Engage Digital Wrap-Up For The Week Of November 20, 2010

Welcome to the Engage Digital Wrap-Up for the week of November 20, 2010. The Wrap-Up is where Engage Digital spotlights stories that we didn’t get to cover individually, but still make for interesting reading about the business of user engagement.

• Confirmed: Accel Sold Facebook Shares At $34B Valuation: Accel Partners has sold less than 20% of its shares in Facebook at a whopping $34 billion valuation.
• Exclusive: YouWeb, Billion-Dollar Incubator?: Forbes profiles Peter Relan’s YouWeb, incubator of high-profile companies CrowdStar, OpenFeint, Sibblingz, and iSwifter. Relan values all four companies together at $1 billion, a valuation that is plausible enough given CrowdStar and OpenFeint’s success. YouWeb takes a one-third stake in each company it incubates, which is a larger cut than competitors like Y Combinator might, but Relan joins each company as a co-founder while it’s incubating and then chairman of the board after a company is spun out. YouWeb invests in only two or three entrepreneurs per year.
• FarmVille No Longer Facebook’s Top Application: FarmVille is no longer Facebook’s largest application, now coming in second behind a page customization app called Phrases. This may be a sign that the social gaming boom in the US has finally ended, with further growth to follow organic rather than explosive patterns. It is possible that FarmVille’s ongoing MAU contraction may signal a possible contraction for Zynga itself in the future.
• Former Player X CEO Tony Pearce Unveils Social Gaming Discovery Portal TeePee Games: TeePee Games has taken $500,000 in funding to launch a game discovery portal designed to help promote Web, social, and mobile games to new users. TeePee is meant to help solve the problem of most users only being willing to play games that are already Top 20 in their category.
• Foursquare Gets Pepsi, SCVNGR Answers With A Fizzy Partner Of Its Own: Coca-Cola: Location-based social network Foursquare has entered a partnership with major soft drink brand Pepsi just as rival location-based social game SCVNGR has closed a major deal with rival soft drink brand Coca-Cola. The terms of the deals are slightly different. Foursquare’s integrates with the grocery store chain Safeway/Von’s to award users Pepsi products based on their check-in history. SCVNGR’s is going to deal with the “scavenger hunt” check-in challenges the service typically emphasizes.
• Google Investor John Doerr: Zynga Is Our Best Company Ever: John Doerr of investment firm Kleiner Perkins Caufield & Byers has stated that Zynga is the most profitable and fastest-growing company the firm has ever invested in. Doerr also thinks highly of Apple’s app ecosystem.
• Google Tests New Augmented Reality Ads: Google’s Google Goggles augmented reality app will now recognize “Google-enabled” print advertisements created by partner companies like Buick, Disney, Delta Airlines, Diageo, T-Mobile. When the Google Goggles recognize a partner’s print ad, they will display a link to the company’s Website and special interactive content for the user.
• Hack Shows Off Augmented Reality On Windows Phone 7: While the current version of Windows Phone 7 doesn’t allow apps direct access to the camera, a hack shows off what augmented reality on the platform could be like.
• Is Smurfs’ Village A Rip-Off?: Capcom’s Smufs’ Village is now the top-grossing app on the iPhone platform, dethroning Angry Birds, but some users claim it’s because children playing the game are purchasing tons of  Smurfberries cash-based virtual currency without realizing that it costs real money.  The source of the problem is a quirk of how iOS works, where an account that’s been activated to allow payment remains active for 15 minutes before requiring activation again. The only way to prevent abuse of the fifteen-minute account activation period is to simply disable in-app purchases in the Settings section of the iDevice.
• Lime Odyssey To Be Published By Aeria Games: Aeria Games will send the freemium MMO Lime Odyssey into closed beta in Q2 2011.
• Meet The Man Who Paid A Record $335,000 For Virtual Property: Forbes profiles Yan Panasjuk, who spend $335,000 to purchase Club Neverdie in Entropia Universe in the single biggest virtual property transaction to date. Panasjuk has played Entropia Universe for ten years. He expects to be able to use Club Neverdie to generate roughly the same annual income its previous owner did– $200,000.
• Metaio Shows Off Augmented Reality Print Ad In Germany: Metaio has teamed with the German restaurant & bar chain Sausalitos and Coke Zero for an augmented reality ad campaign that gives users who view a special Sausalitos print ad a free Coke Zero drink.
• Microsoft Opened Its Wallet To Build WP7 App Success: Microsoft paid location-based social network Foursquare to prepare a WP7 port of its app in time for the platform’s launch. Microsoft approached Foursquare about creating the app in August. Microsoft made similar deals with many other major mobile app developers.
• MindJolt Releases Advertising, Monetization Tools For Third-Party Devs: Social game developer MindJolt has announced AdJolt, a monetization product designed to help other developers optimize their ad and virtual currency revenues.
• Mobile Augmented Reality Apps To Top $2 Billion By 2015: A report from London-based research firm ARCchart calls for the market for mobile augmented reality apps to reach $2.2 billion by 2015. ARCchart estimates that over $1.6 billion AR-enabled phones will be present in the market by 2015, too. As the currently small augmented reality market begins to grow, ARCchart expects established industry players to step up their investments in the space.
