Gaming and Culture

I attended the Virtual Goods Summit on Friday and walked away struggling to figure what topics might be interesting to write about. My net takeaway is that not much has changed in the year that I've been writing about social gaming and virtual goods, with the exception of two facts:

1. Virtual good providers are being lauded as the next big thing to replace advertising
2. There's something weird going on with the ads and offers that have taken over the more traditional banner advertising role

There is no question that virtual goods have become an integral part of social network revenue streams. And the mainstream media has finally started to catch on.

But, I didn't realize the oddities of the way users are being monetized until I attended the event and saw the heavy emphasis not just on monetizing users but on doing so in a way that was transparent and non-intrusive. Theoretically, it's a good idea, but in practice, many of the "offer" providers are purposely or inadvertently running Ponzi schemes.

TechCrunch's Michael Arrington arrived at my second point above and took the theory much further with data that shows many social gaming offers and advertising practices amount to little more than a complicated scam that gets people in the door for free only to take advantage of their lack of understanding of what they've technically agreed to in the various offers.

In short, these games try to get people to pay cash for in game currency so they can level up faster and have a better overall experience. Which is fine. But for users who won't pay cash, a wide variety of "offers" are available where they can get in-game currency in exchange for lead gen-type offers. Most of these offers are bad for consumers because it confusingly gets them to pay far more for in-game currency than if they just paid cash (there are notable exceptions, but the scammy stuff tends to crowd out the legitimate offers). And it's also bad for legitimate advertisers.

Gamers are not just making purchases to enhance their gaming experience but also selling virtual assets to other players, according to new research from video game market research firm VGMarket.

Sales of virtual goods are expected to reach $1 billion this year and already generate near $4 billion annually in China. But there are some challenges, primarily the fact that once you convert your real money to virtual cash you can't readily get the dough back out.

The research revealed that in-game currency is the most frequently sold digital good from player to player and that two out of three sellers sold in-game currency in the last 12 months, earning a median of $22. PlaySpan, a provider of monetization and payment solutions for games and virtual worlds and sponsor of the research, considers that to be good news as its platform enables game developers to provide player to player marketplaces for their players. In addition, the PlaySpan Marketplace currently provides a secondary market for IMVU players to buy and sell goods as well.

One out of two sellers made a sale in a social network game over the last 12 months and earned a median of $50, while one out of four sellers made a sale in a free-to-play game over the last 12 months, with their median earning being $98, or nearly double that on social networks.

Eric Hartness, chief marketing officer at PlaySpan, told me that the secondary market is a boon for games, adding value, real and perceived, to all players by associating a real world dollar value on their playing time, game accounts, and digital items.

You might think that starting a brand-new, high-quality, full-glossy magazine in one of the worst publishing environments in years would be a suicidal business idea. After all, take a look at just about any magazine you can think of, and, thanks to the veritable collapse of advertising, odds are it's about as thin as can be.

But to the folks at Future--a leading games media publisher--the time couldn't be better to launch World of Warcraft: The Magazine, a new quarterly title that is expected to be unveiled at this weekend's BlizzCon event--the world's biggest World of Warcraft fanfest--in Anaheim, Calif. The magazine will be the "official" WoW magazine, and is both endorsed by and produced with the editorial cooperation of WoW publisher Activision Blizzard.

And, indeed, the timing for the forthcoming magazine is clever: The first issue is planned for sometime this fall, just as WoW celebrates its fifth anniversary. And with an astounding 11.5 million players of the game now spread out around the world, Future is hoping that by promising potential readers stunning artwork, behind-the-scenes looks at ongoing development, deep dives into the game's lore, and perhaps even occasional scoops about new features or other WoW elements, it will offer fans an invaluable experience. In fact, Future sees this magazine as something along the lines of a collectible coffee table book.

Still, Future has chosen a difficult business model for the new publication. Each issue is expected to be 148 pages long, with precisely zero ads, which means that the title is shut off from traditional magazine revenues, and therefore will rely entirely on subscription fees. On the other hand, that same dynamic also means that it should be shielded from the vagaries of the advertising market, something that is currently taking down one magazine after another.

