Streaming Games Success Is Elusive

We’ve been hearing about the potential for game streaming for years, and the concept has progressed from incredulity to technology to business. Yet, for all its potential, streaming games (in all its various forms) has yet to make a significant impact on the game industry. New players are entering the market, and old ones are re-tooling their offerings, but it’s not clear that market will ever respond positively. The technological issues, immense as they are, have largely been solved. What remains are much more difficult problems — fundamental game design issues, and very difficult business model issues to sort out.

First, it’s necessary to look at the technology. Essentially, game streaming means that you take the video output from a game device (a PC or a console, typically) and send it to another device with a screen (for instance, a smartphone), where the player makes their control inputs as they normally would. Those inputs get sent back to the game, which processes the result and sends back the output to the player. It’s just what happens when you play any game on a PC or a console — the difference being that you can be a thousand miles away from the PC, and the game is still playable. Also, you can theoretically play a PC game that requires a huge desktop box on your tiny portable device.

That sounds like magic. How can you play a game requiring fast reflexes, like a shooter or a fighting game, with all the time it takes to send data between you and the device that’s actually processing the game It turns out that in games typically there’s a certain amount of lag between your inputs and the screen (particularly with console games in dealing with typical TVs), and that with the right optimization a streaming game can perform pretty well. Sure, there’s often a reduction in the quality of the visuals, and the response may not be quite up to pro levels, but for most gamers it’s quite good enough.

Now we get into how game streaming has been implemented. The technology really became known through the efforts of OnLive and Gaikai. Gaikai was purchased by Sony, and its technology will be appearing later this year under the label PlayStation Now, which promises to deliver a variety of PlayStation games (from PS One, PS 2, PS3 and PS4) to other PlayStation devices like the PS Vita and PS TV, as well as some models of Sony Bravia TVs. OnLive has been in business for a while, but has struggled to find an audience. OnLive is now working with Mad Catz to provide OnLive streaming games through the Mad Catz M.O.J.O. Android-powered console.

Streaming games is also part of the business strategy for Valve with its Steam Machines, which would be able to stream games from your PC to a Steam Machine hooked up to your TV in the living room. Similarly, Nvidia has developed its GameStream technology for streaming games from an Nvidia GeForce-equipped PC to the Nvidia Shield handheld console or the Nvidia Shield tablet, in your own home or even remotely )if you have a sufficiently fast Internet connection). Here’s Nvidia’s footnote: “GameStream gaming outside of your home Wi-Fi network is a BETA feature and requires minimum upload and download bandwidth speeds of 5Mbps. Streaming experience may vary depending on the quality of your Internet.”

So if this technology is so spiffy, why isn’t everyone using it Can game streaming be a major industry force in the future The two primary barriers are now game design and the business model.

While game streaming technology offers to let you play a game from any source (PC, console, supercomputer, whatever) on any target device (smartphone, tablet, handheld console, Macintosh Air, whatever), the design of the games themselves makes this difficult or impossible. PC games are typically designed for keyboard and mouse input. In order to play such a game on a smartphone, those inputs have to be mapped to a touchscreen… or you have to hook up a keyboard and a mouse, which pretty much defeats the purpose of portability. Even when the control devices are similar (such as sending a PS4 game to a PS Vita through PlayStation Now streaming), differences in the controls means some adjustments have to be made (someone has to tweak the game by hand to make it work). Even if you’ve gotten the inputs figured out, the differing screen sizes and resolutions may make the game functionally unplayable (imagine trying to play League of Legends or World of Warcraft on a smartphone).

This means you can’t just take an entire games library, wave a magic wand, and make it available via streaming. Plenty of work has to be done on each title to make it work, even if you allow users to tweak their own control settings. Valve is still struggling with Steam Machines not because of the basic hardware — the issue is the controller, and trying to make it possible to play keyboard-and-mouse games on a controller resembling a video game controller.

The biggest hurdle may well be the business model, though. Customers will probably look for some sort of subscription offer similar to Netflix, where for one monthly price they can access any and all games they want. That’s not easy to accomplish for a streaming service, though, because agreements would have to be negotiated with each publisher. And publishers are very wary of game streaming, which they fear might cut into sales of full-priced games. Getting a good library of content, and making available at a reasonable price, is not easy.

While it’s nice to think about being able to play any game, any where, any time, we’re not really anywhere near that point. It will be interesting to see what pricing structure PS Now ends up with, and what the reception among gamers is. Nvidia’s Shield has yet to make much of a splash, but perhaps the Shield Tablet will be different — especially if Nvidia puts a major marketing push behind it. Valve’s Steam Machines, now slated for a 2015 introduction, are still a big question mark.

Next month there will be a Cloud Gaming Summit in San Francisco, so perhaps we’ll see some answers revealed.

5 Questions With Olga Kay

What did performing in a circus teach you that you have been able to apply to your YouTube career?

The amount of hard work I have to put in before I can see any results and I am talking YEARS! Also not giving up or be discouraged.

 What made you decide to create multiple YouTube channels?

I have passion for many things and I tested different types of content on my channel and quickly realized that not everyone would enjoy it. I had to separate the content.

 What are your goals with Operation: Moosh Clump, your fundraiser to create even more content?

