Only a few European social networks managed not to get completely overrun by Facebook. The Germany-based VZ network is the most successful in Europe, counting over 16 million members. The network consists of StudiVZ, SchülerVZ and MeinVZ, which are seperate social networks targeting university students, students up to high school and working professionals.

In December 2009 the VZ network implemented OpenSocial to bring externally programmed apps and games to the platforms. The results are promising: 484.000 daily active users with a sharp increase in the recent weeks. Currently the network lists over 50 apps and games. Increasing popularity of the games will make the platform more interesting for developers.

In our new series AppStats we will weekly report about developments on the platform. Next week onwards we will additionally provide weekly growth rates. Here are the AppStats for this week:

	App Name	Developer	StudiVZ	MeinVZ	SchülerVZ	Total
1.	Brain Buddies	Wooga	503.706	637.040	751.692	1.892.438
2.	Frohe Ernte	Elex Co. Ltd	194.535	407.214	254.856	856.605
3.	Wobbix Quiz	Quiz-Fabrik GmbH	158.185	233.190	202.851	594.226
4.	Benote deine Lehrer	Spickmich	-/-	-/-	546.994	546.994
5.	Turtle Squad	Plinga	94.221	133.221	191.698	419.140
6.	Röhre	Putpat	71.329	125.356	190.538	387.223
7.	Mein Klub	BILD.de	59.413	79.843	201.734	340.990
8.	FunCards	Plinga	66.263	146.316	98.398	310.977
9.	Crazy Charly	Plinga	44.864	98.277	142.584	285.725
10.	Winter Games	Kaasa.com	39.522	59.161	158.390	257.073

In total, the VZ-Networks count 5.7 million game and app registrations. Surprisingly, games have a share of only 63%. The popularity of relatively basic entertainment, service and news apps might be due to the low number of available quality games. The overall figures seem quite modest compared to US competitor networks, however, it should be kept in mind that the VZ network started the implementation of games and apps just a few months ago. Although social networks like Facebook seem to be way more attractive to developers, the role of the VZ network should not be underestimated. “The VZ networks are the biggest social network in Germany, Europe’s largest economy. We have millions of users there and therefore they are important for us in addition to our global reach on Facebook.“, says Jens Begemann, CEO and founder of wooga. With over 1.8 million users Brain Buddies, wooga’s first game on the VZ-Networks, is dominating the charts. A new wooga game will be launched soon – „We will bring Bubble Island and our future games to the VZ networks. We maintain one code base for both networks and therefore new features and content are always released almost at the same time for both platforms – once the initial porting is done.“.

The number of games on the VZ network is steadily increasing. The first farming game „Frohe Ernte“ launched just a few weeks ago and is received very well. The VZ network announced to implement payment methods in Q2. Once payment systems are working, monetization opportunities will be increased for national same as international game developers. We are looking forward to see the network’s current upward trend continue.

Social games are increasingly catching the attention of major social networks. Until recently, Facebook was almost the only platform where games were heavily promoted and played. After the tremendous success of social games on Facebook other social networks seem to have realized what they are missing and are now trying to gain market shares. At last week´s Game Developers´ Conference MySpace was not the only social network that announced to promote its social games section to a core feature of the platform. San Francisco based social network Hi5 also announced a developer platform for social games. Hi5 counts 60 million members and is especially popular in South America and Asia.

Similar to MySpace, Hi5’s strategy is to allow developers to use viral channels to promote their games. The main teaser for developers is Hi5´s promise to allow notifications, a feature that Facebook banned recently. Furthermore there will be no caps on the number of people  that game invitations can be sent to and what Hi5 calls “super-charged viral channels”.

Additionally Hi5 announced free space for marketing and promotion for game developers such as free banner ads and the inclusion on the hi5 Games tool bar. For in game monetization Hi5 promises to offer favorable revenue shares on their own virtual currency “Hi5 coins” as well as on premium advertising.

