Disney Acquires Kids' Social Network, Togetherville

Togetherville, a social network for for families to create safe online neighborhoods for their children under 10 years old, has confirmed that it was purchased by Disney according to Mashable.com. It sets itself apart from other social networks for children by facilitating parent-child interactions.

Togetherville mimics adult social networks in a kid-appropriate way. Each neighborhood is built around each specific child and remains closed to outsiders. Kids have their own profile pages, complete with their photos. In Togetherville, kids can

• play games and brainteasers
• watch videos
• create artwork
• send and receive gifts
• update their status with pre-screened text phrases, called "quips," such as "Who is going to see Diary of a Wimpy Kid?" and "Aced the test. Oh yeah!!"
• send "safe" messages to friends
• and comment on or "Heart" their friends' activities.

All achieved with active participation from friends and family. You and your child build the neighborhood by creating an account on Togetherville.com. You sign in with your Facebook login - no need to create a new username or password. Togetherville automatically finds your Facebook friends and their children who already have Togetherville, and you easily build your child's neighborhood from there. You can "allow" specific friends to become part of your child's neighborhood or invite others in who may not already have Togetherville accounts.

Parks Associates hosts "Social Gaming" Webcast - FEB 24

Join Parks Associates on Thursday, February 24th at 1 PM CENTRAL for the webcast, SOCIAL GAMING, and examine the current state of the social gaming industry and its business models.

Parks Associates research finds:
-- More than 200 million people play games on Facebook every month
-- 64% of U.S. broadband households with an Internet-connectable game console have it hooked to the Internet, a major increase from 2007, when only 25% had their next-gen console connected
-- PlayStation 3 and Xbox 360 have higher connectivity rates among the current generation of consoles, showing the power of multimedia offerings and popular game franchises in getting gamers online

Pietro Macchiarella, Research Analyst, Parks Associates will feature analysis and forecasts from examining:
-- How are social gaming publishers monetizing their popular games?
-- Are these companies at the mercy of social networks, or are they capable of developing brand loyalty?
-- Are open platforms, free distribution, and low development costs creating low entry barriers to this market?

Click here for registration information.

Nearly one-fifth of active gamers in the U.S. spend money on virtual items

The gaming business is undergoing a major shift away from subscription models as virtual items become a larger part of its economy, reaching almost $6 billion worldwide in microtransaction revenues by 2015, according to international research firm Parks Associates.

Gamers are investing real money in virtual items in Farmville, World of Warcraft, and other online games, to the point they are filing lawsuits to establish ‘ownership’ of these virtual goods. The enormous player base, availability on multiple devices, and the introduction of instruments such as Facebook Credits contribute to growing revenues.

The Parks Associates’ new report Online Gaming: Global Outlook finds 19% of active gamers in the U.S. spend money on in-game virtual items. In contrast, subscribers to premium online game services decreased from 35% in 2008 to 28% in 2010. Publishers of social games, like Zynga, have seen revenues explode as larger percentages of their customers opt to pay for virtual items. The same trend is visible for massively multiplayer online games, where companies such as Nexon America have managed to reach millions of dollars in revenues from microtransactions.

It is becoming increasingly difficult to justify subscription fees. Thanks to social games and free-to-play MMOs, both casual and hardcore players have the option of playing quality games online for free. The virtual-items model that has proven so successful in Asia is finally generating significant revenues in North America.

Are Flash Gaming and Social Gaming the "New Casual?"

The casual gaming industry, already a billion dollar business, is still firing on all cylinders. Companies focusing on traditional business models such as try and download and subscription services are doing just fine. Big Fish Games recently got $83 million in new funding and Oberon Media got another $20 million to scale its business. As an industry, however, these business models are experiencing slower growth rates. The two high-growth areas are social gaming and flash gaming. These two phenomena are intertwined, since many social games are developed using Flash and many flash gaming sites are introducing social networking features. Most of these games are free to play, easy to access, and have multiplayer features. Sites and publishers monetize the games through advertising and sometimes virtual goods. The games are frequently very simple to play and can be served in small bites. If retail games are five-course Italian dinners and downloadable casual games are hamburger and fries, flash and social games are the Tapas. In a certain way, they are the new casual games.

Flash gaming sites, such as Miniclip and Addictinggames, have been around for quite a few years. They've attracted tens of millions of young Internet users and seen explosive revenue growth. Several new companies banking on the flash gaming phenomenon, including Mochi Media and Kongregate, are also having great success.

Social gaming is relatively new to the scene. Playfish is a great example. The company just received $17 million fresh funding, in addition to the $4 million VC investment it received at launch. Kristian Segerstråle, the CEO and Co-founder of the company, is an industry veteran and a smart guy. He served as the managing director of Glu Mobile before founding Playfish. In less than a year, Playfish has amassed more than 10 million monthly actives, including 1.5 million daily users, who spent more than two billion monthly minutes of play time. That equals 200 minutes a month per user. The secret sauce is easy but high-quality games and a highly-viral distribution channel that's literally free to use. Another interesting fact about social games is that players play the games with people in their network, instead of strangers. They play the games to keep in touch. In the meantime, they can avoid the frustrating problem of opponents quitting the game. Other highly visible social gaming companies include Zynga, Social Gaming Network, and Serious Business. Almost all of them have received significant VC funding in the last 12 months.

Partially because of the success of these flash and social gaming companies, a new crop of companies have recently emerged to leverage Flash/Java/lightweight proprietary technologies and social networks to take 3D virtual worlds mainstream. These companies include Vivaty, Metaplace, Electric Sheep, Small Worlds, Just Leap In, and Google.

The cost is rising for downloadable casual games. It's becoming increasingly challenging to bootstrap a downloadable casual game. Some of the latest games costs high six figures or even seven figures. The barrier to entry is also becoming higher for new players due to market consolidation. Inevitably many independent developers will shift their attention to flash and social gaming. With Flash 11 supporting full 3D capabilities, we'll also see much fancier games. Social games will soon find their ways to other platforms, especially mobile phones. Social games not only fit the play pattern of mobile players but also help solve the discovery problems. I won't be surprised if Kristian makes a triumphant return to the mobile gaming industry.

So are social and flash gaming the "new casual?" You bet. And all you game publishers and casual gaming companies need to pay attention!