Gaming and Culture

Video game developer Electronic Arts announced on Monday that it has acquired social-gaming company Playfish, paying $275 million in cash and $25 million in "equity-retention arrangements." Playfish also is entitled to up to $100 million if it meets performance milestones by December 31, 2011.

EA also announced later Monday that it planned to eliminate 1,500 jobs, or about 17 percent of its workforce, as part of a plan to reduce annual costs by about $100 million.

The acquisition of Playfish falls in line with EA's desire to be more than just a developer for traditional gaming platforms, like consoles and the PC. The company said in a statement that the acquisition "strengthens its focus on the transition to digital and social gaming."

Thanks to the explosive growth of social networks and games made for those platforms, Playfish is enjoying strong performance in the social-gaming space. The company has more than 150 million games installed on several platforms, including Facebook, MySpace, the iPhone, and Android-based devices. According to Playfish, more than 60 million active players per month are playing titles. Its Facebook titles include Pet Society, Restaurant City, and Country Story--all three are among the most-popular games on the social network.

The EA Interactive division, which Playfish will join, has done a fine job of capitalizing on the trend of online and mobile gaming. That division includes Pogo, one of the top casual-gaming sites on the Web. The Mobile side of EA Interactive has captured 34 percent market share in the U.S. with the help of Madden NFL 10, The Sims, and Tetris.

Updated at 10:20 p.m. with details of job cuts.

Call of Duty Modern Warfare 2 has some inspiration from Twitter.

(Credit: infinity Ward)

Call of Duty Modern Warfare 2 might have been designed by a capable team of Infinity Ward developers, but the company had some help: Twitter followers.

Infinity Ward Community Manager Robert Bowling told Develop Online in a recent interview that during the development of the highly-anticipated release, the developer called on Twitter users for help.

"During development, if we are sitting in a design meeting and we are arguing about something, no matter what it is, I can just turn to what is now 60,000 people and post the same question," Bowling told game developer news site Develop Online. "'Do we think players will like this?' well why don't we ask 60,000 of them and get a good representation of what we think they may like?"

But it was the next statement that might cause gamers participating in social networking to rejoice. Bowling told site that Twitter was "fantastic throughout development" and he "would recommend many, many more people adapted that into their design schedule."

Bowling also said that Infinity Ward didn't ignore any responses to its design questions. He said that developers "listened to all" of the suggestions, but filtered out those that didn't match the company's "design philosophy." Suggestions that asked for more gore, for example, ran against the company's design philosophy, Bowling said.

Regardless of whether or not Infinity Ward incorporated every idea into Modern Warfare 2, Bowling told the publication that now more than ever, gamers are getting closer to the development process.

"The average gamer is so much closer to the people who make the games than they ever were before," he told the publication. "And as a result of that they are so much more developer-aware. No longer is it an Activision game, but an Infinity Ward game, or a Treyarch game or a Bungie game. And gamers know where to go to offer their feedback."

Oh, how things have changed. When I was younger, I sent several snail-mail letters to developers asking for design tweaks in some of my favorite franchises. I never heard back. And it seemed that my plea had fallen on deaf ears.

Today, things are different. The developers of one of the most highly anticipated games to be released in 2009 were listening to gamer suggestions on a social network? Amazing. Let's hope for more of it.

Social networking is on the rise, both on and off the job, leaving companies uncertain how to monitor their use by employees, reports new survey.

More than 50 percent of companies questioned said they have no policy to address the use of social networking by employees outside the workplace, according to a survey released Wednesday by the Society of Corporate Compliance and Ethics and the Health Care Compliance Association.

Typically, companies shy away from restricting an employee's actions off the job. But businesses are concerned about employees who use social networking and reveal private details or post inappropriate pictures that could embarrass the company.

Some organizations, such as the U.S. Marines, have already banned their recruits from using Facebook and Twitter. But the survey found that many businesses aren't sure what to do to restrict or monitor such usage.

Of the companies questioned in the survey, 34 percent said they have a general employee policy that addresses all online activity, including the use of social networking, both on and off the job. Only 10 percent said they have a policy specifically geared toward social networks.

(Credit: Society of Corporate Compliance and Ethics)

More than half of the individuals said their company has no active system to monitor employees using social-networking sites. Around 32 percent said their company acts only when an issue is discovered.