According to Future, World of Warcraft: The magazine will be offered for subscription only--no single copy sales--with U.S. readers paying $40 annually, those in continental Europe 35 euros and the British 30 pounds. The magazine will be published in English, French, German, and Spanish.

"The magazine market is suffering a rough time," said John Gower, the international director of FuturePlus, the title's publisher, "but only those magazines that are based on advertising models. We've seen our magazines increasing across the board, especially the hobbyist" titles.

That may be true, but in order to support what the publishers say will be a costly blend of commissioned art, in-depth articles written by veteran journalists and behind-the-scenes access, Future will have to convince a great deal of its players that it's worth their while to pony up $40 on top of their $15 monthly game subscription fees, even as those same players can find an enormous amount of WoW-related information online.

And that proposition is clearly not for everyone, even some of the most passionate WoW players.

Project Natal is both great gaming and a great workout, as CNET News' Ina Fried experienced firsthand when she got to try out the technology last week.

(Credit: CNET News)

REDMOND, Wash.--One of the reasons that Microsoft got such buzz for Project Natal is because it is so easy to see how the technology could change the face of gaming.

But it's even easier to appreciate once you get a chance to try the gesture recognition technology yourself. When I was in Redmond, Wash., last week, I got a chance to do just that.

Playing Ricochet, a 3D breakout-like game, I found myself wanting to do whatever I could to stop the balls from passing me. It felt less like a traditional video game and more like I was a soccer goalie and an entire team was firing shots at me. (For a firsthand look, check out the embedded video below.)

It was both a lot of fun and a bit of a workout. Apparently, I'm not the only one who has noticed that.

"Since I started working on this project, I've lost almost like 10 pounds," said Kudo Tsunoda, general manager of Microsoft Game Studios and the creative director for Project Natal. "We're going to have the most in-shape development team you've ever seen."

The effort is important to more than just the waistlines in Redmond. Microsoft is counting on Natal to give an important bump to the Xbox 360, which Microsoft has said is only mid-way through its lifecycle, even though it has been on the market since 2005.

After Ricochet, I tried my hand at an existing driving game that had been connected to the Natal interface. And while my steering hasn't gotten any better than when I checked out a set-up from GestureTek earlier this year, Microsoft's technology is quite impressive. The steering and other controls were both intuitive and responsive.

I moved my foot forward to accelerate and backward to slow down, brake, and eventually reverse the car. To steer, I simply used my hands like a steering wheel.

Although Microsoft demonstrated Natal at this year's E3 trade show, the software maker hasn't said when the technology will be available. The company has said that Natal, which incorporates face, voice, and gesture recognition technologies, will be sold as an add-on to the current Xbox 360 console.

The effort to turn Natal from concept to shipping product has been something of a mini Manhattan Project inside Microsoft, according to former Carnegie Mellon researcher Johnny Chung Lee, who is among those working on the effort.

And while smashing bricks and cars are some of the first ideas on how to use Natal, the vision clearly goes a lot further.

Inside Xbox, Tsunoda noted that Natal can be useful for more than gaming. He noted that for many first-time console users, the controller itself can be intimidating, even when trying to do things like navigate through menus. Oftentimes people get their first experience with the Xbox when they are at the house of a friend or family member who has an Xbox and they are handed a controller with lots of buttons.

"For a lot of people that can be intimidating," Tsunoda said. "You don't really know what to do and you're starting to feel stupid and everyone is looking at you and you are not being successful. That's really not a good first way to interact with our console."

Tsunoda and Entertainment Unit President Robbie Bach both said they are confident that Natal will also have great appeal for the core gamers already spending hours a week playing on the Xbox.

"Even the folks who are hard-core Halo or Splinter Cell players, they are also going to want to play Natal games," Bach said in an interview.

In an interview with CNET News last month, Bill Gates talked about how the technology has applications well beyond just gaming.