Mainly to build a team of people to help me with production. Right now I do everything by myself mostly.

 We see you’re a huge gamer. What are your favorites?

The best game of 2013 and 2014 is still Far Cry 3 for me. I also enjoyed Bioshock Infinite and the indie game, Contrast.

 What advice would you give to someone looking to connect with an audience on YouTube? 

Be authentic and create content that makes YOU happy because it’s a lot of hard work and if you are starting off with content you are not into, you will burn out quickly and hate the process.

Facebook Covertly Poised To Take Over Video Space

By Jocelyn Johnson

Facebook offers a reach comparable to YouTube and is already an integral part of any creator’s social marketing mix.  As one video executive told us, when it comes to marketing and distribution online, YouTube and Facebook are the only game in town. Other social platforms don’t matter as much.

But where this starts to get interesting is how Facebook is stealthily readying itself to take YouTube head on.

The social giant’s true potential within the digital video ecosystem was first evidenced by the success YouTube star Ray William Johnson had in pre-releasing his “Riley Rewind” web series on Facebook a day before windowing it to YouTube. Johnson claimed that the series did 10 million views on Facebook in that one day.

Couple that with the seamless integration of Instagram video, the VOD provider Screenburn, which was used to re-release Katy Perry’s documentary “Part of Me”, the LiveRail acquisition for video advertising tech and the new mobile related-videos feature and you can start to assemble Facebook’s strategy in hitting at the major features YouTube, and other OTT services, offer.

And then, in March, Facebook hired former Ryan Seacrest Productions SVP Sibyl Goldman as head of entertainment partnerships, responsible for securing partnerships with studios, networks, celebrities, and other creative talent.

Multiple industry sources tell us that Goldman and her team have talked with YouTube talent and producers to distribute content on the social network. Publicly, Goldman has promoted the added value provided by Facebook’s own video player. “Videos generally tend to reach more people when published natively,” she said during a recent session at VidCon, a point that was confirmed by fellow panelist Justine Ezarik.

However, with a little sleuthy digging and tips from our sources, we’ve found there are quite a few prominent figures actively using and testing Facebook’s player.

One such company that is seemingly finding success using Facebook’s player is Buzzfeed, with its dedicated Buzzfeed Video page, where it’s generating thousands of likes and comments per video post. Some of these videos live only on Facebook while others are syndicated on YouTube as well.

Maker Studios is another company using Facebook’s player for show Nacho Punch. Full episodes of the show can be found uploaded into the Facebook timeline. However Maker is still using YouTube for episodes and the annotations functionality, a feature which Facebook has yet to add, but looking at Nacho Punch’s timeline on Facebook, it includes a blend of both players, likely an A/B test approach.

NachoPunch

Similarly, in a much more tepid approach, Upworthy, the website for viral content, is also being very indiscriminate in its choice of video player. Facebook native video, YouTube, and Vimeo embeds can be found across their Facebook page and social feeds.

However, when asked if Facebook is developing a partner program of some type, Goldman was noncommittal. “Right now, we’re focusing on driving video consumption, sharing, and engagement with fans.”

Even further, Facebook doesn’t have to get into the premium content creation business to entice advertisers to the platform. As long as it continues to educate influencers on the power of the native player while it incrementally strengthens its footing, the mega-giant could move the needle in terms of competing with YouTube.

This article was originally posted on VideoInk and is reposted on [a]listdaily via a partnership with the news publication, which is the online video industry’s go-to source for breaking news, features, and industry analysis. Follow VideoInk on Twitter @VideoInkNews, or subscribe via thevideoink.com for the latest news and stories, delivered right to your inbox.

Microsoft Tries A New Direction For Gaming: HTML 5

Classic board games are seeing a resurgence in recent years, and part of that is due to the increasing availability of electronic versions of popular board games. One of the most popular board games is Settlers of Catan, which is an enormous bestseller in its native Germany as well as in North America. While there are excellent iOS and Android versions of the game, it’s not available on Windows Phone. Microsoft’s Internet Explorer team decided to rectify that with Catan Anytime, and HTML 5 app that you can play on any modern browser.

You’ll need to find at least two friends to play, though, since the game has no AI players handy. Also, it’s not yet equipped to match you up with random online players, hence the need to find some friends before you start. It’s asynchronous, so you take a turn and wait for your opponent’s turns to arrive via email.

The game does have some advantages over the board game version, in addition to the portability and near-universal ability to run on most devices. Automatic trading is built in, so you don’t have to get repetitive queries from other players about trade items. The dice rolls and numbers have been simplified for this version, although Microsoft plans to add full Official Catan rules in August. Currently, you can chat in-game by using Skype.

Why is Microsoft doing this, aside from a desire to see a great board game played on Windows Phone It’s a nice marketing tool to attract attention to the once-mighty Internet Explorer, which continues to lose market share. Plus, this showcases the capabilities of HTML 5 for cross-platform use and rapid development. It’s an interesting experiment for Microsoft, and potentially a useful way to increase support for Windows Phone. Will we see more such experiments, this will be an interesting space to watch.

