Social games are big, but who's spending money?

Friday, February 19, 2010

We all know by now that games built on top of social networks' platforms are a big deal, but the results of a study commissioned by games manufacturer PopCap give some idea of just what the numbers are like.

The survey estimates that there are about 100 million people in the United States and United Kingdom who play social games regularly, based on the 24 percent of survey respondents who identified themselves as such. More women than men--55 percent to 45 percent--identify themselves as social gamers, and the average age of a social gamer is 43. That's consistent with anecdotal reports that, in spite of social stigmas still attached to women and gaming, many of the most avid players of social games like Farmville, Pet Society, and Bejeweled are suburban moms.

Here's how the survey worked: Out of 5,000 survey respondents in the U.S. and U.K., 24 percent identified themselves as playing social games at least once per week for at least 15 minutes. Those users were identified as "social gamers," and it's their results that populate the rest of the survey. A PopCap representative said that while the study did include people under the age of 18, that "very few" in that demographic participated in the survey.

(Also note the fact that the survey was commissioned by a game publisher. It likely doesn't make the results suspect, but should be taken into consideration regardless.)

The rest of the survey has quite a bit to say about where people are playing social games, who they're playing with, and whether they're actually spending money.

Women who play social games are more likely than men to play with people whom they know in real life--68 percent versus 56 percent. And Facebook, unsurprisingly, has a huge lock on the market: 83 percent of social gamers say they play games on Facebook versus 24 percent on MySpace, 7 percent on Bebo, and 5 percent on Friendster. Keep in mind that this is U.S. and U.K. only: Friendster has more traction in Asia, and another social site, Hi5, is big in Latin American countries.

Companies hoping to cash in big on micropayments and virtual goods in games may be interested in this item, though: while just over half of social gamers (53 percent) say they have earned or spent virtual goods in a game, only 28 percent say they have spent real-world money on virtual goods and 32 percent have bought a virtual gift.

That means that many of the virtual goods in social games are still earned through the completion of offers and surveys rather than purchased upfront with real money. A full quarter of social gamers say they've been "misled" by an ad or offer in a game, a nod to the prevalence of companies that let players earn points toward virtual goods by completing offers or surveys. These third-party outlets became the subject of major scrutiny last fall when allegations surfaced that they were scamming users into actually spending more money--one of the leading companies in the space, Offerpal Media, ended up changing its terms of service and replacing its CEO amid the mess.

But the bad press didn't do much to alter the trajectory of the social games industry: right around the same time, Electronic Arts announced that it had acquired successful social gaming company Playfish for US$275 million.

Zeus Trojan found on 74,000 PCs in global botnet

More than 74,000 PCs at nearly 2,500 organizations around the globe were compromised over the past year and a half in a botnet infestation designed to steal login credentials to bank sites, social networks, and e-mail systems, a security firm said Wednesday.

The systems were infected with the Zeus Trojan and the botnet was dubbed "Kneber" after a username that linked the infected PCs on corporate and government systems, according to NetWitness.

The Wall Street Journal reported that Merck, Cardinal Health, Paramount Pictures, and Juniper Networks were among the targets in the attack. NetWitness speculated that criminals in Eastern Europe using a command-and-control server in Germany sent attachments containing the malware in e-mails or links to the malware on Web sites that employees within the companies clicked on.

NetWitness said it discovered more than 75 gigabytes worth of stolen data during routine analytic tasks as part of an evaluation of a client network on January 26. The cache of stolen data included 68,000 corporate login credentials, access to e-mail systems, online banking sites, Facebook, Yahoo, Hotmail, 2,000 SSL (Secure Sockets Layer) certificate files and data on individuals, NetWitness said in a statement and in a whitepaper available for download from its Web site.

In addition to stealing specific data, Zeus can be used to search for and steal any file on the computer, download and execute programs and allow someone to remotely control the computer.

More than half of the compromised machines were also infected with peer-to-peer bot malware called Waledac, the company said. Nearly 200 countries were affected, with most of the infections found in Egypt, Mexico, Saudi Arabia, Turkey and the United States.

