Virtual World Law Blog

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Piracy battle goes to CES, Wikipedia may join SOPA protest, Google social search faces privacy concerns

A contentious battle over Internet anti-piracy legislation shifted from Washington to the Consumer Electronics Show, The Washington Post reported. The Consumer Electronics Association, which is behind the show, has been a vocal opponent of the two bills circulating in Congress that would help Hollywood titans, record labels and pharmaceutical firms enforce copyright infringement laws online.

Mobile virtual currency market to hit $4.8bn by 2016

In fact, a study released yesterday from Juniper Research predicts that the amount of money being spent on virtual currency in mobile apps is going to more than double in the next four years, going from $2.1bn last year to $4.8bn by 2016.

Bethesda Buys Interplay's 'Fallout' Rights, Ends IP Suit

Interplay Entertainment Corp., original developer of the "Fallout" line of video games, on Monday forfeited its rights to continue work on the series -- resolving a trademark dispute with former business partner Bethesda Softworks LLC.

Domino's Pizza uses augmented reality offers to boost food sales

Domino's Pizza, which has already been testing the waters of mobile marketing for some time now, has started a new campaign that includes the use of augmented reality, to add a whole new dimension to its latest 555 pizza offer.

CES: Better augmented reality with high-tech contact lenses

Augmented reality has made progress on smartphones, with apps letting people layer information and graphics over a view of the real world. A startup from the Seattle region is looking to take the next step toward an AR future with special contact lenses that make it possible to view objects projected onto glasses a short distance away from the eye.

Banks start playing games with your money

A new video game has gotten its hooks into Brian Kealer, a 26-year-old San Francisco software engineer. He's not killing birds or using his vocabulary to impress his friends. No, Kealer is after real prizes, like the iPad2 he just scored. And he's playing with his bank account. 

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A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

From the Supreme Court to Anonymous, 2011 was a transformational year for games

It's no exaggeration to say that 2011 was a transformational year for the game industry. As the game industry's trade group chief, Michael Gallagher, said, "The word 'historic' is overused, but as we look back on 2011, it is a perfect fit for our industry's year." Here's a recap of 13 events that made this such a big year for games.

Viacom Owes Additional $383 Million in 'Rock Band' Video Game Dispute

After already paying $150 million to former shareholders of Harmonix, arbitrators have determined that Viacom owes an additional $383 million to the video game company that created Rock Band, according to a regulatory filing on Tuesday.

New Wave of Hacker Attacks Coming

Virtual currency, sometimes called cybercurrency, has become a popular way for people to exchange money online. These online "wallets" are not encrypted and the transactions are public, making them an attractive target for cybercriminals. There have already been attacks directed at users of Bitcoin, one of the largest virtual currencies, said Dave Marcus, McAfee's director of advanced research and threat intelligence. "Our concern isn't confined to Bitcoin. Virtual currencies seem almost designed to attract hackers," he told me.

5 social network predictions for 2012

Facebook is the power hitter in social networking today, and is likely to drive the most activity and a fair share of the innovation in social networking in 2012. But it's not the only company driving things forward. Here are five ways social networking is likely to play out in the coming year.

Welcome to the future: We predict big trends in social games for 2012

Now it's that time of year that we, once again, reshuffle our tarot decks and see what the next 12 months will hold for games of a social nature. And, even if the Mayan predictions about the world ending in 2012 prove true, that won't happen until December -- so everyone has plenty of time to get this stuff in under the wire.

Virtual Reality Treadmill

Some of us prefer running outdoors simply because it offers something different for the eyes (and senses), instead of pounding it on a treadmill like a hamster in a gym. Of course, there are others who do it right from the comfort of their home, and there are also some pros to offset the cons - you definitely lower the risk of being robbed, and neither do you need to sacrifice your morning run whenever the skies open and start to pour. With the $2,000 Virtual Reality Treadmill, you will be able to enjoy the best of both worlds.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Virtual Justice

Rutgers University law professor Greg Lastowka looks at whether players can and should be granted legal ownership of virtual items, whether or not there's any existing legal precedent and how the virtual item landscape may change in the near future.

Italian court: Online editors not responsible for reader comments

Online commentators Wednesday welcomed a ruling by Italy's highest court that the editors of online publications cannot be held legally responsible for defamatory comments posted by their readers. In a ruling handed down at the end of October, the Court of Cassation acquitted a former online editor of L'Espresso news magazine of the crime of failing to prevent defamation committed by one of her readers.

OUII Seeks Clarity On 'Process Of Establishment' Claims

The U.S. International Trade Commission should review a recent finding in a video game patent infringement case and clarify how to determine if a domestic industry is in the process of being established in Section 337 cases, the ITC's Office of Unfair Import Investigations said in a petition publicized Tuesday.

Germany's Merck wants Facebook page back

Germany's Merck KGaA has threatened legal action after it said it lost its Facebook page apparently to rival Merck & Co. in the U.S., though it has yet to identify defendants in the case.