Source: GigaOm

Big Brands Gravitating Towards eSports

Anyone who still has doubts about the validity of eSports, or electronic sports, needs only to look at videos out of the sold-out KeyArena in Seattle from Valve’s DOTA 2: The International tournament. Over 10,000 people watched team Newbee defeat Vici Gaming three games to one in a best-of-five format to take home just over $5 million of the over $10 million in cash handed out on July 21. Vici Gaming went home with nearly $1.5 million and the third and fourth place teams, Evil Geniuses and DK, also went home winners with over $1 million and over $819,000, respectively.

While the majority of the millions of global fans watched the action via livestreams on their PCs and connected devices, ESPN3 covered the action just like it would an NFL or college football game. In fact, eSports has thrived thanks to livestreaming companies like Twitch, which back in May Google was rumored to be acquiring for $1 billion. But TV networks like ESPN certainly help put professional video gaming into the mainstream spotlight. And advertisers and sponsors are more accustomed to televised exposure for traditional sports.

One trend that’s clear with eSports is the crossover into holding major events in traditional sports venues. Last fall, Riot Games sold out the Staples Center for its League of Legends Championship Series Finals. While 12,000 people watched live in the home of the Lakers and Kings, over 32 million tuned in to the livestream. This year, European Sports League (ESL) hosted a DOTA 2 tournament at former World Cup soccer stadium Commerzbank Arena in Frankfurt, Germany. And Riot will host its 2014 World Championship in October at former South Korean Olympic venue Sangam Stadium, which seats 66,000 people.

“Selling out stadiums shows how passionate players are about eSports,” said Dustin Beck, VP of eSports at Riot Games. “Fans from all over the globe will be tuning in to watch the best of the best LOL eSports team battle it out for the World Championship the same way soccer fans from across the globe came out to support their favorite teams during the World Cup. That level of passion and engagement translates to an opportunity for brands who are looking to communicate with this audience by bringing added value to their eSports experience.”

Russell Schwartz, president of theatrical marketing at Relativity said eSports is the new appointment TV, only it’s online.

“Outside of sports on TV, which is the only thing people watch live any more, eSports is the best way to reach Millennials,” said Schwartz. “It’s a live experience that people can interact with online. It’s not that it’s a huge business yet, but it’s getting there. Television is so elusive these days, but with eSports we know it’s where male gamers 14 to 35 are watching.”

Major League Gaming and Relativity formed a strategic content and marketing partnership across sports management, television, film and digital media in 2013. The goal of the collaboration was to accelerate MLG’s growth as a mainstream media property, drive appointment viewing to MLG.tv and further strengthen Relativity’s presence in the gaming space.

Relativity used MLG.tv to promote this year’s theatrical releases of Kevin Costner’s 3 Days to Kill and Paul Walker’s Brick Mansions. HBO TWX reached out to Riot Games and used the League of Legends online audience to promote the launch of the fourth season of Game of Thrones.

Earlier this year, Coke Zero KO kicked off its partnership with Riot Games with the development of the Challenger Series, a series for amateur League of Legend gamers to compete for a spot in the professional league. In essence, it’s a minor league system for players to show their eSports prowess and potentially graduate to the Big Leagues and compete for big money, sponsorship deals and free travel around the globe to compete in tournaments.

“We have worked very closely and collaboratively with Riot Games to create a league that delivers true value to the fans and players of the sport, and that begins to build an infrastructure for eSports that mirrors that of the more traditional sports,” said Matt Wolf, Coca-Cola’s global head of gaming. “To help promote the partnership, we recently launched @cokeesports on Twitter as a place for the brand to engage with fans through our activation with League of Legends. Moving through the end of the year, we will have a presence in South Korea for the World Finals in October.”

League of Legends is currently the most popular eSports game in the world with over 85 million players across the globe. As a result, those playing the game professionally are working with some big brands. Erich Marx, director of Interactive and Social Media Marketing at Nissan North America, partnered with League of Legends Team Curse because he and many people on his team are gamers, technologists and fans of eSports and they believe in its potential.

“Our job is to find audiences that are apt to engage with us and who will appreciate our content and hopefully share it with friends and beyond,” said Marx. “ESports are very innovative, and that fits perfectly not only with Nissan products, but our marketing strategy. ” Nissan is using the huge social networking reach of Team Curse pro gamers to raise awareness of some of its online campaigns.

Red Bull has embraced eSports over the past three years, focusing first on Blizzard Entertainment’s StarCraft 2 and adding DOTA 2 to the mix. The energy drink hosts its own eSports events around the country with top players and invites fans to watch live and online. The company also sponsors pro gamers and treats them the same way they treat real athletes, complete with health and nutrition tips to enable peak performance when training and playing in virtual competitions.

“A huge organization like Red Bull getting involved in eSports makes other big organizations pay attention and attract other big organizations,” said Jimmy “DeMoN” Ho, a DOTA 2 pro gamer on Team Liquid. “McDonald’s recently sponsored an event.”

Also blurring the line between sports and eSports is the fact that traditional Red Bull extreme athletes were competing at X-Games Austin in June for the exact same medals that Call of Duty: Ghosts teams were playing for. ESPN covered the first-ever video game competition, which was hosted through MLG, along with the skateboarding and other extreme sports.