• More Advertisers Tap Virtual Goods For Casual Games: WildTangent is launching a marketing platform that lets brand sponsors reach users by paying for their virtual goods and currency. WildTangent says that in social games, roughly 3% of users buy virtual goods, creating a 97% business opportunity for advertisers.
• Names You Need To Know In 2011: Jon ‘Neverdie’ Jacobs: Forbes profiles original Club Neverdie owner and Rocktropia developer Jon ‘Neverdie’ Jacobs. Jacobs says that ARPU in Rocktropia is currently around $10.
• Ntreev Rebranding As SG Interactive: Freemium MMO publisher Ntreev is going to rebrand as SG Interactive and launch a new game portal early next year.
• Papaya Tech Fosters Android Gaming: Papaya Mobile has launched Papaya Game Engine, a game platform for Android that lets programmers develop games using a language similar to Flash or Python. Game Engine also automatically solves a typical problem Android developers face, dealing with the wide range of screen dimensions possible for Android handsets.
• Perfect World Misses Sale Expectation, Stock Dips: Perfect World’s third quarter profits fell 28.8% quarter-over-quarter to $31.9 million, driving its stock price down 16.2%. Perfect World’s average concurrent user count also dropped 17.3% quarter-over-quarter.
• Planet Michael: What Would MJ Say?: Eurogamer interviews some of the creators of SEE Virtual Worlds’s Planet Michael, essentially trying to find out if they really think the late Michael Jackson would approve of his license being used to build a virtual world. Planet Michael will be the proof of concept for SEE Virtual Worlds’s plan to create a network of planets based on various celebrity and entertainment licenses. Some of Planet Michael’s activities are covered, like hunting zombies in an area based on the Thriller music video. SEE Virtual Worlds currently plans to sell users Michael Jackson’s songs in-game, where they can be stored and played in a “virtual iPod.” SEE Virtual Worlds is also planning a virtual world based on the Universal Monsters license.
• Project Skylight Puts Second Life Right Into Your Browser: A new viewer for Second Life has launched, Project Skylight, which allows users to run Second Life in a browser-based environment.
• Safeway, GameStop, and RadioShack Also Get Facebook Credits Gift Cards: Safeway grocery stores, GameStops, and RadioShacks throughout the US will now sell Facebook Credits gift cards. Other chains selling the cards including Target, Best Buy, and Wal-Mart.
• School Continues To Use Second Life As Teaching Aid: Game Politics profiles the University of Pennsylvania’s Archaeology Island in Second Life, a property that has four different types of archaeological dig locations set up for students to visit.
• Shopkick Brings In-Store Mobile Coupons To Android Phones: Shopkick’s geo-coupon system is now available to Android users through a new free app.
• Soul Master Closes Down For Redesign, Scheduled To Return In 2011: GamesCampus plans to shut down its freemium MMO Soul Master so the game can be completely overhauled.
• Star Walk 5.0 Brings Augmented Reality To iPod Touches: Vito Technology has updated its Star Walk 5.0 app with an augmented reality mode that makes the app usable on iPod Touches as well as iPhones. The augmented reality leverages the iPod Touch’s gyroscope, letting users manually match up the night sky they’re viewing to an augmented reality display in the game.
• Twitter: We Won’t Build Games: Twitter co-founder Even Williams has unambiguously stated that Twitter will probably never be a games platform. The only major Twitter-based social game to date is Spymaster.
• UK-Based RuneScape Dev Jagex Wins Patent Infringement Lawsuit: Judge David Folsom has dismissed Paltalk’s patent infringement lawsuit against Jagex. Paltalk has also sued, and settled with, Microsoft in the past over the same patents.
• Virtual Chocolate Factory Social Game To Offer Real Chocolate: Players of PlayFirst’s social game Chocolatier: Sweet Society can now order real-life chocolates available exclusively through the game, created by San Francisco chocolatier Charles Chocolates.
• Warrior Epic Closes Its Doors: Last week Ijji.com shut down servers running UTV True Games’s freemium MMO Warrior Epic.
• Wooga: Virality Is Dead, Long Live Engagement: Wooga now publishes more than one Facebook social game with over 1 million daily active users each, a feat only Zynga and Electronic Arts have previously achieved on Facebook. Wooga says that it only acquires three percent of its users through advertising and the rest through positive word-of-mouth.
• World Of Tanks Announces Vivox Voice Chat: Freemium MMO World of Tanks now supports Vivox’s voice chat service.
• Yu Suzuki Hopes Shenmue City Leads To Future Developments For Series: Shenmue creator Yu Suzuki says in an interview with Famitsu that new social game Shenmue City was inspired by the creator’s time spent playing Zynga’s Mafia Wars. Suzuki was inspired to try his hand at making a social game because of the potential he felt in the genre.
• Zattikka Acquires Monty Python License For Social Games: Zattikka plans to make social games based on the Monty Python license, using the “characters, settings, sketches, and comedic approach” of the program.
• Zynga On The Hook For Virtual Currency Ads: A federal judge has refused to dismiss a class action lawsuit accusing Zynga of misleading Facebook users into giving their personal information to advertisers.

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