Virtual World Startups Seek Refuge From Patent Attacks

The developers behind the next evolution of the Internet -- linked, immersive, 3D environments -- are trying to think of ways to minimize the adverse impact of software patents on their industry.

Social media in for worse cyber attacks in 2012

Social media sites and cellphones will prove to be fertile grounds for cyber criminals to exploit globally important events in 2012 to steal personal information and data and make financial gains, cyber security firm Websense has said. The Websense document, " 2012 Cyber Security Threats," has said identity information posted by users of sites such as Facebook, Twitter or LinkedIn may prove more valuable to cybercriminals than even credit cards.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

U.S. virtual goods revenue on Facebook to grow 32 percent to $1.65B in 2012

That growth rate is lower than the 40 percent growth for 2011, as the market analyst firm predicts that revenue this year is growing from $800 million in to 2010 to $1.25 billion by the end of 2011. While that is rapid growth, it shows that the fast-growing virtual goods and social gaming industries that use it are maturing and slowing down.

SecretBuilders Passes 5 million Member Mark, Makes Parents Magazine's Top 10

SecretBuilders, a game world for children with an emphasis on creativity and historical adventure, was selected by Parents Magazine, the leading parenting magazine in the world, as one of the Top 10 kids' websites for 2011, alongside PBS Kids, National Geographic's Animal Jam, Nickleodeon's Monkeyquest, and Pearson's Poptropica.

Online gamers crack AIDS enzyme puzzle

Online gamers have achieved a feat beyond the realm of Second Life or Dungeons and Dragons: they have deciphered the structure of an enzyme of an AIDS-like virus that had thwarted scientists for a decade.

Facebook Changes The Social Networking Game... Again

Today at their annual F8 conference Facebook announced some dramatic changes to its platform. But this time it's different. Why? Because the big social networks (i.e. Facebook, Twitter, MySpace, and now Google) have traditionally battled over the social graph - your relationships in the digital world and how to help build and connect them, but now Facebook is laying claim to your life.

Dangerous Intersection Of Mobility And Credit

There's a 2011 version of the birthday cakes, mugs of beer, and other gifts Facebook used to let us "buy" for our friends. Since July 1, Facebook has required all game developers that receive payments through the site to use Facebook Credits for the transactions. When developers go to convert Credits into cash, Facebook gets a cool 20% cut.

Clarins Gets into Social Gaming on Facebook

In a seemingly unusual move for a cosmetics company -- not to mention a French one -- Clarins launched a casual game on Facebook earlier this week called Spa Life.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Video Game Targets 'Tea Party Zombies,' Fox News Personalities

A New York-based video game developer has set his virtual crosshairs on Republican and conservative political figures in a game called "Tea Party Zombies Must Die," which allows players to indiscriminately slaughter politicians like Michele Bachmann, Mike Huckabee and Sarah Palin.

Red Robot Launches Life is Crime Game With Location-Based Play

There's got to be more to location-based mobile games than checking in. That was the thinking behind the game startup Red Robot Labs and its first game, Life of Crime. Life of Crime uses what Red Robot believes is going to be its critical asset: the R2 Gaming Network platform for making location games.

Can Gamification Help Solve the Online Anonymity Problem?

There's been a lot written recently about the issue of online anonymity, and in particular how Google believes that a "real names" policy is necessary so that the Google+ network maintains a certain tone and level of trust.

Amazon Gets Serious About Social Games, Calls Out for Developers

The Facebook gaming arena is about to welcome a new gladiator: Amazon. The household name of online retailers (and e-readers) is officially pulling out all the stops for its inevitable entrance into the space, openly and internally calling out for a team of designers and developers.

Most Bosses Monitor or Block Social-Network Use At Work

Viruses, loss of confidential data and fear of employees tooling around doing sweet FA on Twitter are the top reasons that employers give for putting the brakes on social media in the workplace. And it's stopping them benefiting from new collaborative technologies, says ClearSwift Research.

Social Gaming Startup Guerillapps Launches First Green-Theme Upcycling Game on Facebook

Guerillapps, a Manhattan-based social gaming startup, today announces the launch of Trash Tycoon, its first green-theme social game for Facebook. The game is now available for play and takes a unique approach to social gaming by incorporating awareness for environmental issues and sustainability. The first game to ever highlight the concept of upcycling, Trash Tycoon is an immersive, fun game that presents opportunities for real-world impact.

Your Virtual Cow Could Be Worth $0

Fans of SuperPoke! Pets were crushed recently when Google announced it was pulling the plug on the game. Google killed off all but one project from social app maker Slide, which it bought last year for around $200 million.