“This is another example of the maturity of eSports,” said Ehtisham Rabbani, general manager of Logitech’s gaming business. “We believe that eSports helps keep the X-Games relevant. ESports already has greater viewership online via streaming than many sports today, including the X-Games and many NBA and NHL games. It is not if, but when will eSports become the most popular sport in the world.”

Even the NFL has taken notice of eSports. St. Louis Rams offensive lineman Rodger Saffold is an avid gamer who attended his first MLG competition in Anaheim in 2013. He liked eSports so much he bought Call of Duty: Ghosts team Rise Nation Gaming, which was one of the teams that competed at X-Games Austin a few months after the Activision and Xbox $1 Million Call of Duty Championship in Los Angeles.

“I didn’t even know about eSports until last year, but I just enjoyed playing Call of Duty so much, and I was always online,” said Saffold, who recently signed a five-year, $31.7 million contract extension with the Rams. “I love the bragging rights. And now here I am. I finally see everything for the first time from a first-person view instead of on a computer screen. It’s all good for these kids. It shows that video games can bring you some money now. It’s not always a waste of time.”

ESports is definitely not a waste of time for big sponsors. Intel INTC has been sponsoring eSports for over 10 years now. George Woo, who heads up the Intel Extreme Masters global eSports tournament, said the company entered the space to establish a marketing platform to promote its gaming processor online and offline to make it the preferred and recommended processor brand by enthusiasts and to drive purchase intent for all of its gaming products.

“Attendance to Intel Extreme Masters events has grown 10X with us filling up sport stadiums, where we have visitors lining up to get a seat to watch the competition,” said Woo. “Online it has grown 100X, where we now get more viewers watching livestreams for a single event than we’d have tune in for an entire season in the past.”
The article originally appeared in Fortune on July 24th, 2014 and has been reprinted with permission from the author.

Casual Connect 2014: Sage Advice For Mobile Games

The mobile game business is growing and changing rapidly, and it’s often difficult for those living inside this rapid pace to get perspective. Video games as an industry have been around for more than 30 years, and there’s a lot of valuable experience from that time that’s highly relevant today. Unlocking those vaults of knowledge and sharing some of the priceless pearls of wisdom at Casual Connect 2014 were two industry veterans, Gordon Walton and Eric Goldberg, in separate talks that addressed some important issues.

Gordon Walton

Gordon Walton is perhaps best known for his immense labors at BioWare in bringing Star Wars: The Old Republic to life, shepherding that project through most of its lengthy development. Walton has been producing games for decades, though, and has worked with teams of a handful to teams of hundreds and back down to teams of just a few. Along the way, he’s gathered some observations about the process of moving from AAA games to mobile, and he shared those insights with the audience.

“When you’ve made big games with an army of people, can you really make games with a handful of people ” Walton asked rhetorically. “Yes, it’s like riding a bicycle.” He noted that the focus changes between small games where you’re focused on what you do today, while on big projects if you focus on daily tasks only you’ll never reach the end goal. In any case, though, you still have to make a great game regardless of the size of the project. “Quality is still #1, you can’t make games that don’t rock,” Walton said. “Every once in a while you’ll see something that breaks the rules, but usually not. You have to do less, better, rather than more, half-assed.”

“You really need to understand your market. You need to understand your customers, you need to understand how marketing is done, you need to have an idea of how you’re going to acquire those people. Developers in my experience like to ignore marketing. They like to think ‘No, no, we’ll just make a great game, all that other stuff is fluff, it’s not all that helpful.’ The truth is it’s just as important, it’s just as big a pillar as the great game. A mediocre game with great marketing doesn’t do any better than a great game with poor marketing. Both of them suffer, typically. A development leader who hasn’t studied marketing is handicapping themselves, they’re going to have to have a really great partner on that side that they trust.

Walton also discussed the importance of hiring the right people, and that on a small team everyone needs to be excellent work. As projects get bigger, you’ll need people devoted solely to management and project management, rather than everyone being hands-on. Overall, Walton noted, the drive to quality continues, and even games that are relatively simple will have a high degree of polish that goes into the graphics and game design.

Eric Goldberg

Next up was Eric Goldberg, a long-time game designer and executive who’s been consulting with game companies for decades. Goldberg spoke on the topic of Publishing as a Service, and how games have transformed from one-time packaged products into ongoing services. That change means re-thinking much of what goes into the design and development of games. Properly done, games-as-a-service can be terrific cash cows, propelling numerous companies into the billion-dollar annual revenue class.

Goldberg noted that there are six essential skills, which also denote areas where there are problems as we make the transition from product to service. The six essential skills: Programming (in the sense of scheduling content, not coding), deployment, direct marketing, monetization, analytics, operations. This applies to anyone who is in the service business, such as Rovio and Supercell. “They both had similar genesis stories,” Goldberg noted. “They both did 40 or 50 mobile titles that failed before they delivered their great hits. If you look at how Rovio developed Angry Birds, they did not fully get the service lessons, and Supercell — and I had the privilege of working with that team when they did their previous work at Digital Chocolate — did. In fairness to Rovio, Supercell came along two or three years later, so they had a chance to learn from their lessons.”

