Matthew Roszak

Owen Van Natta is back in the game.  He’s back in business. And he’s back in the games business.

Zynga, the maker of FarmVille, Mafia Wars, and other popular Facebook games, is hiring the social-networking veteran as executive vice president of business operations. Van Natta, who’d been consulting for the company, starts work on Monday, and is also joining Zynga’s board of directors.

It’s the latest in a string of high-profile hires and business deals for Zynga, which is widely believed to be gearing up for an IPO.

Van Natta most recently ran MySpace, but was ousted from his job as CEO in February amid a high-profile conflict with Jonathan Miller, the chief digital officer at MySpace’s parent company, News Corp. Before that he briefly ran Project Playlist, a now-defunct music startup based in Palo Alto.

He’s best known for his role as chief operating officer of Facebook, where he was known for his aggressive dealmaking, a career capped by Microsoft’s investment in the social network at a breathtaking valuation of $15 billion.

Van Natta will oversee the company’s “revenue strategy, corporate development, internal expansion, and brand,” according to a company biography, and reports to Zynga founder and chief executive Mark Pincus.

That Van Natta took a non-CEO job following MySpace will likely raise eyebrows. Van Natta had been vocal in the past about his ambitions to run a major Internet company — an ambition which contributed to his departure at Facebook, where founder Mark Zuckerberg is firmly ensconced as CEO. But Zynga is one of the hottest companies in Silicon Valley right now, with huge plans for international expansion, and Van Natta is getting not just a broad portfolio of responsibility for the business but a seat on the board as well.

Zynga recently hired a new CFO, Dave Wehner, a former managing director at boutique investment bank Allen & Co. Robert Goldberg, previously the company’s vice president of business development, is taking a new position as CEO of Zynga Japan. The company has formed a joint venture in that country with SoftBank, the Japanese Internet giant, and is expanding elsewhere in Asia through acquisitions and its SoftBank relationship.

Google has also reportedly invested in Zynga and partnered with the company to bring its popular games to Google Me, a social network Google is developing to compete with Facebook.

http://games.venturebeat.com/2010/08/13/zynga-owen-van-natta/

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Social gaming firm Mentez has raised a round of funding to build games for the Latin American market and Brazil.

New York-based Insight Venture Partners has invested an undisclosed amount of money into Miami-based Mentez. Mentez will use the money to expand its portfolio of social games across Latin America and Brazil. It currently has 21 games on Orkut, the dominant social network in Brazil. Mentez also has seven games on Facebook, which is more popular in the rest of South America.

Some of those games were created by Playdom, which signed a distribution agreement with Mentez earlier this year. Among the popular Playdom games on Orkut are Tiki Resort and Bola. Mentez also operates a lot of its own games like Happy Harvest (“Colheita Feliz”), a farm game.

Juan Franco, chief executive of Mentez, said in an interview that Mentez has 12 of the top 20 games on Orkut, which is owned by Google. That’s a big deal because Orkut has 52 million active users and Brazil’s population has embraced social networking in a big way (Orkut users visit the site 26 times a month, on average). In Brazil and the rest of Latin America, Mentez has more than 22 million weekly active players, or those who come back once a week to play.

The opportunity in Brazil and the rest of Latin America is so big that Franco believes it’s a unique opportunity for expansion. Brazil has more than 201 million people and last year had more than 75.9 million internet users. Within a couple of years, that could cross 100 million users, which is about the current internet population of all of the rest of Latin America combined, said Franco. The Brazilian market has drawn other game companies; Aeria Games opened an office in Brazil last week.

Mentez also has its hooks in Brazilian users beyond games. It runs an alternative payment network in Brazil called Paymentez, which gives seven alternative payment options. That’s because credit cards are not widely used in Brazil. You can go into any one of 25,000 internet cafes or 100,000 retail locations across the country and find Paymentez cards. Paymentez is processing more than 45,000 transactions every day. Mentez also runs special offers with brands like Kraft, Wal-mart, Samsung, Hyundai, American Express and 20th Century Fox. Kraft offered millions of special cocoa seeds in Happy Harvest that players could plant to grow chocolate trees. The chocolate bar could then be harvested, stolen, or given to their friends as a gift.

Jeff Horing, managing director at Insight Venture Partners, said he believes Mentez has the management team and strategy to win in the related markets in the region. Franco said that Mentez is making money from its users, thanks to the alternative payment systems. The company’s games are free-to-play, but players can purchase virtual goods with real money. Roughly 3 – 5 percent will buy virtual goods in Brazil, generating revenue for Mentez. By comparison, those rates are 2 – 4 percent in Latin America, 1 – 2 percent in China, and 4 – 6 percent in North America.

