VentureBeat

How will the current crisis on Wall Street affect Silicon Valley? – “I don’t think it will have much of an impact on Silicon Valley as an operating entity,” banker Bill Hambrecht tells Om Malik. Watch the video for more.

Meanwhile, how will online advertising be affected by Wall Street turmoil? — Maybe not so bad, some hopefuls in the industry tell PaidContent.

Global Agency Interpublic Group creates new venture arm — It will be called Mediabrands Venture Fund, and follows similar moves by marketing conglomerate rivals WPP and Publicis. IPG has already invested in social network Facebook, TV ad creation company Spot Runner, and marketing firm Huge.

Grand Theft Auto maker Take-Two Interactive sees shares plummet — After a nine-month-long acquisition bid by EA ended in failure.

The Wall Street Journal gets a redesign — See screenshot or click here.

The Wrath of The Lich King is coming — The massive multiplayer online game’s creator, Blizzard, expects to release it around the world on November 13. Meanwhile, EA prepares Warhammer Online for September 14th.

Data-focused gadget company Ambient Devices gets venture backing — An undisclosed amount from .406 Ventures.

Nanosolar to build ten-megawatt farm — This will be the first really good-sized deployment of the company’s technology.

Bill Gates reflects on crappy Windows experiences — As the beginning of a farewell series to Microsoft co-founder Bill Gates, the Seattle PI has printed a long, stream-of-consciousness rant by Gates about the frustrations of using a piece of Windows software in 2003. “The lack of attention to usability represented by these experiences blows my mind,” Gates says in summation. Any ideas for retirement presents?

A123 looks to electrical grid storage market — Wildly successful (so far) battery startup A123 has signed contracts with several utilities to plug its lithium-ion batteries into the electrical grid for short-term storage needs, according to CNET. The technology is for “grid stabilization”, or meeting short-term shifts in demand, rather than storing power for long periods, a requirement for solar and wind power that has still not been satisfactorily met.

Google joins drive for ubiquitous Internet — The search giant has thrown its weight behind a national initiative that aims to put broadband web access in everyone’s hands, regardless of social status. Hopefully, it will be more successful than municipal WiFi.

Japanese browser companies invade Silicon Valley — Lunascape has established a Silicon Valley beachhead, following the example of another Japanese company, Fenrir, that recently released its Sleipnir browser to the international market. The two are intent of breaking into a browser market already jostling with offerings like Camino, Firefox, Flock, Opera and Safari.

Japan may restart solar power subsidies — The Land of the Rising Sun may finally live up to the name, with a proposal on the table to renew subsidies and provide a boost to the solar industry. Japan’s local market dried up when it cut the grants in 2006.

IPhone may set sail early on July 11th — Boy Genius speculates that the iPhone may launch hours before expected on July 11th, so that week-long camping trip iPhone addicts embark on over the July 4th weekend may end early.

Animoto offers video creation for business — Animated slideshow creator Animoto has begun offering its video creation tools for business use, on a subscription basis. The company’s last product launch was a Facebook widget we reviewed in March.

Tech jobs up, New York number one — High tech jobs are up in 51 cities, according to new statistics reported by BusinessWeek. Seattle leads in the number gained and New York in overall jobs, likely due to the banking and ad industries. Meanwhile, Silicon Valley still has the highest concentration of techies, not to mention entrepreneurs.

Halo 3 body count exceeds Earth’s population — Are you working, reading blogs, or just playing Halo 3 again? Smart money is on the third option, with Halo 3’s kill count up to 6,743,784,316, some 40 million more than Earth’s population.

More hit games, really? — Meanwhile, just to seal the free-time fate of tech geeks everywhere, Blizzard appears to be dropping hints that its next blockbuster is on the way.

Dressing up as a person of the opposite sex and casting magic spells in a fantasy world has become a popular American pastime. U.S. online video game subscriptions are generating $1 billion a year in subscription revenue, according to market researcher NPD Group.

Those numbers include revenue from massively multiplayer online games (virtual worlds such as World of Warcraft), casual games such as card games on Pogo.com, and online games on consoles such as the Sony PlayStation Network and Microsoft’s Xbox Live online gaming services.

The numbers are important because sales of retail PC games have been declining or have been flat, prompting many to conclude that consumers are turning to console video games such as Wii Sports on the Nintendo Wii. But the subscription data, which NPD only began collecting in October, shows that PC games are still a vibrant market, said Anita Frazier, an analyst at NPD.

On a monthly basis, more than 11 million gamers are subscribing to online games in the U.S. Console subscription revenues grew 9 percent from the fourth quarter of 2007 to the first quarter of 2008.