“There are several things that people who started in the product industry have to unlearn,” Goldberg pointed out. “One is that developers can be publishers. They could not be in the product environment, they needed the intermediaries called publishers.” The second key unlearning needed is the timing of your development effort. “Post-launch is much more important. It used to be that all of our effort went to delivering the game that shipped on that fixed date. The idea of operations, that you have to deal with an existing audience, is a key feature of services. The last is that you cannot avoid the business of games. If you are not thinking about marketing as part of your game design, you will do less well in games as a service, and in some cases, significantly less well.”

Goldberg went on to discuss the six essential skills in some detail, noting that how you schedule content and even what you call it changes significantly — while ‘sequels’ per se are rare in games as a service, there are content releases regularly that often aren’t even given a title. Deployment is the art of choosing the right platforms, territories, and partners for your game, as well as where you’re going to soft-launch it for best effect.

Direct marketing is a key discipline for games as a service, and fortunately, Goldberg points out, “There is a 150 year old discipline called direct marketing that people know how to do very well.” He recommends looking at the extensive materials on direct marketing and all the techniques that were developed for mail, because there’s great wisdom there. “The reason to do this is that most of your competitors are not doing it,” Goldberg advises.

Goldberg advises that you make monetization part and parcel of your game design — it shouldn’t be something tacked on at the end after you created the game.”We have now had several tens of thousands of games that have proved that if you do not figure out the monetization, you will fail. In fact, there’s been a whole series of well-loved games that were built for the old monetization model and failed when redone,” Goldberg said. The poster child for this, most recently, is Dungeon Keeper.

The best practice is to think about each of these six areas, and Goldberg provided his key takeaways in one slide. It’s important, too, to realize how things change as your game service scales up, and the increasing number of people you will need to devote to customer serivce.

3BlackDot Ties Game And IP Creation With Sponsors

At Casual Connect in San Francisco, 3BlackDot co-founders and former Machinima division heads Angelo Pullen and Luke Stepleton, along with former Duck Dynasty co-executive producer Hank Stepleton, unveiled their new influencer-driven entertainment company. The co-founders have partnered with top-ranked YouTube gaming influencers Adam Montoya (SeaNanners – 4.5 million subscribers) and Tom Cassell (TheSyndicateProject – 7.6 million subscribers) to open up new opportunities for brands to connect with gamers and the 13-34 year-old gaming demographic.

3BlackDot focuses on four main influencer-driven specialties:

In partnership with Section Studios, the first 3BlackDot studio initiative includes development of entertainment franchise Zombie Killer Squad in Nov. 2013. The mobile game quickly garnered one million installs in the first nine days, making it one of the fastest growing games to reach this number in history. It reached to the top spot of #1 App in the Apple iTunes store in the U.K., Canada, Australia and #2 App in the U.S. With more than 2.6 million installs, Zombie Killer Squad will release a game update that incorporates two additional YouTube gaming personalities — ihascupquake (1.6 million subscribers) and TmarTn (1.7 million subscribers).

Executive producer Hank Stepleton heads up the PickAxe production arm, whose first project is a live-action short film based on Zombie Killer Squad. The trailer to the film will debut at the 3BlackDot Influencer Lounge and launch party at San Diego Comic-Con.

3BlackDot also creates and builds campaigns for entertainment properties and brands such as Machete Kills for 20th Century Fox, Volkswagen #NowYouKnow, Office Depot and Disney Infinity. Angelo Pullen and Luke Stepleton explain what they learned from Machinima and how they plan on utilizing YouTube Influencers to grow new cross-platform IP in this exclusive interview.

What does the company name mean?

Angelo Pullen: It is a play off of ellipses, to communicate that there is always more to come.

Luke Stepleton: Ellipsis . . .  or ‘And then’ or ‘more to come.’

What did you learn from your time at Machinima that you’re applying to this new company?

Angelo Pullen

Angelo Pullen: Machinima was a great opportunity for us to work with a myriad of large brands and we gained an expertise in organically integrating a brand’s messaging into the YouTube ecosystem, while driving massive viewership and engagement. We were also very successful at building audiences around premium content online for shows such as Halo: Forward Unto Dawn and Battlestar Galactica, which is something else we look forward to putting to use with our production arm “PickAxe.”

Luke Stepleton: Machinima was a great place for me, truly enjoyed learning and working with a good group of people. The most valuable opportunity Machinima afforded me was the experience and ability to work with both brands and influencers.

How has YouTube evolved since its inception?

Angelo Pullen: YouTube started off similar to many other platforms, giving its creators tools to share and communicate. However, the creation of the partnership program and the concept of a platform sharing its ad revenue with the creators that are helping build its audience was one of the single most important moves for a platform to date.

Luke Stepleton: Loads, more than any one person can possibly provide a single answer for. The core of what makes it a wonderful platform hasn’t changed. The single most important change that YouTube implemented was the Partnership program. For me, this may go down as one of the most socially important and impactful decisions made by any corporation in the last 50 years.

What’s the secret to turning YouTube followers into customers?

Angelo Pullen: Authenticity. Provide something that the Influencer and their community actually care about.

Luke Stepleton: Not forgetting the ‘You’ of YouTube, and working closely with influencers to speak authentically to their audience.

Luke Stepleton

What did you learn from your first mobile game, Zombie Killer Squad, when it comes to connecting with Youtube influencers?

Angelo Pullen: Give the YouTube Influencer the freedom to drive the creative direction of the game, specifically for their respective communities, and you will succeed.

