Social gaming and online fan community developer Watercooler Inc. secured $5.5 million in Series B funding led by British online gambling business Betfair, which added its U.S. president Gerard Cunningham to Watercooler's board of directors. Existing investor Canaan Partners, which contributed $4 million to the company in May 2008, also took part in the round.

Watercooler will devote its new financing toward further development of its fantasy sports and social games on Facebook and other platforms. Based in Mountain View, CA, the company has so far attracted more than 26 million users since setting up shop in late 2006.

Its most recently launched product, FanSection Fantasy Football 2009, is a "commissioner-style fantasy football game" available on Facebook, where it's picked up more than 300,000 users (as of last August). Watercooler also claims its 2009 Bracket Challenge application was "the largest college basketball tournament game on Facebook" with over 1.7 million active users.

While this investment gives the legal online betting company a significant stake in Watercooler, it's unlikely Betfair will introduce gambling features to these social network games/applications, as Facebook does not allow for gambling on its site. Betfair, however, still views this financing as a "tremendous opportunity" to build its "global portfolio of sports and social media offerings".

"At Watercooler, we've already achieved fantastic momentum in the social gaming space on Facebook, and we look forward to continuing along that path with the new investment from Betfair and Canaan," says Watercooler CEO Kevin Chou. "Betfair's innovative approach to sports and gaming, along with its strong international presence, made the company a perfect fit as we continue to build innovative social games."

[With social gaming hotting up, GDC 2010's Worlds In Motion Summit has been renamed to the Social & Online Games Summit and expanded in scope to three separate tracks, making it a major part of Game Developers Conference next March. Here's the full information -- lecture submissions are open now.]

Game Developers Conference organizers have announced that the call for submissions is open for the 2010 event’s suite of Summits, which take place on the first two days of GDC in San Francisco, March 9th-10th 2010.

This year’s GDC Summit line-up includes two new events in the form of the Social & Online Games Summit and iPhone Games Summit, alongside the GDC Mobile/Handheld, Independent Games, and Serious Games Summits, which are all accepting submissions through November 13th.

The multi-track Social & Online Games Summit is focused around current and new opportunities for games on social networking services such as Facebook and MySpace. The Summit brings together leading thinkers and businesspeople to examine how social games have expanded the audience of gamers to encompass tens of millions of mainstream users, many of whom are not conventional gamers. It will also cover how online worlds have conquered the children’s gaming market, and how the casual gaming space is also feeding in to the next generation of mass market multiplayer games.

Former Flagship Studios co-founder and art director Phil Shenk has officially unveiled Gravity Bear, his new independent studio focused on social games.

The studio is currently at work on an original IP, it says, highlighting core studio processes focused on rapid iteration and adaptibility. It promises "evergreen" social gaming experiences that evolve as players interact.

When Shenk first revealed Gravity Bear late last year, he said Kevin Klemmick, former senior software engineer for Flagship MMO Hellgate: London, would be the studio's technical director.

Prior to co-founding Flagship in 2003 with several other Blizzard Entertainment employees, Shenk worked at Blizzard North on several titles, serving as lead character artist on Diablo II and as art director on that game's expansion, Diablo II: Lord of Destruction.

Previous to that, he worked at developers such as Maxis South, Wild Tangent, GlassEye Entertainment, and Origin Systems.

"Gravity Bear was formed with the singular aim of creating games that reconnect people to the core of gaming," said Shenk. "Our commitment is to bring the caliber of social gaming experiences players want -- as they want them – which means delivering new kinds of excitement and fun that blend the latest in modern game design with fresh technology."

Runescape follow-up, Mechscape, because it wasn't meeting standards -- and the move cost the company "tens of millions of pounds."

CEO Mark Gerhard told GamesIndustry.biz that the company aimed to incorporate four years' worth of Runescape design lessons in its new MMO, but "it got near completion and we discovered, oops, it didn't do all of those things that we wanted it to," Gerhard said. "So we went back to the original design document and said 'let's do it again'."

"It's a luxury that we are doing well and we can afford to make the decision," adds Gerhard, who took over as CEO in January of this year, following the resignation of Geoff Iddison. "I didn't make the decision lightly, because it's effectively cost us tens of millions of pounds," he added. "Maybe more."

"It's crucial to me we don't just ship a title because we've built it," the CEO adds. "The previous game wasn't a game that we want to play... it wasn't a game ready for launch."

"It was expensive. I hope never again to have to make the same decision twice. But it was the right decision."

