Andrew Sheppard is president of San Francisco-based Kabam Studios.

E3 ended yesterday, and even before the conference came to an official close, the mega booths with Time Square-sized displays and rock concert-quality sound systems are already fading from the industry’s collective memory. PlayStation 4. Xbox One. The first batch of next generation $60-a-shot sequels. Many were whispering that they’d seen this cycle before; that it seemed like 2006 all over again. There is one key difference this time ’round — we’re living in 2013.

I predict this year’s E3 will be the last time we see record attendance at the conference and that over the next five years, E3 will struggle to stay relevant in an increasingly global mobile/tablet gaming world. Just as the Consumer Electronics Show (CES) reduced from two gatherings annually to one and Qualcomm has replaced Microsoft as the keynote, so, too, will E3 decline and hopefully evolve. Why? Free-to-play (F2P) mobile games are eating into the market for console games, and mobile game developers simply don’t require city-sized shows to influence the market or reach consumers.

The massive growth of F2P mobile gaming corresponds with one of the most revolutionary periods in the industry since consoles replaced the coin-operated arcade in the early 1990s. In less than two years, Kabam has gone from having no apps in the iOS and Android stores to being a top 10 global publisher and developer. We are proud of this accomplishment and to be joined by eight “new” F2P mobile publishers/developers. The notable omission of traditional game companies from the top 10 list (only Electronic Arts makes the cut) is shocking given consumer spending on iOS games eclipsed handheld “console” games in Q1 2013 . Where are Activision, Ubisoft, Take-Two, and the other industry leaders? Why are these companies’ investors allowing them to sit this platform out?

The hard reality is that mobile gaming is as different from console gaming as console gaming is from coin-op arcade games. Every month, companies submit 6,000 new games to the iOS and Android app stores. A large majority of these games are free-to-play, which means consumers can choose whether they want to continue playing and eventually pay for the game (usually through in-game purchases) they just downloaded. Also, as supported by the Top Grossing rankings, the most successful genres and associated game designs are those that steer heavily into the mobile and tablet use cases in a way that many console games cannot.

I read a lot of articles about how the “science” of F2P gaming is crowding out the ‘art’ of gaming. A good number of console game developers cling to this belief, oftentimes pointing to the meteoric rise and decline of Zynga as proof.  And just like the coin-op game developers before them, this audience misses the point; their personal gaming preferences are no longer representative of the market. The market has moved — and will continue to move — toward free-to-play mobile gaming.

At Kabam, we maintain that F2P mobile game development requires a balance of science and art and that the art is increasingly important given the power of the underlying device. With their dual-core/quad-core processors, powerful GPUs and memory, the iPhone 5, Samsung Galaxy S4, Nexus 4, and other devices match the power of current generation handheld gaming devices and soon current generation consoles. These are muscle cars waiting to be driven fast and furiously by gamers playing such mobile titles as Warner Bros.’ Injustice. Given the appeal of console-quality graphics, sound, and gameplay, it’s no surprise it’s a top-grossing game on the app store charts.

Looking forward it won’t be long before all publishers and developers come to understand the importance of balancing the art and science of game development. Traditional game developers will need to add science to their mix; F2P mobile game developers will need to add art. Those who make these changes quickly will flourish; those who do not will be selected out via industry Darwinism.

We’ll see who’s leading the F2P mobile revolution in five years. I can’t wait to buy my ticket for E3 Mobile 2018.

Andrew Sheppard is president of San Francisco-based Kabam Studios.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Stay on top of all our E3 2013 coverage here.

LOS ANGELES — Third-party game publishers are typically shy about favoring one game console maker over another.

But Electronic Arts’ Frank Gibeau, the president of EA’s worldwide labels, said at an investor breakfast what may be obvious about the dueling at the Electronic Entertainment Expo press briefings that Sony and Microsoft staged to introduce their PlayStation 4 and Xbox one video game consoles.

“Sony is having a great show. They have done a good job on services, price points” and policies for consumers. “We like the reception to all of the news from console makers. Sony is striking the rirght balance. Microsoft is showing killer capababilities that we have known about for a while. People have stopped talking about whether Generation 4 will be a growth driver.”

Sony drew more applause at its event for pricing its machine at $399, or $100 lower than Microsoft’s Xbox One. Sony also was praised as more consumer friendly in deciding not to charge for used games and putting few restrictions on consumers, in comparison to Microsoft.

Now, he said, they are talking about the growth that will happen this fall. He acknowledged that EA gave Microsoft a big exclusive with the announcement that Respawn Entertainment (founded by Call of Duty pioneer Vince Zampella) will launch its title Titanfall exclusively on the Xbox One. But that is considered a “tactical exclusive,” or a limited endorsement for one console.

While Gibeau praised Sony, this doesn’t mean, however, that EA is going to favor Sony over Microsoft when publishing games exclusively. EA’s strategy is to be a cross-platform company so that it can reach the biggest audience for its games and spread out the costs of its development and marketing.

“Over the lifetime, we are not tilting one way or another on these platforms,” Gibeau said.

Last time around, Gibeau said the consoles were very different.

“Now the architectures are more alike than different,” he said. “We are able to get more efficiencies” about the commonality between the upcoming consoles.

As for the hot consumer rights topic of used games, Gibeau said EA is still evaluating the announcements about used games. He said that EA’s position would be consumer-friendly and a promote a positive experience with consumers.

“We make the ammunition in the hardware wars,” Gibeau said.

One investor asked why EA had not launched a free-to-play version of FIFA Soccer.

Gibeau replied, “I think you’ll be very pleased this fall.”

He said afterward that EA will adapt FIFA for touchscreens and also launch its Korean online version of FIFA in more territories like Russia and Brazil.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Stay on top of all our E3 2013 coverage here.

LOS ANGELES — Digital Extremes’ free-to-play online multiplayer action game, Warframe, was recently announced for the PlayStation 4. On display at this week’s E3, it looks on par with its PC iteration, currently in open beta. Creative Director Steve Sinclair told GamesBeat that the team only received its PS4 dev kits just three months prior to the public unveiling.

Sinclair praised the PS4 for its power and ease of development, and he pointed to the playable Warframe demo as proof of both. As previously reported, Warframe on PC felt like it needed to be played with a controller, and now it will be with the PS4 version. Digital Extremes has added touchscreen functionality for quickly using special abilities as well as having the announcer communicate with the player through the controller’s speakers.

Warframe will launch aside the PS4 later this year, and Digital Extremes says it plans to pump it full of as much variety and content before and after release.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The freemium or free-to-play (F2P) business model is still new. Some early adopters have used exploits or tricks to squeeze money from their players while others created what we call a “pay-to-win” experience that practically guarantees victory if you pay money. These tactics may have generated a lot of revenue for developers, but as the market, business model, and expectations mature, players will accept them less and less. They probably won’t go away altogether, but it’s better to get ahead of the curve and start designing and executing smarter games today. Here are 5 examples of what not to do.

Make players spam their friends

I know this was a popular tactic in Facebook games, but stop gating content based on the number of “friends” someone has in the game. Actions like “friending” or “making an in-app purchase” (IAP) should complement the experience, not be a requisite. Don’t hold content back from me until I’ve recruited enough friends. My assumption was that developers understood that friend-gating content would ultimately fail on mobile; however, I’m still seeing this in new releases.

Trick people into paying and sharing

Decay or extinction mechanics are widely used in freemium gaming. Decay and delay can be natural fits depending on the theme, but players have started to dislike the extinction mechanic, and it’s becoming less popular — especially if it involves something you can create a bond with, like a pet. How popular would Hay Day be if your animals died because you didn’t log in to feed them?

Another mechanic that’s potentially a deceptive business practice is making some buttons difficult to find or press. I’ve seen games try to hide Xs so people thought they had to purchase something or grey out buttons so they believed they had to “share” on Facebook to get to the next screen. Are these tactics clever or just misleading? There’s no right answer, but it’s probably better if it doesn’t involve money. Developers have to ask themselves whether they want to increase monetization through tricks or by making an awesome game that people naturally want to share or pay money for. Personally, I would think about what seems ethical and fair to your players.

Advertise poorly

Stop using intrusive, sloppy advertising solutions. I’m looking at you, banner ads! The first argument a developer usually makes is that adding advertisement solutions will cannibalize its IAP revenue. That’s true, but only if you don’t advertise intelligently. W3i conducted a study and blogged about it. Take the screenshot at the top as an example of how to advertise well.

People who don’t intend to pay have another way of giving back to the developer. Players who want to pay will continue to since they don’t care about advertisements, anyway. However, if you obstruct their view or clutter the user interface, then you could drive all players away. That’s why I’m not a fan of the “paying to remove ads” feature. You’re spamming your players and admitting it to them. It doesn’t have to be like this.

Design rigged F2P player vs. player (PvP) games

If you’re thinking, “But all F2P PvP games are pay-to-win,” I’m here to tell you that you’re wrong. There’s paying to win, and then there’s paying for competitive advantage. Take a look at this screenshot, for example.

Attacks range from 3-12 and defenses 4-9 for grinding currency weapons, but for a premium weapon … well, you only get 112 attack and 100 defense. This game is purely stat driven, so buying this weapon clearly allows you to beat everyone else, and there’s nothing a non-paying player can do to win against these players unless they pay, too.

Now let’s look at another F2P PvP game called PlanetSide 2. It’s a first-person shooter (for PC) where you can buy different weapons and vehicle upgrades with premium currency (station cash) — or you can grind to unlock them, but it’ll take some time.

Some are more powerful, have faster/slower reload speeds, and are more accurate or have lock-on capabilities for vehicles. However, just having a higher damage output doesn’t mean you’ll automatically win a battle. It’s the same with fire rate, reload speed, or any other characteristic because these stats only complement your natural ability to play the game. But wait … there’s more.

Each gun, class, and weapon has specific upgrades that can do a magnitude of things — like reduce recoil, grant more player health, improve class abilities, and add scopes or night vision. These class or weapon upgrades can only be purchased through the secondary currency (cert points), but these points cannot be purchased. You can pay to speed up the rate of earning them, but it’ll still take some time. Why is this important? Players can pay to get the guns that match their play style, but they can’t immediately deck out their weapons or characters with enhancements. Whether you like the game or not, it’s hard to deny that they executed a really solid F2P PvP experience.

Force players to pay to continue

I recently downloaded a new game on my tablet and was enjoying the experience until I ran out of energy and money (following the tutorial, mind you) a little over a minute in. I had three quests and couldn’t complete any of them or finish any action unless I converted. Delay mechanics, choke points, friction — whatever else you may call it — are common monetization mechanics in F2P games, and I’m not here to tell you not to use them. However, the most brilliantly designed games don’t encourage the player to leave while they wait them out.