Franco said the company develops its own games and also works with outside developers. Its internal teams in places such as Brazil and Colombia help architect games to have local appeal, so that the games are culturally relevant. Franco believes the future will be in games made by Brazilians for the Brazilian market. The company was founded in 2007 and has 40 employees. There are lots of small developers in South America, but none with the scale to challenge Mentez in Brazil. Rivals include Vostu.

Mentez scored big with its first game, Happy Harvest, which debuted about a year ago as a localized version of a game that was popular in China. Franco has more than 15 years of experience creating information technology operations in Latin America. Andy Kleinman, general manager for Latin America for Playdom, said that it was an easy decision to tap Mentez in the Brazilian market as the distributor for Playdom’s games. That’s because it so dominates the top ranks and can easily cross-promote games. Franco said the company is making money and was not seeking investment; now, it will use the funds to expand more rapidly than planned.

http://games.venturebeat.com/2010/08/09/mentez-gets-investment-to-build-social-games-in-latin-america-exclusive/

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Nintendo  reported a loss for its first fiscal quarter, which ended June 30, as the Japanese company saw its Wii game sales wither.

Kyoto, Japan-based Nintendo said it had a loss of 25.2 billion yen, or $287 million, compared to a profit of 42.3 billikon yen a year earlier. Revenues were 188.6 billion yen, down 25.6 percent from 253.5 billion yen a year earlier.

The company saw sales of Wii console sales increase, but it said that Wii software as well as Nintendo DS hardware and software sales fell. In addition, the rise in value of the Japanese yen compared to a year ago had a big negative impact on net sales. Nintendo also had foreign exchange losses of 70.5 billion yen, caused by the strength of the yen. Nintendo has a lot of its assets in non-Japanese currencies.

Nintendo said it has sold 73.97 million Wii consoles worldwide, 573 million Wii games, 132 million Nintendo DS handheld game systems, and 740.9 million DS games. The company left its forecast for the fiscal year unchanged. It anticipates selling 18 million more Wii consoles by March 31, 2011, 165 million more Wii games, 30 million new DS hardware units, and 150 million more DS games.

http://venturebeat.com/2010/07/29/nintendo-reports-a-quarterly-loss-as-the-wii-sales-tumble/

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Rumors have surfaced that Disney is in the process of negotiating to buy social game company Playdom for more than $600 million.

Techcrunch reported tonight that it had heard from six or seven sources that a deal was in the works. We also heard the rumor from a credible source earlier today and sent messages this afternoon to Disney and Playdom. Disney did not comment, and John Pleasants, chief executive of Playdom, said in an email only that it was the “rumor of the week.” I interviewed Pleasants two days ago at the Casual Connect game conference in Seattle, and he gave no hint that an acquisition deal was in the works.

Rather, Pleasants said he was on an acquisition spree himself, with Playdom acquiring seven developers in as many months, because the social game industry feels like “the early days of iTunes, the birth of the Nintendo Wii, or the dawn of web-based email. The drivers of social gaming’s rapid growth are the addition of friend-based social play, the launch of web-based games that are more like services than products, and the lucrative free-to-play model, where gamers try a game for free and pay real money for virtual goods as they proceed through the game.

If the deal comes to fruition, it would kick the already-overheating social game market into high gear. Disney has made its multi-year ambition to become a powerhouse in gaming well known. It has acquired a number of game companies over the year, including the iPhone game company Tapulous for $35 million or so last month.

But Playdom is probably the hottest property in town. Zynga, the largest social game publisher with 211 million monthly active users, is likely to hold out until it can do an initial public offering. Electronic Arts acquired the No. 2 company, Playfish, for as much as $400 million in October. That leaves the third-largest player (and the No. 1 social game company on MySpace), Playdom, with 41 million players on Facebook, as the largest available property.

Tim Chang (pictured above) a principal at Norwest Venture Partners, is an investor in Playdom. He declined to comment on the rumor. But he said in a presentation this morning at Casual Connect that a number of companies are watching the growth of the social game industry, and they want in. The parties with lots of cash to invest come from all corners of the earth. They include Russia’s Digital Sky Technologies; China’s Tencent, Shanda Games, and other publicly traded online game companies; Japan’s Softbank; cable TV company Comcast; NBC Universal; and News Corp. The latter was reportedly one of the bidders for the much smaller Tapulous.

