The Week in Geek – Feb. 22, 2008
EA Leaps Into Free Videogames
Piracy is rampant in Asia, so EA experimented with a new model in the S. Korean version of FIFA Soccer – give the game away, and make money on micro-transactions like clothing and performance enhancers. The result? In two years, the online version of FIFA Soccer has brought in over $24 million in micro-transaction revenues – some $1 million per month. That’s nearly twice what FIFA Soccer earned in 2002, its best retail sales year. Micro-transactions now account for about 50% of online game revenues in Asia, a market estimated to be between $3 billion and $4 billion. Games are smart enough to pair players with similar abilities, so you can’t ‘buy’ your way to the top, like some sort of digital steroids. Up next? Battlefield Heroes from EA’s DICE Studios in Stockholm.
Game of the Year
Glad so many of you wrote to say you enjoyed the tip on “World Golf Tour”. Here’s another for the gamers: What’s the best selling computer game of all time? Will Wright’s The Sims. The entire Sims franchise has netted EA over $2.5 billion. Up next? Wright’s latest creation, Spore. And who says gaming is a guy’s world? Spore’s executive producer is Lucy Bradshaw. Looks like Will & Lucy have a hit on their hands – Spore is already winning awards, and it’s not even released yet! Spore will be out for the PC, Mac, Nintendo DS, and some mobile phones, with first versions expected mid-year. Some analysts predict it’ll sell as many as 5 million copies. It had better arrive soon. It’ll be a year late, and (at $35 million to produce) way over budget. The videogame market grew 43% last year, generating almost $18 billion. If Spore is a Sim=worthy successor, look for EA to snag solid growth in ’08.
Toshiba Concedes Defeat in the DVD Battle
The battle for the next-gen DVD format is over & the winner is BluRay. Toshiba, the lead backer of rival HD-DVD, threw in the towel this week, saying it will no longer produce the players. What caused BluRay’s win? The market tipped. Customers sat on the fence until it looked like there’d be a clear winner, and when Warner moved to BluRay, followed by Wal-Mart & NetFlix announcement to back the standard, it was clear Toshiba’s gambit had lost. Another network effects battle for the ages. Looks like Sony (who bundled BluRay players in its highly subsidized Playstation 3) learned from the Betamax failure decades back.
Piggybacking on Facebook
I’ve got to admit as a happily married middle age guy (with two great kids) I always feel weird writing or doing case studies on dating sites, but this article from the NY Times shows how Facebook applets can launch rivals with very little investment. Without spending any money on marketing, Snap’s Facebook dating applications “Are You Interested” and “Meet New People” land higher traffic than established rivals Match.com and Yahoo Personals, all without ANY marketing. Credit the Facebook ‘feed’ feature to spread the word that friends have the app installed, plus the site’s dating demographic sweet spot. 8.6 million people installed the applet, which increased traffic on Snap’s IAmFreeTonight.com dating website twenty fold.
Starbucks to Offer Free WiFi
Chris Bruzzo, the super-smart Starbucks CTO, announced that soon, anyone with one of the firm’s cards set to auto-reload will get 2 free hours of WiFi a day. When I’m on the road with students it’s always been interesting to see nearly two dozen laptop luggers congregate around the free WiFi café. ‘til now it’s never been a Starbucks, where you had to pay for T-Mobile service. With the new AT&T-powered deal, there’s beaucoup incentive for everyone to get an auto load Starbucks card and bring their business to the mermaid. A fast cup & free WiFi, is not only a great value proposition that will drive sales, Starbucks is leading the way for retail WiFi to pick up where municipal efforts have failed. Look for a cascade of free WiFi, particularly if Apple makes it easier to offer location-based couponing ala the super-slick Starbucks/iTunes integration profiled in an earlier WiG. And have you seen the games with the ‘socialize’ option at http://games.starbucks.com/? Pretty neat.
Microsoft will Open ‘Key’ Products
Microsoft is posting some 30,000 pages of technical documentation detailing how Windows, Office, and other products communicate and share information. This kind of information was previously only available under a trade secret license. The European Commission, which has been pushing Microsoft for more openness, issued a skeptical statement. Speaking of the EU, many remain skeptical of whether Europe would allow a Microsoft-Yahoo merger, too. In more openness news, Gates himself announced the Microsoft DreamSpark program. 35 million college students in the U.S., China, Belgium, Finland, France, Germany, Spain, Sweden, Switzerland and the U.K., will get free access to the firms development and design tools. Students get access to the real deal, SQL Server, Visual Studio, and Windows Server, among others. The program will soon be expanded to high schools worldwide, eventually becoming available to as many as 1 billion would-be developers.
Commentary: This is a very smart move. Developers who cut their teeth on Microsoft products are likely to choose those products first when coding. And more software attracts more users, attracting more software (cue the virtuous cycle)… While being proprietary can create lock-in, the Google case actually shows that users stay with remarkably low switching costs, as long as they perceive they’re getting value. Look how easy it is to leave Google – yet no one has done it. By being more open, Microsoft likely doesn’t sacrifice much of the favoritism that existing users will show the firm, plus it gets to bask in the benefits attracted by having a more connected and open product.