The news comes after Google announced an attack targeting it and what is believed to be more than 30 other companies and which was linked back to China. McAfee dubbed that attack "Operation Aurora."

"While Operation Aurora shed light on advanced threats from sponsored adversaries, the number of compromised companies and organizations pales in comparison to this single botnet," said Amit Yoran, chief executive of NetWitness and former Director of the National Cyber Security Division. "These large-scale compromises of enterprise networks have reached epidemic levels."

Microsoft issues new Outlook social-network linkIn a move to marry its old-school Office product with the newer trends of the Net, Microsoft issued be

In a move to marry its old-school Office product with the newer trends of the Net, Microsoft issued beta software Wednesday that brings social-network information into Outlook.

The product, called Outlook Social Connector, has been available in the Office 2010 beta. According to the Outlook Social Connector download site, the new version works with Outlook 2003 and 2007 and connects with social-network partners, which wasn't the case with the earlier version.

Outlook Social Connector will let people see updates from a person's social-network contacts. LinkedIn announced in November that it would become the first actual partner in the Microsoft program. The LinkedIn connector is now available from LinkedIn's Web site.

Microsoft said connectors for Facebook and MySpace will be available in the first half of 2010.

"Starting today you can download the new Outlook 2010 Social Connector to see what your contacts are up to on LinkedIn from right within the Outlook 2010 beta. When Office 2010 ships, you'll also be able to see your contacts' Facebook and MySpace actions in the same place," Microsoft's Doug Thomas said in a blog posting Wednesday.

The Associated Press reported earlier Wednesday about the new software.

Social networking is a hot area of Internet activity, made hotter by the recent >arrival of the Google Buzz service built into Gmail. But it can be tough for people to stay on top of information feeds at multiple social-networking sites; even if you can set up one service to republish updates from another service, conversation about those updates often takes place separately.

Providing a more central communication service is a challenge, though. There are differing communication protocols for different services--if those protocols are available at all--and most social-networking players are vying with each other to be the primary service that people frequent. And there are blurry boundaries between social-networking status updates, e-mails, and instant messages.

In the Outlook Social Connector case, Microsoft has some incumbent advantage because millions of people use Outlook. The Outlook Social Connector will let them read status updates in software they're already accustomed to using, often continuously throughout the day.

However, Microsoft has some challenges. For one thing, the software doesn't let people write status updates of their own, only read what others have written. For another, a lot of social activity takes place on the Web in a personal rather than professional context, and in that domain, Microsoft's Hotmail service is arguably a better fit than Outlook.

One traditional Microsoft rival, Mozilla, is angling for a place at the center of people's online social lives, too. The Mozilla Raindrop project is designed to create software for an online service for unified communications.

IT budget cuts lead to less profit, innovation

A quarter of senior business and technology executives worldwide believe their company's profits and ability to innovate suffered as a result of reduced IT budgets last year, according to new survey.

Commissioned by BT Global Services, the survey also revealed that Asian business heads, particularly in China, India and Singapore, were most affected by the impact of the budget cuts. In fact, 63 percent of Singapore respondents said they felt the effects of the reduced IT spend since the start of the recession.

The online survey was conducted by Datamonitor and received responses from 274 CIOs and other senior corporate executives in 12 countries including Australia, Singapore, Spain, China, the United Kingdom and United States. A further 2,476 employees who use enterprise IT systems also participated in the poll.

According to the respondents, their companies cut IT budget cuts for the first time in 10 years, as a result of the 2009 global financial crisis.

"This research provides a snapshot into the current mindset of global CIOs and senior executives, and it will hopefully act as a spur to action on key issues such as the role IT plays in driving global business success," Jeff Kelly, CEO of BT Global Services, said in the report.

Data management top priority
CIOs also felt swamped by the sheer amount of business data being churned daily, and unable to utilize the information effectively.

According to the survey, 27 percent of senior executives said the inability to retrieve relevant information in time to meet deadlines had resulted in loss of business during the recession. This number increased to 33 percent among CIOs, who typically had a clearer understanding of the impact of data mismanagement, the BT report stated.

