their 30 second counterparts.
  • 10 Second Sponsorships: Sold as caption sponsorships these ad units will include voice-over and banner as a show goes to commercial. In most cases these ad units don’t tell a complete story. These ads are 33.3 percent of a 30 second placement, and cost between 20-45 percent of a 30 second spot. In some cases the advertiser is paying a premium to own this inventory.

A Little Bit About YouTube’s True View Ads

This ad unit requires the user to watch a pre-roll video for at least 30 seconds. If the ad unit is shorter then the viewer is required to watch the entire duration of the ad. For longer ads, if the viewer skips it, the advertiser is not charged for the partial view. Depending on targeting the cost per view (CPV) is $.05 to $.08, but the cost is entirely based on an auction model where supply and demand determine pricing. Certainly the CPV can be as high as $.15.

ION has run dozens of influencer campaigns where creators who have amassed audiences integrate the brand’s message into the video. Based on the complexity of the campaign and the high touch nature of influencer initiatives, we value these ad units at $.12 to $.15.

This cost is higher than True View Ads because the messaging is not intrusive, interruptive or in the periphery of user attention. Users choosing to watch the influencer, the video and consume the endorsement are more apt to take cues from trusted voices rather than ad messages. The ultimate length of these videos are variable to the content, the creator and the interest of the user.

What A Vine View is Worth

Vine condenses the format into just 6 seconds and in that time frame, an entire story can be told.

On par with the shorter length 6 seconds is 20 percent of the “30 second standard,” so every loop is worth 1/5 of a standard 30 second view. Based on this model 5 loops equals one equivalent view. With a 25 percent premium, similar to other video ad units, 1 loop equates to ¼ of a view; 4 loops is one equivalent view.

So, in two different paths we get to 4-5 loops equating to one equivalized view. Since a YouTube influencer view is valued at $.10 that places the cost of a Vine loop at $.02 to $.025.

In other words, 30 seconds of loops, 5 loops, equates to a single view.

 

 

The PayPal Spin-Off: What It Means For Digital Gaming

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With the news of eBay spinning off PayPal into its own publicly traded entity making the rounds, the question emerges what the future holds for PayPal. As one of the strongest digital payment brands in the world, the payment solution provider is a household name among digital gamers everywhere. After its acquisition by the online auctioneer in 2002, PayPal slowly but surely moved away from its parent company, as it sought to innovate and compete in markets less compatible with eBay’s business.

Moving to Mobile
Processing well over $200 billion in payments in the past year alone, and counting roughly 153 million active digital wallets worldwide, PayPal has its own battles to fight as the online payment market moves toward mobile.

What has always set PayPal apart from its competitors was its ability to appeal to early innovators. Central to its global success has been its propensity to facilitate payments where other options were either too expensive or cumbersome. Gamers, to be sure, love PayPal. In the global digital games market, PayPal is the best known brand in most of the top markets.

Emerging Slowly, But Surely
Better still, PayPal is starting to pop up in markets that are traditionally dominated by credit cards. In one of our recent studies we found that the processor has room to grow in markets that recently opened up. Gamers lead the charge here, as markets like Poland and Russia spend a combined $1.5 billion annually on social, mobile and free-to-play games. In China, eWallets facilitate 44 percent of digital game transactions, compared to only 19 percent in Japan. Having earned it stripes in Western markets, PayPal has a leg up on localized payment options for digital games markets, as publishers look for reliable payment processors when entering new geographic markets.

Top Payment Brands
In a world where localized payment options are generally the most popular, PayPal has managed to build a global presence. Among top European markets, well over half of digital gamers has an active PayPal account. And despite the incumbency of credit cards in the U.S., PayPal accounts for 26 percent of digital game transaction, by volume. This will prove to be a key strategic strength as even platform companies like Apple, which recently announced its Apple Pay solution, enter the payment space.

So really the question at hand is — now that it’s all grown up and moved out of its parents’ house — what will digital gaming mean for PayPal?

The [a]listdaily spoke with SuperData CEO Joost Van Dreunen to find out more about the changes in the digital payment space and how it might affect the rapidly growing arena of digital games worldwide.

[a]listdaily: Is PayPal going to expand further around the globe, especially for gaming Google is now using PayPal in a dozen countries for Google Play… do you think that will grow?