Take Clash of Clans, for example. In order to improve my town hall from level two to six, it could take maybe 30 days. I can pay $5 for another builder and increase construction productivity so it only takes 20 days, or I could drop $100 (or $500) and get it now. This uses the same delay mechanics, but the game isn’t just about building a city and reinforcing defenses. That’s only half of the battle. The other half is about raiding other villages. The actual battles last minutes, and training basic armies usually takes 20 minutes or less. More advanced units obviously require more time to train, but you can be out raiding other villages almost every 20 minutes if you choose. This secondary mechanic or second core loop gives players something to do or goals to achieve while they wait for a building upgrade to complete.

Obviously, these mechanics can be the main revenue/marketing-driving mechanics of your game. I’m not here to say these will stop making you money. I’m simply saying that as a market matures, so will game design and player expectation. It’s better to start making smarter choices today so you’re not scrambling to change or squeeze the last pennies out of your game tomorrow.

If you’d like to talk about these or any other ideas, you can find me on my blog, the NativeX blog, or on Twitter.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Let’s be real. Everybody wants to jump into the cockpit of a fully loaded, 40-ton robot and pilot it straight into combat. Everybody. That’s core geekdom, right there. It’s in our DNA.

Lucky for us, you won’t find any shortage of heavy-metal enablers. Two big, free-to-play, online-multiplayer mech games — the elder statesman of robo-warfare and a hotshot challenger — are currently running open betas. A third, based on a nearly-forgotten franchise, is on the way.

Best of all, each one takes a different approach to its carnage. Here’s how the contenders break down.

Mechwarrior Online

If you’re looking for a gold standard in mecha games, up until very recently, the conversation started and stopped with Mechwarrior. “There’s a lot of good weight with that name,” a producer on a competing game readily told me, and he’s not kidding. Its credentials stretch back to 1989 — further if you throw in Battletech, its pen-and-paper RPG forebear — and good luck finding a PC gamer from that time who doesn’t get a pleasant chill just from hearing the battlemech start-up sequence.

It’s different, but yep … Mechwarrior Online has a start-up sequence.

A decade after the last entry in the franchise, Piranha Games brought the classic back with a lot of its nuances intact and an epic scope few others can match. Moreover, Mechwarrior gives you a real sense of piloting a heavy piece of machinery with lots of guns on it. It’s the mech simulation game, equal parts strategy and twitch.

Accordingly, customization plays a major role. Everything about your battlemech revolves around dishing out buckets of pain while managing your heat buildup; overheat, and your unstoppable death machine shuts down, leaving you a sitting duck. You also get to swap out components inside and out, including where your weapons go and in what order they cycle … all the better to follow up high-heat lasers with low-heat ballistic guns and give your mobile suit a second to cool off.

Mechwarrior pays off when you take that custom job into a firefight and see all your decisions pay off. I guarantee nobody wins this game without using their head first.

Bigger mechs give you a bigger platform to build on, but they cut your speed down until a few puny chicken-walkers can literally run circles around you. That gets embarrassing, but it’s a result of pitch-perfect balancing.

In terms of cost, Mechwarrior issues a few free mechs, a few try-before-you-buy “trial mechs” you can take for a limited spin, and then things get expensive, whether you’re spending in-game C-bills or real-world money. A “hero” battlemech can run you anywhere between $17-24, plus a few bucks to open the slot in your mech bay and any cash you want to peel out to pimp your ride. Piranha also offers paid premium time, which boosts your leveling for an hour at a time.

Beyond that, Mechwarrior has another big ace: the franchise’s almost 30 years’ worth of continuity. Piranha leverages it well. When the game leaves beta for live sometime this summer, along with a complete revamp of the user interface and an expansion from 8-vs.-8 matches to 12-vs.-12, it’ll launch an overarching metagame called Community Warfare.

“You can start to play faction-based gameplay,” says Piranha president Russ Bullock. “You can create a mercenary unit and challenge other mercenary units. Or if you want to join one of the great houses of the Inner Sphere, you can work your way up the ranks.” Bullock’s team is also looking into supporting pirate classes who just make trouble.

“In the final phase, you’ll start to battle for territory in the Inner Sphere,” says Bullock. “A lot of the border worlds between the great houses will be up for grabs.” And certain perks go with controlling that territory … perks that vanish if another house takes a planet away.

Here’s the other thing. Mechwarrior Online unfolds in real time, so every minute that passes in April 2013 is a minute passing in April 3049. That plays into a little something Piranha creative director Bryan Ekman calls “the integrity of the timeline.”

“There is a certain set of prescripted events that have to happen,” says Ekman. Meaning roughly six months after Mechwarrior Online goes live, the Inner Sphere experiences one of the more cataclysmic events in the franchise’s history — the Clan Invasion. And then those planets the great houses fought over start falling to the clans, leaving players either fending off the invaders or fighting over what’s left. “It’s so dynamic,” Ekman adds. “So much happens in a very short amount of time. We felt it would be a fantastic way to keep players engaged. They’ll see the changes daily, participate in those changes, and affect how the universe looks.”

Those events will drive Mechwarrior Online for the next two years. Consider that ideal ground for an aspiring pilot in their fully customized walking tank who wants the weight of history behind them.

Or maybe you just want to strap into a giant robot and light some fools up. Let me tell you about Hawken.

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We’ve already written about how much wisdom came out of the VentureBeat Mobile Summit boardroom sessions, but let’s talk about something specific: mobile monetization, which is rightfully a subject on the minds of just about every developer.

Making money on mobile is tough — but it doesn’t have to be. According to Darya Trushkina, business development vice president at Game Insight and Narr8, developers can ensure their games and apps make cash by paying attention to what tactics work and where the industry is headed in the future. Below, we take a look at a few key lessons.

Invest in Windows 8 (seriously!)

The Windows 8 ecosystem is small right now — tiny, even — but it won’t stay that way for long. And that’s a mighty big opportunity for developers just starting out.

My Country is one of the most successful games on Windows 8 so far.

“For developers looking to make the biggest breakthrough, I would suggest considering Windows 8. iOS and Android are both way overcrowded. The cost to get into top visibility spots is too high for any small developer to get into,” Trushkina said.

Basically, because there’s not much competition on the platform, any game that gets released won’t be fighting for exposure. And Microsoft has demonstrated that it’s very much interested in giving Windows 8 apps free promotion, which cuts precious dollars off developers’ marketing budgets.

It’s a strategy that’s so far worked pretty well for Game Insight’s My Country, which hit Windows 8 in March and has already reached over 350,000 users. “From early numbers we see there’s great potential to make money from this platform. Windows 8 has a really good chance to become one of the big ecosystems,” Trushkina said.

Think global, but know your markets

As any company that’s ever sold a product in multiple markets can confirm, what works in the U.S. probably won’t work as well elsewhere. And mobile games are no exception to that.

Source: Flickr: istolethetv

Different cultures require different monetization strategies.

“You can’t create the same game across countries. They need to feel like game was created just for them. The same items you sell in the U.S. wont sell the same way in Japan,” Trushkina said.

For example, Game Insight noticed that, in Japan, players go through content six times as fast as those in U.S, and Koreans are even faster. This forced Game Insight to scale their content creation based on the demands of gamers (more on that below).

Cultural differences even apply to what extent players are willing to pay for content. According to Trushkina, Japanese gamers are much more likely than Americans to pay for apps and in-app add-ons. The trick, however, is to ask for money early.

“Revenue-per-user rates are much higher in Japan than here. If you create high-quality content and customize it,  local users will enjoy it more,” Trushkina said.

Understanding Japan has been a big help to Game Insight, which regularly takes top spots in Japanese sales charts, which, as a foreign developer, is tough to do. “It’s kind of obvious but not many developers are not willing to put time and effort into localization. Translation is not enough,” Trushkina said.

Keep users interested with fresh content

Source: Narr8

Web comic app Narr8 offers initial comic episodes for free, but charges users for later ones.

If you want to retain your customers, you’ve got to keep them interested. This is why Game Insight releases new content for its games on a weekly or biweekly basis. “Users want more and more content, and they want different content. The challenge is to keep up with the market to produce content users want,” Trushkina said.

The real trick, however, is developing that new content for old titles alongside new content for new titles. While there’s no simple tip for maintaining that balance, the developers that pull it off will be able to increase their customer bases while retaining the users they already have.

Free-to-play works … if you do it right

If you’re a game developer trying to make cash solely off mobile banner ads, well, you’re doing it wrong.

“Mobile ads don’t work well on phones,” says Trushkina. Unlike most companies, Game Insight sells its games with no advertising and still does well on the platforms it creates for. Instead of relying on banners, Game Insight focuses on creating addictive games and attractive in-app purchases.

A similar strategy applies to comic reading app Narr8, which offers users initial comics free but makes them pay for later episodes. Basically, if you want to make the real money, let users in for free and get them addicted so that they never leave.

Know your platform

This might not come as a big surprise, but Android and iOS are very different beasts. “The differences start with their terms and conditions and go all the way to their app approval process,” Trushkina said, noting that this changes the way developers create apps for each platform.

Apple and Google also have different criteria for determining which apps reach the top of their charts, which for developers is one of the toughest things to understand. “Google’s algorithm for getting into top positions is changing all the time,” Trushkina said.

That’s a big deal considering how much developers already spend trying to attract more users to their apps. Not knowing which criteria have the greatest effect on placement makes it much harder to predict success.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Jan Beckers is founder and CEO of HitFox Group.

Monetization is survival.

If free-to-play game publishers have made it to the top of the app stores’ grossing charts, it’s for one good reason: Monetizing efficiently was not a choice. Indeed, the free-to-play business model forced publishers to develop and implement the mechanics allowing for successful monetization right from the start.

The good news is, in the process they developed some great practices for the mobile industry as a whole.

As competition continues to heat up in the mobile space, with close to 800,000 apps available on the App Store and as many on Google Play, here’s how all app marketers can learn from them.

Changing the Game

Free-to-play has revolutionized the monetization model in gaming by charging players based on their willingness to pay, instead of displaying one set price for all. Indeed, through a dynamic pricing scheme for in-app purchase items, free-to-play has enabled game publishers to monetize the whole of the price/demand curve.

By removing the lower price limit and allowing a vast majority of users to play the game entirely for free, it has triggered two positive effects:  On the one hand, it enabled the generation of high volumes of players, and on the other, it made it possible to monetize part of the long tail of users, either because they are ready to pay smaller amounts, or by showing them ad offers.