"I think the value is as great for if you're in the home, as you want to manage your movies, music, home system type stuff, it's very cool there," he said. "And I think there's incredible value as we use that in the office connected to a Windows PC. So Microsoft research and the product groups have a lot going on there, because you can use the cost reduction that will take place over the years to say, 'Why shouldn't that be in most office environments?'"

At last week's analyst meeting, Bach and Craig Mundie, chief research and strategy officer, also outlined the broad appeal of being able to interact more directly with computer interfaces. After Bach tried his hand at some Natal gaming, Mundie offered a demonstration of how gesture recognition might function in a work setting, saying that the desktop PC of the future could in fact encompass the entire office.

In his role heading policy and enforcement for Xbox live, Stephen Toulouse is widely known for wielding the "banhammer"--that is being the guy who comes down on cheaters and those who harass people over the online service.

Toulouse said he is starting to shy away from the banhammer moniker, given that he and his team employ a range of punishments, from the temporary suspension of a feature all the way up to permanent ban of all users of a particular console. But, he said, as an avid gamer, he is enjoying his role trying to keep Xbox Live as a fun and safe space.

Toulouse

(Credit: Stephen Toulouse)

"It's nice to get to protect people in a new way," Toulouse said in an interview. Before taking over as top Xbox cop, Toulouse worked in Microsoft's Security Response Center and trustworthy computing unit, handling the flaws in Microsoft's products and the resulting security outbreaks they caused.

In some ways, life has changed little for Toulouse since he switched to the Xbox role in August 2007. He's just fighting different kinds of bad guys.

Whereas Microsoft has a large team of people scouring the Internet for reports of security holes, it also has a team of five or six dozen people that are playing Xbox Live at any given time, looking for any type of problems.

"There's always a segment of the population that is going to be miscreant," he said. Still, he said, at any given time just one-twentieth of one percent of all those using the online service have a complaint registered against them. "It's a tiny fraction of the overall interactions."

Toulouse said he relies on the lessons he learned while trying to protect Microsoft customers from bugs that exploited its flaws.

"I carry with me from the MSRC (Microsoft Security Response Center) days that concept of how can this feature be misused or how can this capability be misused," he said.

Cheating is one of the issues that he deals with, though Toulouse said that is somewhat limited given the closed nature of the Xbox as compared with, say, the PC. Most of the issues come around exploiting a flaw in game's map, say a place that one can go where they can shoot other characters but not be hit themselves.

Probably the area he spends the most time policing isn't in any game at all. It's overseeing the regulation of what people put in their gamer tags and profiles.

"They have 255 characters," Toulouse said. "They can say a lot of things."

The company not only responds to complaints but is also constantly working on expanding its lexicon to include new slang for the terms and subjects that it bans. Urban Dictionary, Wikipedia, and other places help the company keep up to date.

"We spend a lot of time researching those terms," Toulouse said. "It's a huge and fast-moving world in terms of how slang develops."

One of the specific issues that has cropped up under Toulouse's watch is the issue of whether and how users can identify their gender identity and sexual orientation. The issue gained some measure of attention starting last summer after several users were prohibited from referencing a gay identity in their gamer tags.

Microsoft's current practice is to ban any discussion of sexuality in either tags or profiles--a move that makes it impossible for those gamers who want to identify as gay, lesbian, bisexual, or transgender to do so.

In part, Toulouse said, that's because 98 percent of those who have tried to use the term gay have done so not as a means of self-identification but by using the word as a put down.

But for someone who wants to be more than a "banhammer," Toulouse acknowledges just prohibiting all reference to sexuality isn't much of a solution.

"I think what we have today is inelegant," he said, adding that he is working on an improvement, but he still doesn't have a timetable for when a better option will be in place. That's basically the same position he took when the company addressed the issue in February.

"I haven't made a change to date but I am committed to making a change," Toulouse said. "We hear very clearly that customers wish to express this."

Toulouse said that part of the reason it has taken so long is that the company is looking at changing not just the policy but also the profile technology, perhaps adding check boxes where people could include their gender identity or sexual orientation and perhaps other characteristics as well.

"That's the thinking we are leaning toward," he said, adding that no final decision has been made.