On September 15 & 16, join industry titans such as Sony, SalesForce, Zappos, and Adobe at the GSummit in New York City. GSummit NYC will show attendees how to use the power of games to create breakthrough engagement with their customers and employees. Companies like Gilt Groupe, Google, NBC/Universal, MTV, Recyclebank and Aetna have leveraged gamification to transform their businesses, and will share startling insights, statistics and hands-on workshops at GSummit NYC. Check out some of the amazing content and speakers. Register now before GSummit sells out.

Jim Gatto, Leader of Pillsbury's Virtual Worlds & Video Game team and Social Media, Entertainment & Technology team will be speaking from 1:30 - 2:15 PM on September 15 about gamification law and a formula for success.

Earlier this year, Jim spoke at the Gamification Summit held in San Francisco. His presentation on managing legal risk in gamification can be viewed below:

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

LinkedIn's 2Q Earnings Soar as Growth Accelerates

The results announced Thursday provided the first update on LinkedIn's progress since the company's headline-grabbing initial public offering in May. LinkedIn's shares have more than doubled from their IPO price of $45, stirring a debate about whether investors are overvaluing Internet companies. LinkedIn earned $4.5 million, or 4 cents per share, in the April-June period. That contrasted with earnings of $938,000, or 2 cents per share, at the same time last year.

Controversy Erupts Over SpotON3D's Patent Claims

Competing OpenSim hosting companies are concerned that SpotON3D's viewer plugin patent isn't original, will hinder innovation, and that the company isn't playing fair with the broader open source community. Other developers, however, say that SpotON3D's innovation can help energize OpenSim adoption -- and the patent, if it is granted, may not be that burdensome to the community.

Diablo III Will Have Real Money Auction House

For as amazing as Diablo II was, the economy was rather quickly ruined by the sale of virtual items. Most of the better loot required a significant time investment - or luck - so many players naturally flocked to the more convenient option. Blizzard, being the savvy developers that they are, has come up with a work-around for that: A flood of reports are coming in that Diablo III will feature an in-game auction house that will allow you to sell and buy virtual items (including virtual currency) for real cash.

EA Chief Vows to Keep Up With Big Changes In the Video Game Industry

Electronic Arts chief executive John Riccitiello said in a conference call today that the video game industry has fundamentally changed as gamers embrace new digital alternatives to console games - from mobile games to social games. And, he said, EA's strategy is changing with it.

SAP Launches The Ultimate Travel Challenge Dashboard

I find the concept of gamification fascinating so when I heard that a fellow team at SAP was launching a game to showcase one of the company's solutions it peaked my interest.  The game was built on SAP Crystal Solutions and showcases how the product can help your business by simulating the pressure of making informed decisions in a face-paced environment.

Augmented Reality Kills the QR Code Star

Augmented reality leader Layar just took its system to a whole new level by installing a real-world object recognition protocol that's a little like Google's Goggles. In one swoop it may have turned AR apps from intriguing, inspiring, and occasionally useful toys into serious tools for information discovery and, of course, advertising. Let's call it hacking the real world.

PayPal: 12M Monthly Users Are Paying For Virtual Goods

PayPal, which collects a lot of data on online payments, says the monetization of digital content has come a long way since the company was launched in 1998 and sold to eBay in 2002. Now it generates more than $1 billion in quarterly revenue and has more than 100 million active users.

Socialnomics on where social media is and where its going.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

EBay Rings Up Mobile Payment Outfit For $240M

EBay Inc. unit PayPal will beef up its position in the online payment market with the $240 million purchase of mobile phone payment specialist Zong, as big online merchants continue to snap up upstarts in the world of virtual commerce.

The Metrics Are the Message: How Analytics is Shaping Social Games

The freemium gaming business is expanding rapidly. We all know about the Facebook behemoth Zynga, which now claims over 250 million monthly players, and is valued at anywhere between $5-10bn. But online, there are dozens of global companies hawking a range of in-depth gaming experiences.

Online Consumers Willing to Pay Premium for Net Privacy

Online consumers thought to be motivated primarily by savings are, in fact, often willing to pay a premium for purchases from online vendors with clear, protective privacy policies, according to a new study in the current issue of a journal of the Institute for Operations Research and the Management Sciences.

Could Google+ Be the Best Social Network for Your Career?

Barely two weeks old, Google's new social network, Google+, is already scrambling the social media hierarchy. One of its key features -- that your professional and personal lives can go their separate ways -- helps solve a key Facebook drawback.

BizRocket.com, Inc., projects $50 Million Revenue

According to eMarketer worldwide social network spending is expected to reach $6 billion this year. The social networking market for kids age 13 and under is estimated at over one billion ($1,000,000,000) dollars per year and rapidly growing. BizRocket.com, Inc., is committed to earn a significant share of that revenue stream for shareholders and provide a safe Internet experience for pre-teens. BizRocket.com, Inc., projects annual revenues to exceed $50 million by third year of full operations.

Electronic Arts To Pay $750M for PopCap Games

Electronic Arts Inc. said Tuesday that it will buy PopCap Games for at least $750 million in a bid to snag a larger piece of the rapidly growing market for games on cell phones and social networks.