All those features will be particularly interesting for small and less established developers which have a hard time spreading their games on Facebook due to reduced viral channels, very strong competition and more expensive in-game currency. By reducing up-front investments for advertising and by providing a Facebook-compatible API, Hi5 could soon become a cheap alternative for new developers to spread their games.

Most developers are aware of the importance of Facebook fan pages. If a game reaches a certain stage of success it almost automatically attracts a certain number of fans. Surprisingly, only few games have a fan site that is both interesting for the fan and highly useful for the game developer.

For the developer, the fan site can generate valuable feedback which can be gained very easily. People who become a fan give a strong signal that they care about the game and are willing to communicate on the fan site. By simply asking the users what they think about certain game aspects or whether they have any suggestions or criticism on how to improve details it is possible to get very valuable feedback. Responding to this feedback can turn the user into a fan for life, as he will be given the feeling of really being part of the game development. It does not matter whether the feedback is good or bad. If it triggers changes of features of the game the fans will feel highly appreciated and it is very likely they will talk about it and thereby actively promote the game.

For the same reasons a fan page can also be very useful for testing new features and even new games. One possibility is to give fans access to a beta version of a game to test it. This approach will provide free and fast feedback. This works as well if you ask fans of game A to test the new game B – fans will value being asked for their opinion and will enjoy being exclusive testers.

The more a fan feels involved, the more he will be willing to comment on a game. Involvement can be increased if fans get a feeling of knowing the real people behind the game. A good way to personalize the fan site is to post pictures or short clips from the office and especially the team behind the game. Such elements create trust and build a real relationship.

Other elements that can increase the fan’s involvement are custom graphics with every post. Characters from the game, if there are any, can be used here. Graphics or videos of this kind are certain to increase the number of likes and comments because they simply stand out from text only posts on the personal Facebook homepage.

Video guides for difficult levels can be equally valuable for fans and especially interesting for power users. If fans send game play videos that are funny or entertaining they should be posted. On the one hand side it will be entertaining for the fan base and on the other hand it will motivate fans to send in more material and comments hoping for a post of their achievement.

There is a lot of other ways to design an attractive fan page for both sides. Many aspects depend on the characteristics and genre of the game. However, there is one thing that applies to any fan page: Viewing the page as communication channel rather than a one sided advertising platform will lead to higher fan involvement and generate more valuable feedback.

Over the last years, social networking platform MySpace has lost its position as the market leader to Facebook. Today, MySpace counts 100 million users, about 80% of which are US residents as opposed to Facebook’s 400 million users of which only 30% are US residents. The gap is growing each day – MySpace is stagnating while Facebook’s expansion seems unstoppable.

After the recent departure of senior MySpace’s executives the company has finally presented a new strategy to get the company back on track. One crucial component of the new strategy, which was revealed at this year’s Game Developers Conference in San Francisco is a strong focus on social games. The strategy includes a new MySpace design which will heavily promote games and will shift the focus away from music. Additionally, MySpace announced that it will enable users to play MySpace games on the iPhone.  The roll out of the strategy is expected later this year.

Shifting expertise from music to games will be difficult considering Facebook’s immense head start. However, there is potential: about 30% of MySpace users play games daily which accumulates to 1 billion game play minutes monthly. MySpace is optimistic to double the latter figure by the end of 2010 by improving the possibilities game developers have on the platform.

One way of attracting more members is to develop games exclusively for MySpace, as currently the same games can be played more conveniently on Facebook. Recent developments like Playdom’s acquisitions of Facebook game developers show that MySpace needs to act, as major developers of social games focus more and more on Facebook.

There are reasons to be sceptic whether MySpace can reclaim past glory. However, one reason to be optimistic is MySpace´s announcement to allow developers to spread their games virally within the social network. This is good news especially for small developers with low marketing budgets given that, unfortunately for them, Facebook has been cracking down on certain viral marketing practices with its redesign of the platform and new app policy, including the ban of game-related notifications which makes it harder to promote games. All in all it is highly unlikely that MySpace will regain market leadership, but if the company manages to provide a viral platform for game developers MySpace can become serious competition again.