Luke Stepleton: Every creative process and production offers its own unique set of learning opportunities. Working creatively with YouTubers to produce a game is no different than producing a movie or film. It takes the creative input of everyone involved to make it great.

What role will game development play in your company moving forward?

Angelo Pullen: A significant role. We are looking to become a legitimate player in the world of game publishing. Our focus will be on becoming the predominant publisher of Influencer driven games, developing engaging IP that is creatively driven and marketed by Influencers.

Luke Stepleton: Game development is a cornerstone for 3Blackdot, allowing us to work with a truly engaged community.

What opportunities do you see on Youtube when it comes to production?

Angelo Pullen: We are really excited about our production arm, PickAxe, which will be focusing on developing Influencer Driven content for Over-The-Top (OTT) outlets, but incubating the content on YouTube first. We believe that working with Influencers to develop premium content for their respective communities and then letting the community decide if they would like to see more, creates a unique opportunity to mitigate the risk that many other traditional producers are met with, while also increasing the LTV of a viewer for the OTT. It all starts on YouTube.

Luke Stepleton: There are significant opportunities for production on YouTube moving forward. 3BD plans on utilizing YouTube as a place to develop audience and IP. Working with the community on IP development, through the YouTube platform, is a key differentiator for us.

What does Hank Stepleton bring to the table for original series for online?

Angelo Pullen: Hank brings a proven track record of creating content that sells. Hank has produced 12 major TV shows and most recently served as executive producer of the popular American Reality TV Show, Duck Dynasty. Duck Dynasty has broken several ratings records on both A&E and cable television as a whole. The fourth season premiere drew 11.8 million viewers, the most-watched non-fiction cable series in history. Hank will develop content and pitches for digital outlets, as well as traditional cable outlets.

Luke Stepleton: Hank brings a level of professionalism that enables 3BD to immediately become a force in the content production realm. Oh, and he is my brother, whose intelligence, integrity, hard work ethic, and dogged persistence have been integral in my professional development.

Adam Montoya

With so many TVs offering YouTube anyway, how do you see the concept of entertainment evolving across devices?

Angelo Pullen: I think with the creation of more platforms and content, we will start to see more and more serialized content being created for specific niche communities/demographics and they will be offered up to people to consume the content where they like, when they like.

Luke Stepleton: The most difficult part about the future is “Discoverability,” it is an uphill battle for all content creators. 3Blackdot solves the problem of discoverability for its clients on the agency side of our business, as well as for our own IP.

What opportunities does Android TV open up for you as game developers and entertainment creators?

Angelo Pullen: I think with services such as Android TV and Amazon Fire TV, the barrier of entry for indie game developers & publishers has dropped significantly. It’s an exciting time when you create content and games that are platform & device agnostic and can be played on your big screen or taken with you on your mobile device, while still providing a seamless engaging experience.

Luke Stepleton: Android TV is a huge opportunity for 3BD. We are stoked to work with OTTs on developing content with audience already in mind — working with the influencers and their audience to develop IP that appeals to massive cross platform audiences.

What role will YouTubers play in the actual company?

Angelo Pullen: Adam “SeaNanners” Montoya, and Tom “TheSyndicateProject” Cassell are two of our co-founders and partners in 3BlackDot. Not only do they share our vision, but are providing much of the creative direction for our games and content. Moving forward, we look to partner with more YouTube and social media Influencers who share our collective vision towards building exciting IP, content, and games.

Tom Cassell

Luke Stepleton: Adam and Tom are co-founders in 3BlackDot, and like all co-founders they will play an important role: From developing IP creatively, to input on how to more authentically to work with audiences, and finally as thought leaders in their respective space.

Will you be an official YouTube partner and host YouTubers and creators (like Machinima did)?

Angelo Pullen: We do have a collective of YouTubers that is a part of 3BD, but for the time being, we are not looking to aggregate a massive amount of channels. We are much more focused on partnering with YouTubers who are like-minded and want to create compelling assets (i.e. games and content)

Luke Stepleton: Though we understand the correlation to Machinima, our desire is to partner with content creators to create value with influence. Empowering both the company and content creators to deliver truly engaging entertainment properties.

How will you work with consumer brands across gaming and entertainment?

Angelo Pullen: My and Luke’s core competency while at Machinima was working with consumer brands and helping them authentically integrate their products and services into the YouTube ecosystem. As we move forward, we are excited about all of the new ways we can leverage new technology, games and content to drive engaged audiences to a brand’s products and services. We believe the definition of branded entertainment is going to take an entirely new shape as we begin to harness the power of mobile devices.

Luke Stepleton: 3BlackDot firmly believes that any demographic can be reached by leveraging “Peer to Peer” marketing techniques. We firmly believe the most difficult part of the future is discoverability, and that goes for brands as well as content creators. Working with the Influencers inside the YouTube and social media eco-systems can empower any brand to strategically target their desired demo.

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What Facebook’s Q2 Earnings Tell Us About The Future of Advertising

Most web publishers are seeing more than half of their traffic coming from readers who are on mobile devices, but so far the advertising dollars have not kept up with the shift to digital, even less so with the shift to mobile. That is, until now.

