There's a new study from Strategy Analytics predicting massive growth in online virtual world participation over the net 10 years.  The basis of the study seems to be an assumption that a little over 20% of broadband users worldwide will register for a virtual world, but only about 6% will be "active users".

The 1 Billion figure seems high, as other sources have estimated TOTAL broadband penetration worldwide to be 1 billion people by 2011, which would make it a stretch for 5 billion by 2018 (even if Wi-Max and 3G are fully deployed by then).   But even if the total penetration rate were being overestimated, the active user number might not be: if the 3-D Internet is going to be a reality, then wouldn't it be a reality for work as well as for play?  Meaning as collaboration moves away from single-sense (e-mail vs. teleconference vs. webcast vs. IM vs. twitter…) to multi-sense immersive collaborative experiences, the actual market for virtual world services will be larger than $8B/year by 2018?

After an over-1-year-hiatus, Bruce Woodcock (http://www.linkedin.com/in/brucewoodcock - sorry, my editor is still on the fritz with hotlinks…) is back with an updated MMOGCHART (http://www.mmogchart.com/).  And for those who thought the exponential growth in MMOG subscriptions was not sustainable, well, the data shows that at least in the short term is still very much is.  Over 2007, total worldwide active subscriptions grew from around 14,000,000 to 16,000,000 (up 14%).  

World of Warcraft, to no great surprise, continues to dominate, but others are starting to appear, notably Tabula Rasa (http://www.rgtr.com/index.html), Lord of the Rings Online (http://www.lotro.com/), and Vanguard: Saga of Heroes (http://vgplayers.station.sony.com/).  Which means the Fantasy RPG is still the dominant theme.  I wonder how that will all change when the long, long, loooooong-awaited Spore (http://en.wikipedia.org/wiki/Spore_(video_game)) finally arrives later this summer.

One session I attended yesterday but forgot to comment on was the WildTangent session.  They presented basically a sales pitch for their upcoming launch, which is pure digital distribution of games to PCs, including console games.  I'm assuming it means console games will be played through an emulator, which to me means they'll only be able to distribute older (pre-NextGen console) titles.  They signed up quite a few publishers, including THQ and Activision (I think).  Very much an iTunes buy-my-TV-show model.

It's certainly the right direction to be going in.  But at this stage I get the impression the major publishers are only populating it with their back-catalog and other older offerings, partly because of the technology limitations I mentioned but also because they're still testing the waters of digital distribution.  They'll have to ramp up quickly and get top titles fast, otherwise they're not that different from GameTap. 

Still trying to figure out why none of the HTML functions are working for me, so apologies for the text-only posting. 

Today was supposed to start with a Macrovision session on digital distribution, but the speaker never showed, so it was quality time with my coffee and Starbuck's Yogurt Parfait instead.

I next managed to get a seat at the jam-packed Ray Kurtzweil keynote address.  Last time I was in that room was for the Direct Marketing Association's 2007 show which had Richard Branson (of Virgin fame) as the speaker.  He's a very low-key, almost deadpan, public speaker but the audience was still very much entranced with this clearly brilliant mind.  He has a  gift for the understated joking aside, starting with his opening about how "games" in an unfortunate name for the industry given it's real value (a telephone conversation is "virtual", but does that make a verbal agreement over the phone any less real than one in person?  Of course not…so why do we treat games and virtual world interactions differently?")

To set up the topic, what was Games: The Next 20 years, he took a look back.  He observed that 95% of innovative projects fail because their timing is off.  One reason for that off timing is that growth is exponential, not linear, and our thinking processes are based on linear evolution ("there's something in the corner of my coming towards a certain spot…it'll get there in 20 seconds and I better not be in that spot…this is good for cavemen, not for us").  When we look at innovation and pace of change as an exponential function, the overall paradigm shifts become relatively easy to predict.  He then showed plenty of examples: over the past 40 years there's been a billion-fold increase in computing price/performance.  And that pace is accellerating: there will be another billion-fold improvement over the next 25 years.

