So amid all of the performance enhancement drugs (HGH and steroids) conversations, baseball season is just around the corner as spring training started for many teams this past weekend. Not quite Legends Field in Tampa where the Yankees are preparing for 2008, but PixelYork is now home to it’s very own baseball diamond that can be found on 2100-2600 Wall Street.

Check it out when you get a chance. We promise there won’t be Andy Pettitte defending his story or a Roger Clemens sighting here, just good old clean and fun baseball. I know it’s not quite the new (or old) Yankees and Shea Stadiums, but it’s a start. Enjoy!

~The Commish

What you need to know about casual gaming:

1. Fast growing market - Casual gaming is worth $2.2bn, and growing fast - growth rate estimated at 20%
2. Investors are getting in - Rebel Monkey ($1m), Alamofire ($2m), Zynga ($10m), C3L3B ($3m), PlayFirst ($26.5m), Doof ($??), Outspark ($11m) to name just a few
3. Social gaming - Currently this means casual games that integrate with social networks, but virtual worlds are also starting to integrate with casual games (ie. Flowplay and something citypixel.com is looking at). Inside Facebook has a good rundownof the top Facebook game developers. One interesting take away is that the daily active user ratios for these gaming apps are much higher compared to other apps, 10-20% vs. 4-5%.
4. Widening demographics - The San Jose Mercury News reported that women in their 30s and 40s are behind the casual gaming boom - apparently women account for 74% of paying customers. The NY Times just ran an article on how the “growth in the now $18 billion gaming market is in simple, user-friendly experiences that families and friends can enjoy together.”
5. Big game publishers are taking notice - EA has started a division called EA Blueprint. The group will be led by former EA Los Angeles general manager Neil Young and artist and creative director Alan Yu. Products will include brand extensions of existing EA games in addition to original IP. The EA Blueprint games will reportedly focus on social networking platforms, such as Facebook. Apparently CAA is involved somehow.
6. Monetisation - Current focus is on in-game advertising. CPMs are difficult to judge, Jeremy Liew posted awhile back that Wild Tangent was getting an eCPM of $150, but this was a mix of revenue from both premium and advertising driven games. Venturebeat interviewed Zynga and they were talking about CPMs of $0.10. Awhile back Google bought an in-game ad network so apparently they are getting into this space.
7. Guys who know what they are talking about - Jeremy Liew, of Lightspeed Partners and Andew Chen

In my last post I looked at some of the assumptions behind estimated virtual commerce revenue for a virtual world. Next I’m going to look at traditional advertising revenue, ie. simple banner ads. This is excluding the more interesting and exciting possibilities of interactive marketing campaigns and branding.

The cost of advertising is often measured using CPM, or cost per mille. For banner advertising, this is the cost per thousand impressions. The CPMs for Internet advertising are much lower then other medium, to put it in perspective, in 2006, Internet advertising had a CPM of $3.50 while Network TV had $21.75, Magazines $16.60 and Newspapers $18.69. Below are some Internet CPM forecasts from JPM Morgan.

In-game advertising
According to in-game advertising network IGA CEO Justin Townsend, virtual networks are too small for these kind of ads,

these are mainly creatively-driven environments and frankly not open to advertising. And if they are, it’s hard to get one set of advertising standards defined through all the different virtual world companies. If you wanted to provide ads into virtual worlds, it would be one-off bespoke, as opposed to aggregating ten virtual worlds together and providing a decent amount of reach to consumers.”

This is true for the most part, but as the industry develops and ad sizes are standardised, this will change. To determine what sort of CPMs virtual worlds might get you need to look at its closest comparable. Current in-game CPMs might be one comparable, I’ve heard some reports of CPMs at $20, and Sony’s new game Pain is offering advertising at a CPM of $30. I think the current in-game CPM rates are probably higher than what you’d expect in a virtual world as there is more control over ad placement and where the users attention is directed. Also, currently the investory level for in-gaming is low, once more and more games include advertising, and potentially virtual worlds, I would expect CPMs to fall.

Social network CPMs
Another comparable might be social networks, the similiarity being the access to detailed user infomation and that people are using them to interact with other people, but in the case of virtual worlds, in a much more immersive way. These are lower than the average online CPMs (JPMorgan estimates $3.31 in ‘07), Techdirt explains why,

Ads work on Google because people are looking for information. They do a search, and if the advertisement shows information that helps with the query, that makes everyone happy. However, when it comes to a social network, usage is quite different. People aren’t looking for information about products — they’re looking to communicate with friends. In that environment, ads are seen as an intrusion — which is the exact opposite of ads in a search world.

