Ethan Beardsley

Recent market research have shown that Facebook is rapidly becoming one of kid’s preferred gaming platforms.  Farmville and Cafe World are now among the top ten preferred games of kids 7 to 10 in France.

Beyond stating the obvious fact that the popularity of Facebook with the under 13 crowd shows that it is in clear violation of both its terms of service and US COPPA legislation, I thought it might be interesting to share a couple of thoughts on the difference between social gaming networks and kid-focused virtual worlds based on the experience we’ve had with Nooja.

Social games and kid-focused virtual share a strong gaming and social component but have radically different strategies on sharing of personal information. Social gaming is all about playing with people you know whereas virtual worlds are all about playing with people you don’t, may not or will never know. Social games are anchored in day-to-day social interaction with your friends whereas kid-focused virtual worlds are (generally) tightly moderated communities that prevent exchanges of personal information.

While preventing the sharing of personal information may seem like a daunting task in the Facebook era, I believe there are three areas in which kid-focused virtual worlds focusing on the protection of confidential info have a strong role to play :

First, safe havens need to exist in which parents can feel comfortable letting their kids interact. Parents can use filtering tools and spend time with their kids teaching them about safe conduct on the Internet but it’s also important to be able to propose safe, fun destination spots. Many parents understand this and are willing to pay for subscription-based services that provide this environment.

Second, moderated virtual worlds help educate kids about the risks of exchanging personal info with strangers. When we ban kids for exchanging personal info on Nooja, they generally come back to play with a new mindset and help create a community which auto-regulates itself. Creating an attractive, moderated destination is an opportunity to educate kids and create safer behavior which will (hopefully) be applied when they are in other environments.

Third, preventing exchange of personal information allows for a role play that isn’t possible with social networks. Players on Nooja are free to invent personalities for their avatars, to be someone they aren’t in daily life. Under the cover of their online persona, kids play in ways they cannot if they knew each other personally. They can dress their avatar as they want, they can escape from day-to-day existence and experiment with new social relations. By creating an environment in which their true identity is protected, kids are much more free to experiment, to create new personas and engage in the sort of role play which is an integral part of growing up…

Nooja, a music-based virtual world for kids and tweens I’ve been working on for the past two years, has a new website up where you can check out some of our content, storyline and screenshots. You can also sign up for the invitation only beta which will (hopefully) start middle of December.

The site is currently only in French. We’re working on getting out an English version early 2010.

In addition to its original artwork and sophisticated animation, Nooja innovates by its commitment to interactive story-telling. Each month, players will meet and interact with exciting, new secondary characters, explore uncharted territories, fight off the bad guys and progressively learn more about their new planet’s mysterious past.

The game was created and developed by Yamago, a Paris-based studio specialized in Flash. With ten years of experience in browser game development, they were able to bring the project in on time and on budget.

The game is produced and financed by Kazago, an independent online game publisher that I set up in April 2008. We intend to roll Nooja out to most international markets by end of 2010… so stay tuned.

As a first time digital startup CEO, I spend a lot of time reading blogs which share experiences and best practices

One of the blogs that I’ve found most interesting is Eric Ries’s Lessons Learned blog.  While a lot of the stuff is pretty technical (Eric’s a former CTO), I’ve found that he’s established a very clear, pragmatic framework for thinking about the best way to build a lean startup.

I also find a lot of Eric’s examples quite relevant because he often refers back to his experience at IMVU, a teen virtual world with a strong UGC component. This means that he has applied a rigorous  development process to a content-driven B2C product which addresses a pretty fickle demographic.

The foundation of Eric’s model is built on the agile software development model whereby you build quickly, release and iterate rapidly in order to incrementally improve the product based on customer feedback. The strength of this model is that it harnesses the essential power of the Internet. You can ship an imperfect product and improve it in real-time based on customer feedback. You’re spared the educated guess on what your consumers will adopt (no costly focus groups and market surveys…) and you don’t start marketing the product until you’re sure you’ve got your addressable market nailed down and you know how to make consumers pay for your product.

As we work on getting ready for the Nooja launch, I refer back to this model which is full of promise for the content and videogame industry. The entertainment industry is notoriously hit-driven and success is very difficult to predict. If you can combine creative excellence and innovation in the pre-launch phase with a humble, agile and community-driven post-launch improvement phase, you significantly reduce the level of risk associated with investments in digital content.

Internet adoption by kids continues to grow. The 2008 EU Kids Online report shows that 75% of kids 6-17 are internet users.The UK, the Netherlands and Nordic countries all have usage rates that are above 90%. Adoption is also taking place younger and younger. 60% of EU kids 6-10 are online and penetration rates are now in excess of 80% in the most advanced countries.