The result is a democratizing of communications, tools of creation, and tools of production.  Example: his own Kurtzweil Reading Maching for the blind, in 1979 was the size of a washing machine.  You now have a much more powerful version on a smart phone.

So what's the implication for Games?  Well, if it takes >6months to design a game, you need to design it for where the technology/market WILL BE, not where it is now, otherwise it'll be obsolete by the time it gets launched.  Things like computing devices disappear by 2020, replaced by embedded computing in eyeglasses, clothing, mobile devices, etc.  

Definitely lots of food for thought, and not even sure what that means yet.   One of those thinking exercises perfect for quality time with a coffee and yogurt parfait.

From the Jan 29 Hollywood Reporter (yeah, I know I'm 2 weeks behind on my reading): "Par plants promo flag in teen virtual world Habbo".  Money quote:

"…Under the terms of the agreement - one of the first between a major studio and a virtual world - Habbo will have merchandising rights throughout North America for "Beowulf", "Mean Girls" and the upcoming "The Spiderwick Chronicles"…" 

While this is more often than not a technology blog, it's also about the business of games too.  This announcement to me shows Paramount is thinking strategically about natural extensions of selected franchises to where their audiences are going (or already are).  Unlike "hey, this is cool, let's do a virtual world!", it shows someone has been thinking hard about how to leverage virtual asset sales and audience migration away from traditional media like cinema.

Time will tell, of course, whether there will be real value from the partnership.  But for all it's vaunted progressiveness, Hollywood is often a very conservative business, so this stands out in my mind.  Just look how long it took them to jump onto the digital distribution bandwagon.  MTV is ahead of the pack in this regards, of course, especially with their games studio expansion.

TotalBiscuit, aka John Bain, a confessed Warcraft geek, speaks out on the supposed phenomenon of MMO addiction at The University of Advancing Technology TechForum 2006. The original video link is here.

Warning : contains some harsh language but is generally worksafe.

Clay Shirky has been on a mission to debunk Linden Labs‘ claim of “two million registered users” for Second Life (or, specifically, Linden’s refusal to correct those who’ve made that claim), and has done so with icy effectiveness. He’s emerged as one of the leading Second Life skeptics, asking more questions about Second Life here and here. I should also say that Valleywag commenter tparisi wrote a thoughtful rebuttal to Shirky (one, however, that doesn’t question his statistical conclusions.)

IBM’s a great believer in the potential of virtual worlds; the team at eightbar created perhaps the best Second Life blog around, and Irving Wladawsky-Berger has offered some deep insight on what the growth of virtual worlds might lead to. Over 1,000 IBMers have joined IBM’s Second Life community; our CEO led an in-world event and most recently we introduced 12 new islands. All levels of the company - including some functions you wouldn’t normally expect - are aggressively exploring how to effectively use Second Life during the course of business.

With that level of participation comes the responsibility to ask tough questions. I think you’ll see IBM exert that kind of leadership as we continue exploring the potential of virtual worlds in the new year.

I had the opportunity to sit down (virtually) with Steve Davis, CEO of IT GlobalSecure, a software publisher and consultant for security issues specific to the gaming industry. His company develops “SecurePlay“, a security middleware toolkit for online games. IT GlobalSecure is currently working to elevate awareness by unveiling a course covering the whole range of business and technical issues related to game security.

Your blog tracks the proliferation of exploits and vulnerabilities in the gaming world. Have you quantified any loose trends in your survey that you could share?

I have been tracking game security incidents since the late 1990’s. At that time there were usually a half dozen incidents per year. By 2004, the pace was up to about one per month. In 2005, there as about one incident every two weeks. This year (2006), I have said the pace was about one per week. This is actually very conservative. The pace is closer to an average 2-3/week. Part of this apparent increase is attributable to my closer monitoring since I started my blog, so one per week is a good/bad-enough number.

Methodology - My threshold for an “incident” is something that is announced via a press release, a regular news article, or a major online site. Occasionally, I’ll pick up something smaller if I find it particularly interesting or informative. I do not go hunting into warez or hacking sites to find attacks though I will use borderline hacker sites if they provide useful details on the nature of the attacks (usually, I find these sites via major online sites as their reference for the story).