By removing the upper price limit, it also made it possible for the most committed players to spend an unlimited amount of money in the game, therefore unleashing an enormous monetization potential. Aeria Games, for example, the publisher of the card-battle game Monster Paradise, recently reported that its ARPPU (Average Revenue Per Paying User) had seen peaks of $90 and above over the holiday season.

Understanding mobile

The most striking realization of Free-to-Play’s potential on mobile is the rise of mid-core games, such as Supercell’s Clash of Clans (which is reported to make $1 million a day, along with the company’s other title, Hay Day). The success of the mid-core genre stands as a strong example of how mobile audiences should be approached: by addressing as many users as possible, but also by understanding and taking advantage of the great variety of mobile usage patterns.

Whether your app is used a couple minutes here and there, 30 minutes during the daily commute, or the whole weekend long, it should be structured in a way that offers (at least) the value that every user expects from it.

Learning from the challenges of free

The free-to-play model, while offering a whole new perspective on monetization, also brought along some major challenges.

First, acquiring users was no longer synonymous with monetizing them. For players to be converted into payers, they also had to be retained and engaged. So publishers had to develop a thorough understanding of the behaviors and usage patterns at play within their game. This was achieved through the implementation of in-app analytics.

For instance, Struan Robertson of NaturalMotion, the successful publisher of free-to-play hits MyHorse and CSR Racing, explained that you should spend time each day looking at your dashboard of stats.

Then, as the cost of acquiring users kept soaring, it became vital for game publishers to know at which price they could buy additional players in order to remain profitable. Sho Masuda, the VP of user acquisition at Japanese publisher Gree, reported that the company used the large amount of data collected over time to forecast what the value of an install for a particular game is going to be.

Finally, quality of players can vary greatly across the traffic sources employed for user acquisition. This in turn strongly enforced the need to accurately track in-app user activity to determine which sources perform best so you can fine-tune the ad spend and optimize the marketing budgets.

Calling all app marketers

To make the most out of their monetization potential — even if survival is not immediately at stake — all app marketers can benefit from the lessons of free:

1. Understand, consider and engage all your users.
2. Unleash the monetization potential of your biggest fans.
3. Understand and take advantage of mobile behaviors and usage patterns through in-app analytics.
4. Continuously track your promotion channels’ performance and optimize your advertising spend.

Game on!

photo credit: E-Plus Gruppe Fotostream via photopin cc

We don’t have to wait for the PlayStation 4 to see the future of console gaming, at least when it comes to how we’ll be paying.

Today, developer Naughty Dog releases a free-to-play version of the mulitplayer for Uncharted 3: Drake’s Deception, its popular PlayStation 3 third-person shooter from 2011. By downloading a client from the PlayStation Network, users can play with the same people who own the full version.

“From the beginning of Uncharted 3, we were always interested in doing a free-to-play option,” Uncharted 3 game director Justin Richmond told GamesBeat. ”And during the two-year production cycle that was not a reality that we could ever look at. It was just too complex to start separating the multiplayer into its own thing. So for the past year we’ve been working constantly to figure out how we can do something like that.”

Naughty Dog’s solution is to offer the multiplayer component for free with a level cap at 15. Earning levels is how you access extra content like guns and characters. But even though you stop earning unlocks, you can keep playing the game, or you can pay to have the level cap increased or removed.

“But we actually keep track of the unlocks,” Richmond told GamesBeat. “So if you play hundreds of hours of the free-to-play and are like, ‘You know, I really want to get all the stuff that I earned,’ then the second you pay for that level unlock you get everything that you earned over those hours.”

Players can also buy certain items separately via microtransactions, including characters and guns (but not the mods that make weapons more powerful. You’ll have to earn those by leveling). While many free-to-play titles let users exchange real money for in-game currency (which, ironically, is actual dollars in Uncharted 3), Naughty Dog isn’t planning a similar feature. Nor will it allow players to buy temporary boosts that double the amount of experience or money they earn in a certain amount of time.

“The player base is vibrant,” said Richmond. “We have half a million people playing a month, so this isn’t some sort of grab where we’re like, ‘Oh my god, the game’s dying!’ We think we offer something very unique. The barrier of entry to multiplayer, in general, is very high. Not only do you have to buy the game for a fair amount of money, but then you have to jump into an online component as well. We wanted to give the lowest barrier of entry possible to the most number of people, and we think the free-to-play option is the way to do it.”

Naught Dog provided GamesBeat with some samples of how the pricing will work:

• Competitive multiplayer with level 15 cap: free
• Raise level cap to 25: $4.99
• Co-op Arena (W/Shade Mode): $9.99
• Co-op Adventure (W/Fort Co-op): $11.99
• Level cap removed: $19.99
• Uncharted 3 Game of the Year Digital Version: $39.99

Uncharted 3 won’t offer the first free-to-play shooter experience on the PlayStation 3 (that honor belongs to Dust 514, which is currently in open beta), but it’s interesting to see Sony commit one of its biggest franchises to a pricing format that we usually see on PC games.

“This model works,” said Richmond. “Obviously, it works. I think we’ll be seeing more of it going forward.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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KingsIsle Entertainment vice president and creative director Todd Coleman today announced his departure from the company he helped found in 2005.

KingsIsle is best known for Wizard 101, a family-friendly, free-to-play online game.

Coleman announced his departure today on his Facebook fan page. He called his post “one of the hardest I have ever written,” but he said that this “is something that I have to do.”

He didn’t give specifics, but he said that he is working on “a new company, a new game, a new story. I’m not ready to say, but when I’ve got something to show, you guys will be the first to know.”

Below is his open letter to the community:

Goodbye, thank you, and a new beginning.

This update is going to be one of the hardest that I have written, so please hang with me as I try and get through it.

I have decided to leave KingsIsle and pursue my own course. This might sound crazy – and, full disclosure, it probably is – but it is something that I have to do.

What a fantastic experience this has been! As the creative lead of our games, and the first employee hired in Austin, I was in the unique position to watch this team blossom, and watch our games grow from niche titles to mainstream popularity. Wow! A handful of dreamers got together and turned an unknown start-up into the market leader for family online entertainment… That’s not something you see every day. I am blessed to have been able to play a role, and I know that I am leaving the company in capable hands. I have no doubt that the Spiral will continue to expand for many years.

What is next for me? I’m a storyteller, so I will keep doing what I do best – dream up ideas, breathe life into characters, build worlds for you to explore… only next time, I want to do it for myself. I’m an entrepreneur at heart. A new company, a new game, a new story… I’m not ready to say, but when I’ve got something to show, you guys will be the first to know.

I want to thank you for becoming a part of this community. Your patronage has allowed me to work with my best friends, and to entertain you, for almost a decade. You gave me a chance to build something, something unique and wonderful. These are more than games to me. I see these worlds when I sleep. I greet these characters like old friends.

These are the dreams that filled my childhood. I cannot tell you how fortunate I am, to have been given the chance to share them with you.

Thank you.

J. Todd Coleman
“Headmaster Ambrose”

KingsIsle’s official Wizard 101 forums also had a post about Coleman’s departure.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Cockshots. Pwnage. Newbs. In any other game, such crass vocabulary would immediately make me ignore it and move on to something else. But U4iA (pronounced “euphoria”) Games is smarter than that and have instead repackaged that attitude in a way that’s both digestible and hilarious.

The free-to-play Offensive Combat runs entirely within your browser, so you don’t have to download a hefty file to play it. You only need the latest version of the Unity Web player. While the title has been in an open beta for the past few months on its website, the developers have officially unleashed its multiplayer shooter on Facebook, a space usually crowded by farm simulators and puzzle games.

Now I can obliterate stranges with a sniper rifle between sessions of reading my news feed and “liking” status updates on the same screen. Welcome to the future, folks.

What you’ll like

Back to the basics
If you stand still, you’ll die. If you miss your shot, you’ll die. If you stop moving for any reason, you’ll probably die. Quick reflexes and itchy trigger fingers are your most valuable assets when facing your online opponents, especially when only a few shots to the head will take you down. The game has a merciless pace akin to id Software’s Quake series.

The run-and-gun style feels refreshing after playing so many other multiplayer shooters buried in complex layers of perks and upgrades. You’ll still use special power-ups and skill trees, but in the end, what matters is how well you can aim your gun.

Testing your luck
Though you don’t have to spend any real money to enjoy it, playing Offensive Combat feels a lot like gambling in a glitzy Las Vegas casino. Instead of neon signs and an endless stream of drunk patrons, you have outlandish-looking avatars — deranged robots, superheroes, and men in banana suits just to name a few — fighting each other in exotic locales, with the best of the best having their names prominently displayed in the sky for all to see (extremely satisfying when it happens to you).

Other little details contribute to this theme. Every kill and victory gives you gold coins, complemented by a loud “cha-ching!” Sometimes, you can win extra experience points, coin bundles, or unlocked weapons by spinning a large wheel (see gallery below) after the end of a battle. Or you can invest in various mystery boxes that randomly award you a prize. And then you have your experience bar, which is the best I’ve ever seen in an FPS: Not only does it tally the number of XP points you earn after a match, but it has a wonderful sound effect that you’d normally hear coming out of a slot machine.

Even if I had a bad session, just seeing and hearing the bar tick closer to the next level made me feel like I hit the jackpot. It’s a weird psychological hook that kept me playing over and over.

Bawdy sense of humor
With the ability to hit people with the “Binder of Women” and then perform a Gangnam Style dance (one of many taunts known as “pwns”) on their corpses, you can tell that the developers are paying attention to the latest happenings in pop culture. You’ll also find parodies and references to other games in the diverse selection of body parts — including a nod to Half-Life protagonist Gordon Freeman — that you can equip on your action figure-like avatar.

The rest of the items are just plain bizarre, like the tentacle arms, chicken legs, and faces sculpted from Internet memes. Seeing the monstrous abominations running around the maps was a little surreal, as I never knew what people might pick up from the eclectic marketplace.

What you won’t like

A not so simple setup
Trying to get Offensive Combat to run smoothly was a bit of a pain. It never became unplayable, but the framerate would slow to a crawl (at times dipping below 20), and the occasional dose of lag during matches didn’t help. And this was after I experimented with the graphics settings, multiple browsers, and reinstalled the Web player.

I have an older gaming PC, but it shouldn’t take this much fussing around to run a browser-based game. Your experience, however, might vary. Some players I chatted with in-game said they had no problems setting everything up at all.

Exorbitant prices for permanent unlocks
In the beginning, you only own your default set of weapons and body parts. If you want more, you can use your gold coins to either “rent” new guns and items (staying in your inventory for a certain amount of days) or buy them permanently (which is the only way you can modify guns with attachments).