Joost Van Dreunen: Absolutely. Looking at the continued growth of the digital games market and, more generally, at the mass adoption of online shopping and commerce (considering, for instance, Alibaba’s successful IPO) it’s clear that consumption will increasingly take place online and via digital platforms. Gaming has always been a frontrunner in terms of early adoption and innovative revenue models, so we expect that to continue. Google has been rolling out its own payment methods, but can’t afford to ignore or block PayPal because of its popularity among gamers.”

[a]listdaily: Does bitcoin or some similar digital payment have a future in the gaming business This has had its ups and downs, value-wise, and plenty of competition being built. Will this sort of payment be a major factor in gaming any time soon?

Joost Van Dreunen: It’s possible. But although gamers may be playful, they don’t mess with the money. Given a clear incentive to use Bitcoins for gaming over both traditional and alternative payment options, gamers may be willing to switch. But this seems to exist primarily at the fringes for the foreseeable future.

[a]listdaily: Will Apple Pay have a major effect on gaming It would seem to make in-app purchases even easier, especially if new iPads support it (along with TouchID sensors) as seems likely.

Joost Van Dreunen: Not likely. Since it’s a NFC-technology it’s geared more toward physical transactions. It won’t have a big impact on games sales at retail. Here, Apple seems to follow the example set by NTT Docomo in Japan, which offers an integrated credit card system as part of its handsets to make daily transactions seamless. That’s very exciting, but not going to play a major role for gaming. Likely, it will create a problem for a company like Square instead.

[a]listdaily: Will the increasing scope and ease of use for digital payments of various types lead to more virtual item purchases in games Will different business models become viable, like very small transactions for virtual goods or time to play (10 cents an hour, say)?

Joost Van Dreunen: No. In terms of innovating on direct consumer monetization (different from indirect, such as in-game advertising, etc.) the industry is reaching a plateau currently. There’s a moment when making purchases that involve fractions of a penny are neither interesting for game companies (who will have to design and build an endless stream of items for purchase) nor gamers, who (by that logic) at some point would only be spending time in the in-game stores buying items and playing less. Effective monetization is always a function of solid game design and exciting play. No doubt there will be marginal innovations, but those won’t move the needle at large.

[a]listdaily: Other thoughts on where payments for digital games are going?

Joost Van Dreunen: It’s true that traditional payment methods will have to innovate, but they’ll likely cling to the status quo. Already we saw the acquisition of Playspan by Visa. Recently, its Ultimate Game Card was discontinued as it doesn’t fit well with Visa’s overall business. Similarly, AMEX partnered with Foursquare to see if there was value to be had in marrying physical presence with digital currency. This, too, has not reached critical mass. I expect these firms to continue to look for innovative solutions, but at the same time stick to the rivers and lakes that they’re used to for fear of chasing waterfalls.

NCompass Explains How ESports Arenas Will Change The Game

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Marketing and production company NCompass has worked behind the scenes on some big eSports events over the years with major publishers and brands. The NCompass-produced Call of Duty XP in 2011 was a groundbreaking initiative for eSports which, in turn, inspired the celebrated Call of Duty World Championship in 2013 and 2014. Last year, the Best Buy Ultimate Gamers Showdown culminated at the Dallas Cowboys’ Stadium making Madden 25 larger than life on the biggest screen in the country. Additionally, NCompass has executed a global tournament for Kinect Sports Rivals with a live culmination at San Diego Comic Con.

Now NCompass has partnered with Major League Gaming (MLG) to further integrate brands and sponsors into global events. As part of the new deal, NCompass is working with MLG to design new eSports arenas in China and Columbus, Ohio in an effort to increase the production value for fans and open up new opportunities for mainstream brands. This partnership will introduce new opportunities for brands to tap into the massive worldwide gaming audience through events and sponsorships, on-site activations, broadcast integrations and 360° marketing campaigns for the retail, QSR, beverage, CPG and automotive industries. Ryan Fitzpatrick, Vice President, Lifestyle Marketing and Branded Entertainment, NCompass International, explains what’s in store in this exclusive interview.