At the Game Developers Conference in San Francisco, german game developer Bigpoint presented their new technology “Uniter”. Uniter enables PC and smart phone users to play real time multiplayer games against each other. Bigpoint demonstrated their new technology with a prototype racing game where the real time aspect is crucial for game play. On this racing platform up to 16 players can compete in a race simultaneously, even more are planned for other games.

The Uniter technology is the next step in playing games across different platforms. Previous stages of development solely enabled users to play browser games on smart phones simultaneously. According to Bigpoint, Uniter is also capable of integrating consoles. If the technology proves to be reliable it can turn out as real progress for cross-platform-gaming. Bigpoint further announced to invest over 1$ million in the technology.

Tired of seeing the same people every day on Facebook? The internet seemingly offers countless possibilities to get to know other users. However, users´ personal backgrounds such as the country of origin or a common school or university limit the likelihood of meeting someone completely unknown and new, which means that users miss out on meeting fascinating people around the world. Two young entrepreneurs from Austria have set out to address this issue through OneFriendADay.org (OFAD).

The virtual platform is based on a simple but original thought: users get the chance to meet each other and connect randomly while the amount of new contacts that each user can establish is limited. Therefore, enough time is left to get to know a new friend. The only criterion by which a new friend is randomly chosen is that both users speak the same language. No further criteria are used, ensuring that every new friend will be a surprise.

Thanks to the random assignment of the new contact, people are no longer seperated by cultural and ethnical background or social status. The user only gets one friendship invitation per day, providing he logs in. This way the user can be surprised on a daily base. The great friendship, started through OFAD, can last for years, or only for a day – just as one wishes. It is the users own decision how long he wants to keep contact.

This opens up a completely new and exciting dimension of communication across cultures. It literally means that the user can meet an Austrian craftsman today, an American professor the next day and an Afghan salesman the day after tomorrow – as luck would have it. As the founders Alex Feiglsdorfer and Christian Obermay put it, OFAD “encourages intercultural exchange between people of different backgrounds and it works against prejudices. The user regains his special and individual value in the world of the Internet.”

Although the founders do not consider their platform to be competition for traditional social networks such as Xing, Facebook or MySpace, but rather an additional forum for so-called “social butterflies”, OFAD allows users to chat with friends, upload pictures, and, most interestingly for readers of this blog, play social games online. OFAD actively encourages its users to play games with their new friends because it is a very effective way to get to know a person and to foster emotional bonds. In fact, the founders consider games to be a key element in achieving their goal of connecting people from different cultures in a playful way.

The project started in Perg, Upper-Austria, where currently six people are working on OFAD. Around 50.000 users are expected during the first half of 2010, and upwards of a million people are expected to be searching for new contacts via OFAD by the end of 2010. OFAD offers its services worldwide in English and German. Other languages and further features, such as an iPhone app, will follow soon.

Playdom continues its expansion and spends an not undisclosed fee on the acquisition of Offbeat creations –a game developer on the rise. Offbeat has produced 8 games for Facebook including its latest and most popular game, Super Farkle.

Until recently, Playdom was dominant on the social networking platform Myspace. 60% of its traffic was generated there while 40% came from Facebook. Offbeat Creations’ 1.5 monthly active user base (according to Insidesocialgames.com’ AppData) will change this ratio. With the acquisition Playdom will increase its presence on Facebook, adding new games to the existing portfolio of popular Facebook games such as Sorority Life, Tiki Farm, Mobsters 2, Lil Farm Life, Poker Palace or Tiki Resort.

The move comes shortly after having raised 43$ million funding in November 2009. At the time Playdom announced the funding would be used for acquisitions of other developers. Since Facebook’s recent ban of notifications, cross selling within existing popular games has gained in importance. Acquisitions of this kind confirm mountingdoubts over whether small developers will be able to compete under the current Facebook rules. It is likely that giant developers like Zynga or Playdom will continue to buy small developers to have a larger platform to cross-promote their games.