In some ways, this makes sense: You can try different weapons and outfits for a small fee before deciding to buy them. But the problem is that costs are rather high, with prices for guns starting at 9,000 coins or more. Skilled players will undoubtedly collect coins at a faster rate, but prepare to devote some serious time if you want to expand your armory.

Conclusion

Despite the technical problems I had to deal with, Offensive Combat is unequivocally the best Facebook game I’ve ever played. It doesn’t have the most robust multiplayer offering out there — it still lacks support for clans and tournaments — but it’s a fast-paced, no-frills shooter that’s easy to get into. Don’t be surprised if it starts taking precious time away from Halo 4 or Call of Duty: Black Ops II.

Score: 80/100

Offensive Combat is available now for free on both Facebook and on its official website. I played and tested the game on Facebook. 

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Roadhouse Interactive and Infinite Game Publishing announced the launch of the MechWarrior Tactics closed beta today, and they’re encouraging players to provide feedback on the game’s development by buying their way in.

The new Founder’s Program offers players three packages to choose from, and each comes with exclusive benefits and access to the closed beta. The sci-fi turn-based strategy title borrows the structure of a collectible card game, so players can assemble Lances, or squads of four mechs, much like they would decks. It now supports 1-on-1, invite-only matches as well, so you can try out the hexagonal-grid-based combat with a friend.

“MechWarrior Tactics is a game deeply rooted and inspired by the original and cherished BattleTech tabletop games,” Chris Cleroux, the game director at Roadhouse, said in a statement. “It’s important for us to bring to life the essence of the BattleTech experience for fans, and we’re looking forward to their valuable feedback. This is truly a project where the closed beta will be one, long conversation with the fanbase to make sure we creating an experience that captures the magic, excitement, and flavor of the BattleTech universe.”

BattleTech inspired the game’s rules, which Roadhouse then tweaked to fit the online vision. The companies involved have been working closely with creator Jordan Weismann to stay as true to the original games, lore, and universe as possible.

MechWarrior Tactics is a free-to-play, PC browser-based game, so it’s interesting that the developer is inviting prospective players to try it out early by paying for it. You’ll still be able to play it for free when it hits the public (not counting potential microtransactions), but participating in the beta allows serious players to give Roadhouse feedback on how the game is shaping up.

Details on the three available packages are below. They contain in-game currency, limited edition units, decals, skins, badges, and more. Roadhouse may grant temporary currency for testing purposes during the closed beta. Founders members will have to wait to receive their in-game items and currency boosts as well as premium account access, though, until the open beta launches later this year.

The program is only available in North America. The launch date for the finished game has yet to be announced.

Veteran Founder’s Package ($20) includes:

• $25 value of in-game currency* (2,500k C-Bills) for in-game item purchases.
• Two exclusive, Seventh Kommando MechWarrior units.
• Four limited-edition Seventh Kommando decals.
• Seventh Kommando Veteran rank badge
• One-month Lance Tier Premium Account to MechWarrior Tactics at launch: more C-Bills, earn XP and scrap faster.
• Early access to the game starts today.

Elite Founder’s Package ($50) includes:

• $60 value of in-game currency* (6,000k C-Bills) for in-game item purchases.
• Two exclusive Seventh Kommando MechWarrior units.
• Two limited-edition Seventh Kommando ‘Mech Chassis — get a leg up on combat out of the gate!
• Two limited-edition Seventh Kommando skins let you look your best on the battlefield.
• Four limited-edition Seventh Kommando decals.
• Seventh Kommando Elite rank badge.
• Two-month’s Company Tier Premium Account to MechWarrior Tactics at launch: more C-Bills, earn XP and scrap faster.
• Early access to the game starts today.

Legendary Founder’s Package ($120) includes:

• $100 value of in-game currency* (10,000k C-Bills) for in-game item purchases.
• Four exclusive Seventh Kommando MechWarrior units.
• Four limited edition Seventh Kommando Mech Chassis.
• Four limited edition Seventh Kommando skins.
• Four limited edition Seventh Kommando decals.
• Seventh Kommando Legendary rank badge.
• Two-month’s Company Tier Premium Account to MechWarrior Tactics at launch: more C-Bills, earn XP and scrap faster.
• Early access to the game starts today.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The French video game publisher Ubisoft hasn’t engendered a lot of goodwill with PC gamers over the years because of its aggressive digital rights management (DRM) policies. But the company made some big changes a year ago, and it wants gamers to understand that it is playing nicer these days.

“We realized we haven’t always been clear and consistent about communicating what our DRM policy was in the past, and that has led to a bunch of misunderstandings,” said Chris Early, vice president of digital publishing, in an interview with GamesBeat.

Ubisoft’s past policies have created a firestorm of abuse from angry users, both pirates and legitimate customers.

But some observers haven’t noticed yet that Ubisoft has made changes at all, and consumers have a long memory. But Early said the company instituted a big change in June, 2011, with respect to how it implements DRM in PC games. Since then, Ubisoft’s packaged good PC products require a one-time online activation, and then they can be played offline. If you buy the games from Ubisoft online, the games are authenticated at that time. If you play multiplayer sessions or if you play free-to-play games, you have to log in online. Authentication takes place during each session.

“The key date is June 2011,” Early said. “Everything since then is based on our current practice. Every game coming forward is based on that policy, and old games that came before that date are being switched over to that policy. It was originally much more of the stick approach. Now it is much more of the carrot.”

The new policy does a better job of staying out of the way of legitimate and loyal players who just want to enjoy the game.

In 2006, Ubisoft tried to implement the StarForce copy protection technology, but it ran into compatibility issues, and customer complaints led to its disuse. Then,  in January 2010, Ubisoft unveiled an online services platform which required users to log into an online service and remain connected while playing Ubisoft PC games. That meant they couldn’t play the games offline and they couldn’t resell their titles on the used game market. Technical problems accompanied the policy. If you were disconnected while playing, your saved game progress was lost in titles like Assassin’s Creed 2 for the PC. Ubisoft stood out in the industry for being aggressive. Angry users responded with denial-of-service attacks and other protests against the company.

“That, combined with challenges we had with uPlay hardware at the time, made for a pretty poor user experience for a couple of games,” Early said. “Listening to consumers, we then removed the DRM requirements for the games, and by June 2011 had this policy in place going forward.”

Accordingly, the negative feedback is lower these days, except when Ubisoft has some hiccups with the technology. (A Google researcher reported a flaw in Ubisoft’s DRM recently, but the company fixed it and said it had no incidents related to that flaw).

He added, “There were enough online components to those games that we mistakenly believe the earlier policy would not be an imposition for players. That was not the case. Players wanted to be able to play in an online and offline mode. They didn’t want to be online all the time to play.”

The earlier policy also limited the number of times a player could install the game Anno 2070 to just three. But if you installed a new graphics card, it would use up one of the installations and require you to reinstall that game. Ubisoft had to correct that again.

“Listening to our customers, we don’t have that as a limit anymore,” Early said.

The point of DRM in the first place is to establish with the consumer that they are getting value when they buy a Ubisoft game, and they should pay for that value, Early said. It helps stop piracy, which can be very high in the PC market. By emphasizing the “carrot” rather than the “stick,” Ubisoft is making use of alternatives that could help reduce piracy and generate more revenue at the same time. For instance, free-to-play games like Tom Clancy’s Ghost Recon Online open that franchise up to more territories where it isn’t feasible to sell a $60 Ghost Recon Future Soldier game.

“You can participate in a wider variety of services and content or choose a different business model,” Early said. “That allows access to games at a variety of different price points. We can reach a wider variety of people around the world. You can get to our games in more places without pirating them.”

Part of the reason why Ubisoft is the target of piracy is that its games are good.

“If we made terrible games, we wouldn’t have to worry about it at all,” Early said. “The more popular the game is, the more people want to play it wherever they are. As an industry, we need to talk about piracy. At the time when we took a very aggressive stance, we realized it impacted our customers more than it impacted our pirates.”

Ubisoft has also created its uPlay PC game client. That brings together PC game functions together, including a game library. It has social features like chat and leaderboards. It has rewards across platforms and an offline action mode. It has integrated saves, a shopping function, free-to-play games, and a general overall Ubisoft destination. Ubisoft has some rental systems that it supports, but in general it believes users should pay for their games. With online passes, players can reactivate a portion of the multiplayer play with a small fee from the secondary user. That view makes sense because multiplayer play requires Ubisoft to invest money in ongoing support for multiplayer operations, Early said.

“We don’t have excessive complaints about that,” Early said. “In that case, we were not the trailblazer. [EA was]“

There isn’t a consistent view on used games across the industry. But as free-to-play games expand, the used game market isn’t necessarily as relevant anymore, Early said. He didn’t have a comment on what the new game consoles being launched in the future will have as far as DRM policies go. If the platform owners change their policies, you can bet the topic will come up again.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The cafeteria buzzed with excitement. People quickly gathered in groups of four to five, delegating their team captains as they weighed in on the pros and cons of using a wide assortment of mechs — giant mechanical suits equipped with large guns that players use to fight against one another — in the MechWarrior video game universe.

Strange names like Atlas or Jenner popped up in their conversations. Calculated strategies formed out of thin air. Pristine tournament brackets appeared on 42-inch television screens. Thirty-two high-end PC rigs, masquerading as virtual cockpits, lined up on either side of the room, waiting for would-be pilots to command them.

For both the fans and the developers, this was a homecoming.

The MechWarrior franchise hasn’t seen a proper release since 2002. The upcoming free-to-play (F2P) shooter MechWarrior Online, developed by Piranha Games and published by Infinite Game Publishing, changes that. Along with the publisher’s MechWarrior Tactics, the revitalized brand is set to make a big splash in this year. IGP continued its momentum by celebrating with the franchise’s diehard community at the Nvidia campus in Santa Clara, Calif.

Before the mech-blasting began, GamesBeat sat down with Kelly Zmak, the president of the Montreal, Quebec-based IGP, who is one of the key folks responsible for MechWarrior’s sudden comeback. Zmak is an industry veteran: He started at Activision in the mid 1980s, and he worked his way up to various corporate positions, including president of the now-defunct Prototype 2 developer Radical Entertainment.

Dressed in jeans, a black collared shirt, and his trademark cowboy hat, Zmak’s candid answers offer some refreshing insight into not just the future of IGP but for the game industry as a whole.

GamesBeat: Infinite Game Publishing has only been around since last year, right? What’s the history behind the company?