Badgeville Raises $12M to Lead the Way in Gamification

Gamification startup Badgeville has raised $12 million in a second round of funding to add game-like features to non-game applications.

Many people invest significant time, effort and in some cases real money to acquire virtual goods. There is great perceived value in these virtual goods. But there are a growing number of cases, where users have been the subject of hacking and other situations where they have had their virtual property stolen. See for example our prior blog entry on a massive theft of 400 billion poker chips from Zynga users.

Most game and virtual world operators try to shield themselves from claims of loss by their users through effective legal strategies embodied in their terms of service. In most cases, users are only granted a license to use the virtual goods, but they do not own them and the terms often make clear that there is no independent value to goods. Additional disclaimers and liability avoidance language may also be included. Yet, this has not stopped some users from suing for the loss of the perceived value of their virtual goods.

Given these potential claims, what else can companies do to protect themselves from such risks? Apparently, this risk may now be insurable - at least in China - thanks to a collaboration between Sunshine Insurance Group and Gamebar.  According to a report, by China Daily a Sunshine Insurance spokesperson said "The insurance will help to reduce operating risks for online games companies as the companies which purchase the insurance will be covered to compensate customers in the event of lost or stolen property."

It will be interesting to see if that catches on in the US and elsewhere, and if so, what will be covered and what will not. Check back for updates.

On of the announcements coming out of E3 is that GameStop and Virgin Gaming have formed  a partnership to power online video gaming tournaments. According to the announcement, Virgin Gaming will be:

The preferred online tournament provider for featured console game releases sold in U.S. GameStop locations and through GameStop.com. GameStop will offer publisher partners unique, large-scale online tournaments to help market, sell and create deep player engagement for their games. GameStop customers will have the opportunity to win cash and incredible prize packages through the GameStop/Virgin Gaming tournaments, in addition to Virgin Gaming credits redeemable for games and other merchandise.

As online gaming continues to grow, companies are seeking various ways to create ancillary revenue and drive user engagement. Tournaments can be one way of doing that. Tournaments, if done right, can be legal. However, there are a number of legal considerations of which companies must be aware to avoid running afoul of various laws.

Recently the controlling interest in Playtika Ltd., the Israeli social and casual game development company behind the Facebook games Slotomania and Farkle Pro, has reportedly been acquired by Caesars Entertainment Corporation for approximately $90 million USD. 

Playtika was founded in late 2010 and since then has garnered around 9 million users.  Playtika's games, Slotomania and Farkle Pro, are modeled after a slot machine and ancient dice game, respectively.  However, unlike Caesars Entertainment's real life casino games, Slotomania and Farkle Pro are free to play with a "virtual currency" transaction option.  Caesars Entertainment has stated that "[w]e have made a strategic investment in Playtika and look forward to working with their strong, experienced management team in developing free-to-play social games globally."

From this, it would seem that Caesars Entertainment wants to build an online brand and obtain expertise in managing an online gaming property, possibly with an eye to creating synergy between its offline properties and its new online brand.  Additionally, this would likely serve Caesars Entertainment well if any of the current Federal or State-specific proposals to legalize online gambling are successful. 

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

BIA/Kelsey Forecasts Social Media Ad Spending to Reach $8.3 Billion in 2015

Social media advertising revenues will grow from $2.1 billion in 2010 to $8.3 billion in 2015, representing a compound annual growth rate of 31.6 percent, according to BIA/Kelsey's U.S. Local Media Annual Forecast (2010-2015).

YetiZen Starts an Incubator for Game Startups

The game industry is hot, with lots of companies chasing the success of social game darlings such as Zynga and mobile game successes such as Ngmoco. That's why YetiZen is forming a new incubator to help launch game startups.

Gamification: Hype or Game-Changer?

Gamification is already shaping up to be one of the buzzwords of 2011. Educators, brands, charities and government are all looking at how to use gamification to improve engagement, make money or change behaviors.

Virtual Currency Lifts Social TV Guide to New Heights

With new startups jumping into the fray, the social TV space is suddenly very competitive. But one site is celebrating its third anniversary today with two big milestones. The internet TV guide Yidio said it hit 1.5 million registered users and 500,000 Facebook fans, making it the most popular social TV guide on Facebook.

Network Breaches, Social Media, Smartphones Worry Administrators: Survey

In the latest What Keeps Network Administrators Up at Night survey from Amplitude Research, 41 percent of respondents named security breaches to their network and another 40 percent said they are worried about what their end users are doing.

How to Use Game Mechanics to Reward Your Customers

Your customers hoard airline miles and covet their status-symbol black American Express. What was once called "consumer incentives" is now known as "gamification"--and here's how to integrate it into your company and win consumers' hearts and minds while you're at it.

