What's former MySpace CEO Chris DeWolfe up to these days? He wants to be the next big name in the social-gaming craze, we hear.
In late July, TechCrunch floated a report that DeWolfe was hitting up big private equity outlets to amass cash, at least $100 million, for a new venture that would involve "a roll-up of an Internet industry vertical," but TechCrunch didn't specify what that sector was. Three months prior, DeWolfe had been ousted from the troubled MySpace and replaced by former Facebook executive Owen Van Natta.
Former MySpace CEO Chris DeWolfe
(Credit: Michelle Meyers/CNET)Now, several well-placed sources have told CNET News that DeWolfe intends to make a move in social gaming, a red-hot space currently dominated by the Mark Pincus-headed Zynga, and that his "roll-up" plans involve buying up a number of smaller social gaming companies so that he and Pincus can go directly head-to-head.
Multiple sources have indicated that DeWolfe is working on this new venture with Aber Whitcomb, who left his role as the News Corp.-owned MySpace's chief technology officer in late September.
We don't know what kind of progress DeWolfe, who did not reply to a request for comment, has made in securing that private equity money he was reported to be hunting for this summer. We don't know what the company's name will be--if he's settled on one yet. Nor do we know which smaller companies he wants to agglomerate.
But social games are on the brains of multiple ex-MySpace bigwigs, who were able to witness from the front lines the explosion of the industry when game developers started tapping into the viral channels on big social networks. Another MySpace executive, Jason Oberfest, left the company after just over a year to join social gaming start-up Ngmoco.
One source said that Ngmoco's valuation may already be too high for DeWolfe to consider it for his roll-up plans. Rather, DeWolfe is likely looking at very small gaming companies run by a handful of stellar developers but that lack the legal, business development, and dealmaking resources to make any kind of a dent in the current social-gaming market. He also may be looking at companies that had some initial buzz but have since seen their growth plateau or drop off.
We hear that in the months before DeWolfe's departure from MySpace, there was a lot of talk of gaming as the social site, rapidly losing ground to Facebook, attempted to refocus itself as an entertainment destination. When DeWolfe was in charge, MySpace inked a deal with casual-games maker Oberon to power a gaming platform, but that deal is no longer in place. (We've contacted Oberon for comment.)
Now, under the direction of Van Natta and several former MTV execs like Courtney Holt and Jason Hirschhorn, MySpace's "entertainment" direction is much more focused on music, and gaming has taken a back burner for the time being even though there are some hugely popular games on MySpace's developer platform.
Things couldn't be more different in the social-media industry at large, where gaming is currently front and center. While there was early on a close rivalry between two companies, SGN and Zynga, the far and away leader right now is Zynga--which is pulling in between $100 and $250 million in revenues depending on which industry blog you read, and spends tens of millions of dollars each year just buying up Facebook ads for marketing.
A few companies, like Playfish and Playdom, have also grown big (though still smaller than Zynga), and there are persistent rumors that one of them may be sold to an established gaming-industry player like Electronic Arts.
Most other companies in the space are easily several orders of magnitude smaller. Trying to make inroads when there's already a clear, formidable leader is difficult, and the economic climate means the private equity sector might be skeptical about handing a blank check to someone because he happens to have CEO experience.
What we have heard, though, is that DeWolfe already has someone to model himself on: Rupert Murdoch, the News Corp. CEO whom DeWolfe was reportedly very close to during his tenure at MySpace. With a roll-up of acquisitions, he would plan to do for the gaming industry what Murdoch did for newspapers: pluck them up across the industry, and build an empire.
Ambitious, yes.
Not so long ago, the faces of gaming on social networks were those of zombies, vampires, and cuddly virtual pets. Now it's more along the lines of Michael Corleone or Tony Soprano.