(Credit: Society of Corporate Compliance and Ethics)

Of all those surveyed, 24 percent said an employee in their company had been disciplined for inappropriate behavior on a social network, while 37 percent did not know. The percentage was higher in the nonprofit sector, noted the survey, with 33 percent reporting an employee incident versus only 13 percent in the for-profit sector.

"Business clearly hasn't caught up with what its employees are doing online," said Roy Snell, CEO of the Society of Corporate Compliance and Ethics. "The risks are twofold. First there remains the business risk of employees doing things online that may reflect badly on the company. The second is that, as business develops policies and procedures in this area, there are going to be a lot of people finding that what they have long done is no longer acceptable at work. During the adjustment period there is likely to be a great deal of friction created."

To conduct the survey in late August, the Society of Corporate Compliance and Ethics and the Health Care Compliance compiled responses from 798 people in both profit and nonprofit organizations, as well as government agencies.

It might not be as hotly anticipated as the "Beatles: Rock Band" game, but Microsoft announced at its annual press briefing at the E3 Expo that Facebook and Twitter will be coming to the Xbox Live service.

The press event included short demonstrations of what are effectively Facebook and Twitter clients for the gaming console, aesthetically adapted to the Xbox Live interface.

With the Facebook app, which will be a download from Xbox Live, members will be able to engage in a limited number of features including photo browsing, status updates, and looking at friends' profile "streams."

But what's more important to game developers is the fact that the Facebook Connect standard--which was rolled out first to Web developers, and then to iPhone developers--is coming to the Xbox this fall. This means that players will be able to log in with their Facebook accounts and broadcast their gaming activities on their social-network profiles.

Xbox manufacturer Microsoft made a $240 million investment in Facebook in October 2007. The service now has well over 200 million active users around the world.

Both Facebook products are "penciled in for the fall," Facebook platform program manager Gareth Davis told CNET News. He said that while there currently aren't plans to bring Facebook's virtual currency plans to the Xbox, he implied that it's not out of the question. "We're constantly looking at ways of improving the user experience or the developer experience with Facebook credits," Davis said.

This post was updated at 2:26 p.m. PT with comment from Facebook.

SEBASTOPOL, Calif.--By day, Silicon Valley's young elite were scribbling frenetically on whiteboards in the conference rooms at O'Reilly Media's corporate complex here, with executives and engineers from normally competing companies working together to tackle problems from open-standard implementation to social-network privacy. But in the evening, their dark sides emerged.

The occasion was Social Web FooCamp held here last weekend, a relatively new offshoot of the annual invite-only "unconference" that Tim O'Reilly started throwing in 2003. And the after-hours activity was Werewolf, a strategy game that has been a craze among the Web 2.0 crowd for several years running now. For some of the unconference's more hard-core players, rounds of Werewolf lasted well past 3 a.m.

The lawn of tents at Social Web FooCamp last weekend, home to many a game of 'Werewolf.'

(Credit: Caroline McCarthy/CNET News)

Nobody quite agrees on how this trend began. Some say it caught hold among the Bay Area set when some British software developers introduced it to them at the Future of Web Apps conference in London in 2007, and others point to gaming experts like Jane McGonigal of AvantGame, who have studied Werewolf tactics for much longer. Either way, some in the tech industry see it as just too insidery.

"I'm not really into it," said one engineer from the Santa Monica, Calif.-based MySpace, shrugging as he walked past the glass-walled conference room in which two games of Werewolf were going on simultaneously. "It's a Valley thing. We don't really play it in L.A."

Indeed, jumping on the Werewolf bandwagon--a club that counts Digg founder Kevin Rose, Facebook evangelist Dave Morin, and ubiquitous wine guru Gary Vaynerchuk as devoted members--seems to be as complex as getting immersed in the fandom of a TV show like "Heroes" or "Lost." Similar to a game known as Mafia, the game pits a circle of players against one another as the uninformed villagers attempt to discover which among them have been secretly selected as killer werewolves who pick off the villagers one by one in a night phase when all villagers' eyes are closed. In the day phase, the entire group votes to kill a player whom they suspect to be a werewolf.