Reports vary quite a bit on actual social network CPMs, here is a round up: Facebook (according to Bear Sterns research, $0.88 blended CPM, but prime CPM up to $10), MySpace ($0.10 - $3.00), Flux ($1.50), Friendster ($0.04).

Virtual world CPMs
Will future virtual world CPMs be somewhere in between? In-game CPMs are high right now, but as it becomes more common, there isn’t going to be enough demand, and CPMs will fall. Unlike online advertising, in-game advertising isn’t going to attract the same array of verticals. If using for forecasts, I would be conservative and assume that virtual world CPMs will be closer to social networks.

While social networks are focusing their business models on advertising, virtual commerce are driving the business models of virtual worlds, ex. Habbo Hotel (90% of revenue), Tencent (65%), Cyworld (43.5%) and Nexon (85%). Statistics on the current market size of virtual goods are hard to come by, but one stat puts the amount that people spend on virtual items at over $1.5bn/year.

Use cases
Jeremy Liew has a great post on the use cases for digital goods; (i) increased functionality (ii) self expression and (iii) communication. The virtual goods in citypixel.com are mostly about self expression, allowing users to personalize their apartments and other spaces.

The ability to buy a car with virtual currency has introduced virtual goods that increase functionality into the world.

Ultimately, to maximise the monetisation potential of the virtual world and to provide users with the greatest number of options, all 3 use cases should be provided.

Current adoption rates
Finding statistics on the current level of user adoption of virtual commerce is very difficult. Social networks and virtual worlds are using private companies and don’t have to release these figures. To get a sense of what the average number of transactions per user might be for social networks and virtual worlds, you have to really scrounge the Internet looking for numbers.

The most readily available statistic for these sites is registered users, “active users” or “unique users a month” would have been preferred but there are varying definitions and not always released. I then tried to find how many virtual transactions each social network or virtual world has a month - this was quite difficult and I was only able to find numbers for a few, and they are a bit sketchy. See the table below for my findings:

The market for virtual commerce is at its infancy so these low numbers aren’t very surprising. What is surprising is how successful Neopets has been in this area - apparently they have consistently ranked as one of the Internet’s stickiest sites, which would explain alot.

Transaction size
I tried to find the average dollar amount of a typical virtual transactions, but this was even more difficult. The average transaction size on Xbox Live is $2.78, with users spending on average $1.46/month. Maple Story transactions are on average $2.67 with users spending $0.02/month. Facebook charges $1 for each virtual gift. According to Wikipedia, Habbo hotel users who participate in virtual commerce spend $15-20 a month, no idea what average user amounts are though. I’d be interested if anyone has anymore info on how much users are spending on virtual goods

So what better way to celebrate Super Sunday then to party in CityPixel, right? Have all of you stumbled upon 7100-7600 Lenox Avenue within PixelYork before? We aren’t holding the Super Bowl this evening there, but it is the home of PixelYork’s state-of-the-art stadium. Definitely check it out next time you are navigating within the city. We are still trying to finalize what features the stadium will include, so we are open to all suggestions on what we can offer there. Heck, if it’s a good idea we may just implement it, so this is your chance to be part of CityPixel history!

Now back to the big game tonight! This is definitely a historic game as the Brady-led Patriots attempt to complete only the second undefeated season in NFL history. But Eli and the Giants are on a roll, since they last met up with New England in Week 17, and will definitely put up a fight. Aside from waiting for the next “funniest” commercial, look for Plaxico and Bradshaw to put up some huge numbers in the game.

Now if only tomorrow was a national holiday! Can’t we move up President’s day by a couple of weeks, to this Monday, ha!

Go Giants!

~The Commish

So as I reflect from my second world tour in the past couple months I realize we need more distinctive landmarks from around the globe at CityPixel. As the mayor hasd mentioned in his previous post, look for new pixel cities in the near future. Who wouldn’t want to see a pixel- Glockenspiel like you can find at Marienplatz in Munich or Big Ben and the Eye in London? Oh and who can forget the Eiffel Tower or the Arc found in Paris. Please share with us which cities you want to see pixelated in the future and the landmark you most would like modeled!