Gerhard told GamesIndustry.biz that the scrapped project's engine and much of its design will be used in Jagex's next project currently in development. He noted in particular that the team was glad to get rid of a project that wasn't working, and is feeling energized about the new plans.

The Nickelodeon Kids and Family Virtual Worlds Group will use PlaySpan technology and services for its virtual goods and microtransactions. The payment platform will power the company's Neocash virtual world currency across multiple payment provides like credit cards and prepaid cards.

PlaySpan, a publisher-sponsored in-game commerce network, says its monetization solutions are used in over 1,000 online games, virtual worlds, and social networks. Nickelodeon will also use PlaySpan subsidiary PayByCash to offer more than 80 global payment methods for virtual items/currency to its users.

The Nickelodeon Kids and Family Virtual Worlds Group operates several online virtual worlds targeting kids, tweens, teens, and families, such as Petpet Park and Neopets, the latter of which has over 45 million players. The company is also currently developing two other projects, World of Neopia and Monkey World (working titles).

"There is meaningful entertainment value in premium experiences for our community," says Kyra Reppen, SVP and General Manager at Nickelodeon Kids and Family Virtual Worlds Group. "We want to make buying virtual currency and managing purchases as easy and convenient as possible for our players, and PlaySpan is a great partner to help us do that."

Nexon is continuing to make headway in the U.S. Last year saw its successful Combat Arms launch, and this year, and this year it's bringing Dungeon Fighter Online from Neople, the developer it recently acquired.

The company has several more products up its sleeve, but still considers itself to be feeling out the market in the U.S. We spoke with Nexon America VP Min Kim about a wide range of topics, from Counter-Strike Online's viability in the U.S. to the state of Nexon's console initiatives, to the closure of the company's North American development studio in Vancouver.

Perhaps most interestingly, Kim stated that the company is currently not interested in tackling the high end MMORPG market and going head to head with WoW or Aion.

In fact, Nexon views services like Club Penguin and others as feeder services or gateways to Nexon's products, which will pay dividends in around five years time:

State of Nexon Today

How is Nexon actually doing in the States? The Vancouver studio did close down. That made people wonder a little bit.

MK: Yeah. That's really unfortunate. That was a completely separate office from my office. We're the publishing arm, they're the development arm. The economy going really sour last year was very scary for the company. The burn rate on that development house was very, very expensive to upkeep with the currency exchange and whatnot.

So, I think that's what led management to shut it down. It wasn't that we're doing poorly here. If you look at some of the numbers we put out last month, I think we had 30-something percent growth on July over July of last year. So, our numbers are actually doing really good. We haven't announced yearly numbers yet, but everything's extremely positive. And with Dungeon Fighter coming out, I think it's going to be even larger.

having a lot of focus internally on the North American market just because our performance has been so good, especially with the rest of the market kind of being down. I think a lot of people are moving towards online.

Online game maker Cryptic Studios said its most recent MMORPG, the Atari-published Champions Online, has garnered over 1 million created superhero characters, but the size of the subscriber base is unclear.

Cryptic is the studio that created the MMORPGs City of Heroes and City of Villains, NCsoft-published superhero properties that are still in development by other studios. Atari acquired Cryptic earlier this year as part of the publisher's stronger focus on online gaming.

While Cryptic and Atari said the game has surpassed 1 million created characters, the companies did not reveal exact subscriber numbers. Players are able to create multiple characters per account using the game's robust character creation system.

On NPD Group's September PC game retail charts, Champions Online ranked third, following the top game Aion, a new MMRPG from NCsoft, and Electronic Arts' The Sims 3. Champions Online launched September 1 this year.

The superhero MMO genre is becoming increasingly crowded, with Sony Online Entertainment developing DC Universe Online, due next year for PlayStation 3 and PC, and Marvel Universe Online from Gazillion Entertainment, which signed a 10-year licensing agreement with comic book publisher Marvel.

Major Japanese mobile social network operator DeNa "strategic, multi-million dollar investment" in iPhone social platform developer Aurora Feint, taking a 20 percent stake in the company.

Simultaneously, Konami subsidiary developer Hudson Soft will become the first Japanese game maker to incorporate Aurora Feint's OpenFeint technology when it releases a new Bomberman title later this year.

OpenFeint is a suite of online features that connect iPhone games from different developers with social features like friends lists, lobbies, achievements, leaderboards, and social network integration.

