VentureBeat

Sony has started setting the stage for the launch of its Home virtual world. The company has been running beta tests with thousands of users for weeks now, and the formal launch is still expected to be this fall on the PlayStation Network.

About 18 months in the making, Home is Sony’s “Hail Mary” play in the console battle with Nintendo and Microsoft. It will test whether gamers really want a layer of social networking served on top of the games they play on the PlayStation 3 game console. By contrast, Microsoft and Nintendo believe that gamers might talk to each other via cute little characters. But Sony has built a full-blown virtual online space. The graphics of the characters look good. But they don’t really move their lips or express themselves physically; that’s something that will change over time.

Susan Panico, senior director of the PlayStation Network at Sony’s U.S. game division in Foster City, Calif., said that Sony isn’t the first to market, but it has a big opportunity with Home because consumers already trust the Sony name. While Home could have been many things, Sony decided to focus the content around playing games and the culture around them, said Jack Buser, director of Home for the U.S. game division.

“It’s really a 3-D social network for gamers,” he said.

While it’s not exactly a world like “World of Warcraft” or Linden Labs’ “Second Life,” Home is the most ambitious push by any console maker into creating a virtual world for gamers. It will live or die on whether it’s simple, fun, and deep enough for gamers who have plenty of other things they want to do — like play games. And the price is right: free for those who have a PS 3.

The PlayStation Network — which has 13 million PlayStation 3 and PlayStation Portable registered users — is tightly integrated with Home. The PSN is the network that gamers use to play each other in online matches. They can also use it to download games or videos to the hard drives of their consoles. It has the records of a player’s achievements (trophies) in games, such as the number of victories in an online game.

The architecture of Home is different from Second Life and World of Warcraft. Both dedicate a considerable amount of computer and storage firepower to maintaining a continuous world with geographic parameters. That is, if you buy a house on the corner, it will always be on that corner, next to something else.

But Home isn’t really a world. It’s more like a series of virtual spaces. If you want to visit your own personal apartment, where no one can visit without your permission, then you teleport there. If you want to go to the central plaza, you teleport there. Same goes for the bowling alley or the bar from the game Uncharted. You’re free to decorate your home as you wish. If you want to listen to music, you can walk up to a jukebox.

If you arrive at a bar and it’s too crowded with people, no problem. Sony will generate a new “instance” of the room. This borrows a trick from other worlds that have popular places. Sony creates a new version of the bar and lets in all of the overflow people. It does that until there are enough bars to accommodate everyone. The only problem is that friends who are stuck in one version of the bar may not be able to talk to your avatar in another version of the bar.

You communicate with other avatars by moving next to them and typing words. It’s not so easy doing that with a game controller. But you can plug a universal serial bus keyboard into a PS 3, and you can also use any Bluetooth head set to talk as well. At some point, you will be able to walk up to a group of friends and spawn a multiplayer game.

The bowling alley has a number of social games: bowling of course, arcade machines, and pool. The pool game even has accurate physics. The arcade machines are basically emulators of your old favorites. When you click on a machine to play a game, the game itself fills your whole screen.

In the movie theater, you can go into a room and see what’s playing. You can actually watch that movie with your avatar in a social setting, making comments about it that others in the theater can see. That turns movie-watching into an online social experience. The closed beta is restricted to those 18 years and older now, while the open beta will allow anyone 13 and older. There is a profanity filter, and Home will be compliant with the PS 3’s own parental controls.

The version the Sony folks showed me was still incomplete. Sony hasn’t mentioned a release date yet, but Panico says an open beta will start soon. There aren’t many people around in it now. I imagine it will be fun once there are millions of people, all creatively expressing themselves through wacky avatars. But I expect it will be rather lonely and boring at the outset. It will also grow more interesting when partners like Electronic Arts start building out features such as an EA Sports fan space. Publishers, brand owners and media companies are all creating their own spaces inside Home, Buser said.

He said that Home will constantly change, with some things disappearing if they become less popular, and new spaces appearing as they are built. He said Sony will listen carefully to community feedback as it expands the service.

“Home is a living, breathing space,” he said.

Virtual worlds are in fashion now, drawing investments of $184 million in 23 worlds in the first quarter. But the original player here is Linden Lab, which launched Second Life in 2002. Mark Kingdon came aboard as chief executive of Linden Lab in May, replacing longtime CEO and founder Philip Rosedale, who remains chairman. More than 15.1 million registered users have tried out the virtual world. Kingdon was formerly the CEO of online creative/marketing agency Organic. Today, Linden Lab announced Direct SLurl, a way to get into Second Life from the web. We chatted with Kingdon about the state of Second Life and the virtual world industry.

VentureBeat: What have you been up to since taking over as CEO?