Companies such as Zynga have shown a tremendous ability to generate profits, even with 1,000 or so employees. Playdom, at 600 employees, has produced hit games such as Social City, which has more than 9 million monthly active users. The company is certainly enjoying good times; for the second year in a row, it threw an overcrowded party at Casual Connect, where I snapped this picture of a happy Pleasants with his colleagues.

But there are clouds on the horizon. One of the themes at this year’s Casual Connect was the post-viral era of Facebook games. After Facebook cut its viral channels to reduce spam for non-game users, traffic for many of the games on Facebook has gone downhill. That has forced many companies to advertise their games more heavily, putting profits into the pockets of Facebook but driving up costs for the publishers. If the growth continues to stall, then it might make sense for some of the companies, such as Playdom, to sell while they’re at their peaks.

That may be why Playdom might be thinking about taking the money and running. On the other hand, if there really is a gold rush going on, it might be foolish for Playdom to sell out at such an early point in the social gaming era. Playdom has raised a total of $76 million to date from Bessemer Venture Partners, Disney’s Steamboat Ventures, and New World Ventures. Pleasants said he believes that brands will come into the market for social games; his own company has a deal with ESPN, which happens to be owned by Disney.

http://games.venturebeat.com/2010/07/22/is-disney-ready-to-buy-social-game-company-playdom-for-more-than-600m/

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SGN today launched its first game where players with Android phones can engage in multiplayer competition with players using iPhones.

The Skies of Glory flight combat game launched last fall on the iPhone, and its Android version is launching today. Players can connect via Wi-Fi and other wireless modes and play each other in multiplayer dogfights. Such live cross-platform play hasn’t been possible before, but the Palo Alto, Calif.-based company did the necessary work to make it happen.

You can form a team of Apple pilots to fight against Android users or have players on different platforms fight on the same side. The Android version requires players to have version 2.0 or higher of the Google mobile operating system. Such phones include the EVO, NexusOne and Droid. The Android version was developed in collaboration with Revo Solutions Games, which developed the original iPhone game.

Randy Breen, chief executive of SGN, said in the mobile games panel this week at VentureBeat’s MobileBeat 2010 that cross-platform games will help broaden the audience for mobile games over time. It’s more convenient for friends to be able to play each other across any platform, since the odds of friends having the same phone are relatively low.

“Mobile phones are unquestionably the gaming platform of the future.  Smartphones are becoming accessible to all, and we are really excited to offer a true multi-platform, multiplayer social mobile gaming experience through ‘Skies of Glory,” Breen said. “As more and more people connect with family and friends through gaming, we continue to facilitate that connection regardless of users’ device or platform preferences.”

SGN and Revo Solutions created an open multiplayer platform framework to support a variety of platforms with a range of wireless connectivity, from EDGE to 3G and Wi-Fi. SGN has had more than 18 million downloads of its iPhone and iPod Touch games. It remains to be seen whether Apple itself will be a fan of cross-platform play.

http://games.venturebeat.com/2010/07/15/sgn-launches-skies-of-glory-as-the-first-cross-platform-android-iphone-game/

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After much delay, Nvidia launched its high-end graphics chip, code-named Fermi, this spring. But a new generation of Fermi has arrived just in time for back-to-school season.

A no frills version of Fermi, formally named GeForce GTX 460, debuts today as a high-performance graphics chip for price-conscious gamers. The GTX 460 targets graphics cards that sell for $199 to $229, which puts them in the sweet spot for gamers. In the parlance of gaming, the original Fermi, the GeForce GTX 480, was like a combat tank, while the 460 is more like a “hunter,” said Justin Walker, product manager at Nvidia.

“People drool over the newest graphics chips, but we realize not everyone can afford it,” Walker said.

The GTX 460 will go up against mid-range chips from Advanced Micro Devices. Nvidia claims these chips are four times more powerful on some measures, such as tesselation, than AMD’s equivalent Radeon graphics chips. The Nvidia 460 chips are powerful in part because they’re made with the same 40-nanometer manufacturing process that Nvidia’s contract manufacturer, Taiwan Semiconductor Manufacturing Co., uses to make the 480 chips.

This new introduction is part of Nvidia’s typical technology waterfall. It takes its high-end design and launches it at a high price for the most fanatical gamers. Then, as it becomes easier to manufacture such chips in volume, it comes up with stripped down models until it eventually covers every bracket of the market. Right now, the 480 chip priced above $199 can only hit about 14 percent of the market. But at $199, Nvidia can address another 31 percent of the market. Once it targets $99 and below, it can blanket the market.