Internationalization is one of the biggest challenges that start-ups face – and one of the most attractive opportunities in terms of growth and revenue. We have identified a practical example of internationalization, sMeet Communications GmbH – and highlighted some of the key areas of their internationalization strategy. We have also got some helpful advice to consider before taking the plunge into unchartered, international waters.

Before starting the internationalization process budget considerations are crucial: do you have a substantial budget, or are you looking for a low-cost strategy? The next step is to identify the right market: is there enough potential for your product? Are there existing competitors in that market, or are you ‘unique’? If you know what your budget is and which market you want to corner, you then have to consider ‘product-localization’: can you transfer your product directly into the new market or do you have to alter it to fit with cultural, social and economic differences? The specification of the target group should follow, along with your marketing strategy. It’s also very important to consider your revenue channels: are your potential customers willing to pay for your product and if so, what is the most popular payment method in this new market? Analyzing competitors or similar products will really help you here, as you can see how these products have been accepted by the end user. Last but not least, you need to consider the logistical elements like  an office. Do you prefer having local offices, or is it more cost effective to be based centrally in your home country?

To answer these questions, we have asked Sebastian Funke, CEO of sMeet Communications GmbH for some insights. sMeet is a 3D virtual chat site with games and interactive social features. For the past two years, sMeet Communications has launched its 3D chat site into multiple international markets including UK, Spain, France, Italy, Greece and South America. On the back of several successful, low-cost international campaigns, sMeet continues to grow with a Polish launch scheduled for this month. Market research is the first step in the internationalization process. ‘You need to make sure all marketing campaigns are in place weeks before the launch, as fully synchronized campaigns are very important to customer acquisition’. Due to the nature and broad appeal of the sMeet platform, product-localization is not necessary; however translation is always required. In almost all countries, the target demographic for the sMeet 3D world is very similar, and acceptance of the product is high, but understanding individual markets is imperative. Sebastian says that, ’…over time, we’ve learnt a lot about our users and how they adopt our product differently. We feel that communication is the key to understanding, and asking our users directly through surveys and questionnaires will give valuable insights into the level of product satisfaction’. ‘Before each launch, we always check the product issues thoroughly. After a launch it is important to measure the success of your product features – resolve any issues, and take constructive criticism and feedback from the community. Remember, their opinion matters!’

Despite similarities in terms of target demographics – preferred payment methods can differ greatly.  To understand customer payment trends, sMeet turns to competitor analysis as a guide to choosing the right payment providers. But monetization is a complicated area, and requires time, experience and above all – patience. Some countries prefer to pay in cash; some prefer credit cards, while others use prepaid cards. The issue of payment is very important for a company like sMeet, which generates revenue through the sale of virtual goods. ‘It’s a good idea to get in contact with payment providers early, that way you know what your options are, and there is no nasty surprises’ advises Sebastian. Without a reliable way to monetize your users, you cannot have a successful launch.

Finally, you need to think about how your firm will be structured. sMeet has opted for the centrally structured model, with many international employees based in Berlin. Each market has a specific Country Manager in charge of translations, business development and customer acquisition, as well as Community Assistants to increase user satisfaction and deal with post sale customer queries.  ‘We’ve learnt that having a centrally-based international team is a positive way for our company to grow. It improves the flow of creativity and new ideas and information, and ensures that everyone stays focused.  In our current situation, this could be difficult to maintain if we had several regionally-based offices. The important thing is that we are adaptable to our human resource needs,’ says Sebastian.

Internationalization strategies need to be well thought out, and should be prepared in advance so that problems, IT issues and poor managerial decisions can be avoided. Remember that all areas require attention, and it is especially important to consider the right payment methods and marketing strategies. When all aspects are synchronized effectively, internationalization can offer your company a lot of opportunities for growth and prosperity.