How have you seen eSports grow over the years

The growth has been exponential since NCompass got involved about seven years ago. It’s grown in such a way that we’re seeing massive amounts of content that these programs are creating. We’ve gone from live audiences of 500 people to 10,000 people to online viewerships in the millions online.

What role has livestreaming played in this success?

Livestreaming has been the ultimate reason we’ve seen such success. We did Call of Duty XP in 2011 and the Call of Duty Championship the last two years as well. The broadcast component does change these things. We’re trying to push for an experience that’s like a show. In the past you’d do an eSports event and put a camera in front of it. We’re trying to create an eSports event for broadcast and work with Hollywood professionals on production design so it feels like a big entertainment event.

What role will stadiums play in eSports moving forward?

Stadiums play a big role because those are the only real places where we can do these massive on-site spectator events. We have the more controlled studio environment with set pieces for smaller events without the complications of 8,000 to 15,000 people. One of the key elements of our MLG partnership is opportunity to work with them on developing and designing the MLG Arena in China. We’ll be able to give some direction on what an eSports arena needs to have and see it built from the ground up.

How will the Chinese arena compare to these eSports Arenas we’re starting to see in the U.S., including the MLG one being built in Columbus, Ohio?

An eSports arena like the MLG Arena in Ohio and the Irvine Arena are really broadcast studios where we can highlight gameplay and competition. In China, we’re talking about something on the scale of a Staples Center designed exclusively for eSports. It will be the coolest LAN Center 80 percent of the time and then turn into a place where it can be a production studio for events. It’s pretty massive. It’ll be in this heavy entertainment destination with a lot of foot traffic, but the initial numbers will be massive.

How big is massive compared to eSports events we’re seeing now in soccer stadiums?

It’d be massive compared to soccer stadium, which are typically one to three day events. With this arena we’re talking about an actual multiyear agreement where we’re doing programming 365 days a year. About 20 percent of the time will be these massive events for 10,000 to 20,000 people. We have the support of the Chinese government. Working together to make sure the programming is consistent throughout the year.

How do you see the U.S. catching up to what’s happening in China and Asia?

The eSports world has been driven by what’s been happened in Asia over the last 10 to 15 years. Our goals and hopes with MLG Arena in China and in the States and throughout Europe and South America is that it becomes more of a unified global phenomenon.

Where do you see eSports five years from now?

Five years from now, eSports will continue along this trajectory. Over the next two to three years we’ll see a pretty massive spike. Look at MLG this winter and the exposure with Summer X-Games on ESPN with a more mainstream audience. When you look at some of the numbers in the U.S., eSports has become a more socially acceptable thing. It’s not as much as a surprise when you say you’re going to an event with 10,000 to 20,000 other gamers.

How do you see new games entering eSports?

In the past, the room for new games has been dictated by leagues like MLG and ESL and what they do. We bring the creative, content and production resources to MLG to expand the Pro Circuit and start incorporating other titles into their league and ranking system.

How do you see established stadiums impact sponsors and advertisers?

Sponsors will be huge for the right brands to get on board eSports at the right time. Some brands are already dabbling with it, while others are going deeper. There are opportunities for non-gaming endemic brands to align themselves with what is national pastime. What helps big brands is when people in power positions with brands have kids and they see how they consume eSports online — usually through gaming consoles and gaming content. That’s what makes conversations easier. Plenty of people are savvy enough to see the huge growth opportunity with gaming.

How does the concept of eSports spectacles at stadiums help with mainstream growth?

The spectacle impacts what people see on site in the audience as well as view online. We’re drawing on our experience of event production and experiential marketing. We’re bringing in top rock and roll and Hollywood set designers, pulling people in from other worlds and bringing new technology from both Hollywood and the music touring industries to raise the bar for esports productions.

How does having a dedicated arena help stage eSports spectacles?

With arenas like China, a lot of that is tied to budget and going back to a space repeatedly and having the time and budget to make the production much bigger and better. When we start establishing more arenas, the level of production is going to skyrocket.

What opportunities do eSports arenas open up for sponsors?

With connected stadiums, that’s where a forward-thinking brand partner is going to come in — like a telecom partner to power the arena. ESports is different than traditional sports because the action is on the screen and not really tied to the 11 competitors playing. I think we’ll see new ways to connect fans to the players through these connected arenas.