Nvidia designed the chips to handle Microsoft’s latest graphics technology, DirectX 11. Games such as Mafia II, coming in August from Take-Two Interactive, use DirectX 11 to deliver cool effects such as trench coats that flow when a mobster wearing them is running down a street. A bunch of other PC games coming this year, from Civilization V to Kings and Castles will also look better when they exploit DirectX 11.

Graphics boards using Nvidia’s chips and 768 megabytes of video memory are available today for $199 from a bunch of manufacturers. The 1-gigabyte version of the graphics cards at $229 will be available on July 26. PC makers such as Dell’s Alienware division will ship computers with the new Nvidia chips. The 460 chips have 336 cores, or processing brains, for CUDA tasks, or non-graphics, compared to 40 in the 480. It also runs on 160 watts of power, rather than 250 for the 480. One result is the 460 can be part of a very quiet PC.

http://games.venturebeat.com/2010/07/11/nvidia-goes-for-price-sensitive-gamers-with-powerful-new-graphics-chips/

When you’re taking on a billionaire, you have to bulk up. That’s what Titan Gaming is doing as it readies to challenge Virgin Gaming, the recently announced affiliate of Richard Branson’s Virgin Group. Titan is forming new partnerships and adding video game veterans to its board and management team to build itself a stronger position. The Los Angeles-based company is one of a number of companies competing in the online video game tournaments market.

John Maffei, chief executive of Titan Gaming, said in an interview that he has added game industry veterans Keith McCurdy and Brock Pierce as board members and appointed other veterans David Christensen and Michael Steuer to the management team. Last month, the company also announced it had raised $1 million in angel funding and lined up strategic distribution deals with ZAM Network and Quepasa. Both are social networks that will use Titan Gaming’s technology to offer cash or prized-based game tournaments.

While Virgin Gaming has begun staging its own video game tournaments for consumers, Titan Gaming is a business-to-business company, partnering with video game publishers and others who want to stage game tournaments on their own sites. Maffei believes that Branson’s entry into the space — as heralded by Branson’s own appearance at a press conference during the E3 video game trade show two weeks ago — validates the market for online tournament gaming. But Maffei believes that game publishers would prefer to operate their own sites rather than make games available to Branson’s Virgin Gaming.

McCurdy was formerly head of Electronic Arts’ online game division and a vice president of technology at game company EA. Pierce was the founder of Affinity Media, formerly IGE, a virtual currency business. Christensen is a 12-year game executive who ran international business development for Sony Online Entertainment and a former Affinity Media executive. Steuer will be vice president of product development and was previously vice president of games at Twistbox, which made skill-based mobile games.

The competition among these startups will be interesting. Virgin Gaming is betting on the larger Virgin Group brand to get gamers to come to its site to play online tournaments for cash and prizes. But Maffei is going to companies such as Quepasa, a big social network with 14 million followers in South America and other places, to provide them with the ability to host their own game tournaments. Titan Gaming has technology to match players of comparable skills. In places where it’s legal (it is not legal in 12 U.S. states), players can duel each other for money. Titan supplies features such as leaderboards and points competitions.

The first partner will go live with a site in July, while ZAM Network, a site for fans of massively multiplayer online games, will go live in the fourth quarter. ZAM has more than 11 million unique monthly visitors and Maffei formerly ran it. Game developers could potentially reach a network of 25 million gamers by the time those launches happen. Maffei said his platform will support all sorts of game titles: hardcore and casual, console and PC games.

“We think the next hot model is competitive video games,” Maffei said.

Of course, competitive video games have been around for a while. Major League Gaming is one of the survivors of the many startups that tried to get gamers to engage in tournaments. MLG focuses on hardcore superstars and tournaments for them, but both Titan Gaming and Virgin Gaming are focused on the larger masses of less-skilled gamers.

Maffei believes that his company can make a lot of money much the same way online poker companies have done so, taking a cut of the game stake no matter who wins.

Titan was founded in 2006 and has 30 employees. Titan’s game providers include Wicked Interactive, Digital Bee, Goods Pants, and Mode 7 Games. Most of these are relatively unknown indie game developers. Besides Virgin Gaming, rivals include King.com, BringIt and WorldWinner. Titan has raised $1.3 million altogether from investors including West Coast Angels.

http://games.venturebeat.com/2010/07/06/titan-gaming-takes-on-billionaire-richard-branson-in-video-game-tournaments/

Helios Interactive doesn’t have the greatest pedigree for success in video games. Its parent company, Mehta Group, is a multibillion-dollar transportation company.