In Facebook’s impressive earnings report from Q2 2014 released yesterday, it was revealed that revenue was $2.91 billion, up 61 percent from $1.81 billion during the same period last year. What’s more, nearly two thirds of those revenues came from mobile ads. It represents a wide gap in favor of mobile and illustrates that a fundamental shift is not just under way, but has already happened. So what finally made the difference

According to the ad exchange OpenX, more than half of the effective mobile campaigns are now being delivered in a native format. With banners ads proven ineffective on the web and even less so on mobile, Facebook pioneered this format which allows advertisers to present their marketing messages in a less intrusive manner in the news stream with the same look and feel “in-stream”.

Native is the “killer app” that advertisers were waiting for in order to shift serious ad dollars over to mobile. Facebook is already banking a lot of those mobile dollars with company operating margins at 48 percent in the second quarter. They are now focusing on getting native right on other platforms such as Instagram as well.

We can expect similar advertising results from other publishers as they trim and tweak their own “in-stream” ad offering.

 

 

Casual Connect SF 2014: Getting Details From Google, Mobile Publishers

Casual Connect 2014 in San Francisco offered a packed schedule of sessions covering a wide variety of topics. The [a]list daily was there, and here’s some of what was discussed. Google talked about its plans for gaming, and mobile publishers discussed how they are increasingly providing more value to developers in the increasingly sophisticated mobile marketplace.

Google’s global head of games business development for Google Play, Bob Meese, discussed some of the reasons that it’s a better time than ever to be creating games fro Android. For one thing, he pointed out, there are over 1 billion monthly Active Android users. “That’s the largest group of people playing games on any platform, ever,” said Meese. Though he didn’t mention how many different devices and versions of the operating system that is spread over, an important consideration for developers. Google paid out over $5 billion to developers in the last year, Meese mentioned. (On Apple’s earnings call yesterday, the company revealed it has paid out more than $20 billion to developers so far, with $5 billion of that in the last six months.)

Meese spent a fair amount of time talking about Android TV, and how developers should be developing for a multiscreen world, with games moving from smartphone to tablet to the TV screen. Google has lined up a number of top TV makers to support Android TV, and Meese encouraged developers to go to developer.android.com/tv to get a free Android TV and Android TV development kit. “We are looking for local multiplayer experiences, and games that can be played with a simple remote,” Meese said, not expecting developers to bring their entire catalog of games to Android TV.

Meese also noted the increasing utility of Google Play, and showed some stats on how developers are benefiting from the higher quality users who log into games using Google Play. For instance, Deer Hunter players who accessed the game through Google Play logings were made 4.6x as many purchases as other uses, and had three times the LTV (lifetime value). Meese noted that Google is also helping developers extend their reach geographically, now offering support for Google Play cards in 16 countries, direct carrier billing in 25 countries, and PayPal in 12 countries.

The Mobile Publishers Executive Roundtable brought together some top executives at mobile publishers to discuss why, in fact, mobile publishers have their uses when developers can simply put titles right into the App Store or Google Play store. Why give up margin to a mobile publisher

DeNA’s Barry Dorf, VP of partnerships & alliances, established where the mobile game business is at right now. “Twenty months ago DeNA had the #1 and #2 top-grossing games on iOS and Android, but the world was a different place back then,” Dorf noted. “Getting your apps into the top ten, figuring out how users are playing, … it was the dawn of the age we’re in right now. Since then times have really changed. There are three top players; there’s Supercell, GungHo, and King, and they make up 60 percent of the App Store top-grossing. There’s about ten companies that make up about 30 percent of the top-grossing, and then indies make up the other 10 percent. That’s changing dramatically, even today. The top 60 percent is growing, the top 30 percent is getting smaller, and we’re tapping into that 10 percent. It’s harder and harder for indies to break into the marketplace today.”

Giordano Contestabile,VP of product management & revenue at Tilting Point, explained how there’s still room in the marketplace, but developers need help. “The market is dominated by a few players, but the #100 app in the US is doing $30K per day — that’s a $1 million per year run rate,” Contestabile said. That’s still a reasonable amount of money if a developer is small enough. “The App Store is dominated by a few players, but these players are all new,” Contestabile said. He explained that production values are rising, and players expect you to compete with the best in class even if you’re only a small developer. You need to have money, someone who understands user acquisition, monetization, and expertise in a lot of areas that most small developers just don’t have. Hence, mobile publishers provide the help. “If you only want to hit a single or a double, you don’t need a publisher,” Dorf added.

The publishers discussed some of the specifics about how they help developers . “We do a lot of user acquisition, but we also rely on other forms of marketing,” Contestabile noted.. “For example, we launched Leo’s Fortune a couple of weeks ago, and we premiered a live-action trailer which was a huge Rube Goldberg machine built to simulate the game environment. It was very expensive, took about 70 days to shoot, but it’s gotten 1.5 million views on YouTube so far. There are two reasons why we do that. One is because performance marketing is increasingly expensive, and we want to find other ways for people to discover the game. But really, we want to build brands, we want to build big franchises over time. I don’t think you can build a brand by buying your users one at a time. People have to feel an emotional connection to the game.”

