VentureBeat

It’s not often that video games hit the milestone of 25 million. A handful of titles have gotten there, such as Pokemon, The Sims, Windows Solitaire, and Tetris. Bejeweled is joining those ranks today, according to its developer, PopCap Games.

The Seattle company says it has sold more than 25 million copies of its jewelry puzzle game across a bunch of platforms, ranging from online games on the PC to mobile phones. The game first debuted in 2000 as a downloadable game on Microsoft’s MSN web site. It was originally called “Diamond Mine,” but Microsoft suggested the game be renamed Bejeweled, since there was already a game called “Diamond Mines.”

Now the company estimates the game and its sequel, Bejeweled 2, have been played more than 6 million hours. For that reason, PopCap is declaring the game the most popular paid game of the 21st century.

Jason Kapalka, chief creative officer and the original designer of Bejeweled and Bejeweled 2, said in an interview that the company got no takers in the early days of online gaming. It offered the game for $60,000. The game play was dead simple. You simply look at a grid of jewels, swap adjacent gems, and try to align three gems of the same type in a row.

“I’d really like it to become known in the culture as the new Solitaire,” Kapalka said, “where people play it just to kill time.”

The audience of gamers who have played the game, including its free versions, is estimated at 350 million to 450 million. At least 350 million copies have been downloaded from web sites, while tens of millions of copies have been installed on mobile phones. Revenues from the 25 million units sold have crossed $300 million.

Those revenues have helped fuel an expansion for PopCap, which has more than 200 developers worldwide now. Kapalka said the company is working on a new version of Bejeweled, though it remains to be seen if that one will be called Bejeweled 3.

For the past three years, Bejeweled has been ranked among the top three “family entertainment” software titles sold at retail. Platforms include the web, PCs, Macs, mobile phones, Xbox, PlayStation, handhelds, Blackberrys, iPods, iPhones, in-flight airline games, on-demand TV systems in hotels, and even scratch-off lottery tickets.

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.

U.S. video game companies haven’t done well in China. Stymied by piracy and sometimes unable to understand the tastes of Chinese gamers, they’re floundering in one of the fastest-growing game markets.

But Seattle-based PopCap Games, which has pioneered the development of casual games such as “Bejeweled,” hopes to buck the trend. The company is sending its long-time business development director James Gwertzman to Shanghai to head the company’s Asia/Pacific office. Gwertzman has studied the Chinese market and spent about half his time in Asian in the past year. He also served in Asia for two years in a previous role for Microsoft.

Gwertzman will manage a team of developers, artists, business development staffers and others charged with taking hits such as Bejeweled and “Zuma” to Asian audiences. The office will also include a team of Chinese developers tasked with creating original games for the Asian market.

“If we can get it right, it’s a tremendous opportunity,” Gwertzman said.

The good thing is that PopCap’s games are well known in China. The bad news is that most retail versions are pirated. “It’s clear that whining about piracy is not going to be the way for us to build a business in Asia,” said Gwertzman. Instead, he said, the company will explore different business models such as subscription online games, virtual goods sales, and other models that work in the region. He said the “try and buy” models may work, where gamers play a version of a game for free and then pay to unlock more of the game.

Historically, PopCap has focused on single-player games. But the nature of the market in China may force the company to come up with multiplayer versions. The company may also try its hand at creating mobile games for the Chinese market.

Gwertzman said it’s important for the company to remain humble, despite its successes in the U.S. PopCap has added staff in Korea, Singapore and formed a partnership with game publisher Square Enix in Japan. The company has 15 people in Shanghai and more than 200 overall.

Companies such as Electronic Arts have invested heavily in China but don’t have much to show for it. EA currently has an investment in The9, a company that distributes World of Warcraft for Blizzard in the Chinese market. PopCap CEO Dave Roberts (whom we interviewed in April) will be one of the speakers at the annual China Joy video game conference in July.

If there is a hit factory in casual video games, it’s PopCap Games. While other companies drove the industry to increasingly complex and narrowly-focused games, Seattle-based PopCap has broadened the market for games and revived the arcade-like feel of early video games. About 76 percent of its customers are female and 89 percent are 30 or older. The top reason people play: stress relief. (So says the company’s surveys).

The Seattle company had sold more than 2.7 million games at retail during 2007. Since 2000, its games have been downloaded more than a billion times. And its big hit, “Bejeweled,” has sold more than 10 million units since it debuted in 2001. Its other big hits include “Zuma,” “Bookworm,” “Chuzzle,” and “Peggle.” Each month, gamers spend about 3 billion minutes playing PopCap games. Bejeweled for the iPhone has seen more than 1.2 million visits in four months.

I sat down with CEO Dave Roberts and co-founder John Vechey, director of operations. They explained why the company stays focused as a game developer and leaves publishing to others. why they’re not interested in venture capital, and how they develop games that are bigger than “Halo.”

HUMBLE BEGINNINGS (photo: Roberts, left, Vechey right)

VB: What is your history?

Vechey: We started the company in 2000. It was myself, Brian Fiete, and Jason Kapalka. At the time, we were going to do simple little web games. There was no good business model for it. Our first game was “Bejeweled,” a Java game you play in your browser. We partnered with MSN. It wasn’t really making much money for us. It was a small licensing fee (of about $1,500 a month). At the time, advertising was the only way you made money from browser-based games and the ad market was pretty much gone. We had a lot of success in numbers. We were getting 45,000 peak simultaneous users. It was by far the most popular game on the Internet. But it was tough because we weren’t making any money. We had tried to sell it for $60,000. Thank God, no one bought it.

After a year and a half, we considered doing a downloadable version of the game. People asked if they could play it offline. We created a deluxe version, with better sound and music and graphics. You play offline. We released it on our little web site. In the first month, we made $35,000, which was amazing for three guys. The next month we made $35,000. So we went to bigger companies like Yahoo Games and MSN Games. We said we can give you the web version now. We won’t charge you that $1,500 a month anymore. And we asked them to put this downloadable version up. We could share revenues when people purchased the downloadable version. That created a casual games industry. That became the start of the business model. Read the rest of this entry »