You've probably seen it in your news feed: From Facebook to MySpace and now Twitter, Mafia-themed games have more or less taken over. Mobsters, a game created by development company Playdom, is the most popular application on MySpace's platform. Mafia Wars, owned by Zynga, is a huge hit on Facebook. The Social Gaming Network has an iPhone app called Mafia: Respect and Retaliation. And earlier this month, a Twitter-based game called 140 Mafia launched. The craze appears to have started with a Facebook app called Mob Wars, which was built by a smaller company called Psycho Monkey.
The premises of most of these games are the same. You can found or join a "mob" with friends from the social network that the game has been built on. You can carry out missions, including "killing" other players in rival mobs, in order to earn points. Your activities are broadcast, via news feeds or Twitter posts, to your friends on the network in question.
With the mobster gaming craze, social-network developers may have found the secret to bringing multiplayer role-playing games--long the lucrative domain of ultrageeks--fully into the mainstream. They can build elaborate role-playing scenarios with points, levels, teams, and weapons, but without the nerdy stigma that's become attached to fantasy-themed games in the vein of World of Warcraft. (A 2006 episode of the Comedy Central cartoon "South Park" summed this up well.)
"A lot of the core architecture is very similar to role-playing games in the past, in the way that levels and achievements and so forth are often themed around the certain topic but are pretty generic, actually," said Justin Smith, who runs the blogs Inside Facebook and Inside Social Games. "When you compare a dragon game to a mob-based game, they're actually pretty much the same thing with different content."
"People just really like the crime genre," said Mark Pincus, CEO of Zynga, which publishes Mafia Wars. The mobster game is currently the company's most popular app, with 15 million active users across social networks Facebook, MySpace, and Tagged. "GTA (Grand Theft Auto) and a lot of derivative games of GTA top the charts, and I think that it's more those games feel more culturally relevant to people than a lot of other games that go into other genres that are either historical or more fantasy. I think that people like fantasies that are closer to reality."
There's another side to it: Organized crime in the real world tends to be concerned with the illicit transfer of wealth in one form or another (drugs, laundered money, gambling, you name it). When you take the popular perception of the mobster lifestyle and transport it to a gaming environment, there are plenty of opportunities to bring money into the mix. Most of the Web's Mafia-themed role-playing games make money from display ads as well as the sale of virtual goods, and some make it possible to earn extra points and "level up" by completing offers and surveys. It's no secret that some social gaming companies are making a ton of money, but mobster games are a particularly lucrative enterprise.
"(It's about) climbing your way to the top, and the status, and the ego of being the biggest and the best and the toughest," said Jason Bailey, CEO and co-founder of Super Rewards, the company that has partnered with 140 Mafia to power its payment platform. In 140 Mafia, for example, players who want to speed up their "recovery" from a round of game play can petition to the "godfather" for a favor (and that'll cost them real money).
Plus, Bailey said, it gets personal: "It has that small violence factor as well, being able to feed on people and put them on the hit list. When somebody does that to you, when somebody kills your character...the rage that it conjures up in people is much much stronger and they're much more willing to retaliate than in a sports game or a racing-themed game."
As with any online sensation, though, the question remains: Is this just a fad? From film noir to "The Godfather" to "The Sopranos," mobster themes have a solid shelf life to them, but mobster games on social networks could easily fade from favor if something more exciting comes along. But the real lasting power, social gaming insiders said, is in the fact that Web development makes it possible to keep a game in a constant stage of evolution. Once these games hit critical mass--which Mafia games arguably have--it's easier to keep people around.
Short attention spans
They're also low-maintenance, said Dave Kahn, head product manager for Zynga's Mafia Wars.
"I would say the difference between what makes Mafia Wars more popular over time than your traditional console game or your traditional hardcore game is that you can have the same experience with five minutes of play and you can interact with your friends," Kahn said. "I would say a game like GTA or a game of that crime genre would be much more popular if you could interact with your friends on a daily basis, and it doesn't require much time investment for you and your friends to have that satisfactory interaction."
"You're able to come in and come out in short spurts. You can play for 30 seconds, you can play for five minutes," Jason Bailey said. "It's not like a first-person shooter or a real-time strategy game where, if the phone rings, you're going to get shot. It's really easy to come in and out of these games."