Overall, nearly 25 percent of CIOs acknowledged they had more information than they could handle and make sense of. This sentiment was echoed by senior business executives, 18 percent of whom said they struggled with the deluge of data, while 15 percent of IT users shared similar sentiments.

In Singapore, which accounted for 222 respondents, 17 percent indicated they had too much information to deal with.

Some 34 percent of CIOs worldwide said they had only just enough, or nowhere near enough, market data on hand to analyze and make the informed decisions.

Of the data management issues CIOs face today, Chin Hu Lim, CEO of BT Frontline, said in the report: "[IT heads need to] embrace the challenges and opportunities to impact the relationship between information and business success of their organizations."

The report also stated that 90 percent of all respondents agreed information management was "critical" or "important" to the future of their organizations. Some 92 percent of Singaporean respondents shared this view.

CIOs resisting cloud move
Looking at the potential of cloud computing, the BT survey showed that business leaders lost the message about the basic premise for the platform: cost reduction. More than half, or 53 percent, of CIOs globally failed to see how cloud computing could save them money, even though the cloud model was designed to reduce capital expenditure by cutting out the need to purchase additional servers or software applications to refresh IT architecture, the report stated.

They also had reservations about hosting critical enterprise data and applications on servers that were located outside their domestic market, citing for security and compliance reasons. Some 57 percent of CIOs and 53 percent of senior business executives indicated resistance to hosting their corporate data in the cloud.

In fact, 30 percent of global respondents said they would be uncomfortable with servers based in Southeast Asia, preferring Europe instead as the destination of choice. Some 25 percent favored the U.K. as their preferred server location.

"Although we are already delivering enterprise-level cloud services such as hosted Internet Protocol telephony, for many organizations [cloud computing is] still in its infancy," Kelly said. However, he added that the lack of clarity on the benefits of cloud was "understandable" and highlighted the work vendors and aggregators still to do to address this issue.

Malware crashed systems during Windows security updates

Windows systems that crashed during the latest Microsoft security update last week did so because they were infected with a rootkit program that made changes to the operating system kernel, Microsoft said late on Wednesday.

"The restarts are the result of modifications the Alureon rootkit makes to Windows Kernel binaries, which places these systems in an unstable state," Mike Reavey, director of the Microsoft Security Response Center, wrote in a blog post. "In every investigated incident, we have not found quality issues with security update MS10-015."

The patch addresses a vulnerability in the 32-bit Windows kernel that could allow elevation of privilege that was disclosed last month.

The Win32/Alureon family of malware can modify DNS settings, hijack searches, and fraudulently click on ads, Microsoft said in a post on its Malware Protection Center Blog. Last year, versions appeared that infect the miniport driver associated with the hard disk of the operating system, the post says.

Microsoft will not offer the patch through Automatic Update for 32-bit Windows systems until a solution is available, but 64-bit versions will be offered.

Anyone believed to have been affected by the Alureon rootkit can visit https://consumersecuritysupport.microsoft.com. Those in the United States can contact Customer Service and Support at no charge using the PC Safety hotline at 1-866-727-2338 (PCSAFETY). Those outside the United States can find local contact numbers at http://support.microsoft.com/international.

Customers who choose not to install the update can implement the workaround or install the update manually as outlined in the MS10-015 bulletin.

"A malware compromise of this type is serious, and if customers cannot confirm removal of the Alureon rootkit using their chosen anti-virus/anti-malware software, the most secure recommendation is for the owner of the system to back up important files and completely restore the system from a cleanly formatted disk," Microsoft said.

For instructions on how to back up your files in Windows, visit this page. For instructions on how to reinstall Windows, visit this page.

Facebook, PayPal green-light payment partnership

Here's another one of Facebook's gradual moves into the e-commerce world: The company announced Thursday a "strategic relationship" with eBay-owned payment system PayPal to make its technology available for the purchase of self-service ads as well as the Facebook Credits currency.

"We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service," Dan Levy, director of payment operations at Facebook, said in a release. "As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible."

PayPal, which operates in 190 markets with 24 currencies, is often used as an alternative for customers who don't have credit cards, something that will be useful in international markets where it may be more difficult for small businesses to purchase ad space on Facebook.