The anti-team-builder
The catch is that the villagers, who constitute a majority of the players, have no idea who else is a villager and who is a werewolf, and the individual werewolves will do whatever they can to conceal their intentions. If the usual quasi-leisure activity at a corporate retreat is a team-building game, then Werewolf is an anti-team-builder. An expert player must be skilled in deception and misinformation, in the tactics of persuasion, and in not falling prey to others' arguments.

"It's kind of like poker without cards," said Kevin Slavin, managing director of the New York game development firm Area/Code. "It relies on asymmetric information, it relies on some people having different types of information than others, people having information that only they know, and mentally it's about kind of the interplay between information and social dynamics."

But there are plenty of strategy games out there. Why, specifically, is it this one that's captured the imaginations of the geek set?

"It's very elegant...(which) means it generates a lot of interesting behavior with very simple rules, or very few rules," said Area/Code creative director Frank Lantz, who added that a digital version of Werewolf has turned into a huge craze on a popular message board for poker enthusiasts. "That's one thing that appeals to the technology crowd, (which) is attuned to this quality of emergent behavior and elegant systems, that unfolds into all kinds of complicated behavior from a very simple set of rules."

"I certainly came into it first, pretty much, because of the Ruby on Rails conference and that kind of tech group," said James Cox, the developer who has most recently been in the news for having sold the @cnnbrk Twitter account to CNN. "People who come to Ruby as a language, (are) people who find those kinds of games and puzzles interesting."

And it does get complex. "If the villagers are allowed to keep a pencil and paper, they always win. If they are allowed to get up and switch seats, like, if every round you get up and you move, then the villagers also always win," said Max Ventilla, the ex-Googler who just launched social search start-up Aardvark, and who was one of Social Web FooCamp's avid Werewolf players.

"The way that the werewolves win is that one, they know what's going on so they have more information, and two, they are able to convince the townspeople who don't have info to basically forget about everything they've heard," Ventilla explained. "When you vote with your gut you're extremely swayed by the person sitting next to you. Each werewolf is trying to convince the villager to their right or left that the two of them are in it against everybody else."

So the setup of Werewolf--the simple structure leading to complex interactions, the puzzle-solving nature of it--has major geek appeal. But for young entrepreneurs, it also exercises a valuable skill set. It can take the same mastery of persuasion to convince the person sitting next to you that you aren't a werewolf that it does to talk a boardroom of venture capitalists into that crucial Series A investment round.

This Flickr user's first exposure to the Werewolf game. Among the photo's tags is FooCamp06.

(Credit: Flicker member Buster McLeod)

"If you think about what the fundamental skills in play in something like Werewolf are, they have to do with persuasion and communication. For entrepreneurs in particular, this is kind of a lot of the currency of their everyday lives," Slavin said. "Bringing the types of interactions that are most typical in those scenarios...and turning them into something useless, something that only has social currency instead of live-or-die consequences for the company, is (fun) in the same way that it's fun to bankrupt your friends in Monopoly, not in real life."

"Those are incredibly important lessons for an entrepreneur," Ventilla said. "You're constantly reminded of just how much you need to do until you're really top-notch at those things."

As clubby and insidery as Werewolf may seem, the FooCamp players last weekend were actively seeking new recruits. In fact, James Cox said, they can make it much more exciting. "(Newbies are) really unpredictable, so they can really change the way the game works," Cox said. "You can't pick who they are and what they do...when you play with the same people for a long time, you get to know them really well and can predict werewolves."

But from the sidelines, the casual onlooker might wonder if the popularity of Werewolf is actually a glimpse at a thread of treachery running through Silicon Valley's hyper-competitive culture, particularly at an event like FooCamp where cooperation and idea-swapping rule the daylight hours.

"When ethical considerations are put on hold, you see how people perform in that sense...it's tempting to assign meaning to that," Area/Code's Kevin Slavin said. "I have seen some people lie so convincingly that it's tempting to assign meaning to that with regards to their actual character, and I think that it would be a classic mistake, and it may be in fact the very fact that this has no consequences that allows them to lie so persuasively."

"If it actually lined up one to one in terms of how one played Werewolf and how their interactions played out in the real world," Slavin continued, "we'd end up with some very scary conclusions."

Virtual world Second Life has put in effect some new measures to keep adult content away from users who might not want to run into it. Or fly into it, as avatars might do.