BuzzFeed To Keynote At The 10th [a]list Summit On Dec 3rd

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BuzzFeed with its 150 million monthly unique visitors and its millions of dollars in revenues from mostly mobile traffic has captured the attention of investors, advertisers and the entire media industry lately.

We are now really excited to announce that we have Terry City, Buzzfeed’s VP, West Coast keynoting out next [a]list summit focused on Mobile Marketing at the W Hollywood Hotel on December 3!

In case you missed the memo, Buzzfeed is doing some pretty innovative things right here in the heart of Hollywood.

Coming off their recent $50 million investment from premier Silicon Valley VC Fund Andreessen Horowitz, Terry will tell us specifically about the company’s plans for it’s Los Angeles and Bay Area operations as it relates to moving the needle for its marketing and advertising partners.

The company has made a series of interesting key hires here in Los Angeles including online video visionary Ze Frank and Pulp Fiction Producer Michael Shamberg.

“I don’t think there’s ever been a Hollywood R&D model like we have here,” said Shamberg in a recent interview with The Hollywood Reporter, who has been spending about two days a week at BuzzFeed’s 100-plus-person Hollywood campus.

What Shamberg is referring to is Buzzfeed’s obsession with data and thus is takes the internet and computer science seriously when looking at what content users are clicking on and sharing online on mobile devices mostly, information advertisers certainly can relate to.

However, what BuzzFeed is truly doing differently than many online media companies is working with editorial as well as sponsored content side-by-side as lines are blurring the line between news and advertising.

The company’s focus on mobile-friendly “native advertising” created in-house is something that now also traditional media companies like The New York Times and Washington Post are getting into.

“What we’re all about, the special sauce, is the intersection of technology and editorial,” said Greg Coleman, BuzzFeed president in a presentation at Advertising Week in New York yesterday. “How can we create content, and in our case in advertising, that people want to share As a point of differentiation, that’s where we are.”

Silicon Valley VC Fund Andreessen Horowitz has proclaimed that they believe Buzzfeed will emerge as a preeminent media company in a mobile age. Those kind of statements from some of the world’s smartest investors makes one pretty curious to find out more what Buzzfeed has in store, don’t they

 

GameStop’s Secret Weapon: Kongregate CEO Emily Greer

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GameStop has been an interesting company to follow over the past few years. As the foremost retailer for console games, the company has been dealing with the difficult situation of seeing the revenues for the entire physical retail games business decline since the high point of 2008. Many observers could see that digital distribution would become increasingly important, leaving many to wonder if GameStop would become the next Blockbuster, a retail chain that focused on selling videos in boxes until the pressure of digitally delivered video caused it to go bankrupt.

Yet GameStop has continued to confound the critics with a number of moves designed to rescue it from Blockbuster’s fate. While industry retail revenues declined, GameStop continued to pick up market share, alleviating some of the downward pressure. While mobile games, social games and free-to-play games boomed and caused more worries about the future of the video game business, GameStop worked harder on its relationships with publishers. The company also invested in a number of new businesses, including digital distribution, streaming games, buying and selling smartphones and tablets, and new specialized retail chains, as well as worldwide expansion and boosting its PowerUp Rewards memberships. Not all of these efforts have been successful, but GameStop is gaining an ever-increasing share of its revenue from these new business areas, enough that key analysts rate the shares a Buy.

One of the best-performing ventures for GameStop has been its acquisition of Kongregate in 2010. Kongregate began as a web site hosting Flash games, created by siblings Emily and Jim Greer in 2006. Kongregate began publishing mobile games last year, along with announcing a $10 million fund devoted to mobile gaming. The company, now headed by Emily Greer as CEO, has been experiencing strong growth, and the [a]listdaily sat down with CEO Emily Greer recently to discuss what Kongregate has been doing.

Kongregate been doing well over the last year. . .

123 percent year-over-year growth!

OK, I think we can call that pretty good! Tell us about Kongregate’s move into mobile publishing.

It’s been really exciting getting into publishing, it’s something that we identified that we felt there was a need for in the market. There were a lot of developers out there who were hitting a wall in the mobile arena because of all the advantages incumbents have. It’s gone a lot better than we expected, we’ve really been able to make a big difference in the business of a bunch of companies, including games that had already been released.