“Performance marketing has become table stakes,” said Walter Driver, CEO of mobile publisher Scopely. “That’s just blocking and tackling now. I think you’re going to see a lot more of this offline marketing starting to be table stakes, running television campaigns, working with celebrities, influencers, creating spectacles and trailers. Those are the kind of things you need to do to break out of the pack. That’s a big financial risk for a developer who has already invested a lot of itme and capital into a single game, and may not have another game coming out for quite a while. It’s another area where you’re going to see publishers provide value.”

Let Games Be Free-To-Label

A recent action by Google in response to the European Commission is having a major impact on the mobile game business, and there are serious issues at stake. Essentially, the European Commission in conjunction with national authorities asked Google, Apple and the Interactive Software Federation of Europe in December of 2013 to take action on the following issues:

  • Games advertised as “free” should not mislead consumers about the true costs involved;
  • Games should not contain direct exhortation to children to buy items in a game or to persuade an adult to buy items for them;
  • Consumers should be adequately informed about the payment arrangements for purchases and should not be debited through default settings without consumers’ explicit consent;
  • Traders should provide an email address so that consumers can contact them in case of queries or complaints.

The EC’s recent press release announced that Google has complied with the request: “Google has decided on a number of changes. Implementation is underway and will be completed by the end of September 2014. These include not using the word “free” at all when games contain in-app purchases, developing targeted guidelines for its app developers to prevent direct exhortation to children as defined under EU law and time-framed measures to help monitor apparent breaches of EU consumer laws. It has also adapted its default settings, so that payments are authorized prior to every in-app purchase, unless the consumer actively chooses to modify these settings.”

With a regretful tone, the EC acknowledged that so far Apple has made no immediate actions in the matter, but in in a statement to Recode.net, Apple said that its iOS “controls go far beyond the features of others in the industry,” and added that they “are always working to strengthen the protections we have in place, and we’re adding great new features with iOS 8, such as Ask to Buy, giving parents even more control over what their kids can buy on the App Store.”

Here’s where the issue gets more complicated, and we may see some unexpected consequences. Sure, it’s been obvious for a while that there’s a problem with kid’s app as and in-app purchases. Parents were getting credit card bills with hundreds or even thousands of dollars in charges, and then discovered that that cute little game they let little Janey play on the tablet was pushing smurfberries by the $99 wheelbarrow. It shouldn’t be incumbent on the parents to police kid’s apps and investigate whether or not there are insidious in-app purchases lurking behind the candy-colored screens. Both Apple and Google have been tightening up the in-app purchase process to keep kids from running up a bill.

The big problem with the actions that are being taken is a fundamental one, and something that the industry needs to address. Or, at least, Apple, Google and Amazon should come to some agreement on thiss, because if those three set rules then you can bet the vast majority of apps will be forced to cooperate.

The issue is one of nomenclature. If, as the statement implies, Google is going to require every game with any form of in-app purchase to not use the word “free” in its description, that’s creating another problem while trying to solve one. All free-to-play games are most decidedly not equal. There are some where there’s very few in-app purchase options (with some work you could probably find some that had only one item for sale). Others are replete with virtual goods and extra time and all manner of ways to get people to shell out money. Is Dungeon Keeper really the same as Candy Crush and World of Tanks Blitz

For that matter, there sure seems to be a clear difference between time-gated games (where you can only play until your time or energy or other unit runs out, then you must wait for more to appear or purchase some) and games where you can play as much as you like, but virtual items are optional add-ons (like League of Legends or World of Tanks). Heck, even in Candy Crush if you don’t mind just playing a few minutes in a session (and regular bouts of frustration), you can play regularly without paying a dime — in fact, that’s a game challenge in itself, to see how far you can get without paying. That sure seems like it’s free to play. Isn’t removing that label verging into Orwellian doublespeak

Worse, we don’t really know what terms Google will choose to replace “free-to-play.” Or will they let each publisher come up with something, as long as it doesn’t include the word free Or is ‘free’ acceptable if including in the right phrase If every game is using its own nomecnlature, it will be harder than ever to figure out what type of game you’re about to download. And then Apple and Amazon may have entirely different words to describe the same thing.

The problem needs to be addressed quickly, before a new Tower of Babel is built. Perhaps some of the top publishers could weigh in with suggestions, but Apple and Google need to come up with some nomenclature proposals, and fast, that the industry as a whole can adopt. Perhaps there would be different terms used for games intended for kids than for games aimed at adults. Whatever the case, let’s not hamper the ability of publishers to make money here.

Look, if the terminology gets too far from describing what games actually do, publishers may do an end run around the whole mess. Create a free version of the game and version that includes the in-app purchase options, in much the same way we have free games that contain ads and ad-free versions that you pay a little extra for. But that’s messy and could easily result in a revenue drop. We really don’t know how that would play out.

Google, Apple, don’t rush into a bad decision here. Get some of the top publishers on the line and talk out the nomenclature issue. By all means, let’s keep kids from running up unintended bills — and for that matter, crack down on unscrupulous publishers who are aiming to exploit kids. But let’s not hurt the rest of the lucrative and fast-growing mobile game business while enacting proper protections for children. The best solution would be to keep non-kid’s games the way they are: Free to label as the publisher desires. The marketplace will quickly punish games that abuse the label of free-to-play, as many games have discovered to their sorrow.