Kelly Zmak: Yeah, since August. The initial efforts actually started almost five years ago now. A group of guys got together — Nick Foster, who’s currently our CEO; Anthony Brown; and a number of other guys got together — and started pitching a concept. It was a free-to-play space [with] a business model based off of, obviously, on a mindset of four or five years ago. And if you think about how the market has so dramatically changed over the last few years — even in my mind, the last year — you know the history of it started with an idea. Like most concepts do.

Source: linkedin.com

Kelly Zmak, the president of IGP.

And then really in April/May of last year, when I got involved in 2011, the ideas had formulated. We had established some good relationships with investors, and we started to really identify the business model and the business plans associated with it. So the history started from just a pretty humble beginning of the ideas and a group of people involved, to evolving last year to a [set] of business models and proposals that we brought to an investment group. The most difficult thing of any idea is actually getting somebody to put some money into it and to give you the opportunity to prove that you can do it.

That was really what we were focused on. I was joking with my wife the other day [that] August 19 is our one-year anniversary of the business, and it’s been a wild year. But that history is actually, like most great starts, just an idea and a group of people that got together and said this is what we want to do.

And back then, it involved MechWarrior. So it’s always really revolved around that IP. It’s evolved and changed and certainly modified and grown as we’ve gone through the years, but it’s been a great humble beginning to a place where we think we’re gonna see some great things over the next few years.

GamesBeat: It seems pretty timely, because even four or five years ago, F2P games weren’t up to the quality that they are now with games like Tribes: Ascend or Blacklight Retribution. Was F2P always in store for the revitalization of the MechWarrior brand?

Zmak: Yeah, it was F2P and really focusing on triple-A [quality]. I’m largely from a retail space. I started in ’85, and consoles have always been kind of my heart and my soul, though I’ve had PC experience throughout the years. I was involved in the original Mech 1. I was involved in Mech 2. I was involved in Mech 3. So I have a lot of history with MechWarrior.

When I came in the organization and saw the license and the IP and saw [Russ Bullock, the president of MWO developer Piranha Games] and his team, I really had an opportunity to dive in to what they were wanting this product to be. And then we worked together to evolve that concept. But it always stayed true to the basic premise that we wanted a F2P model that focused on a core gaming audience. We felt that was a niche market place. We felt that it was a untapped audience.

We believe that the maturity that you see in the F2P market in Korea, you’re gonna see in the North America market. We believe that the success of our key competition clearly demonstrates that there’s a desire among consumers to invest in games that they like and are willing to participate in this process. Really, what we’re talking about is a transition from retail boxed product, where I had to think I knew what the product was going to be when I shipped it.

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RuneScape is one of the oldest established massively multiplayer online (MMO) games, going strong 11 years after its 2001 launch and recently passing 200 million registered accounts. Mark Gerhard (pictured), chief executive officer of Jagex Games Studio, took time to speak to GamesBeat, via email, about the industry’s rush toward free-to-play experiences and the future for Runescape and Jagex.

Embracing a new model

With ongoing contraction in the retail-game sector, more-traditional publishers are embracing the free-to-play model, of which Runescape is a prime example, as they look for opportunities to expand their digital sales. Gerhard says he’s “excited to see the change,” but adds that, “it’s a very different business running a games service [which is how all the successful free-to-play games today are built and run] compared to the traditional publisher’s expertise in commissioning a product, shipping the said product, and simply marketing the life out of it.”

Traditional publishers looking to reinvent themselves is understandable, “given the sharp declines in both their relevance and revenues,” says Gerhard. “Clearly pretending the market hasn’t shifted is not a strategy for success.” He cautions that, “simply observing spectacular results from a handful of industry-leading companies and surmising that it’s easy to replicate is very likely to compound their existing problems rather than resolve them.”

It could be too much of an ask for traditional publishers to embrace the service mindset, constant data analysis, and sustained innovation required to succeed in the free-to-play space. “We are talking about a complete inverse in culture; it’s hard to imagine many will get it right on their own,” says Gerhard.

Saturation of the MMO market

New MMO titles are appearing all the time, which has led to a genuine concern that the market will become overrun. Gerhard believes that players will become more discerning about where they choose to spend their time when this happens and will switch content even faster. He’s happy with Jagex’s position in this eventuality, saying, “I believe as the market becomes more heavily congested, consumers will gravitate towards the most recognizable and trusted brands, a shift that will only continue to benefit Jagex. It ultimately comes down to what’s original and best.”

The launch of major MMO competitors, such as Dungeons and Dragons Online, The Lord of the Rings Online, and Star Trek Online, hasn’t resulted in any attrition in Runescape, according to Gerhard. “Be that because they continue to remain engaged with our ever-changing content throughout, perhaps return rather quickly after trying any new content, or simply that we may serve a different psychographic to the some of these other games is not completely clear.”

Free-to-play releases on consoles

Games like Dust 514 (a first-person shooter set in the EVE Online universe) and superhero MMO DC Universe Online are bringing the free-to-play model to consoles, but Gerhard is adamant that such a move is not on the cards for Jagex. “The amount of online customers around the world accessible via browsers on desktops, smartphones, and tablets ranks in the billions. Weigh that against the tens of millions of connected consoles, and it’s clear that it’s not a number-one priority for us for a while.”

It isn’t just a numbers game. During discussions a few years ago, Gerhard discovered that, “the real issues were not the expected ones of choice of content or even to a degree the commercial models, but rather that the platform holders themselves were not prepared to open up their closed ecosystems to the web. We found that they were even less prepared to contemplate the notion that we insisted our community would be playing the same game on every platform,” including the Wii, Xbox 360, and PlayStation 3.

“When the consoles do open up completely then we would readily support them as part of our roadmap,” says Gerhard.  “I’m certain this change will come in time, simply out of necessity, but if history is anything to go by, the progress will be glacial.”

Transformers Universe

Going forward, Jagex is focusing a lot of its key development resources on Transformers Universe, an MMO property with huge potential. The team is, “super excited about how Transformers Universe is taking shape and rather punchy about its potential to be a truly breakthrough game,” says Gerhard. He is aware that a huge amount of work is still required for the project to reach completion, and focus remains on the progress made with every daily game build. “We remain grounded by the enormity of effort still required over the course of the next six months.”

Jagex’s potential

Given the ongoing success of RuneScape and the upcoming release of Transformers Universe, Gerhard is confident of Jagex’s future market value, when compared to companies such as Zynga and Nexon. “I genuinely believe we are a gold mine of equal, if not greater, market-value potential, but that will probably only start to become widely evident early next year as some of our major initiatives start to come to fruition. We’ve still got tons of work to do over the next six months, but if the successes of the first half of this year are anything to go by, we will completely smash it in the second half.”

As for the future of gaming? Gerhard is clear that it lies in the growth of free-to-play initiatives. “Free to play will largely be the way of the future given it offers the best value and choice for consumers. As any industry matures, that’s where the focus shifts.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Update: As Kotaku reports, Microsoft has only shut down Microsoft Flight and another children’s game for Kinect, Project Columbia, laying off some developers. But the Vancouver, Canada-based studio itself is still operating.

In a statement, Microsoft said:

Microsoft Studios is always evaluating its portfolio of products to determine what is best for gamers, families, and the company, and this decision was the result of the natural ebb and flow of our portfolio management. Many factors were considered in the difficult decision to stop development on Microsoft Flight and Project Columbia, but we feel it will help us better align with our long-term goals and development plans. For Microsoft Flight, we will continue to support the community that has embraced the title, and the game will still be available to download for free at http://www.microsoft.com/games/flight/.

Original story: Microsoft has reportedly shut down Microsoft Flight, a simulation game of piloting real-life aircraft, again. If it’s true, as one user reported on Twitter, it would be the second time in three years that that has happened to the flight simulation division.

The company has yet to confirm the rumor, which is spreading rapidly through Facebook and Twitter.

Microsoft was the custodian of one of the longest-running flight sims in the history of video games, Microsoft Flight Simulator. But three years ago, during a time of contraction in the game industry, Microsoft shut down the studio developing this series.

Then the company revived the game studio to create a small-scale version of the traditional games. During the past year, Microsoft launched Microsoft Flight, which is a downloadable, free-to-play, online-only game. In this successor, you can fly one or two aircraft over the Hawaiian landscape. If you want to fly over a different island, you can pay real money to unlock new territories.

As such, Microsoft showed it was willing to invest in games with new business models. Free-to-play web games are taking off. Riot Games has a huge hit with the downloadable, free-to-play game League of Legends. That prompted China’s Tencent to buy Riot for almost $400 million. But not every free-to-play game is a huge hit.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The people have spoken. And they want their Ouya. The new video game console company, Ouya, has raised more than $5 million in a crowd-funded Kickstarter project in just seven days, with 22 more full days to go in the solicitation.

“We’re inching toward 40,000 backers and that’s exciting to see,” said Julie Uhrman, the chief executive and founder of Ouya. “I’m overwhelmed by the support. The idea is resonating with developers and gamers.”

Ouya plans to launch a sub-$100 console in the spring of 2013. It will have free-to-play indie games running on the Android operating system from Google. The machine will have a Tegra 3 processor from Nvidia and a touch-cable game controller.

Since its announcement last week, 39,171 backers have donated $5,002,705, or an average of $127 per donation. Most of them want to get the Ouya console and controller in exchange for a pledge of $99 or more.

Uhrman said donors include game developers who like the open nature of the console, which is going to be hackable for hobbyist purposes. The extra money “allows us to deliver more consoles and do better tools to support game developers,” she said.

Uhrman said the company is taking suggestions into account and she likes the feedback the Kickstarter donors are giving. She said the company may modify the console based on suggestions, but it has not decided on any changes yet. Some players want music and video playback in addition to gaming.

“This feedback allows us to focus on the task,” she said.

Some have reacted with skepticism to the company’s attempt to challenge Nintendo, Sony, and Microsoft. But Uhrman said, “A little skepticism is healthy. It keeps everyone on their toes.”

Uhrman said the San Francisco company is raising money only on Kickstarter at the moment.

The system will enable developers to make money from their games in any way they want; they’ll no longer be bound to the standard $60 price for a console game. The Ouya will offer free demos and business models such as free-to-play, subscription, virtual goods, or paid fees.

Famous industrial designer Yves Béhar (who also did the Jambox speakers) created the look of the Android-powered Ouya box.

The box will include a quad-core ARM Cortex A9 processor, a Nvidia Tegra 3 graphics processing unit, 8GB of Flash memory, 1GB RAM, and Bluetooth connectivity. The controller takes a cue from the upcoming Nintendo Wii U console: It can play traditional games but also has a touchpad. This means that developers can create special experiences for the Ouya console, Uhrman said. The company is seeking content such as role-playing games, shooters, and casual games.