Aurora Feint claims over 200 currently-available iPhone games -- including notable titles like Pocket God and Minigore -- hook into the platform, with 500 more in development from some 2,500 registered developers.

Dena has its own mobile phone-based social platforms, including Mobage-town, a graphical mobile-only virtual network that hosts over 250 games, including MMOs. In a statement, company CEO Tomoko Namba said DeNa's existing leadership in the traditional mobile arena meshes well with Aurora Feint's market position on iPhone.

"We look forward to a long-term partnership which will bring the synergy of our experience in operating large mobile social networks, and the experience of OpenFeint in operating a large social gaming platform in the smartphone market," he said.

Hudson's corporate officer Masato Shibata said the developer plans to release "several games which utilize this beneficial tool to the fullest extent."

In our latest employment-specific round-up, we highlight some of the notable jobs posted in big sister site Gamasutra's industry-leading game jobs section this week, including positions from 5th Cell, Insomniac and more.

Each position posted by employers will appear on the main Gamasutra job board, and appear in the site's daily and weekly newsletters, reaching our readers directly.

It will also be cross-posted for free across its network of submarket sites, which includes content sites focused on online worlds, cellphone games, 'serious games', independent games and more.

Some of the notable jobs posted this week include:

Gazillion Entertainment: Project Manager
"We are seeking a Project Manager to be a key member of the Game Operations/IT Team. This is a full time permanent position and will report to the Director of Project Management - IT and Gaming Operations. Projects will vary from internal IT back office applications to key portions of a worldwide gaming operations infrastructure."

Insomniac Games: FX Artist
"FBI, ATV, CTU, ATF, SRPA, ETA, HR, TSA, OPEC, MIA, RSVP, RIP, CSI, WTF, WHO, FX, IMO, LOL - these are all acronyms- some real and some made up that everyone knows. Well we are looking for an FX wizard. We’re talking about creating those mind blowing fxs! Insomniac Games is looking for an artist to create effects to work and assist in gameplay, environment, and the cinematics of the game."

Benjamin Joffe, CEO of +8* (Plus Eight Star), a consultancy firm which brings the concepts of the Asian market to Western companies, delivered a presentation at San Francisco's Virtual Goods Summit 2009, highlighting the state of the market in Korea, China, and Japan.

When it comes to the size of the Asian virtual goods market, says Joffe, "This is an estimate I came up with a few months ago... Some calculations with online gaming and social networks, I said about $5 billion."

He now supposes that number could increase to $7 billion by new calculations. Though he says it's worth noting that "Asia is already more than the sum of North America plus Europe, in terms of internet users and mobile users."

These markets are drastically different and much larger than the U.S. at present, he says. China alone will have a $3.5 to $4 billion online games market for 2009, for instance, according to Joffe's numbers.

Japan has two mobile-only social networking services that draw 70% of their revenue from virtual item sales.

The top social network in Japan, Gree, has a 60% profit margin -- the top SNS (social network service) profit margin globally. Only 25% of its revenues come from advertising; 75% are derived from games.

This year, the U.S. market will be worth $1 billion, but notes that "the US market potential is somewhere between 3 to 35 billion dollars," says Joffe, somewhat jokingly. 


The question of which market delivered virtual item sales and microtransactions first is irrelevant, he says. Though the U.S. did some pioneering work, "Asia was the first place where the market reached over $1 billion dollars."

And while the top social games on Facebook are currently Western-developed, Joffe is sure that Asian competitors are coming with the big guns. One of the top 10 publishers for monthly active users, 6Waves, is based out of Hong Kong. China's Rekoo and Elex are at 30 and 36. "Execution trumps creativity in that space," says Joffe.

Speaking at the Virtual Goods Summit in San Francisco on Friday, Zhan Ye, president of GameVision, commented that he has worked on traditional, single-player PC games as well as new free-to-play games in China.

In fact, he's brought experienced developers from the West to China and seen the culture clash -- because the two types of games, while seemingly similar, have important differences, he says.

Changing The Way You Think

"As I was working with designers in the U.S. and China, I couldn't help but notice the huge contrast between the old way of doing games that I was used to, and the new way I've learned from the young designers in China," says Ye. "You have at least three decades of history; in China, because the industry is so young, we don't have a lot of traditions."

"If you are a designer and you start on a free to pay project and you start with those old assumptions, you will fail -- no matter how good a designer you were in the old days," warns Ye.

"Ubisoft Shanghai has the best and brightest designers in China, and they were all trained by Western developers... but when they left and started their own projects, they all failed."