This past weekend, Toulouse was in San Francisco for a panel discussion on the role of homophobia in virtual worlds--an issue that more than just Microsoft is trying to grapple with. More than 100 people turned out for the discussion, which was sponsored by the Gay and Lesbian Alliance Against Defamation and also included representatives of Electronic Arts, Linden Labs, the Entertainment Software Association, and Flynn DeMarco, founder of gaygamer.net.

GLAAD's Justin Cole said that it is not surprising that it is taking Microsoft time to come up with a workable solution to what is clearly a big problem.

"For a system as big as Xbox Live to be able to change something isn't as simple as just a flip of the switch," Cole said.

Another issue for Toulouse and team is educating parents about the need to set controls for their children's use of the Xbox. With other game consoles, the biggest issues are often deciding which games a child can play and for how long.

Many parents aren't aware of a potentially bigger decision that comes with the Xbox. Because it runs online and has chatting capabilities, parents also need to decide with whom their child can communicate online. With Xbox Live, users can get text and audio messages, as well as pictures.

"Those capabilities, like any capabilities, can be misused," Toulouse said. By default, accounts set up for under-18 users turn off the chat capabilities, but many teens set up their own consoles and decide to make create adult accounts, which allow all such messages by default.

Parents often think about these issues when it comes to their children's computer use, but don't always think about having similar rules for things like the Xbox. To try to make parents aware, Microsoft has launched a "Get Game Smart" Web site as well as recruiting a number of online parents and teens to serve as "ambassadors" to their less savvy counterparts.

It's a lot more complicated than when he was young and his parents could just take away the power cord if he wasn't allowed to use his Atari home computer. However, he got an early taste of how to cheat the system--saving up his money and buying an extra power cord from a local electronics store.

Metaplace is a massively multiplayer online role-playing game, or MMORPG, that runs in Flash. It doesn't have nearly as many users as Second Life, nor the cult following of World of Warcraft.

But in an announcement that could go a long way in helping the service expand beyond its 6,000 active users, Metaplace worlds can now be embedded into a blog.

Once that embed is complete, Metaplace users can play in the world right on the blog. If the blog author adds multiple embeds of different worlds, the gamers can be in each of them simultaneously.

Is Metaplace really the kind of service that would make you want to create a world and embed into your blog?

Metaplace worlds can now be embedded in blogs.

(Credit: Screenshot by Don Reisinger/CNET)

I had the chance to try out Metaplace. And although it has some issues, for the most part, the service is well worth a gamer's time.

A scene from Spore Hero, a new variation on Spore designed for the Nintendo Wii.

(Credit: Business Wire)

Aliens beware. Nintendo gamers will now be able to transform into galactic Spore heroes with the release of two new games for the Wii and DS.

To be unleashed this fall by Electronic Arts game studio Maxis, Spore Hero and Spore Hero Arena, are new additions to the Spore universe created exclusively for the Nintendo platforms. Spore transports players to a virtual galaxy in which players create entire civilizations, explore new worlds, and befriend or battle alien creatures.

In Spore Hero, created for the Wii, players take on the role of hero to defend their planet from a dark alien force bent on worldwide destruction. The game includes a Wii-enhanced Spore Creature Creator, which lets players design their own aliens from over 200 different body parts (tentacles included).

Earlier this month, EA said that gamers had concocted more than 100 million Spore creatures.

In Spore Hero Arena, for the portable Nintendo DS, players create a gladiator-type hero trekking from one planet to the next to complete missions and vanquish dangerous aliens. Spore Hero Arena offers a multiplayer feature for use by up to three peoples locally or with one person over a Wi-Fi network.

"Whether it is the stylus-driven action of the Nintendo DS or playful controllers of the Wii, the massive Nintendo audience is the ideal home for Spore Hero and Spore Hero Arena," Lucy Bradshaw, vice president and general manager at Maxis, said in a statement.

The Spore franchise has grown in sales and popularity since the first Spore game was released last year. A recent addition to the franchise is Creature Keeper, a kid-friendly version of Spore. Another new game, Spore Galactic Adventures, will be unveiled in June for the PC and Mac.