Seeing as how there are more online services available, this increase isn’t particularly surprising. Can you draw any conclusions about the most prominent type of attack, or perhaps characterize the most typical of targets?

Actually, the growth of the problem is pretty impressive, at least to me. Publicly disclosed incidents have been doubling every year for the past several years. The problems have been spreading across the board. The most surprising, and disappointing, is the number of code compromise incidents. This is one of the most damaging problems and probably the easiest to fix. I am most interested in the areas where we haven’t been hearing much: casual games, tournament games, and, of course, online gambling. Serious cheaters are going to “follow the money” as they do everywhere else.

By code compromise, you mean hacking of the game client, right? How can this be easily prevented?

No, by code compromise I mean the disclosure of the game’s source code base. Typically, these losses have been by the game developer, though publishers have been guilty as well. It is a failure of basic IT security. Game code and raw art assets can be worth hundreds of millions of dollars or more (or less). They should be protected appropriately during the development and publication process.

What are your thoughts on the emphasis on security in the game industry, today?

“Generally speaking, game publishers own the security problem in this industry. This has serious implications. Developers are compensated for delivering a product on-time and typically get the bulk of their compensation for completing the game on-time. Therefore, they do not have real incentives for good security design or practices unless such incentives are written into their contracts Also, because game publishers still see themselves in the “publishing” business where most revenues are earned in the first 30 days after a product release as opposed to a longer sales and services cycle, they have allocated security into the QA or distribution side of the business where there is little power or incentive to address security strategically.

“This leaves out some great revenue “tails” – tournaments and other “secondary” markets for games could extend their shelf-life by adding more traditional sales and open up additional revenues from licensing and royalties.

“There are a lot of ways that good security can grow revenues, not just try to protect against loses.

Are middleware vendors indifferent to security? How many breaches, how much downtime, how many lost users and revenue will it take?

“The middleware guys haven’t focused on security because the developers and publishers are still struggling with the decision to use middleware at all. As the middleware market matures and game publishers really come to terms with the opportunities and implications of online play, security should become more clearly important.

“People have been telling me for years that the game industry needs a “Pearl Harbor” incident. Part of my motivation for writing my blog is to show that, while Pearl Harbor hasn’t happened, the industry has experienced a number of Dunkirks, Polands, and North Africas.

Based on your observations, what is your general appraisal of security amongst the MMORPG developers, themselves?

“Security is being taken more and more seriously by MMOs once they are in operation. After all, this is where security failures cost real money. I am not so sure about MMOs in development. It is much easier to change PowerPoint slides and specifications than a running game service. However, the development team is not typically rewarded for good security. They are paid to get a game out the door as quickly as possible. Even worse, they are often not the guys who are stuck with the security problems once the game is in the field. This is the same problem faced by other types of games as well as other software services with a security component. It is hard to make developers accountable for security.

What are the “wins” that we’ve seen towards security with respect to online gaming? What are the success stories that you feel should be told here?

“Even Balance has been doing a great job in the US with PunkBuster. It may not be what you or I would consider the “right” solution from a security purist perspective, but they have raised awareness of the issue. In some sense, their model is perfectly suited to the way the industry thinks about security. Hopefully, publishers will start looking at their PunkBuster budget and consider if there is a better way. There are similar stories in Asia with nProtect’s GameGuard and AhnLab’s HackShield.

“There has also been some interesting data out of Korea from NCSoft. According to some public articles, they spend 10 billion Won (out of 350 Billion Won in revenues) on security. This doesn’t include the marketing costs associated with lost customers (I don’t know if it includes customer service costs for security related incidents either).

Finally, what is the most important thing that MMORPG developers and middleware developers can do to increase the security of their offerings?

“The biggest thing developers can do is to begin to consider security in their designs from day one. There aren’t any magic bullets, just good engineering and business strategy.

Thanks very much for your time!

“My pleasure.”

For interested readers, a related discussion took place in early October over at covertcreations. The article is titled, ‘MMORPGs, Security and the Grand Promise of Middleware’.