Ouya will have a custom Android interface and its own online store. It will be open to any developer who would like to make a game for it. The system will launch with TwitchTV integration, so users may view tournaments and live-streamed plays. The standard fee for games or items purchased on the network is 30 percent.

It won’t be easy for a startup to compete against Sony, Microsoft, and Nintendo. Other rivals include Valve’s Steam, a digital distribution client for PCs, and cloud-gaming service OnLive. That’s why venture capitalists turned down Uhrman when she was trying to raise money.

Uhrman came up with the Ouya name at the beginning of last year while she was running digital distribution for IGN, a highly read games news site owned by News Corp.

Advisors include Ed Fries, the former head of Microsoft Game Studios; Brian Fargo, the CEO of InXile and a longtime game developer; Markus “Notch” Persson, the creator of indie sensation Minecraft and head of Mojang; and Adam Saltsman of Canabalt. Investors include Jay Adelson, the former CEO of Digg; Joe Greenstein, the founder of Flixster; Hosain Rahman, the founder of Jawbone; and Eric Hautemont, the publisher of Ticket to Ride. Behar is the Ouya product designer.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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“There hasn’t been a hi-res free-to-play game on the console yet, and we still don’t have any definite announcements or dates, but we’re actively working on it,” Hi-Rez Studios chief operating officer Todd Harris said in a recent interview. “We are in talks with both console providers, specifically Sony and Microsoft, about how best to support free-to-play on consoles.”

Free-to-play refers to any title that is accessible at no cost and generates revenue through microtransactions and in-game advertising. The business model, commonly used in massively multiplayer online role-playing games and social games, has gained in popularity over the last few years. A study by market research firm Newzoo found consumers spent $4.9 billion on F2P MMOs in 2011, a 24 percent increase over the previous year.

However, despite their growing popularity, F2P titles have had little-to-no presence in the console gaming market. But that could soon change.

Last year, Todd Harris told Eurogamer that F2P games supported by microtransactions on the Xbox 360 are “inevitable.” He still stands by that position, and believes the business model is better for both studios and gamers. “[A free-to-play] game succeeds on its own merits because people can just try it out for themselves. Consumers choose how much they want to pay.” He adds that it also gives developers incentive to deliver content and features that their communities want.

Wedbush Securities analyst Michael Pachter has a different opinion. He believes Microsoft is not interested in adopting the business model on the console. “The margin isn’t that good for them, and free users suck up server space,” he said. “Given that Microsoft gets only 30 percent and has to run the servers, it isn’t likely all that profitable.”

Pachter points out that Facebook, which has over 800 million users, makes about a third of its profit from sales of virtual currency for F2P games like Zynga’s FarmVille. He estimates that Xbox Live Gold, Microsoft’s paid subscription service that has around 17 million users, would make maybe $10 million a year. “I’m sure Microsoft doesn’t think it’s worth the hassle. I think Microsoft thinks about profit per user, and they don’t need to cannibalize existing traffic by offering free-to-play.”

R.W. Baird & Co. analyst Colin Sebastian disagrees. While he says the last thing publishers want is to shift gamers from buying $60 titles, he thinks F2P will become a monetization option across platforms. “One thing that companies such as Zynga have taught us is that there is no inherent risk in adopting a free-to-play model as long as the core gamers are willing to play and pay,” he said. “If Microsoft still gets their royalty and subscription fees, then it shouldn’t matter as much to them how publishers price the games.”

GamesBeat contacted Microsoft for this story and was told that the company “is always evaluating different business models, but has nothing to confirm at this time.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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For better or worse, snacking and gaming seem to be inexorably linked. Now social gaming giant Zynga is building on this relationship, by teaming up with Frito-Lay and Walmart, to offer in-game rewards for its popular Facebook games with purchases of specially-marked snacks.

The promotion is a great way of giving the Zynga brand a strong presence in Walmart stores, where $15 and $25 top-up Game Cards will be sold alongside the snacks. They will be prominently placed, in displays near the check lanes, and will no doubt make a great impulse purchase for some of the 240 million active Zynga game players that will be out doing their weekly shop.

From March 1 to April 12, 2012, the promotional codes will be featured on five million bags of snacks. The codes can be redeemed against exclusive virtual items in the three participating Zynga games — FarmVille, CastleVille, and CityVille.

If you want a Flowery Oak to spruce up your castle, you’ll need to grab yourself some Funyuns. A Spring Dragon can be obtained by eating your way through a bag of Cheetos Crunchy Cheese, and a packet of Doritos Nacho Cheese will reward you with a virtual Nacho Garden for FarmVille. Seriously.

Players wanting to get their hands on super items, such as Glowing Glass Condos or Spring Pegacorns, will need to do some serious snacking. These items are unlocked by redeeming on-pack codes from four different specially marked Frito-Lay snack brands, along with a $15 or $25 Zynga Game Card, in the same game.

Jeff Karp, Zynga’s Chief Marketing and Chief Revenue Officer, said: “This promotion between Zynga, Frito-Lay and Walmart is a fantastic example of how brands can work together to bridge the online and offline worlds, all for the benefit of the consumer. We are continually looking for ways to surprise and delight our more than 240 million monthly active users, and we can’t wait to offer our players online, in-game rewards for their offline purchases.”

Full details of the promotion, including a picture of what a Nacho Garden actually looks like, can be found at the Zynga website.

Just remember, as much as you want that Spring Pegacorn, snack responsibly folks.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Marriage in online role-playing game Maplestory is serious business. Just ask some of the folks who found themselves marrying other players in the game, or the marriage and family therapist who weighed in on their online relationships.

Marriage expert Athena Carrillo Lee of Mind Body Spirit Therapy in Los Angeles had a few words to say about those who virtually tie the knot.

When asked why people form these in-game relationships, she said, “Some players might forge online partnerships because they see it as advantageous, the way someone might marry for money — no offense to those of you with those values. Others, who play in order to socialize, might forge a partnership because they wish to flirt, romance, and marry, as these are certainly social activities.”

Carrillo Lee rates these sorts of bonds quite positively. “If someone is only capable of social interaction at this level, then I’m grateful they have some level of interaction,” she said.

Sadly, for those looking for romance on Maplestory, the odds aren’t great. In 2010, of the 26,982 in-game marriages performed, 20,344, or 75 percent, ended in a virtual divorce. The good news? If you are still interested in finding love, Maplestory divorces dropped to 46 percent in 2011, at least for North American gamers.

According to DivorceRate.org, the divorce rate in America for a first marriage is 50 percent. That goes up to 67 percent for a second marriage. By the third marriage, it’s 74 percent. So it seems you may have a better shot staying married in a game than in real life.

But just like real life, you have to watch out for angry exes in Maplestory. One married player was hit with the classic, “You’re not the person I fell in love with.” His virtual spouse said he didn’t seem to care about her anymore. It gets worse: The gal logged into his account and started dropping the items in his inventory, and that’s when he decided to cut ties with her. Like I said, marriage in Maplestory is serious business.

As for how to be successful in your online marriage, Carrillo Lee says, “Don’t marry to get something, marry to share something — you. It’s a great way to get to know yourself.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The study, Trends in Digital Gaming: Free-to-Play, Social, and Mobile Games, claims 135 million people play at least one hour per month compared to 56 million in 2008. Seventeen percent of all gamers have downloaded a title on their smartphones, up from 7 percent in 2008. About 80 percent play free-to-play (F2P) games on the PC or log into Facebook to spend time on the farm or frontier.

Online and mobile gaming are transforming the industry, the study says, changing it from one focused essentially on packaged goods sold at retail to one that provides services to consumers.

“Instead of ending support of customers after they buy individual game titles, game companies now focus on building gamer communities and developing ongoing relationships with their customers,” said Parks Associates research analyst and study author Pietro Macchiarella. “The positive effect of this approach is that game monetization can be extended beyond the point of sale. Unlike traditional offline games, the online world allows the industry to earn revenue even when people play the same game repeatedly.”

Macchiarella says F2P titles remove the barriers of retail costs and subscription fees, which can be big turnoffs to casual gamers. These players see the microtransaction model — where one buys individual virtual items or upgrades to enhance the gaming experience — as a way to reduce expenditures because it allows them to spend according to their budget.

However, Parks Associates has found that people who spend money on these titles tend to spend amounts that are comparable to the cost of traditional titles. Those who spend money on Facebook games average about $29 per month, while those who pay for virtual goods and upgrades in free-to-play games spend about $21 per month on average. Macchiarella says these amounts are not too far from the $24-$27 per month spent on average by incidental and occasional gamers on new console titles.

Due to the ease of making microtransactions on smartphones and tablets, the study predicts mobile gaming will expand industry revenues over the next several years.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Crytek, the developer behind Crysis and Far Cry, is backing a new social gaming network called GFACE. Created by a “small team with big ideas”, GFACE promises to deliver high quality free to play multiplayer games directly to your browser, while also offering Facebook-like social network features.

Crytek chief executive officer Cevat Yerli is a director of GFACE, and says, “GFACE enables its users to discover and experience entertainment together in real time. We want everybody to play everywhere for free.” With Facebook already offering its users a multitude of gaming opportunites, GFACE looks to be setting itself apart by focusing on providing quality multiplayer games first, and then building its social network around them.

According to the GFACE website, it will be providing a range of gaming experiences, from casual 2D games right up to console quality ‘core’ 3D games. Crytek’s first person shooter Warface is featured heavily on the site, and looks set to be one of the banner titles for the service. Warface is powered by CryENGINE3, the same game engine used for Crysis, Crysis 2, and the upcoming Homefront 2. It promises to deliver visuals that are “without equal” in the free-to-play arena.

Perhaps the most impressive aspect of the GFACE service is that all the games will be delivered via cloud-based streaming technology, much like OnLive or Gaikai. This means that hardware limitations won’t stop users from accessing any of the GFACE games. It also looks set to allow smartphone and tablet users to join in with large scale multiplayer games. A promotional image for the service shows three players with different devices teaming up on a multiplayer first person shooter, with each player taking on a different role.

The GFACE website states, “Because GFACE runs in your browser and is designed for live cross platform fun; it is independent of hardware and operating systems, so you can play with everyone, anytime, anywhere.”

GFACE’s social networking features will allow users to create groups, share links and media, and watch live videos together. The service will also include video chat facilities. While none of these features are unique, having them all in one place, alongside a streaming free-to-play gaming service, makes GFACE a very interesting proposition.