But Helios is making an interesting play to capture the hearts of game developers with its GameCore development platform, which can be used to create cross-platform games with cool 3D graphics. A couple of weeks ago, Helios said it would give away the platform for free to independent game developers.

Helios is also using GameCore to create MetaJets 3D (pictured at top), a cross-platform game based on the MetaJets animated TV show. The show launches on the Cartoon Network cable channel over the July 4 weekend with a five-hour marathon. And the company is also in the midst of making Truck Off (yes, appropriate for a transportation company), a 3D monster truck racing game with multiplayer play. As you can tell from the images, games created with GameCore look pretty good.

On top of that, MetaJets 3D players will be able to play head-to-head in instantaneous action regardless of whether the different players are using PCs, Macs, devices with web browsers, or Facebook. Helios can do this because GameCore enables cloud-based game play, where game data is in central servers and the player’s own machine is really just a portal for logging into the game.

Not bad for a transportation company. But Mehta began its diversification into technology ventures 12 years ago. Ravé Mehta, chief executive of Helios Interactive (pictured right), said the game business is a long-term investment for diversification into the information age. The game-building technology has been in the works for seven years, but Mehta acquired the group in early 2008 and turned it into Helios. The collective investment to date has been more than $11 million.

“We can extend our platform to on-the-go gaming, where you start at home and you continue playing on a mobile device,” Mehta said.

More than 10,000 developers are using the GameCore platform now. But GameCore faces big competition from five-year-old Unity, which makes an engine to create 3D games that run in web browsers. GameCore is trying to match Unity by providing a full solution and seeding free copies among emerging game makers. Another rival is Epic Games’ Unreal technology, but that has been used primarily for big budget PC and console games. Helios’ premium version sells for $1,500.

Mehta says the company will add support for iPad and iPhone games soon (as soon as Apple lifts restrictions on allowing such adaptations). Mehta said it took four employees just three weeks to make the Truck Off game, which is still in beta testing.

One cool feature is that more than one game developer can modify assets in a particular game level at the same time. It also lets game developers visualize prototype sections of a game early and create their own user interfaces for a game. Mehta claims that the company’s more efficient tools can save 30 percent of game development time compared to other more antiquated systems. It also supports “socializing” games with Facebook integration, multiplayer matchmaking, and other social features.

The company is betting that Web-based games, which have heretofore been simple two-dimensional games, are shifting toward visually arresting 3D graphics. With tools such as GameCore and Unity, developers are proving that it is possible to create console-like graphics on web-based platforms.

While the Mehta Group is a huge 30-year-old multinational transportation company, Helios itself has just eight employees. GameCore is currently in version 2.5 and it has been out for the past nine months. Mehta is trying to get game development schools to adopt it for training students.

Mehta previously served at Modis Technologies, a virtual reality software company that created military simulations. That company was sold in 2000. He says a bunch more games are in the works. As for the competition, Mehta says, “It’s an uphill battle, but the battles are always changing.”

http://games.venturebeat.com/2010/07/01/helios-interactive-snares-indie-game-developers-with-cross-platform-gamecore-tools/

Facebook can be a daunting place for many small businesses. While they dream of reaching some of the social network’s more than 450 million users, they don’t always have the time or money. Enter a new Facebook application, FavRav, that aims to help local businesses tap current customers to create positive recommendations for their Facebook friends and drive business.

The company’s service sounds pretty simple. A business can create a FavRav profile, send an email to their current customers and ask them to recommend the business to their friends. Ideally, customers would agree and write up a glowing review which would then be automatically posted to the users Facebook wall as well as other social networks, including LinkedIn and Twitter. Promotions can be attached to updates as well to help drive friends interest. The company claims a 3-5 percent clickthrough rate.

The price, at $29 a month, seems attractive to small businesses. Other means of driving business leads, such as SEO or banner ads, can cost several hundred dollars a month with much lower clickthrough rates.

While one might think review giants like Yelp or CitySearch might be direct competition, cofounder Bill Manos argues that FavRav is different:

“If you’re looking for a recommendation on a great ‘date night’ restaurant or local bar, you can use the other myriad of referral/recommendation sites like Yelp or Citysearch. We’re really the place people come when you need a trusted referral from friends on important decisions like your first child’s pediatrician, a realtor for your next home purchase or an insurance agent to help you protect your family.”

Redbeacon, a company that helps you find local service providers, also lets Facebook users tap their friends through updates to gain perspective on local businesses and their services.

The Westlake Village, Calif.-based company, founded in 2009, is privately funded and claims to have over 30 businesses using the service currently.

http://social.venturebeat.com/2010/06/28/favrav-facebook/