Technorati tags : games security, steve davis, secureplay, it globalsecure, game middleware

A cluster of IBM BladeCenter LS20s provides the heartbeat of CCP’s popular MMO, EVE Online. With no sharding, and a solid state storage array that serves a database processing over 150 million entries daily, it’s no surprise that EVE has finally broken the 30,000 concurrent user barrier.

Via Softpedia :

“CEO Hilmar Veigar Pétursson’s thoughts on the subject: The sharp growth rate of EVE Online was pushing the limits of the technology we replaced. Our goal was to implement a scalable solution that could accommodate the influx of new subscribers and gracefully manage the steadily increasing demand put on our infrastructure. IBM provided us with optimized hardware that improved overall game performance and increased capacity, especially during peak server usage timeframes.”

Technorati tags : EVE Online, CCP

Online gaming represents a significant and growing presence in the field of global media and entertainment. As another sure indicator of this, the online game industry is getting its very own conference.

Via GameDaily :

Today, Evergreen Events announced the first Online Game Development Conference (OGDC). The conference is designed “to be the foremost source of high-quality technical and creative information for the interactive game development community.” OGDC will take place May 10-11, 2007 at the Fairmont Olympic in downtown Seattle.

If you sign up for their conference update maillist, you’ll have a chance to win free passes. The OGDC is also proudly sponsored by IBM.

Technorati tags : ogdc, game conference, IBM.

Linden Labs put out version 1.10.5 of Second Life yesterday [release notes]. After the upgrade, the first time I logged in (actually the first 2 times I logged in, weirdly) I was prompted to accept a rather long new Terms of Service agreement.

VTOR has some commentary on the the ToS (along with some biting remarks on the scalability and stability of the platform), and NWN has commentary on another of the changes in the new version - the fact that you can now see whether a user is a paying customer in their profile.

It’s a long ToS and I’ve not analysed it in detail to work out whether the changes significantly impact my activities playing around with LSL and random objects I might choose to create. Comments?

There’s another new change, which is that LL have increased the number of categories of place types - see this forum post.

Irving Wladawsky-Berger has a great post in his blog this week about “life and business in the virtual world”.

“Finally, with IT all around us, it is very important that we leverage all that powerful and inexpensive computing power so that future applications will be much more human-like, realistic and “immersive.”  We see this future emerging most clearly with computer and video games, especially with the new generation of game consoles like the Xbox and PlayStation 3, as well as with massively multiplayer online environments like Second Life and World of Warcraft.   “

Tags: Second Life , WoW , mmog

Thanks to IBMer Noah Kuttler for passing along this story posted on Kotaku.

Terrorist Guild Holds WoW Server Hostage

The Imperial Order, a World of Warcraft guild on the Detheroc server, is holding the server hostage. The guild has completed the various quests needed to obtain a septer used to ring a gong. Ringing the gong will open the gates giving everyone on the server access to new content, but the guild refuses to do it. At least, they refuse to do it until someone pays them 5,000 gold.

They say they’d rather be known as the obnoxious guild that held their server hostage than forgotten as the kind guild that opened new content.

Nobody remembers the fair and quietly intelligent people we meet in their daily lives, but everyone remembers those who ruin their day.

We’ll have plenty of time to conquer this new content, but for now we see an endless novelty in holding it hostage. And this is what we will continue to do: Hold it hostage.

Tags: WoW , World of Warcraft , Gaming

We’ve done some talking on this blog about virtual communities and people coming together in mmog environments. Here’s an interesting twist that speaks to that point, but is also shows that online communities can be venues for communication with our friends and family IRL (in real life).

Recently, a whole family joined a WoW guild, The Clockwork Crew (server, Hyjal)
Here’s the post (quoted with their permission) that was made on the Clockwork Crew forum.

ME: I’m a 31 (almost 32!) year old gal in Ontario. I’ve been playing WoW for about a year now. I have characters on 4 or 5 realms, but I seem to like this one best…all my buds are here! Before WoW, I played Diablo 2, which was cool for its day, but has NOTHING on WoW. I have 2 children whose interest has been piqued by my game play (see below).