Later this year, parent company Linden Lab will create a standalone "continent" for adult content, and members who don't purchase private "land" will be asked to migrate there if they wish to partake in adult-related activities. Second Life is an 18+ environment already, but stricter age verification policies will be put in place. You'll need a "verified" account, either through credit card information or through Linden Labs' filtering system, to get into the adult "continent."

Members will be asked to start flagging content as adults-only as part of a new content rating system, which will start to roll out in an update to the downloadable Second Life client that will be available next week.

"The people that are on our mainland and in our estate, if they are going to engage with adult content, are being asked to do that in the adult content area," said Cyn Skyberg, vice president of customer relations at Linden Lab. "Private land owners will be asked to tag their searches for adult-related listings so that it goes into the adult filter."

So what does this mean for Second Life, which was briefly a marketers' paradise before swifty falling from grace in the Silicon Valley pecking order? Well, it'll help make it a friendlier environment for some of the new "residents" whom Linden Lab hopes to woo. The company is profitable, due largely in part to the sheer volume of virtual goods and transactions made on the platform by loyal users, and Linden Lab sees corporate and academic institutions as an area for future growth. Keeping porn in its place could be good for P.R.

"A portion of this will be perceived as definitely being more corporate- and educator-friendly because you'll have more control over the things you're experiencing," Skyberg said.

Updated at 6:15 p.m. PDT with correct list of companies that have signed on to test the software.

After it made headlines last week for yet another executive leaving the company, you'd really think things couldn't get much worse for virtual world Second Life and its parent company Linden Lab.

The marketing hype--it's the next Internet!--bottomed out long ago. There was a wave of unflattering press, from virtual terrorism to technical problems to banking scandals. Even the NBC sitcom "The Office" jumped on board, lambasting Second Life with an episode in which Dwight Schrute, the show's archetypal "creepy nerd," professed his addiction.

"I signed up for Second Life about a year ago," Schrute, played by actor Rainn Wilson, explained with his usual dweeby pomposity. "Back then, my life was so great that I literally wanted a second one."

Riding a flying Segway in Second Life.

(Credit: Linden Lab/Screenshot by Caroline McCarthy)

This month's departure of Ginsu Yoon, vice president of corporate development, follows the exits of high-profile executives like chief technology officer Cory Ondrejka and eventually founder and CEO Philip Rosedale. In a post on the Linden Lab blog, Yoon called it "a graduation of sorts for the company and for me...great companies evolve their management around the reality that experienced executives enjoy different stages of company development."

Sunny spin, sure. But this might be one instance where a major executive shake-up could actually be a positive sign.

True to its reputation as a haven for utopian dreamers, Second Life's original executive team wasn't entirely in touch with the business side of things. "I describe it as sort of like being in a Berkeley commune and if the kitchen catches on fire you have to take a vote before you put it out," said Wagner James Au, author of "The Making of Second Life: Notes from the New World," who was employed as a contractor at Linden Lab in 2006.

Philip Rosedale's replacement, announced just over a year ago, was digital-strategies veteran Mark Kingdon. Critics took this as a move that Linden Lab meant business, and the sands shifted internally as well.

"It's got less of that start-up feel," Au said of Linden Lab, which now employs more than 300 people. "The big shift in corporate culture happened after Philip left, and after he stepped down as CEO and then took a chairman role."

Linden Lab representatives do not disclose financials, but they say that Second Life is profitable. Mark Kingdon explained in an interview with CNET News that he estimates user-to-user monetary transactions in Second Life may hit $450 million in 2009, up from $350 million. "(Revenue) comes from land maintenance fees, fees from the 'Lindex,' which is where people trade our micropayment currency, and also from the sales of Linden Dollars themselves," Kingdon said, "and some other sources like in-world advertising and e-commerce, where we recently made a couple of acquisitions."

Herein lies the heart of the matter. Second Life might have earned a reputation as a nexus of odd subcultures, but its primary sources of revenue--a virtual currency, micropayments, an array of virtual goods--fit right into the social Web's business model du jour. Facebook, for example, has been ramping up the focus on its virtual gift application, and is testing a new product in which members can purchase credits simply as street-cred points that they can dole out to their friends.