Little Alchemist is a great example. They released last August, I think, and it was a really good game with good metrics, but they couldn’t scale it. We took it over in January in about six months the daily revenue increased 10x. That was a combination of advice on game design and really being able to put the marketing behind it, as well as getting it some additional Apple features. It’s really fun to take a two-person team that had a good game that they weren’t able to really get in front of people, and turn that around. They’re rapidly increasing their company, it’s now five people. I love reporting that to GameStop, but I also really, really love writing big checks to people who are living hand to mouth.

The rest of our business is still growing too. Everybody’s saying web is fine but mobile is everything, but you see in the reports of PC sales starting to uptick and PC games and eSports like League of Legends, that was really premature. We see that in our business. Even with all the growth on mobile, we’ve grown our web platform both in traffic and in revenue in the last year, and we’ve seen an upswing in advertising revenue as well with the new console cycle. It’s a fun time when all three parts of your business are growing. With cross-platform publishing I feel we’ve hit a vein of something that is really needed in the industry. With changes of distribution into extremely crowded marketplaces like Android and iPhone, even Steam opening up, there’s just more and more need for developers to get professional support on everything from free-to-play monetization and analytics to marketing and game features. It’s great when you find something where you really feel like you’re making a difference and making the industry more functional.

You’re growing the web business and the mobile business. Are you seeing more titles that are cross-platform, not just between Android and iOS but between mobile and the web?

We are, but that’s partly because that’s our focus. What we are seeing is that Unity is winning in terms of development; most of the games coming to us are in Unity. Partly because as Android has grown in importance it’s one of the best options for cross-platform, and as soon as you’re using Unity the web version is relatively trivial. We lead with web for many reasons. We’ve got this great platform to put a lot of users into the game. We’ve got our Kong Plus beta program that lets games expand slowly and test with a lot of our best users. There’s a lot of advantages to testing and optimizing on web. The biggest is one is that we’re controlling the traffic into the games. It’s a consistent source of traffic and we have hundreds of benchmarks as to how games perform on Kongregate. Other people are using Australian and Canadian test markets and buying traffic, and you’re at the mercy of what you’re getting from the network that week and who you’re bidding against. There’s a lot of variables.

What we’re seeing for our games that are successful is that it’s a very clear three-legged stool of iOS, Android, and Web. Depending on the game, one or the other is stronger, but they’re all good legs of the stool.

Now the issues of going cross-platform are business ones rather than technical, right?

One big difference is that, for people other than on Kongregate, when you’re taking a game cross-platform there’s less of an advantage because you need to buy traffic. When you put it on Facebook it’s essentially no different a situation than on iOS or Android, where you’re paying for ads to bring users in, and the platform is taking thirty percent. Whereas with us on Kongregate you’re not paying for the traffic, so that makes a huge difference in advertising. You get that organically.

What we find is that the stats are really, really comparable between web and mobile. The lifetime values (LTVs) of players are very similar between web and mobile. Some of the retention metrics are a little bit different; the first day retention is a little bit lower on web, but the long-term retention is a little bit higher.

Clearly Kongregate has a large audience where you can find players for new games, but how do you reach new players?

We’re doing very heavy amounts of marketing. Not every game is going to have the LTVs to support significant amounts of paid marketing, but for those games that do we are investing heavily in marketing. This is one of the big things we are able to do for developers. I mentioned Little Alchemist, and that’s a game where we’ve been able to spend heavily on paid marketing. That, of course, helps drive organic traffic. As well, we’ve been able to secure Apple and Google features. I think fifteen out of sixteen games on those platforms. That’s not something that we promise developers, but both Google and Apple appreciate the fact that we’re coming in with a portfolio of games that are high quality.

How many mobile games are you publishing, and what types are you looking for?

We are literally looking at hundreds and hundreds of titles per month. We’re publishing at a regular cadence — at least one game is going out per month. We’re trying to reach out across a broad set of genres and types of games. We’ve got several cards, RPG type games, we also have match 3 games, endless runners, rogue like games, and more experimental types like Endless Boss Fight. The heart of Kongregate web has been this endless diversity of games. Anything you see on our home page is going to be of good quality, that’s what we’re trying to represent and effectively representing for games in the mobile marketplace as well.