BTW: did you catch the Fortune profile on Melinda Gates a few weeks back? What a hero! While her work is just utterly inspring, I must confess that I took particular pleasure when the article revealed Melinda decided on Duke when a Notre Dame professor told her “computers are just a fad”.
Will Ferrell and the End of Media As We Know It
In its first three weeks Funny or Die patched together with just $17,000 in seed money from Sequoia, drew almost 3 million unique visitors, a figure that exceeded the monthly averages of Comedy Central, the Onion, and CollegeHumor.com. Much of this was driven by a clip called “The Landlord”, in which tenant Ferrell is berated by a foul-mouthed toddler (the little girl is the real life daughter of Adam McKay, Ferrell’s Talladega Nights collaborator). In FunnyOrDie’s model, viewers weigh in on whether a video is good. If not, it’s banished to the crypt. Management envisions the model will work beyond laughs, and has launched a skateboarder site ShredOrDie, and a Jeff Foxworthy-esque site MyBlueCollar.com. Some A-list comics, along side a slew of amateurs, have contributed clips to the site. But of the 16,000 videos online nothing has approached the 50 million+ views “The Landlord” has garnered. By August the monthly unique visitors had plummeted 73% from 2,896,000 to 775,000, placing the site outside Nielsen’s top 10 humor destinations. Still, ad revenue for web videos has $776 million, nearly double the ’06 figure. We’re a long way from an end game, one can imagine a site that learns your sense of humor from your ratings and leverages collaborative filtering to the equivalent of an SNL-length clip set where you laugh at every bit.
PC Power in Your Handheld
Nearly all of the world’s smartphones are based on technology from Britain’s ARM. Intel used to provide ARM-based chips, via a technology called xScale, but sold this business to Marvell (which TechTrekkers recognize as a firm founded by Partners from Tallwood Venture Capital). Why would Intel get out of the fast-growing mobile business? To re-enter it with a technology compatible with the same chips in PCs and Macs. Intel’s vision is for code running on laptops to shrink into UltraMobile devices. The first power-sipping x86 chip for mobile devices is code named Silverthorne & is expected to appear in devices the second half of this year. Within two years look for a chip code-named Moorestown. That one will cram 3 chips into one – an x86 processor, a graphics adaptor, and other support functions.
The Blogging Czar of Moscow
The fourth largest website in Russia belonged to a firm started in San Francisco which did nothing to bring it to prominence. LiveJournal, started by SixApart, is so hot that Russians often refer to the word blog by saying ‘zhe-zhe’, a shorting of Zhivoy Zhurnal, or LiveJournal in Russian. In December, Russia’s SUP acquired LiveJournal for an estimated $30 million. Why are blogs so popular in Putin-land? Some say they are “the only platform for free speech in Russia”. Blog on, comrades!
Japan: Google’s Real-Life Lab
Google’s partnerships with the two largest Japanese mobile firms (KDDI & NTT DoCoMo) give it access to some 82 million mobile power-users who turn over their handsets like fashion accessories. The user base is perhaps the world’s most demanding, and Google plans to leverage what it learns overseas to improve mobile experiences like search & messaging for all. I’ll be in Tokyo with our students in May, and look forward to comparing what I see there with my visit to Seoul just a few days later. A visit to Google Korea is planned.
Lenovo Builds the Perfect Laptop
We’ll be back at Lenovo in Beijing this year, too. China’s first global brand (and first World Wide Olympic Sponsor) landed on the cover of BusinessWeek this week, with the ThinkPad x300. While not quite as slim as the MacBook Air, in some configurations the device is less than 3LBS. It was approved the day Jobs announced the Air. BusinessWeek reports a Lenovo exec called out to a secretary ‘get me an envelope’. It fit (barely – its not Air-slim), but it does have an Ethernet jack. BusinessWeek says the only thing slightly less than perfect is the bottom – too many vents & stickers.
Lessig May Run
The Boston Herald phoned the other day to ask me about online politics, and (although this quote didn’t make the paper) I’d mentioned the most interesting thing I’d heard recently was Larry Lessig’s pitch to run for Congress in California’s 12th District. Check out the YouTube video in the TechCrunch link above. The pitch from Lessig, a Stanford Professor specializing in all things CyberLaw (and frequent Wired contributor), is perfect for the geek set. Deconstructing the video, Lessing makes the case that is akin to “congress has a bug in it, and that a users, we have a responsibility to squash the bug”. The bug is the lopsided influenced of special interests. Look for more from change-congress.org, a movement that will likely catch fire even if Lessig himself doesn’t make the House.
Weird Scholarships
GMSV recently pointed to ScholarPoint Connect’s list of the Weirdest and Wackiest Scholarships You Never Heard Of. The site is frequently down, but is worth a chuckle. Klingon Scholars, anyone?
As for those missing iPhones – we got a WiG report from BC Alum and Nanjing Talk Show Host, Keith Galinelli who says “It is true that here in Nanjing you can pick up [an iPhone] for about 4000RMB and it is cracked to work with China Mobile, no problem. My friend has one and loves it – you can get online and use almost all of the features.”