U.S. Military Finds More Uses for Video Games, Virtual Worlds and Smartphones

Video games, virtual worlds and smartphones are an excellent way to train U.S. troops, say advocates of the technology within and outside of the military. Evidence of the growing interest in the technology can be seen from a recent GameTech convention held in Orlando, Fla. GameTech had 775 participants and 29 vendors.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Is Online Poker Over?

This week, the FBI landed a crushing blow on all of the online poker sites that are advertised nightly in the United States. Individuals involved with internet gambling companies PokerStars, Full Tilt Poker and Absolute Poker were indicted for bank fraud, money laundering, and illegal gambling and sued in a companion civil suit that seeks at least $3 billion in forfeitures and penalties.

HP Rolls Out Virtual Banking With Avaya's Web.alive

Building on HP's Unified Communications and Collaboration Services portfolio for the enterprise, HP and Avaya today announced a strategic offering that provides banks with a customer-centric, humanizing element for assisted self-service.

What Effect Has the Internet Had On Religion?

The concept of religious ritual is so deeply embedded in our social fabric that it is natural for it to have made the leap to virtuality. And it hasn't just reared its head in worlds such as Second Life. Social networks, including Facebook, have active and close-knit communities of religious followers of all creeds, gathering in what science writer Margaret Wertheim described in her 1999 book, The Pearly Gates of Cyberspace, as "a new kind of realm for the mind".

Hackers Go After Points, Credits, and Virtual Currency

Virtual thieves can sell stolen points in online forums or on eBay, or they can try to exchange points for rewards. However, most online retailers, social media, and gaming websites recognize the thieves' behavior patterns when cashing in stolen points. By analyzing the history of the device being used to access a website, the website's operator can prevent fraudulent transactions.

Social Gaming on Track to Become $5 Billion Industry by 2015

Parks Associates, an internationally recognized market research and consulting company specializing in emerging consumer technology products and services, forecasts revenues in the social gaming market will increase by five times from 2010 to 2015, due in large part to advertising revenues and sales of virtual items. These factors already pushed revenues over $1 billion in 2010.

FNB's eBucks Buy 19 Million KMs of Fuel

In December 2009, members of eBucks, First National Bank's rewards programme, were given the ability to pay for fuel with eBucks, FNB's virtual currency, at participating Engen service stations around South Africa. Since then, FNB has enabled eBucks' members to fill up on fuel to the value of over R13m at participating Engen service stations - which is enough fuel to drive almost 20 million kilometres or - more accurately - to make 25 trips to the moon driving an average family sedan.

IU Shares $297,929 NSF Grant to Study Use of 3D Virtual Worlds

The National Science Foundation has awarded $297,929 to a multi-disciplinary team from Indiana University and Arizona State University. The award supports on-going research concerned with the use of computer-generated 3D virtual environments by business and educational enterprises.

Virtual Currency Drawing in More Viewers

Virtual currency isn't just for gamers any longer. New data from Jun Group indicates that video viewers are also interested in virtual currency. According to their report on incentivized social video, virtual currency is pushing consumers to watch more video content in the social space.

Many nonprofits are using social media to create awareness of their cause, raise funds, develop closer connections with existing constituents and engage with new ones.

On April 14, 2011, at The Kreeger Museum in Washington, DC, Jim Gatto delivered a compelling presentation on top social media legal issues targeted to nonprofits. His presentation explored examples of how nonprofits are using social media today, including a focus on virtual goods, virtual currencies and gamification and the associated legal issues. For a copy of his presentation, please click here.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Sony Settles With Alleged PlayStation 3 Hacker

Sony Computer Entertainment America LLC said Monday it had resolved its breach of contract and copyright infringement suit against alleged PlayStation 3 hacker George Hotz, ending a brief but contentious battle in California.

Virtual Real Estate Selling for Millions

Real estate records come and go with startling frequency and this $US6 million (NZ$7.65 million) sale might not sound like much of a record, until you find out Planet Calypso is a fictional place on the Entropia Universe social gaming site.

Could Virtual Currency Become King in Developing Countries?

Hot on the heals of my post (Brendan Burge) about a virtual currency calledBitCoin, I have uncovered another rather surprising new paradigm. It would seem that increasingly people in Third World countries - what I prefer to call developing countries - are making a living by performing "micro-tasks" in the virtual economy.

PCS Holds World's First International Virtual Easter Egg Hunt

"When we say 'Easter eggs,' we mean just that," says John Barnhart, lead developer at PCS. "The term 'easter egg' has come to mean an intentional hidden message in a computer program. Well, these Easter eggs really are Easter eggs! You know, those boiled chicken ova decorated with food coloring that children hunt for in hopes of scoring some chocolate."

Gamification: CIOs Told to Get On Board

Gamification, the process of applying gaming techniques to the workplace, is set to become a mainstream approach in large organisations, according to analyst firm Gartner.