SON: My son is 9, and has 3 characters on WoW. Only one is on Hyjal, but he has recently become a member of our fine guild…Lightcharger. If you see him about, please remember the following:
1. He’s 9, so his typing/convo skills are lacking
2. He doesn’t play too often, so he doesn’t have mad skills like his mommy
3. He’s mine, so if you have a chance to lend him a hand with his playing, please feel free to do so. Don’t worry about sending him money & items…I make sure he has enough to get by.

DAUGHTER: My daughter is 11 (almost 12). She has 2 characters on WoW, but none on Hyjal. She doesn’t play very often anymore. Her current interests include boys, friends, boys, shopping, boys, reading, boys, hanging at the mall, and don’t forget…boys.

EX-HUBBY: Sacralidge. Need I say more?

STEP-DAUGHTER: She plays a couple of characters, but none on Hyjal.

Kallie/Phoeb/Shadowlilly/Annarchy/Pandamonium (GOOD LORD!)

With IBM currently leading the video game industry in processor development, it makes sense that they also have professional gamers in their ranks. IBMer Carlos “Johnny” Lopez II talks with Game Tomorrow about his move to professional gaming (and recent win in the Electronic Arts $250k Battlefield: Modern Combat tournament!), and his career with IBM.

Read the whole interview here.

For future reference, interviews can be found on the front page of this blog by clicking on links under Pages on the right sidebar.

Tags: IBM, Electronic Arts, Battlefield 2, GameTomorrow

Well, the MMOG Live Interactive Web Seminar 2, hosted by IBM this page Nov 16, went off very well. We had over 575 registrants from 35 countries, a big jump from the MMOG 1 event back in June. All the speakers were very well received. We tried a slightly different format this time, more of a talk-show style web broadcast from our 6 cities (Austin, Canberra, Los Angeles, Paris, Reykjavik, and San Diego) and it seemed to bring a lot more life to the proceedings.

All our speakers were fantastic (especially given some of the glitches as I’ll describe later). Our intrepid hosts, Julien Merceron from Ubisoft, and Marcel Baron and Sheena Stewart from IBM, opened the proceedings up before passing it right along to our first speaker (well, second speaker, but I’ll get back to that in a minute), Richard Garriott from NCSoft (my personal favorite). He talked about generating real intellectual property for online games. He brings a new meaning to cross-discipline information mining! And I thought I was a renaissance man! Next up was Adam Joffe from SONY Online Entertainment, relaying some of his experiences on setting up and running services oriented architectures for online games. Robert Spencer from BigWorld joined us from Canberra talking about some scalability tests they’re running to hosting hundreds of thousands of concurrent users. Steve Canepa’s and Patty Fry’s final round table on where the games industry is going was a facsinating discussion about both technology and business trends such as changing demographics, media convergence, how vendors like IBM are increasingly important as games companies shift from programming towards the art and design of games.

For those of you who missed MMOG 2, you can go to the replay until February 15 here: www.westcast-systems.com/ibm/event/vod.html. For those of you who still want to listen in on MMOG1 from June 1, that replay is also available here: http://www.westcast-systems.com/ibm/event/mmog1.html

And we’re also converting the files into downloadable audio and video files for your own replay. Watch the IBM site for more details coming soon.

Of course, we weren’t without our interesting glitches, which I can laugh at now though I wasn’t exactly laughing while they were happening. Makes you remember to always have a Plan B (and Plan C and Plan D…) in place when Things Go Wrong: Due to a scheduling conflict, one of our originally scheduled speakers had to drop out, so we had to scramble to get a replacment. Our rock star gamers at CCP Games were more than happy to oblige; unfortunately Iceland decided it was a good time to do some tinkering with their Internet Backbone the same morning, resulting in dead air just as we were going live from Reykjavik. Now what kind of icecream sundae would it be without a banana: there were terrible fumes in IBM’s Glendale (Los Angeles) offices where our VP for Media and Entertainment, Steve Canepa was presenting. The troopers made it through their talk with more aplomb than Anderson Cooper! Continuing our sundae metaphor, for the chocolate sauce, Verizon decided it was a good day to disconnect my neighborhood phone lines. Oh, the cherry on the top was the last-minute discovery that our IBMers’ cell phones didn’t get reception at the NCSoft office location in Austin where Richard was broadcasting from. Our intrepid IBMers had had to scramble to get a landline strung into the room. And what dessert would be complete without a dessert wine: the RER regional commuter train in Paris had an emergency shutdown, which almost delayed the arrival of Julien to our moderator panel.