GFACE has just entered its closed beta testing phase. You can register your interest in joining the beta at the official website.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Online Warmongers is a company looking to bring the production values and quality of a traditional retail game to a free-to-play shooter. Over a million players have now experienced the beta test of its War Inc. Battle Zone game, and around 200,000 users are logging in every month. With the game due for full release in April, Online Warmongers’ founder Sergey Titov spoke to VentureBeat about building a balanced free-to-play shooter and his vision for the future of the game.

VB: Can you tell us about the background to the game and the team you’ve put together?

ST: When I left Riot Games (I had been serving as Technical Director since the company’s foundation until the summer of 2008), I decided to concentrate on online and free-to-play markets. At this point there was a boom of F2P [free to play] games in Asia, Russia and partially Europe, with some very weak waves hitting the United States. I founded Arktos Entertainment Group – my own investment and online publishing company – and bought out the shares of my partners in Void Production LLC, a Russia-based high-end technology development team.

I then set a goal to our CTO [chief technical officer] to build the best online game engine possible, tailoring it for FTP game requirements. By mid-2009, we had a pretty solid foundation — an extremely reliable and scalable server and backend architecture, and a client that not only provided a fast and very powerful rendering core, but was lightweight and scalable across platforms. In fact we had the client running on PC, Xbox 360, and PS3, and by the end of 2009 we were ready to take the next step – it was time to make a game using our awesome technology.

We had two game concepts; the first being a modern shooter with Battlefield-style game play. I am a huge fan of the Battlefield series, as are some of the Senior team members, and we’ve been dying to bring this type of experience to F2P. The other game idea was a Mech based combat game. The Shooter won.

At the same time we were talking to a few of our friends who were working on the Call of Duty series and also Star Trek Online, and they wanted to start their own company. So this is how Online Warmongers Group and War Inc. Battle Zone were born.

VB: What differentiates your game from other F2P military shooters, such as Alliance of Valiant Arms or Battlefield Play4Free?

ST: As I’ve said before, our goal was to bring traditional retail production value and quality to an F2P game. As gamers, we feel that there are two camps in free-to-play shooters. On one side we have several games that are fun to play, but they feature dated graphics and really low production values. On the other side we have Battlefield and Call of Duty – very high-end, very solid games, but they require the player to pay $60, then grind endless hours, days, and months just to unlock a new decent gun, for example.

We wanted the best of both worlds. We wanted to make a game with premium quality, like modern graphics and high production values, yet we wanted to have all the perks of a free-to-play game. We wanted to be able to speed up our progression by spending a little cash, and we wanted to be able to bring in our friends without having them pay $60 each just to enjoy playing together.

This is what War Inc. Battle Zone is about. We offer a retail quality game in a free-to-play form.

VB: You say that War Inc is balanced to ensure that competitive and loyal players are rewarded. How do you preserve this balance while ensuring that players are still rewarded for their in-game spending?

ST: This has been the hardest thing to solve, and I really hope that we’re almost finished with this task. Basically, when playing War Inc. Battle Zone you always have a choice between spending time on the game and investing some real-world cash to speed things up. Our monetization is built upon that concept.

Yes, paying users will enjoy more convenience perks, as they can create highly customizable private games (basic users have a limited set of options there). They also have early access to new guns and gear, and they have access to some unique items that do not give them an advantage in the game but clearly identify them among players. They have more cosmetics customization options and so on.

It’s clear that our design works – around half of the top players are free players, while [the] other half are paying users.

VB: War Inc was entering its final beta testing period in December 2011. Is this still ongoing, and if so, do you have an expected date for leaving the beta stage?

ST: We launched our first very limited closed beta in April 2011. We launched our first open beta in July 2011 and went into Stage 2 in December. We have very solid plans for an official release of the game in April 2012.

VB: What kind of numbers do you have playing the game at the moment, and what percentage of players do you find spend money on the game?

ST: Since we launched open beta, slightly over 1M users registered and played the beta version of the game. Today around 200K players are playing the game every single month. As for percentage of paying users – I’ll just say that we’re making around $0.40 per day per daily active user.

We understand that still being in beta and actively changing the game design lowers our numbers and conversion rates. This is why we’re working as hard as humanly possible to get to the point when we can safely say, okay we’re done developing Version 1 of the game and we’re ready to officially get rid of the “Beta” stigma.

Interview continued on Page 2

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Riot Games, developer of popular free-to-play online game League of Legends, has announced its opposition to the Stop Online Piracy Act (SOPA). Chief Executive Office Brandon Beck announced in a forum statement “While we do support efforts to prevent online piracy, the current form of this legislation comes at far too high a cost for us, our players, and online communities across the internet.”

The SOPA bill is intended to target rogue websites and prevent piracy, but critics say it will stifle creativity, cost jobs and curb free speech. If it passes, SOPA will give the U.S. government and copyright holders the authority to seek court orders against websites associated with infringing, pirating or counterfeiting intellectual property.

League of Legends has more than 30 million registered players, and Beck has reached out to them, saying “We’re not usually inclined to comment on politics. We’re a game company, and making games is just a whole lot more fun. But there is legislation under consideration today by the United States Congress that gives us serious concern.”

Beck explains how SOPA would specifically affect League of Legends, with the potential loss of the game’s online forums and restrictions on the sharing of game videos and live streams, due to copyright concerns. He adds that SOPA may “raise serious constitutional free speech issues, and could even compromise the basic security infrastructure of the internet.”

Community news sharing site Reddit recently announced that it plans to shut down on Jan 18 in protest of the proposed SOPA legislation. Speaking on a dedicated Reddit thread, Riot Games’ Attorney, going by the user name RiotLomar, said that while his company is not currently considering a blackout of its own, “nothing is off the table.”

He explains how he believes SOPA opponents can help prevent the bill from passing: “Where we can ultimately win, is in public action.….Congressmen, whatever you think of them, will always value votes over money. If a single Congressman receives enough letters, they will respond. If you make this an election issue – that’s how you kill SOPA”. He adds “I’d much rather anyone saved the time it would take to fill out a petition to write your Congressperson. And to bug everyone you know to do the same.”

Riot Games is not the only gaming company that has come out against the controversial SOPA bill. Major League Gaming, a professional electronic sports operation, has stated it is “firmly against both the specifics of SOPA and the philosophy behind the bill.” Epic Games, creator of the hit Gears of War series, has also declined to support the SOPA legislation, in its current form.

You can keep up with news on SOPA by following VentureBeat’s ongoing coverage.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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As one of a growing number of massively multiplayer online (MMO) games adopting a free-to-play strategy, APB Reloaded has hit a milestone of 3 million users, just one week after its relaunch. This is all the more remarkable given the  failed initial launch of the game in 2010, under the title APB, which saw developer Realtime Worlds going into the equivalent of bankruptcy.

APB was originally released in June 2010 by Electronic Arts, under a subscription model, with players purchasing game time, either by the hour, or as an unlimited 30 day access package. In addition players were required to purchase a retail copy of the game, either in boxed or digital form, which included an initial 50 hours of access.

This strategy seemed to backfire horribly, especially when Metacritic reviews started appearing, casting the game in a very bad light. Poor sales and low player numbers resulted in the game servers being closed, just 79 days after launch, and developer Realtime Worlds going into administration. After the event, a member of the development team admitted “if we’re being brutally honest, we didn’t pay enough attention to the design of the game”.

APB has now been reborn, under the title APB Reloaded, and early signs are that this revamped incarnation of the game, now published by GamersFirst, will prove to be more successful. Gone is the subscription model, and in its place is a free-to-play system, supported by micro-transactions, where players can spend real money on optional items, which can be used in-game.

GamersFirst ran a lengthy Beta testing phase for APB Reloaded, before releasing the game on Valve’s digital distribution platform Steam on Dec. 7. APB Reloaded has already gained 3 million users, and is currently the second most popular microtransaction-based game on Steam.

Vindicia chief executive officer Gene Hoffman, who has worked on payment systems for MMOs such as Star Trek Online and Rift, spoke to GamesIndustry.biz today, saying “Look, some of these MMOs are launching and, they’re really bad”. He went on to note that many such titles are accidentally stumbling towards a free-to-play model, which eventually ends up resuscitating the game. The original APB launch seems to be a prime example of this problem, but its fast track failure sadly ended with the closure of the original development studio. Hopefully the relaunched APB Reloaded has pro-actively hit on a business model that will prove more of a success.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Online-gaming firm Nexon went public today on the Japanese stock market, raising $1.2 billion in a move that will call a lot of attention to the virtual goods and online gaming markets.

Nexon’s online gaming business has grown fast in Asia over the past decade, and it has become a worldwide success built on the free-to-play business model, where users play for free and pay real money for virtual goods in small transactions. Nexon pioneered the model that Zynga is using to make its own play for an IPO in the social gaming market. While Zynga has gotten more attention, it will be interesting to see if, as Business Week suggests, Nexon gets more attention with its stock than Zynga.

Next to Zynga’s expected IPO, the Nexon deal is one of the biggest pending IPOs in the video game industry and it’s an example of the continuing strength of Asian online game companies. Nexon in particular has pioneered the top business model of the day: free-to-play games where people play games for free and pay real money for virtual goods. It’s a growing business: Market researcher Strategy Analytics expects the virtual goods market to grow from $6.8 billion in 2011 to $12.7 billion in 2016.

As we noted earlier, the prospectus for the offering says that Nexon has 1.2 billion cumulative registrations, 77 million monthly active users as of September, 600 million virtual items sold in 2010, and 500 billion minutes played in 2010.

Nexon is one of Asia’s largest online game publishers, with games including MapleStory, Mabinogi, Vindictus, Combat Arms, Dragon Nest and Dungeon Fighter Online. The games take anywhere from two years to five years to develop. To juice sales of the games, Nexon sells its virtual currency game cards in 45,000 stores in the U.S. alone.

The Nexon IPO is the biggest IPO in Japan in 2011, and the largest one since Otsuka Holdings raised $2.05 billion in December 2010.

Nomura Securities, Morgan Stanley, and Goldman Sachs are lead investment managers. After the IPO, Nexon could have a market value of about $7.69 billion to $8.97 billion. That compares to $6.99 billion for Electronic Arts.

In its IPO filing, Nexon said it has eight games with more than $100 million in lifetime revenues. Of those games, three had more than $300 million in revenue and one had more than $400 million in revenue. The two games combined have generated lifetime revenues over $1.5 billion. Nexon noted that as of last year, Dungeon Fighter accounted for 30.9 percent of revenues and MapleStory was 26.3 percent of revenues.