The top five games in the first quarter of 2008 were “World of Warcraft,” “RuneScape,” “Lord of the Rings Online,” “Final Fantasy XI,” and “City of Heroes.” The top casual sites in subscribers were Electronic Arts’ Pogo.com, Real Networks’ RealArcade.com, Bigfishgames.com, Gametap.com, and Disney.com.

And yes, this commercial message has been brought to you by sponsors Microsoft and Intel. Just kidding.

[photo: flickr/flawedartist]

[Update: corrected some figures here] China’s online video game market is expanding rapidly, with sales expected to nearly quadruple from $1.7 billion in 2007 to $6 billion in 2012, according to a survey being released Friday by market researcher Niko Partners.

The market is expected to grow 32 percent 47 percent in 2008 to $2.5 billion, while the overall five-year compound annual growth rate through 2012 is expected to be 28 percent. That makes China one of the fastest-growing markets in the world.

“This market is attractive because it is leading the way for online games,” said Lisa Cosmas Hanson, managing partner of Niko.

One of the country’s hottest games is Blizzard’s World of Warcraft, which has more than 1 million concurrent users in China. Chinese players pay roughly $4.30 for 66 hours of game play. Most players play the game in China’s 185,000 Internet cafes. But the domestically created Fantasy Westward Journey game, an online game run by Netease, has held the No. 1 spot with 1.5 million peak concurrent users in 2007.

Cosmas Hanson said online games represent 95 percent of the Chinese market, largely because it’s technologically easier for online game operators to prevent piracy. Sales of legitimate offline packaged games, for instance, represent a tiny part of the market: $160 million $20 million in sales in 2007.

Niko estimates that 90 percent to 95 percent of packaged games sold in China are pirate copies. The pirated packaged software market actually shrank from 9.7 million units to 6.8 million units between 2006 and 2007, mainly because pirates are going to peer-to-peer networks to download games. Read the rest of this entry »

Red 5 Studios, a new start-up formed by the team that built popular online game World of Warcraft (WoW), has raised $18.5 million in venture capital to create online games that integrate more social networking aspects from the outset.

The funding comes from Benchmark and Sierra Ventures. Red 5 Studios is based in Aliso Viejo (southern California), not far from the team’s former employer, World of Warcraft’s parent Blizzard. The new company is led by Mark Kern, team leader on developing WoW, and two other Wow creators. The investment is significant because it comes at a time when gaming has become popular and investors hope to leverage the power provided by social networking on the Web. Last week, we reported that Shawn Fanning is forming Rupture, to form Web communities around games.

The investment is the latest move by Benchmark partner Bill Gurley to invest in interactive entertainment (he is an investor in Jamdat, acquired for $650 million last year, and Second Life, which has become hyped lately). Benchmark Europe is also an investor in Sulake, maker of the popular interactive game Habbo Hotel. Gurley told VentureBeat his interest in the sector began during his travels to China several years ago, when he visted gaming companies Shanda and TenCent, but was unable to invest. He scoured the sector back in the U.S. and became interestng interested in Blizzard’s team, seeing a drive and focus he hadn’t seen in other companies.

Red 5 wants to become the leading studio for popular MMO games (MMO stands for Massivey Multiplayer Online games), where thousands of players play at one time.

Historically, Gurley says, the winners in the gaming space have been publishers, rather than independent studios. Gurley says he thinks Red 5 will change that. Red 5 Studios’ first title is under development; it is financed and will be distributed globally by Webzen, which has given a large sum of money — totaling more than Benchmark’s investment — but it is not an equity investment.

MMOs have so far been a niche sub-sector of the games industry, accounting for less than ten percent of the industry’s developers. But WoW has grabbed the industry’s imagination, Kern said. The Red 5 team will focused on the PC, not the console.

Benchmark’s cash will help pay for an extensive back-end infrastructure, including server, database and networking needs. In fact, $18.5 million is not much, Kern says. Movie budgets are getting to the $60 to $100 million range, he noted. “Games aren’t there yet, but they’re expensive to create.”

The team has been together since January, and has been self-funded. Kern said staying at WoW was not an option. He and his team hankered to create something new — namely blend games with Web 2.0 social networking.

So how does he plan to make money, if the game is opened up to the wider Web community, and not controlled like WoW? Kern says continues to think through this question, and has ideas on paper, but asserts that the development process will take years. “It’s really early,” he said.

Moreover, while Napster’s Fanning is creating a company, Rupture, to create social networks around existing games, Kern believes Fanning will get only so far without tight integration with games and help from developers. “They’re too closely guarded, and worried about their value leaking out,” Kern said of publishers.

A total of nine people have joined Red 5 from Blizzard. Gurley calls the new company “the Pixar of online games.”