MK: I started in May. I’ve crossed my third month. It’s been incredible. So much is happening with Second Life. My focus has been getting to know the people and the company and working with our teams to map our strategic direction for the company. We’re wrapping that exercise up. It started before I joined. We have a clear sense of direction. We are making progress with our platform from a stability perspective. Our viewers are getting better with each release. We are continuing to expand the user base and the number of simultaneous users. We hit a new concurrency high.

VB: You replaced longtime CEO Philip Rosedale. And one of Linden Labs’ early employees, Cory Ondrejka, also left. How do you view the change in leadership?

MK: It’s been very smooth and comfortable. We have a very engaged group of employees. What I see is a continuation of the great work that Philip and Cory started. I come from a user-experience and usability background and from a larger company. We want to focus on making it usable so we can keep growing the user base.

VB: What are some of the decisions you’ve made?

MK: My decisions have more to do with priority and focus. We are focused on making the experience more accessible. And we are working to make it stable as it scales to greater numbers. We hired Frank Ambrose as senior vice president of global technology. He was at AOL and MCI before he joined us and he is focused on scalability and stability.

VB: What are your user numbers like now?

MK: Registered users is above 15 million. The more important number is the simultaneous users. That is now more than 68,000. The diversity of users continues to grow. Companies are actively developing their presences in Second Life, more around collaboration and product development. You might say it’s a renaissance for businesses in Second Life. The first wave was well documented as a brand-building exercise. Now the second wave is more focused on collaboration and learning. On the consumer side, the thing that is most interesting is we have a lot of international adoption. I spend a lot of time visiting the “help islands” where new residents (as Second Life members are called) “rez in” for the first time. The diversity is staggering, with Polish-speaking or other users joining.

VB: How many registered users are there now?

MK: We focus more on the simultaneous users and usage hours. The last stats we posted showed user hours grew 8.5 percent to 380 million in the second quarter. The number of regions owned by residents increased 44.2 percent over the first quarter to 1.5 billion square meters.

VB: The registered user number isn’t as meaningful because people try it out and don’t return if they don’t like it.

MK: Yes, we don’t really have a tourist visa for people who want to check it out. We’re thinking about making it more accessible for people who don’t have the time to invest in it.

VB: Will you do a visa?

MK: We are thinking about the best way to do it. One thing we did this summer was simplify the registration process, taking it from seven pages to one page. That really boosted the completion rate starting in early July. That’s paying off now in concurrent users, we believe. We’re looking at a lot of ways to simplify the consumer proposition. We are making strides. Our latest viewer (the screen interface the member uses to view and navigate through the world) is simpler and easier to use. We’ll do more redesign over the next 12 months to make it more accessible for new users.

Read the rest of this entry »

The discovery of water on Mars might spur a lot of interest in the science fiction dream of terraforming the Red Planet into a habitable place. That could be good for Avatar Reality, a virtual world company in Honolulu that is building “Blue Mars,” a 3-D world with ambitious graphics and a setting that takes place after the successful colonization of Mars.

It is the brainchild of Kazuo Hashimoto, chief executive officer, and his cofounder Li-Han Chen, vice president of development. It is being bankrolled so far by Henk Rogers, the video game pioneer who discovered Tetris and brought it to the West.

Their virtual world has some of the prettiest graphics I’ve ever seen and is one of the most ambitious in the works; but, then, they’re used to big bets. Their last collaboration was on the “Final Fantasy: The Spirits Within” movie, a $137 million computer-animated film that was an artistic tour de force when it debuted in 2001 but bombed in the market.

This new venture is another grand undertaking. Hashimoto and Chen started the company at the end of 2006. At that time, Rogers had sold his company Blue Lava Wireless for $137 million to Jamdat Mobile (which EA later bought). Rogers then decided to pour his money into a number of startups. He also started the Blue Planet Foundation, an environmental nonprofit aimed at cleaning up the earth.

“With the NASA news, it will make our story more believable,” said Hashimoto.

While Rogers was obssesed with the idea of terraforming Mars, Chen and Hashimoto thought they could deliver much more realistic avatars, or human characters, in a virtual world. Their experience with the Final Fantasy movie taught them that overly realistic characters didn’t work. Yet they felt that they could do much better than the graphics of avatars in Linden Labs’ “Second Life.” Hashimoto said that the 3-D graphics of Second Life were acceptable to nongamers, but not to gamers. While other popular worlds with cartoon-style graphics are aimed at kids, Blue Mars will be aimed at adults.

“There were many things that people complained about,” Hashimoto said. “We thought we could fix all of those things and that might be a business that would be big enough to interest Henk.”