A few years ago, Facebook's e-commerce plans were rumored to be a competitor to PayPal, code-named "Facebook Wallet". The project was far enough along that Facebook was demonstrating prototypes to potential customers in the industry, sources say. But the "Wallet" never made it to market, and Facebook's e-commerce plans have shifted to the "credits" system and its focus on micropayments and virtual goods. Right now they're used in Facebook's "gift shop" as well as with a few beta-test partners in the social gaming and nonprofit space.

In addition to PayPal, credits can be purchased with credit cards or a mobile phone number--the social network has partnered with Zong, one of a handful of companies in the pay-by-mobile niche, to power that.

PayPal co-founder Peter Thiel, an early investor in Facebook, sits on the social network's board of directors.

Nokia needs to iron out app strategy

Nokia's decision to limit app publishers on its Ovi Store to registered companies is a "necessary evil", but its app store strategy still needs to be ironed out, says an industry analyst.

In a recent interview, the Finnish phone giant said to ensure mobile Ovi Store carries clean apps, part of its screening process encompasses permitting only registered companies to submit apps to its store.

This requirement, however, sets up a barrier for individuals interested in developing apps for the app store, as well as aspiring startups and entrepreneurs that may not have registered business licenses.

Marc Einstein, ICT industry manager at Frost & Sullivan, said in an interview with ZDNet Asia that the move is an effort to avoid some of the controversies seen at competing stores, such as offensive content that had ended up on Apple's App Store in the past.

As such, Nokia's move to limit app contribution is a "necessary evil", said Einstein.

He noted that while this might seem counterintuitive to Nokia's efforts over the past year to court developers, it is unlikely the reason developers are flocking to competitors such as Apple. Rather, he attributed it to the app store's popularity among users.

"Because you have to rewrite apps for different stores, developers want to maximize their time with [high-traffic] stores. I don't think the reason people aren't writing apps for Ovi is because they can't get in the door.

"The iPhone has had amazing traffic statistics where people are downloading the most [apps], so developers want to get on that platform more," Einstein explained.

Nelson Wee, Nokia's Asia-Pacific senior services marketing manager, explained in an e-mail to ZDNet Asia that the company established the policy "due to international tax complexities". It is also aimed at ensuring content on the Ovi Store is legal and authentic, he said.

"We are looking beyond just the quantity game and rather, focusing on the consumer experience [to] work with developers to surface the right content for each consumer, across more than 100 Nokia models," Wee said.

He pointed to a self-service facility at publish.ovi.com, which supports various content platforms such as Symbian, Java and Flash Lite.

Nokia should iron out app store strategy
Over the past year, various mobile phone industry players have come up with their own app stores, in efforts to replicate Apple's success with its own app store. Microsoft, for example, last year opened its Windows Mobile marketplace, while Research in Motion also announced its BlackBerry App World.

However, these "me-too" stores have so far fallen short of achieving the same gleam as Apple's App Store, said Einstein, adding that Nokia needs to work out its strategy regarding its various moving parts.

He pointed to Nokia's joint announcement with Intel at this week's Mobile World Congress in Barcelona, to come up with a new Linux-based platform called MeeGo.

This was an attempt to revamp its mobile app ecosystem, he said. The analyst noted that so far, there has been "a degree of confusion with Nokia's app store strategy" that the phone maker must iron out to attract developers.

Nokia has lost smartphone market share over the past year. The company in December 2009 announced plans to consolidate its handset lineup and focus on smartphones. It is also pushing its Maemo OS to developers, while continuing to support the Symbian OS.

Einstein said: "While Nokia has lost market share, it's still number one. It makes sense for them to try something in this space."

The alliance with Intel also helps to offer a broader concept of converging apps for PCs and mobiles, and allowing these to run on both platforms. This, he said, reframes the possible development scenarios for app makers.

Nokia, however, should synchronize its efforts across its different arms to make a concerted push into the apps space, said Einstein.

"You might expect confusion from a vendor so big, but it must find one strategy," he said.

 
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