Video Professor responds to Scamville article

Recently TechCrunch wrote an interesting investigative report called “Scamville: The Social Gaming Ecosystem of Hell,” which pointed out the questionable practice of allowing users to opt-in to special offers in order to earn in-game currency from titles made by social game developers like Zynga and Playfish. In that article, the author categorized the Video Professor products as particularly scam-my. The special offers would often have “fine print” or would have charges that consumers might not know about until after the transaction was complete.

Other web sites, like Business Insider, referenced that article, and cited other sources for facts, saying that Video Professor in particular was an out and out scam. Video Professor, in case you don’t know, is a series of educational CD-ROMs that claims to teach its users techniques to master certain programs like Excel, operating systems like Windows XP or online services like eBay. Certainly the offers as detailed in all of these reports are questionable, but Video Professor is feeling a bit battered and bruised.

A recent exchange of emails with its Vice President of Public Affairs, Brian Olson, pointed out one truth: the company was never given the opportunity to defend itself or to explain its products, services and business practices. In fact, the company was met with either silence or out and out hostility from most journalists. According to Olson, one nameless editor offered the following response to an inquiry on presenting the company’s side of the story:

“It’s a huge fucking scam. And you know it.”

Ouch. Considering that the use of its name (and other offers) could have ruined Playfish’s chances to be acquired by EA - a deal which was finalized earlier this week - and the fact that Zynga’s CEO indirectly mentioned these deals in a recent blog post (and a video making the rounds on YouTube), we thought it would be fair to give the company a chance to defend itself. The company at least deserves some credit for trying to address all the talk about its products being a rip-off to consumers. First a response to the allegation that its dealings with Zynga and Playfish were shady:

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EA acquires Playfish for $275 million

Electronic Arts has acquired Playfish, the makers of the Facebook games Crazy Planets, Pet Society and many other social gaming properties. EA says that this acquisition accelerates the company’s position in social entertainment and strengthens its focus on the transition to digital and social gaming. Playfish will operate under EA Interactive, a division of EA focused on the web and on wireless.

EA has acquired Playfish for approximately US $275 million in cash and approximately $US 25 million in equity retention arrangements. In addition, the sellers are entitled to additional variable cash consideration, up to a maximum of US $100 million, contingent upon the achievement of certain performance milestones through December 31, 2011. This puts the total price tage to right around $ US 400 million.

Playfish claims an installed base (collective number of games) of more than 150 million, played worldwide on platforms such as Facebook, MySpace, Google, Bebo, iPhone and Android. Playfish currently has over 60 million monthly active players across its ten titles – including Facebook hits Pet Society, Restaurant City, and Country Story – driving more than 1 billion game play sessions every month.

On a related note, leading global venture capital firms Accel Partners and Index Ventures announced that they have sold their holdings in Playfish to EA.�

How Zynga may have ruined possible Playfish buyout

An interesting report on Silicon Alley explains how some refreshing honesty from social gaming company Zynga may have inadvertently killed a rumored buyout deal between EA and Zynga competitor Playfish. That deal was described as in being worth somewhere around $400 million USD.

But the honesty only came after technology site TechCrunch dug into both Zynga’s and Playfish’s use of “free offers” as a way to earn in-game currency. These offers were sometimes shady, often not very useful to the user, and mixed in with legitimate offers from advertisers like NetFlix. They included lead-gen offers from less scrupulous advertisers like Video Professor and Tatto. After being called out about it, Zynga CEO to speak up about the whole mess on his blog:

“We have worked hard to police and remove bad offers. In fact, the worst offender, Tatto Media, referenced in the TechCrunch article, had already been taken down and permanently banned prior to the post. Nevertheless, we need to be more aggressive and have revised our service level agreements with these providers requiring them to filter and police offers prior to posting on their networks. We have also removed all mobile ads until we see any that offer clear user value.”

But here’s the real kicker for Playfish; Some portion of the revenue it has reported may be based on such offers, which won’t exactly help seal a real or imagined deal with EA. In other words, Zynga may have inadvertently (or purposely) just screwed one of its biggest competitors out of a $400 million deal.

Gravity Bear opens its doors

A new social gaming company has opened its doors this week: Gravity Bear. Gravity Bear is led by industry veteran Phil Shenk, who was previously co-founder and Art Director at Flagship Studios. The founding members of Gravity Bear have decades of experience in the games industry, having colletivelyt worked at such places as Flagship, Wild Tangent, Sega Entertainment USA, Sony Computer Entertainment America and Blizzard.

Gravity Bear is currently developing an original IP built to deliver on the company’s core promises of providing new entertainment products for social gaming. More information will follow in the coming weeks. You can learn more about the company at gravitybear.com.

Zynga dominating the social gaming space

Zynga is the biggest dog on the front porch in the social gaming scene, and this morning news that it now has 129 million monthly users playing games like Mafia Wars, FarmVille, YoVille and even the highly generic Zynga Poker puts an exclamation point on that fact. Zynga says that it has more than “quadrupled its monthly users over the last six months.”

According to data from Developer Analytics approximately 34 million users worldwide play Zynga games every day. The company also has the four top Facebook games that we have already mentioned above. On a negative note, Zynga is probably responsible for half the spam you and I get from games like Mafia Wars and YoVille. So in that respect, F*ck you, Zynga. Just kidding.

Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Tagged, Yahoo! and the iPhone, and include FarmVille, Zynga Poker, Mafia Wars, YoVille, Vampires, Street Racing, and Scramble. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered in San Francisco.

Playfish expands in San Francisco

Social gaming company Playfish has opened a new game development studio in San Francisco. The studio, which complements Playfish’s acclaimed development studios in London, Beijing and Norway, will target the Bay Area’s talent resources to create original social games for friends to play together on platforms such as Facebook, MySpace, Bebo, iPhone and Android.

Playfish’s latest studio joins the company’s existing business development focused office in San Francisco, which was established in 2008. Further details and information about available positions in San Francisco and other Playfish offices can be found at www.playfish.com.

GDC Austin opens its doors

The 7th annual Game Developers Conference Austin (or GDC Austin for short) returns to the Austin Convention Center today, kicking off 4 days of sessions focused on the connected gaming space, covering MMOs, virtual worlds and social networking games. New to GDC Austin this year is a lineup of two day of summits centered on Game Writers, Game Audio, iPhone Games and Independent Games development. 

GDC Austin serves up more than 130 lectures, panels, keynotes, and roundtable discussions, presented by 230 industry insiders and an expo floor with more than 80 exhibitors and sponsors. The event ends Friday, September 18.

Speakers include John Smedley, President, Sony Online Entertainment; J. Allen Brack, Production Director, Blizzard Entertainment and Frank Pearce, Co-Founder & Executive Vice President of Product Development, Blizzard Entertainment; and Sebastien de Halleux, COO & Co-Founder, Playfish.

Learn more at www.GDCAustin.com.

BioWare has teamed up with Tor Books to publish Dragon Age: The Calling, a new novel set in the world of Dragon Age: Origins, BioWare’s newest role-playing game franchise set for release in November of this year. Dragon Age: Origins lead writer David Gaider, follows up his debut novel, Dragon Age: The Stolen Throne, with a new adventure set in the dark fantasy universe of Dragon Age: Origins. Dragon Age: The Calling is scheduled to release on October 13, 2009, for $14.99.

Dragon Age: Origins is scheduled to release on November 3, 2009 in North America and November 6, 2009 in Europe for the PC and Xbox 360, with the PS3 version coming later in November. The game is rated “M” for “Mature” by the ESRB mostly because of the sex BioWare has talked about - or at least that’s my guess.