"Digital Goods" Fraud is Big

The Wall Street Journal reports that digital items within games and social networks accounted for $2.2 billion in sales in 2009, and are expected to account for $6 billion in sales by 2013. Billions more are spent on music and other downloadable digital media.

Baidu Signs with Facebook to Establish a New Social Networking Site

This week, tech and financial blogs were buzzing with the purported Baidu-Facebook deal, announced by Chinese web portal Sohu.com.

By 2015, Over 50% of Organizations Will Gamify Innovation Processes

By 2015, more than 50 percent of organizations that manage innovation processes will gamify those processes, according to Gartner, Inc. By 2014, a gamified service for consumer goods marketing and customer retention will become as important as Facebook, eBay or Amazon, and more than 70 percent of Global 2000 organizations will have at least one gamified application.

GoldRun Leverages Augmented Reality for Mobile Marketing

Vivian Rosenthal once wrote an architecture masters thesis on the intersection of the physical and virtual worlds. Now, the New York entrepreneur is mining that intersection for profit with a start-up that's getting attention for the way it uses augmented reality to create marketing campaigns that end in real-world rewards.

American Express today unveiled Serve, a digital payment and commerce platform that gives consumers a new way to spend, send and receive money with services that go beyond the existing global payment networks. Some interesting points from the press release issued today include the following:
 

• With Serve, consumers can make purchases and person-to-person (P2P) payments online (serve.com), via mobile phones, and at millions of merchants who accept American Express cards. Serve unifies multiple payment options into a single account that can be funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account.
• Serve accounts can be accessed via Serve Apple iOS and Android applications, at Serve.com and through Facebook. Through Serve, American Express aims to expand into new segments of the market that do not rely on traditional charge and credit cards to manage their day-to-day finances.
• Consumers set up an online account at Serve.com or through a smartphone app. Funds can be added from bank accounts, debit cards, credit and charge cards, or other Serve accounts. Customers can use those accounts to send and receive money to friends, pay bills and make purchases online. Serve bridges online and offline commerce - each customer will be issued a Serve reloadable prepaid card linked to their Serve account that can be used at any merchant or ATM that accepts American Express cards. 
• Serve offers users the ability to easily create, manage, and specify sub-accounts for their friends, family members or colleagues. Sub-accounts are linked to the master account and allow users to set spending profiles for everything from children's allowances to dog walker fees.
• Serve is partnering with five major charities - Autism Speaks, Best Friends Animal Society, Malaria No More, Save The Children and Stand Up For Kids - to enable each organization to raise funds via a donations widget. Widgets can be downloaded on Serve.com and at facebook.com/paywithserve, and shared on other Web sites, including Facebook, to encourage donations. Serve will match all contributions via the widget up to $100,000 for each charity.
• In the coming months, Serve will offer selling widgets that give customers the ability to sell items through their own social networks. 

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Disney Buys Social Networking site Togetherville

Togetherville, designed for children under 10, adds to Disney's stable of Internet properties including social gaming company Playdom and mobile application developer Tapulous.

Gamification and Avoiding the Fate of ARGs

Supposedly, there's much that can be done with gamification to build deep engagement with users. Games can enhance lives. Everything can become a game, from work to social causes, education and art.

Virtual Reality Technology at City Tech Lab

New York City College of Technology (City Tech) yesterday inaugurated a new state-of-the-art psychology research laboratory, the first such facility in the college's history.

There's a Bigger Mistake You Could Make Than Offending the SEC

Opinions on how advisors and their vendors should approach social media abound. It's an interesting topic. But, perhaps because of the focus on compliance, some basic issues haven't been addressed in-depth. You might wonder: "Why the heck did Twitter get popular? What can it actually do for me? Should I just pipe my regular marketing materials into these new networks?"

Snooping on Social Networks to Vet Jurors and Hire Employees

While attorneys use Facebook and social media to vet jurors, some government agencies are demanding social network passwords from potential employees. Sometimes social networking comes back to bite you with privacy invasion.

Mobile Social Gaming Goes Mainstream

Sometimes it seems like the only thing that's permanent in the mobile industry is impermanence--the pace of innovation guarantees that nothing stays the same for very long. One exception is the enduring popularity of mobile gaming: From BlackBerry staple Brick Breaker to blockbuster du jour Angry Birds, the titles may change, but consumer interest in gaming remains intact.

hi5 Announces "Sociopay" Advanced Monetization Platform

hi5, one of the world's leading platforms for social games, today announced the launch of the SocioPay monetization platform designed to maximize revenue for social games. SocioPay

dynamically determines the optimal monetization solution for every commerce opportunity, including identifying players who are less likely to purchase and offering advertising as an alternative to traditional payment options.

MocoSpace Launches $1M Mobile Game Developer Fund

Mobile social network MocoSpace is launching a $1 million HTML5 Mobile Game Developer Fund to accelerate the development of games played on smartphone browsers.