On the flip side, though, casual players who haven't put a massive time investment into a game are quite likely to be more fickle about whether they stick around or not. Time will tell when it comes to just how "sticky" mobster games turn out to be for players who aren't completely hardcore.
But beyond attention span issues, perhaps the biggest challenge to the creators of mobster games is that there are simply too many of them already, and the companies that make them have fallen into courtroom infighting that bears an ironic resemblance to actual mob warfare. There's an outstanding lawsuit between Zynga and Playdom, for example, over the latter's allegedly illegal use of the Mafia Wars name in advertising its own Mobsters game. And Mob Wars creator Psycho Monkey sued Zynga over copyright infringement in February.
"There's a variety of litigation that's still pending, and I think it just generally reflects the current culture of game development on social networks right now," Inside Social Games' Justin Smith said. "There's a lot of rapid iteration based on adapting other games and twisting them in a very slight way, and there haven't been many good examples of cases in which the IP has been successfully protected in the courts. So I think it will really be interesting in seeing how some of these cases play out over the next few months."
As we learned in the Scrabulous-Wordscraper-Lexulous affair last year, in which the manufacturer of board game Scrabble used litigation to force a Facebook-based imitator to change its name, intellectual property laws for games are complicated, and extremely similar games may legally coexist as long as they don't share a few key features. But it's not clear whether the mob wars over Mob Wars and its ilk will be without carnage.
"There's literally 20 or 30 mob-themed games on the Facebook and MySpace platforms, and that's conservative," Jason Bailey said. "If people find something that works, they copy it and copy it and copy it, ad nauseam."
The playing field for mobster games, as well as any other games on social networks that make money through virtual goods and transactions, could also change dramatically when social networks start introducing payment systems of their own. Facebook will start to do this soon, and it's also been circulated as a possible business model for Twitter. It's unclear what the rules will be in either case.
But Super Rewards' Jason Bailey--whose company will be a competitor to Facebook's in-house virtual currency platform, it should be said--thinks the dominance of mobster games won't change much if Facebook brings new rules to the applications on its platform. It may be too late for the massive social network to be the real kingpin when it comes to monetizing the likes of the mobster game craze.
"Facebook's issue, I believe, is it's hard to tack something like this on later...companies go out and spend millions of dollars building games for your platform," he said. Were Facebook to start requiring a cut of the revenues, "there would be literally a riot of people with torches at (CEO Mark) Zuckerberg's house tonight complaining about it."
Well, that's a whole different kind of mob.
The Social Gaming Network, which operates gaming applications like Warbook and Super Snake for social-networking developer platforms, announced on Thursday that it has opened a platform of its own. Developers can now access an application program interface (API) so that they can contribute; the company is set to let developers in on Thursday night and put out more information next week at the Game Developers' Conference.
The Social Gaming Network is owned by Webs.com, the Web 1.0 veteran formerly known as Freewebs, and currently works with Facebook and Bebo's platforms.
It's the second gaming start-up to put out an announcement about developers this week. Zynga, a similar site recently launched by Tribe.net founder Mark Pincus and funded by Valley luminaries like LinkedIn founder Reid Hoffman and PayPal founder Peter Thiel, announced earlier on Thursday that it would be launching a developer initiative so that game publishers and developers can get their applications on more social-networking sites. Currently, Zynga's games are compatible with Facebook, Bebo, Friendster, and Meebo, with MySpace.com on the way.
Zynga and the Social Gaming Network aren't the best of friends--Social Gaming Network founder Shervin Pishevar has been critical of Zynga's games, which he claims infringe upon existing ones (Sea Wars, for example, is a lot like Battleship), and company representatives have said that they think Zynga's popularity metrics are exaggerated. Both gaming start-ups claim to be "the biggest social gaming network." It might not be HD DVD vs. Blu-ray, but this is a rivalry that could get ugly.
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