In 2010, Nexon’s revenues were $903 million, up from $668.2 million a year earlier. Net income was $107.5 million in 2010, compared to $229.2 million a year earlier. For the nine months ended Sept. 30, 2011, revenue was $853.5 million, up 26.5 percent from a year ago. Net income was $260.1 million, up 14.6 percent. Overall, Nexon expects to continue growing for the full year in 2011. Nexon has been profitable since 1996.

Much of the revenue is spread across multiple territories. For instance, only 35.2 percent of revenues for the Mabinogi game comes from Korea. In the U.S., virtual goods typically sell for 50 cents to $5. In MapleStory, there are 2,000 virtual goods items for sale in the U.S. version, all designed for a Western audience. They include things like a “summer royal” hairstyle.

Nexon has 3,537 employees, including 1,507 employees in development. Rivals include NCsoft, NHN Games, Hanbit Soft, Neowiz Games, Square Enix, DeNA, Gree, Nintendo, Sony, Tencent, Shanda Games, Electronic Arts, Activision Blizzard, Riot Games, Zynga, Disney and Microsoft.

More recently, Nexon has been expanding in the U.S., launching a Facebook version of MapleStory and investing in mobile social games. It also invested in social game maker 6waves Lolapps. The company’s overall strategy is to take its games to new platforms and devices, build a global brand, expand its game portfolio, and extend its existing game franchises.

Nexon is planning to issue 70 million shares of common stock on a global basis, including 34.9 million shares to be issued outside of the U.S. and Japan. In Japan, the company will issue 35.05 million shares. After shares are issued, Nexon will have 430.6 million shares of common stock. After the offering, NXC will own 59 percent of Nexon’s shares. NXC is controlled by Nexon founder Jungju Kim.

Among the risk factors, Nexon cited hacker attacks. It said that in April 2011, a server in North America was hacked and that may have led to access to encrypted data on 24 million accounts. Nexon found that virtual currency had been tampered with and it suspended the accounts of users who saw abnormal increases in virtual currency. In August, 2011, another hacker attack in Korea may have provided hackers access to 4.5 million unencrypted cell phone numbers, including 130,000 with other personal information. Nexon said it was also aware of 200 illegal servers that were hosting its games for free.

As of Sept. 30, Nexon had $577.7 million in cash. Nexon was founded in 1994. It began a global expansion in 2005. Over the years, it acquired Wizet, Neople, Ndoors, and GameHi. Revenues from mobile games were not material in 2011.

Now it has 57 online games played in 104 countries. Some 32 of the games are role-playing games, six are first-person shooters, and 19 are in other categories such as social games. Nexon’s KartRider game has more than 270 million registered users.

Among the investors is Min Seo, Sangbeon Kim, Seungchan Lee, Softbank Ventures Korea, NE Partners and Insight Venture Partners. Nexon said that it invested in JC Entertainment on Oct. 24, giving it a 16.3 percent share in the company.

This post was updated after Nexon opened up at 1,307 yen Wednesday on the Japanese stock market.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Sci-fi and space massively multiplayer online games (MMOs) are played by an estimated 14 million people in the U.S., according to Newzoo’s 2011 MMO Report, but a full 68 percent say they only play free-to-play MMOs, with half of the remainder saying they play some mix of free and subscription-based games.

The ratios are similar in Europe, where 76 percent of sci-fi MMO players ignore subscription games, and in the emerging markets of Brazil, Mexico and Russia, where 80 percent of sci-fi MMO players play exclusively for free, Newzoo said. Paid subscription MMOs fare somewhat better in Asia, where 52 percent of sci-fi MMO players pay for at least one subscription.

Newzoo’s report comes as more and more MMOs transition to a free-to-play model as a way to attract players, who may eventually pay much more for in-game items. Warner Bros.’ DC Universe Online saw its revenues increase 700 percent following a recent move to a free model, and even venerable subscription-based MMO World of Warcraft recently expanded its free trial to allow unlimited free play up through level 20. Last month, Newzoo estimated total U.S. spending on all free-to-play titles has increased 24 percent in 2011.

EA is bucking this trend by charging upwards of  $13 per month for access to The Old Republic, which is currently in beta and launches fully on December 20 . EA CEO John Riccitiello said in September that the game would need about half a million subscribers to break even, and the company says the beta test has currently attracted over 2 million players.

While Newzoo CEO Peter Warman said he didn’t want to use the MMO data to make any predictions about the fate of The Old Republic, he did say he was ”very curious to see how [many free-to-play] sci-fi gamers EA will be able to convert to [paid subscription] gamers.” EA could also find success by converting subscribers from successful fantasy-themed MMOs, such as World of Warcraft and Rift, Warman said.

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Although the game is initially free to play, if you want to upgrade your park quickly, you are going to have to cough up some real cash, with some single rides costing the equivalent of $60.

This move comes hot on the heels of EA’s decision to introduce a $30 a year subscription fee to its Tetris iOS game.

The game has not yet been released in the US, but Canadian iPhone owners can already get their hands on it. AOL has reported on the game, in which you build your own theme park, by choosing shops and rides, and says that progressing without spending any real money is a painfully slow process.

Users sticking to the free features in the game are able to unlock a limited selection of attractions, but any really ‘cool’ items cost Tickets, which are purchased with real money. AOL states that a Skull-Train roller coaster in the game costs the equivalent of $60 to purchase, and that the majority of the game’s rides are just as expensive.

There is certainly money to be made in the freemium game market on iOS, with Smurfs Village  and Tiny Tower both having proved their worth recently. Whether EA can replicate its Sims Social Facebook success on iOS remains to be seen, but with the average transaction value for iOS or Android purchase at $14, they may be a little off the mark.

Dark Orbit players recently helped demonstrate this whale theory, with 2000 of them each splashing out €1000 ($1335) on a rare virtual space-drone, which can be used to gain a competitive advantage in the game.

Whilst some developers shy away from the sale of big game-changing items, preferring to offer premium features with optional subscriptions, Bigpoint are embracing the fact that some players will spend big, in order to improve their performance. Thanks to the four-day space-drone sale, Bigpoint netted a cool €2 million (about $2.67 million) in extra sales revenue.

Dark Orbit is a space-based massively multiplayer online game, in which your spaceship can be supported in combat by drones. There are different levels of drone ranking up to the 10th Drone, which is the very rare Zeus Drone. The usual means of obtaining the Zeus drone is to collect all 9 previous drones and then obtain blueprints in order to make it in the game. When Bigpoint put this limited number of Zeus drones up for sale, at a quite staggering price for a virtual item, 2000 players happily stepped forward to pay, in order to circumvent the otherwise arduous task of collecting it legitimately.

Bigpoint Games, a German company specializing in browser-based free-to-play online games, was founded in 2002. It is currently on course to deliver over €200 million (about $267 million) in revenue from the sale of virtual goods in its games this year. In April this year, two major private equity firms bought a majority stake in the company for $350 million.

With figures like that, it is easy to see why many developers are now looking at the free-to-play model as the best way of monetizing their own games.

[Update: Gamesbrief has followed up its initial report, now stating that the 2000 Zeus Drones were sold for in-game currency, not cash. If a player had bought in-game currency (Uridium) at full price, they would have spent the equivalent of €1000 on one Drone. It is possible that players purchasing the Zeus Drones had previously bought Uridium at discounted prices, or earned it through in-game activities. As a result, it is not possible to say exactly how much revenue Bigpoint made from the sale of this single item.]

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The makeover is about how to keep users coming back, which in turns leads to better monetization. Despite being free-to-play, RuneScape offers players the option of purchasing a monthly membership, which provides a host of premium benefits. It also generates revenue through adverts that appear above the playing screen for free users. With many MMOs now rushing towards such free-to-play business models, including DC Universe Online, Jagex CEO Mark Gerhard has recently offered some words of caution: “It’s less about what’s the right model, less about how to take money from a customer’s wallet, and more about what kind of gameplay you have that’s conducive to that type of monetization mechanism.”

The new RuneScape website is described as a complete overhaul, and as well as providing a fresh look, it also offers players some features that have not been seen before:

- The RuneScape Wiki: The manual has now been moved over to the new, community-editable wiki. Even if you’ve never used or edited a wiki before, it’s really easy to do. Follow the link for details of the basic requirements for editing, and for guides on how to get started.

- The Events Section: There’s a whole new section devoted to the organisation and advertisement of events. The Jagex Community Engagement team, clans and individual members of the community can put up details on the events feed and place a location pin into the events map to direct prospective attendees.

- RuneScape News to the Fore: News, media and social networking activity feeds have been given pride of place on the new front page, ensuring that up-to-the-minute RuneScape information is readily available at all times.

Alongside the new look website, Jagex has also created a nifty new logo for its game, which celebrated its 10^th anniversary in style this year, at the Runefest event in London.

With so many publishers starting to experiment with the free-to-play business model, in which just 3 percent of players typically spend money, Jagex is obviously hoping that RuneScape’s new look helps to keep it ahead of the game.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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DC Universe Online, for PC and PS3, originally required a paid monthly subscription when it launched in January this year. But Sony announced in September that the game was becoming free-to-play, with income being generated through micro-transactions and an optional subscription package. It was a gutsy maneuver, given the potential change in revenues for the title.

This move seems to have paid off, certainly in terms of player numbers. “DC Universe Online’s transition to free-to-play has been welcomed by the community and gamers with heroic enthusiasm. In just one week alone, 1 million new players have joined DCUO, with a 50/50 split between PC and PS3” Lorin Jameson, executive director of entertainment at Sony Online Entertainment Austin, said today.

Under the free-to-play business model, DC Universe Online now boasts a three tier access structure, as detailed below:

Free Access: New players have access to the base game content in DC Universe Online, including Gotham City, Metropolis, and all current raids and alerts outside of dowloadable content (DLC) packs. Free Access lets players create two characters and join a League, among other benefits. Free-level players can also purchase DLC packs, additional character slots and more in-game.

Premium Access: Any player who has spent at least $5 qualifies for the Premium Access level. Premium-level players get additional character slots, additional inventory slots, and higher cash limits. DLC packs, additional character slots, and more can be purchased in-game. All previous subscribers are automatically granted Premium Access.

Legendary Access: Legendary Access provides the most content, features and benefits of the three access levels. Loaded with enhanced features, Legendary Access is available for a $14.99 monthly fee (multi-month discounts available) and includes access to all DLC packs at no extra cost, more than 16 character slots, over 60 inventory slots, the ability to form Leagues, and many other benefits.

With SOE’s solid record of creating world-renowned MMO games, such as Everquest and Free Realms, it will be interesting to see whether this move pays off in the long-term. Getting gamers to sign up for a free-to-play MMO is one thing, but making sure they stick around and spend some money is another challenge altogether.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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