Congressman Edward J. Markey (D-Mass.), a senior member and former chairman of the Energy and Commerce Committee's Communications, Technology and the Internet Subcommittee, sent a letter dated February 8, 2011 to the Federal Trade Commission (FTC) requesting more information about possible consumer protection issues related to "in-app" purchases, particularly relating to kids.
 
The following is excerpt from the letter:

"I am disturbed by news that in-app purchases may be taking advantage of children's lack of understanding when it comes to money and what it means to 'buy' an imaginary game piece on the Web.  Companies shouldn't be able to use Smurfs and snowflakes and zoos as online ATMs pulling money from the pockets of unsuspecting parents.  The use of mobile apps will continue to escalate, which is why it is critical that more is done now to examine these practices. I will continue to closely monitor this issue and look forward to the FTC's response."

Click here for a copy of the letter

It is important for companies to understand the potential legal issues with innovative business models and to ensure clarity so that consumers understand

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Don't Buy and Sell Pokemon Data In Japan

Japan is going a bit copyright crazy of late. It's not cool to sell customized figures online, it's not cool to rent video games in love hotels, and now, it's apparently not cool to sell Pokémon save data.

Lessons of the NBC Agreement With Battlestar Galactica Fans

NBC / Universal has agreed to let Battlestar Galactica-themed roleplay sims continue in Second Life.   They too had been issued a cease and desist order through a DMCA (Digital Millenium Copyright Act) order.  In their case, the order was arguably even more serious - filed against Linden Lab itself, resulting in the closure of several Battlestar-themed sims and even the confiscation of content..

Wannabe Cool Kids Aim to Game the Web's New Social Scorekeepers

Today, a new generation of VIPs is cultivating coolness through the world of social media. Here, ordinary folks can become "influential" overnight depending on the number and kinds of people who follow them on Twitter or comment on their Facebook pages.

Guitar Hero Video Game Series is Axed by Activision

Activision Blizzard, which makes the Call of Duty and World of Warcraft series, says it's ditching the franchise because "the popularity of music-themed video games has faded".

Social Gaming Market Value to Approach $4 Billion by 2015

The global social gaming market's value will grow by 166 percent from $1.5 billion in 2010 to almost $4 billion by 2015, according to a recent forecast by analyst firm Business Insights.

Visa Acquires Playspan

Pushing into the virtual goods space, payments giant Visa has acquired Playspan, which powers e-commerce for hundreds of online games and virtual worlds, for $190 million.

How Location-Based Services Changed Social Games in Asia

As social gaming on mobile devices continues to grow throughout 2010, so will the number of applications offering location-based services. But will 2011 be the year that location-based social games take off in the U.S?

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

UC Legend Sues NCAA Over Trading Cards

Oscar Robertson, former University of Cincinnati and National Basketball Association Hall of Fame inductee, has joined a class-action lawsuit against the NCAA for using his name and image without his consent.

CloudCrowd: An Assembly Line for Content

"We're doing to service industries what China did to manufacturing," CloudCrowd CEO Alex Edelstein tells me. CloudCrowd collects tasks from clients--currently translation and proofreading jobs--via its Serv.io site, and then distributes them to waiting workers via a Facebook app.

"CSI" Facebook Game Offers Bonuses for Watching the Show

Thursday night's episode of CSI will have something extra for fans of the show's Facebook game: clues to unlock in-game bonuses.

Hacker Steals $12M Worth of Zynga Poker Chips

29-year-old IT businessman Ashley Mitchell plead guilty to stealing $12 million worth of Zynga Poker chips in a British court yesterday, and is now facing a substantial jail term.

Internet, Social Media Make Their Mark in Egypt's Crisis

The political unrest exploding across the Middle East is just the latest illustration that social media is no longer just for teenagers to tweet about their lives, play Farmville, and post pictures from last weekend's party. Today, it has the potential to shake regimes and drive leaders from power.

Will Social Media Leaks Or Pokes Win Nobel Peace Prize?

Two years ago, the world wondered how a newly-elected president like Barack Obama could qualify and win the Nobel Peace Prize. Even the president questioned the honor. This year, that same president might also question why WikiLeaks is now a candidate for that same distinction.

Fire Up the Avatars - Educational Virtual World Curricula Launches

Today, WiloStar3D LLC announced a joint collaboration with Exeter Township School District- Reading PA, and Manhattan-Ogden USA, Kansas to pilot Avatar Storytellers, an Immersive Learning virtual world curricula for grades 5-7.

A UK court entered  a guilty plea against Ashley Mitchell, an IT guy who hacked into Zynga's servers last year and stole 400 billion virtual poker chips. His efforts to resell them, which is against Zynga's terms of service, netted him $86,000 and a yet to be determined jail sentence.

To avoid issues with the gambling laws, Zynga sells poker chips to users for real money (and in some cases to reward user actions), but prohibits any cash out or resale of the chips.