The Final Fantasy film, whose team was housed in the same Honolulu skyscraper as Avatar Reality and Rogers’ businesses, had more than 240 people working on it. Avatar Reality has 21 employees and will likely build up to 35 people before it launches in 2009. A beta version is expected to be available to the public by the end of 2008. Read the rest of this entry »

Funtactix wants to set itself apart in online games by addressing one of the most annoying problems: the inability for users to take their game characters and achievements from one game to another. With the Moondo cross-gaming universe being unveiled today, you can do just that.

So far, the universe is small with two games involving shooting and racing. But Sam Glassenberg, chief executive of the Menlo Park, Calif. company, says the company’s 3-D engine allows it to churn out new games every eight to 12 weeks. A new selection of sports games will debut in August. With each game, players can reuse their own avatars, or animated game characters, and their “power ups,” which give them special powers such as better speed or armor.

The games are a step up from simple Adobe Flash games and require a 90-megabyte download. That’s a barrier to some gamers, but it’s not a huge download burden. By October, Funtactix plans to introduce a browser-based version of the cross-gaming universe. Glassenberg says that most games build up barriers that keep you from going to another game. In online multiplayer games such as World of Warcraft, the last thing the company wants you to do is take your character and go to another game.

But the Funtactix games are more casual, with sessions typically lasting two to five minutes. Glassenberg says mainstream players who appreciate variety will like Moondo.

The games have been available in a limited beta since February. Funtactix was founded in 2006 by Yaron Leifenberg and Ilan Graicerand. The company received $6 million in a first round of funding in 2007 from Benchmark Capital and Jerusalem Venture Partners. Glassenberg, former lead program manager for DirectX graphics at Microsoft, joined five months ago. The company has 25 employees, with most of the development team in Tel Aviv, Israel.

The company’s idea of porting characters and achievements across games faces no direct competition today. IBM and Linden Lab announced earlier this year that they were exploring the idea of making avatars portable across virtual worlds, but retrofitting their games to support such capabilities would require a huge amount of standardization. With so many worlds, it would be tantamount to boiling the ocean.

Microsoft and Nintendo have endorsed the idea of cross-game play to some extent. Microsoft talked at its E3 press conference about letting players create their own avatars for Xbox Live. In casual games such as Uno, players can use their avatars inside the game. Likewise, Nintendo Wii players can create their own Mii avatars, which they can use in games such as Wii Sports or Wii Fit. However, those players can’t take their achievements in one game and apply them to another.

Funtactix has thousands of players already. When it put up its second game earlier this year, usage of both games shot up 80 percent. And the number of game sessions played by new users jumped 250 percent. The games include Slider Party, a fast-paced shooter game where players can play in groups in a light-hearted style; Boost, a high-speed racing game where players race customized vehicles head-to-head; and Crystal Run, a team-baesd “capture the flag” game with a top-down view.

The real hurdle for the company will be game quality. Games made in eight to 12 weeks just aren’t going to compare to some of the hardcore fare out there. On the other hand, the cross-game play will allow Funtactix to set itself apart from all of the other casual game companies, ranging from Gaia Online to PopCap Games. The games are free to play now and will be ad supported. Over time, Moondo will add virtual item transactions and other business models.

Fans of Second Life can now access the virtual world through their mobile phones, thanks to a Redwood City, Calif. startup called Vollee.

Squeezing a relatively high-end game like Second Life onto your mobile phone without slowing the experience to a crawl is an impressive technical achievement. And this isn’t just some pared-down “check your status” feature, but a real mobile version of the game, one that lets you wander, fly or teleport through the world and chat with your friends. Vollee says it takes advantage of compression and 3G mobile networks to minimize bandwidth requirements.

Second Life Mobile is launching its public test today, offering compatibility with 40 different 3G and wireless-enabled mobile devices. (The company plans to add more devices soon, including the iPhone.) We haven’t had a chance to try it out, but gaming site 1UP played with a demo at the Game Developers Conference in February and raved that the experience is “stunning” and “PC-perfect.” I’ve embedded a video of the mobile version in action below.

It will be interesting to see if gamers are actually interested in exploring big virtual worlds on their phones. The mobile gaming market is dominated by casual products, and while technical limitations have a role in that, it’s also easier to imagine someone playing a quick game on their phone, rather than looking for a deep, immersive experience.

This announcement could also be a boost for Linden Lab, the startup behind Second Life. The San Francisco company’s board recently appointed a new chief executive to replace founder Philip Rosedale. The ostensible reason was to help the company handle rapid growth, but there has also been talk that Second Life hasn’t quite lived up to its initial promise.

Vollee also has plans for a mobile version of World of Warcraft, the number-one massively multiplayer on-line roleplaying game. The company, originally called Game Stream, was founded in Israel, and has raised $11.5 million in two rounds of venture funding.