The system is there in Second Life, and in spite of what the media has concluded, it seems to be alive and humming, even if it's still relying on virtual-world enthusiasts rather than blue-chip marketers. More importantly, what Linden Lab seems to finally be recognizing is that Second Life needs some permanent institutions before it can hope for an influx of people.

Corporate participation is key
The burgeoning space known as "Enterprise 2.0" may turn out to be Second Life's real cash cow. While many marketing campaigns that went into the virtual world have since pulled out or lie fallow, IBM, which has had a presence in Second Life since late 2006, hasn't given up. There are more than 50 IBM regions, or "sims," in Second Life now, including sales and marketing centers, and IBM has been working with Linden Lab to develop and test a behind-the-firewall environment for workplace collaboration and training. Intel, Northrop Grumman, and the U.S. Naval Undersea Warfare Center have also signed on to test the software.

"Businesses are finding great value in collaborative tools and virtual learning, and I think it's going to be an incredibly powerful platform," Kingdon said. Having a more business-savvy executive team--which recently added veterans of Adobe, Pixar, and Intuit to its ranks--is key.

The corporate participation is crucial because you can't just throw individuals into Second Life the way you can into a social network or a role-playing game that has clear aims and instructions.

"It's like trying to learn World of Warcraft and Photoshop at the same time," Wagner James Au said, adding that Second Life's once crash-prone software is "slowly getting better" as new development goes on. "You go in and there's generally a bizarre menagerie of creatures, and it's just kind of overwhelming for people and there's not any specific goal. That's kind of the whole design of Second Life: you want this free-form world where you can do anything. But it's sort of that paralysis of choice that economists talk about. When you have way too many choices, a lot of people just kind of get frozen."

Au, who continues to keep close tabs on Second Life at the blog New World Notes, estimates its current active user count to be 650,000, and said that it's finally starting to grow again after a period of stagnation. Over half of its users are now outside the U.S.

"We had really terrific active user growth that started nicely in the middle of last year," CEO Mark Kingdon said. "In the last week of March, users spent more than ten million hours in Second Life, and that's up from six and a half million in the same week a year ago."

The organized groups slowly gravitating toward Second Life as a platform aren't restricted to companies, though. "There's a mini-MMO within Second Life called Bloodlines that's like a vampire role-playing game. It's got, like, 40 to 60,000 users in it," Au said. "It's gotten complaints, because to advance as a vampire you have to infect other people so they've been showing up in (virtual) shopping malls and fashion shows and started biting people."

Dwight Schrute had better watch his back--or neck.

Linden Lab, the parent company of virtual world Second Life, has quietly snapped up two companies that had built e-commerce marketplaces on its platform. The two start-ups, Xstreet SL and OnRez, will be combined into the "Xstreet SL platform," a sort of Craigslist-eBay hybrid for the trade of Second Life virtual goods.

Financial terms of the deals were not disclosed.

It's a revenue stream for Linden Lab, which will take a cut of each sale. And, the company says, virtual goods are a $1.5 billion industry. Though a vicious marketing hype-backlash cycle has painted Second Life as an also-ran, $360 million in Second Life goods were bought and sold in 2008, believe it or not, and there are currently 680,000 items up for sale on Xstreet SL.

Based on the Web rather than in-world, the newly acquired marketplace is part of an ongoing strategy at Linden Lab to recapture mass interest by giving members and prospective members an opportunity to "shop" outside of the Second Life environment.

"Having a Web marketplace to browse and search is a great way to find new designers, keep up with the latest creations, or just find that perfect gift/texture/dress/home/weapon/couch," a post on the Linden Lab blog explained. "Our goal is to make the Web marketplace a wonderful complement to in-world shopping and a great benefit for all residents."

Perhaps part of the thinking is that by giving Second Life more of an official Web-based presence, the marketing will take care of itself. That's possible. But reversals in fortune are rare on the Web, where even a successful product can't stay stagnant for too long before an enterprising rival eclipses it.

Worth noting: virtual goods have been banned from auction giant eBay for nearly two years now, but Second Life goods were exempted because of Linden Lab's argument that the virtual world does not count as a game (and the ban specifically targeted gaming items).

Second Life also has reason to take some of its financial activity out of the virtual world: resident-created banks were effectively banned after a series of scams and scandals last year.