Well, no one ever said it was easy to run a simultaneous web broadcast from 6 cities in multiple timezones. But in the end I’m pretty confident the audience didn’t see the background glitches. Much like Geoffrey Rush’s character in Shakespear in Love: “Allow me to explain the theatre [webcast?] business: the natural condition is one of insurmountable obstacles on the road to imminent disaster. [So what do we do?] Nothing. Strangely enough, it all turns out well. [Why?] I don’t know. It’s a mystery.” And of course I’m also confident our audience really got a lot of great value out of the proceedings, and we’re hoping to continue this series in the Summer of 2006. So keep your eyes peeled!

Who knew?

Man buys virtual space station for US$100,000
Jon Jacobs, a director of independent films who hails from Miami, FL, has purchased a virtual space station from the Swedish software company that owns and operates the Massively Multiplayer Online Roleplaying Game (MMORPG) Project Entropia. This is believed to be the largest single purchase of virtual real estate by an individual.

Just to follow up on Catherine’s posting. Here are some pictures from the event.

As many of you undoubtedly know, today was the first day of Blizzard’s Blizzcon convention in Anaheim, California. At this conference, gamers from around the globe are taking part in developer panels, battles, and other entertainment. The company is also using this venue as a launching pad for new games.

The big announcement of the day was upcoming World of Warcraft expansion set, World of Warcraft: The Burning Crusade. According to Blizzcon, “Users can join the Horde as one of the power-driven Blood Elves, or aid the Alliance as a yet-unrevealed new race! Explore the scarred Orcish homeland of Draenor! Delve into mysterious new dungeons, engage your enemies on new battlegrounds, and acquire wondrous new items! Take up dangerous and rewarding new quests for your faction! Train in an all-new profession! Increase your might as an adventurer up to the new level cap of 70, with new spells, abilities, and talents, and meet head on the plethora of new challenges awaiting you!”

Also today, Blizzard, allowed conference attendees to be the first players anywhere to play the newly released Starcraft Ghost. The product premier was kicked off with a competition. Achieving first place and winning the competition was my son, Michael Hoffman!

The conference runs through tomorrow. I will be posting some pictures tonight.

Anyone else attending this event? Post your reactions here.

Tags: Blizzcon

The second day of the NetGames workshop was a bit more relaxed for participants as the program consisted of just technical sessions (see the preview and impressions of the first day here). But the impact of industry participation on the first day was clear — several speakers (and questioners) referred back to some of the comments by the panelists and keynote speaker in their presentations. Day 2 focused on networking, which is the general research area of much of the NetGames community.

Each year NetGames has a session devoted to how network effects impact gameplay in different types of games and this year’s papers studied the effect of latency on MMORPG and racing games. In addition, there was a session on network measurements of games in which the goal is generally to develop a traffic characterization of a certain type of game in order to develop models or just to gain some understanding of the network behavior of games. This work is a bit controversial in that some folks don’t find much use in just measuring network behavior without some ideas about how to improve that behavior, or identifying the implications. I disagree with this view a little (I’m also biased in favor of network measurement work in general) — it takes quite a bit of effort to do a solid traffic characterization. And though it would be nice if these papers could go further, this first step is a necessary one that, if well done, is enough for a full technical paper (in my opinion).

General feedback on the workshop was very positive. As we hoped, the inclusion of significant industry participation was appreciated by the researchers who are very interested in understanding the prospects of their work actually having an impact in real games. For their part, the participants on the industry panel were also very encouraging. One thing that stayed with me was the comment by Grantley Day that one reason why the gaming industry is overtaking the movie industry is that it has a research community contributing to it.