Here’s the latest action:

Mashup companies take over Web 2.0 — InfoWorld profiles three companies making announcements at this week’s conference: Serena, which is launching an online marketplace for business mashups; JackBe, which has a new version of its enterprise mashup platform; and Kapow, which provides a hosted service to build mashups that provide web intelligence. We’ll also be writing more about Rearden Commerce and Zude in the next few days. And we just covered SnapLogic, which provides data integration for, you guessed it, enterprise mashups, and has launched version 2.0 and professional editions of its software.

Linden Lab names Mark Kingdon as new chief executive — Kingdon previously spent five years running digital ad agency Organic. The appointment of someone with a stronger business background than founder Philip Rosedale makes sense, particularly since Linden Lab board member Bill Gurley told me the company needs a chief executive who can help it grapple with rapid growth. Less charitably, the appointment can be seen as an attempt to help Linden get back on track after struggling to live up to the initial promise of its virtual world Second Life. Rosedale announced last month that he plans to step down.

IBM buys storage company Diligent Technologies for $200M — The terms of the deal were not disclosed officially, but Israeli newspaper Globes says it was for $200 million. Diligent is IBM’s third Israeli acquisition this year.

StumbleUpon approaches 5 billion stumbles – The website-discovery and rating service is about to get its 5 millionth user, and is also getting very close to nearly 5 billion “stumbles” (recommendations). Not only is that a number just plain impressive, but since each stumble should improve StumbleUpon’s “discovery” service, it also means the site is getting better and better. StumbleUpon is owned by eBay.

Solar plant builder Stirling Energy Systems gets $100M — The funding comes from NTR plc. Stirling is building solar energy projects in the Imperial Valley and the Mojave Desert.

Walter Bender resigns One Laptop Per Child — Apparently Bender , who served as the organization’s president, is more interested in incorporating open source methods into education.

Linden Lab, maker of the online virtual world Second Life, is looking for someone to fill founder and chief executive Philip Rosedale’s shoes. Rosedale (pictured on the left) has announced that he plans to step down as CEO of the San Francisco-based company, although he will stay involved as the new chairman of the board and will also have a full-time role in Linden Lab’s product development and strategy.

Rosedale, a former chief technology officer at Real Networks, has been key in making Second Life a reality. (When he saw The Matrix, Rosedale was reportedly disappointed because the film portrayed exactly what he wanted to do with Second Life, minus the the enslavement of the human race.)  But as Linden Lab continues to grow, Rosedale says it’s time for someone with more operational and management experience to take over the company’s day-to-day workings.

Bill Gurley of Benchmark Capital, who sits on Linden Lab’s board, tells us that this is a normal step for a company grappling with rapid growth, pointing to a number of other examples, including Google. (We’ve also wondered if it’s time for Facebook’s Mark Zuckerberg to find himself a CEO.) In fact, Rosedale approached the board about possibly stepping down as much as nine months ago, Gurley says.

“(Rosedale’s) view was that he wasn’t enjoying the job as it reached that scale and that he could be more impactful on the company doing something else,” Gurley says.

Second Life is widely seen as the leading virtual world, but month-to-month registration growth has slowed in recent months, falling from a high of 50 percent in October 2006 to 4.6 percent in January of this year. Gurley, however, says that the change in leadership doesn’t mean Linden Lab is looking for a new direction. Revenue is “through the roof”, and Linden Lab could even go public now if it wanted to, he says.

There doesn’t seem to be a definite timeline for finding Rosedale’s replacement. Gurley says the board is hoping to hire someone who’s run a company of a similar size. And because Rosedale will remain deeply involved, compatibility with him will be a key requirement for the new CEO, Gurley adds.

Last week I interviewed Wagner James Au about his new book, “The Making of Second Life: Notes From the New World.” Today, here is my review of the book. The Wall Street Journal published this review today and with their permission we’re making it available here in case you didn’t catch it. (I left it in their respectable style with honorifics).

Catherine Winters hit a bad patch about five years ago: The young Canadian woman, a high-school dropout and temporarily homeless, was squatting in a condemned building in Vancouver. And yet, despite her bleak surroundings, she regularly found herself in a rich world of staggering variety. Having salvaged a computer from a Dumpster and repaired its broken fan, and with a soup can to snag a wireless Internet signal from a nearby office building, she escaped her neighborhood’s menace by stepping into the three-dimensional realm of the nascent online community Second Life, where it didn’t matter whether she had running water or a proper bed.

As Wagner James Au reports in “The Making of Second Life,” Ms. Winters, navigating through Second Life in the persona of her 3-D “avatar,” a punky girl named Catherine Omega, was busily putting her computing skills to work constructing the buildings and streets of the site’s first city. Second Life users, or “Residents,” as they’re called, are responsible for everything that happens within the virtual world — from playing games and making friends to buying property and fighting wars — but the site itself is operated by Linden Lab, the San Francisco-based brainchild of Philip Rosedale, a former chief technology officer of RealNetworks. Read the rest of this entry »