This trend brings a couple of ideas/reflections on creating a safe internet experience for kids:

1. Kid’s usage is very difficult to control. Some parents of younger kids are starting to use filtering software but adoption is not yet widespread. The key to online safety is probably parental involvement, education and making sure that attractive and appropriate content is available online for kids. Anecdotal evidence suggests that more and more parents are actually sharing and interacting with their kids online. I hear lots of stories about families playing MMORPGs like World of Warcraft together.
2. Creating “destination sites” for kids is helpful but not sufficient. The US Children’s Online Privacy Protection Act  (COPPA) imposes strict guidelines for the collection of personal information from kids who are less that 13 years of age. Such guidelines have probably helped define an industry of kid-focused virtual worlds and communities like Club Penguin but the reality is that it’s pretty difficult to create a walled garden. Facebook or Habbo have huge appeal for younger kids… they are theoretically in conformity with COPPA because they ban kids less than 13 years of age but there’s little that the sites can do to prevent an 11 year old with a valid personal email address from registering on the site.
3. Financing internet content requires adoption of pay models. If you let your kid surf online for free, he will necessarily be much more solicited than if he’s in a premium pay environment. The success of many kid-focused freemium virtual worlds like Club Penguin or Webkinz suggests that parents are increasingly recognizing this.
4. Producers who create content which can appeal to kids need to make sure their site is safe regardless of age or registration procedures. The real sweet spot for online content producers is “online family entertainment” : web content that is safe, appeals to both kids and parents, creates opportunities for family interaction and that can be monetized without advertising.

This is a very interesting  presentation on gaming startups from a European perspective. Jussi focuses on a lot of the funding strategies I’ve been learning about during the past 18 months with Nooja. The comments about the public funding process really hit home and it was interesting to see how close they are to our experience in France with the CNC production advances and government tax credits. Jussi also discusses lean startups and the importance of interacting with your consumer very early. We’re thinking about getting the big picture right for our September launch but we realize they’re will be a lot of tweaking to do. Our question always has to be is it “good enough”?

This isn’t a new video but it’s a great reflection on the expectation of kids for both entertainment and education. Marc Prensky, the inventor of the term digital natives, said it no differently : “Our students are no longer “little versions of us” as they may have been in the past. In fact, they are so different from us that we can no longer use our 20th century knowledge or our training as a guide to what is best for them educationally”.

There’s been a lot of talk in both the US and Europe about e-learning. The US now seems to be moving forward with lots of hardware investment but one of the issues that doesn’t seem to be particularly well thought out is the software side, particularly for the younger kids learning basic writing, reading and math skills. Videogame producers and educational publishers still haven’t made much investment in this area. Family entertainment specialists like Viacom or Disney have some initiatives which focus on preschoolers but most of the product out there isn’t rigorous enough to truly support an integrated e-learning process. There’s a strong opportunity in this area that some companies like Dreambox are looking to seize.

Eric Ries evangelizes about lean startups using his experience at IMVU, a virtual world focusing on teens and young adults. Eric focuses particularly on getting the product out quickly and cheaply, split-testing, customer feedback and continually releasing small improvements.

This notion highlights one of the things I find to be so interesting about online gaming. Contrary to the film or videogame industry, your success does not ride on the sales numbers of the first two weeks.

Instead it’s all about releasing an initial product, building a community of core users, understanding their reactions and behavior and gradually improving the product. Your product will probably have issues at first but, if you have a coherent, rigorous method for improving it, you will get there. The biggest error would be to spend years and millions of dollars in product development before getting a conversation started with your users.

Production of Nooja, our virtual world, has been done on a reduced budget and tight timeline. When we release, we will need to continue to apply lean startup principles : testing, improving and retesting as rapidly as possible…

The economics of producing content for the Internet mean that you have to be low-cost, experimental and quick to adapt to feedback from your users. Multi-million dollar investments in TV animation are probably very risky if you’re investing on new franchises.

It’s interesting to see new virtual production studios like Israel-based Aniboom evolving as cheap(er) platforms for content innovation.

If you can produce quality short-form content for the web, it’s pretty easy to get a quick consumer response before starting development of more costly, long-form content. Traditional studios are starting to get it. Fox has just recently announced a crowd-sourcing deal with Aniboom to try to discover the new Simpsons.

Great excerpt from a TED talk of Peter Hirschberg that was picked up by Fred Wilson. Tough days to come for traditional broadcast TV…