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The Live Gamer/Two Fish acquisition signals the end of the distinction between social games and hardcore MMOs

By on August 25, 2009
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The recent acquisition of TwoFish by LiveGamer was justified by the need to offer a full-service ecommerce solution across all genres of games, not just MMOs. Does this mean the end of the distinction between hardcore and casual?

LiveGamer was formed to offer ecommerce services to MMO publishers. Headed by Mitch Davis (of Massive – sold to Microsoft for $200-$400m – and Brash Entertainment), it has raised $24 million in funding from Charles River Ventures, Kodiak Venture Partners and FirstMark Capital.

TwoFish offers analytics and ecommerce tools to social and casual gamers and raised $4.5 million last year from Triplepoint Capital, Rustic Canyon Ventures and Venrock. But according to TwoFish’s Lisa Rutherford (in an interview with InsideSocialGames), “small players [like TwoFish] can’t keep up if they stick to social.”

Mitch Davis also said that Live Gamer had to broaden out from its hardcore audience: “Social game developers are a major customer category for us, because we’re seeing an explosion in the number of game developers and games in the market,”

We are beginning to see categories collide as developers offering games for the hardcore market find that they need the same tools and technologies as those offering games for the casual market. Much as it pains many games developers to admit it, the days of a clear distinction between core games and casual games on the web are rapidly coming to an end.

Meanwhile, social games publishers and virtual world developers raised almost $1 billion in venture money in 2008. They have to spend it somewhere. And tools providers will be one of the beneficiaries of this largesse.

But now the tools providers have a key strategic challenge: how to ensure that they will be the last man standing when the venture money dries up, the web-based games companies consolidate and there are fewer customers to go around.

One solution is for the tools companies to merge or be acquired, as this transaction demonstrates. Acquisitions like these will continue, as companies like Live Gamer use their market-leading position (and their VC money) to ensure that they are the strongest providers when the ready flow of VC money into the social gaming and virtual world space ceases.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • deftangel

    Way too long, there is a whole site full of it! He has a very good grasp of Nintendo's disruption & blue ocean thinking though. In 2008 it was compelling reading. The main problem with it now is that the next phase, so to speak, of this strategy hasn't manifested. Nintendo didn't just not make software to encourage their users to swim “upstream”, it appeared to stop making software over the last year altogether.

    And whilst you might suggest that Sony have fallen into the derivative “trap” with their motion controller; Natal, social gaming & the iPhone are disruptive technologies in their own right, to varying degrees.

    He hinted at articles talking about when the “disruptor becomes the disrupted” but has never posted them. A shame.

  • I liked the comment from Shigeru Miyamoto that most publishers put their 3rd or 4th tier development teams on their “casual” games, while Nintendo puts their #1 team on the case – and he believes that explains why Nintendo does so much better than the others.

    And I definitely agree that the problem is too many hardcore gamers (i.e. developers and publishers) thinking, as the article puts it, that casual = retard.

    But it is too long…

  • deftangel

    “Casual” vs “hardcore” was always a false dichotomy anyway. This (long) article can grate but it's worth sticking with. The correct terms are “upstream” & “downstream” consumers.

    http://malstrom.50webs.com/birdman.html

  • Way too long, there is a whole site full of it! He has a very good grasp of Nintendo's disruption & blue ocean thinking though. In 2008 it was compelling reading. The main problem with it now is that the next phase, so to speak, of this strategy hasn't manifested. Nintendo didn't just not make software to encourage their users to swim “upstream”, it appeared to stop making software over the last year altogether.

    And whilst you might suggest that Sony have fallen into the derivative “trap” with their motion controller; Natal, social gaming & the iPhone are disruptive technologies in their own right, to varying degrees.

    He hinted at articles talking about when the “disruptor becomes the disrupted” but has never posted them. A shame.

  • I liked the comment from Shigeru Miyamoto that most publishers put their 3rd or 4th tier development teams on their “casual” games, while Nintendo puts their #1 team on the case – and he believes that explains why Nintendo does so much better than the others.

    And I definitely agree that the problem is too many hardcore gamers (i.e. developers and publishers) thinking, as the article puts it, that casual = retard.

    But it is too long…

  • “Casual” vs “hardcore” was always a false dichotomy anyway. This (long) article can grate but it's worth sticking with. The correct terms are “upstream” & “downstream” consumers.

    http://malstrom.50webs.com/birdman.html

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