I missed a lot while I was gone, some Presidential primaries and caucuses around the country like in New Hampshire and Iowa, with no clear-cut leader from either party as Barak and Hillary duke it out for the Democratic nomination and a three headed race between McCain, Huckabee, and Romney…Sorry Guiliani, but the race is over for you. (Maybe a VP candidate?) It was not good to see the dollar weaken even more, especially amid some more write-downs from banks due to the sub-prime crisis. Are we in a recession yet? MLB went to Congress and what was accomplished? Too bad for Miguel Tejada, who came out the biggest loser. Atleast on the sports front, one Manning is still in the playoffs, and his name ain’t Peyton. Wahoo Eli, go BLUE! And oh yeah Britney Spears is still crazy!

As for technical news, the CES went by without any big splashes out of Las Vegas, unless you think the LG Watch Phone is cool. As for MacWorld, also a snoozer, as Apple unveiled their smallest laptop to date, the Macbook Air. I am more interested in the new Apple TV and iTunes’ movie rental service. TV viewing is changing as the internet evolves and Apple is positioning itself for those changes. While on the discussion of streaming movies online, remember you can link to your favorite YouTube videos to TVs that you can hang up on your custom apartment and cube walls. That’s right, you can share your favorite variation of “The New Haircut” with all citizens of PixelYork! Yaegar bomb, yaegar bomb!?!?!

~The Commish

Greetings Citizens,

Here at the mayor’s office we’ve been tweaking the site to make it as user friendly as possible. Please help by letting us know of any bugs you discover, or anything that you think could work better. We’re also adding a bunch of new premium items, so show your support for the city by logging in, aerning pixels, and buying the stuff that will set you apart.

Also, with all the press coverage on the issue, I want to point out that no citypixel.com staff members have injected steroids or any other performancing drugs. PixelYork Stadium is clean too. All the bat boys are in good standing and have reported no wrong doing by the players.

Further, while I am Legend and Cloverfield have showed the negative aspects of big city living, PixelYork is vampire and monster free. Heck, if you look around Spiderman, the Punisher, Santa Claus and a radioactive looking guy have been hanging around so I think we’re in good shape if any vicious or undead creatures decide to visit.

And last but not least, we’re working on a few new cities and places of interest for 2008. Keep an eye out for some European and South Pacific action in the coming months!

Keep it tuned here, and, as always, tell your friends to tune in too! (If you let us know that you had some people sign up you might notice a little pixel bonus in your account….)

 -The Mayor

Welcome back commish. (Yeah that’s me talking about myself!) I probably should have warned you all of my little hiatus before I departed, but unfortunately I did not. Anyway, I am back from traveling Europe the last few weeks and I missed quite a few things, a la Thanksgiving (with the scrumptious turkey), Black Friday (with all the bargains), and ARod back on the Yankees.

It’s good to be back at CityPixel after a long trip, but I definitely enjoyed my time. If you enjoy going on excursions like me (and are strapped for cash), no worries, because we have plans at CityPixel to create other pixel cities (Tokyo, London, etc.) that you can reach through PixelYork. Look for an airport/transportation center within the virtual city in the future!

Well that’s enough from me, I will have another post with a teaser/trivia question to earn some pixels later this week, but I first must get back to unpacking! In the meantime let me know what I missed the last few weeks.

~The Commish

Greetings Citizens!

We all need some down time, and The Mayor, AKA me, just ran out to catch the movie Hitman.

As you can imagine, the theatre was reserved and I was the only person present for the cinematic experience. It’s really the only way to see a movie.

Anyways… I know you can’t all be the mayor of a fine city, like PixelYork, but if you get the chance - rent a whole theatre for yourself.

The movie was pretty good. Agent 47 is a good character, and it would be nice to see someone make an avatar with the black suit and red tie. Would be pretty easy if someone wanted to impress me. No real contest, but if you do it I can thank you publicly.

Oh, no synopsis or anything. If you want to know what it was about go rent a theatre.

Till next time!

-The Mayor

Greetings Constituents,

As we near the mid-point of the 4th quarter, and begin to enter the Christmas season, I was wondering what the city was missing, and what you all would like under the tree - so to speak anyway.

You’ve seen the cars, the pet store, and all the other new stuff that we’ve added recently. But that was all on the roadmap. What can we give you loyal users to make your experience better, more interesting or enjoyable?

You’re receiving more pixels when you log in and use different features of the city, and that means buying more stuff. Anything you wish you could buy, but can’t find?

Well it’s time for me to go take a nap on my tiger skin rug, and bask in the shade of my elephant. If you think I’m talking crazy then you haven’t seen all that our stores have to offer.

I look forward to hearing your recommendations…

-The Mayor