Zynga's Terms of Service states:

"Zynga owns, has licensed, or otherwise has rights to use all of the content that appears in the Service or the Zynga games. Notwithstanding any provision to the contrary herein, you agree that you have no right or title in or to any content that appears in the Service, including without limitation the virtual goods or currency appearing or originating in any Zynga game, whether earned in a game or purchased from Zynga, or any other attributes associated with an Account or stored on the Service.

Zynga prohibits and does not recognize any purported transfers of virtual property effectuated outside of the Service, or the purported sale, gift or trade in the "real world" of anything that appears or originates in the Service, unless otherwise expressly authorized by Zynga in writing. Accordingly, you may not trade, sell or attempt to sell in-game items or currency for "real" money, or exchange those items or currency for value of any kind outside of a game, without Zynga's written permission. Any such transfer or attempted transfer is prohibited and void, and will subject your Account to termination."

With respect to chip "purchases", Zynga states:

"The purchase of Zynga Poker chips from a third party seller is a violation of Zynga's Terms of Service. We are  not responsible for any losses incurred and will not restore chips.

The only safe method of purchasing our chips is directly through the application, via the Buy Chips tab."

As virtual currencies proliferate, it is important for companies to ensure that they think through their business models, develop and enforce effective terms of service and consider up front how they can use technological measures to deal with people who inevitably will try to beat the system. This requires a careful integration of business, legal and technical strategy.

For more information on legal issues with virtual currency, see Pillsbury's Virtual Currencies Overview.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Federal Games Warning Label Law Introduced to Congress

On Wednesday, U.S. Representatives Joe Baca (D-CA) and Frank Wolf (R-VA) introduced a bill called the Video Game Health Labeling Act that would federally mandate warning labels on a large subsection of video games.

LinkedIn IPO May Be First in Wave for Social Media

LinkedIn Corp.'s plan to raise as much as $175 million in an initial public offering may be the first in a wave of share sales for U.S. social-networking companies.

Facebook Plans to Extend Credits to Mobile Devices

Mobile devices will get access to Facebook's virtual currency system under plans revealed by the social networking website's head of international business development.

Gamification Coming to the 2011 Game Developers Conference

In a sign that it's becoming more of an issue for mainstream video game developers, the 2011 edition of the Game Developer's Conference is setting aside a day to discuss the topic of gamification.

SEE Acquires MindArk Virtual Planet, Design Studio for $6 Million

SEE Virtual Worlds, a developer of branded online virtual worlds, announced on Thursday that it has acquired Planet Calypso, the first virtual planet in MindArk's "Entropia Universe" massively multiplayer online role-playing game, for $6 million.

Virtual Goods! Virtual Currency! Virtual Output!

The Keiser report talks about what the economy of 2050 will look like.

Jermaine Dupri Creates 'Global 14' Social Network

The site, which is supposedly the "coolest, hippest city on the Internet," originally came to Dupri when he was the president of urban music at Virgin Records and working with longtime collaborator Janet Jackson on marketing her '20 Y.O.' album.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

On Microsoft and 'Contributory Cybersquatting'

A federal judge in Seattle on Wednesday issued an interesting decision concerning cybersquatting, the act of setting up sites with the intent of selling the domain names, or, more pertinently, setting up sites with URLs that are a typo or two away from those of popular sites.

Augmented Reality Ads on the Rise Around Europe

A growing number of European startups have taken to creating virtual experiences that double as commercials. But as this sector is rapidly expanding, challenges remain.

Augmented Hype? Mobile's Next Big Thing

Some executives in the mobile industry think AR will be huge. While revenues from AR alone amount to no more than a few tens of millions of dollars, that number is set to double annually to reach USD 350 million in 2014, according to New York-based ABI Research. The impact across the broader mobile and computer industry could be much bigger, convincing consumers to use their mobile devices even more than they already do.

Google to Launch Groupon Competitor

One of our sources has sent us a confidential fact sheet straight from the Googleplex about the company's new group buying service. "Google Offers is a new product to help potential customers and clientele find great deals in their area through a daily email," the fact sheet says.

U.S. Army Launches Social Media Handbook

The United States Army has officially announced the release of the 2011 Army Social Media Handbook, a document that's meant to offer social media guidance for soldiers, personnel and families alike.

Verizon Makes First Legal Challenge to FCC's New Net Neutrality Rules

Verizon has filed an appeal challenging the net neutrality rules that the FCC adopted last month, which aim to prevent Internet providers from blocking or slowing legal content.

Zynga Rolls Out RewardVille Virtual Currency Program

RewardVille, which went live in beta today, will "slowly roll out" to a small group of users in coming weeks. According to Zynga, the program works like this: Each time you play a participating Zynga game, you'll earn Zynga Points (zPoints) and increase your Zynga Level (zLevel). At every zLevel, you'll earn Zynga Coins (zCoins) to use on free, exclusive in-game items in RewardVille.