Thursday’s Business in Gaming conference, put on by MIT’s Sloan School of Management, showed me that gamers aren’t afraid to say what they really think. And that Facebook is really stirring debate in the industry, as it is in communication, commerce, advertising, and almost anything else we can think of. I caught a lot of candid comments from panelists, who represented all slices of the gaming industry: small indie startups, console developers, social gaming companies, big MMO players, VCs, and lawyers. Check below for a rundown of some of the points that really struck me.

—Gaming is a frontier with plenty of room for new participants. At the first panel I attended, called “The Game Entrepreneurs Play,” moderator Steve Charkoudian, who chairs Goodwin Procter’s technology transactions practice, noted the dominating presence of big names in console games (think Harmonix), social games (Zynga), and massively multiplayer online games (World of Warcraft). “Part of me wants to ask, ‘Are you crazy, what are you thinking?’” to the new entrepreneurs trying to break their way into the scene, Charkoudian said.

“There are more opportunities now for a small startup to make money than ever before,” said Eitan Glinert, creative director and founder of Cambridge-based indie game startup Fire Hose Games. “Because the market’s growing so much, all of a sudden these new channels are available.”

Thanks to Facebook and smartphones, online gaming has really cracked open to the masses, beyond the hardcore gamers who make a life of it (more on that later). Games are cheaper to develop, and thus don’t have to reap the millions of dollars that traditional, big console titles do, said North Bridge Venture Partners principal Dayna Grayson, a panelist on the entrepreneurs’ session.

There are plenty of “small, lean, nimble teams making games for less money,” agreed Ichiro Lambe, founder and president of Boston indie game firm Dejobaan Games.

—No one knows quite what to do with mobile yet. “There’s a lot of confusion and Wild Wild West to that market now,” Grayson said. “Confusion in the space means opportunities if you can figure it out before someone else.”

And growth with gaming on … Next Page »

Comments (1) | Reprints | Share:          

In the last week, we’ve seen acquisitions in both the life sciences and IT spaces, as well as an IPO and startup funding.

—Curt Schilling’s Maynard, MA-based video game company, 38 Studios, attracted $75 million in loan guarantees from the Rhode Island Economic Development Corporation, according to media reports. In exchange, the company has pledged to move its headquarters to Rhode Island, and says it will bring 450 direct jobs to the state by the end of 2012.

—Andover, MA-based JAZD Markets, a provider of business-to-business, directory-powered marketing platforms, grabbed $4 million in equity funding. The company, which is backed by Commonwealth Capital Ventures and Pilot House Ventures, raised $8 million in 2008.

—IBM acquired Marlborough, MA-based Storwize, a maker of technology for the real-time compression of data. The companies didn’t disclose the financial terms of the transaction, which is slated to close third quarter 2010, though other reports pegged the deal at $140 million. Storwize investors include Bessemer Venture Partners, Sequoia Capital, Tenaya Capital, Tamares Group, and Tokyo Electron Device Limited.

—Wilmington, MA-based Charles River Laboratories International (NYSE: CRL), a provider of lab mice and drug research materials, has terminated its planned acquisition of contract research firm WuXi PharmaTech. It’s paying China-based WuXi (NYSE: WX) a $30 million fee for ending the deal.

—SiGe Semiconductor, an Andover-based maker of radio frequency chips for wireless communications, registered for an initial public offering worth $143.8 million. The company, whose chips enable wireless connectivity for products like personal computers and home entertainment centers, had accrued a deficit of … Next Page »

Comments | Reprints | Share:          

38 Studios, the Maynard, MA-based video game company started by former Red Sox pitcher Curt Schilling, has confirmed that it will be moving its headquarters to Rhode Island, according to a report in the Boston Globe. The gaming company attracted a $75 million loan guarantee from the Rhode Island Economic Development Corporation, and has said it will bring 450 direct jobs to the state by the end of 2012. We reported earlier in July that 38 Studios was considering the move, news that came a few months after Schilling urged the state of Massachusetts to offer more financial support to the video game industry. 38 Studios also made headlines late last week with the unveiling of its first video game product: a single-player game entitled “Kingdoms of Amalur: Reckoning.”

Comments | Reprints | Share:          

Veteran Red Sox pitcher Curt Schilling is unveiling the first game put out by the Maynard, MA-based video game company he founded, 38 Studios, at the San Diego entertainment festival Comic-Con today.

The single-player game, called “Kingdoms of Amalur: Reckoning,” is based on the fantasy novels of author R.A. Salvatore. It was previously kept under wraps at 38, referred to as “Project Mercury,” and will be distributed by video game giant Electronic Arts (NASDAQ: ERTS) when it hits stores in the fall of 2011. It has been developed by the 38 Studios subsidiary Big Huge Games, which was a Maryland gaming company that 38 Studios acquired last year from game publisher THQ.

Reckoning isn’t the only video game product that 38 Studios has wrapped in a codename. The game studio is also working on a massively multiplayer online game (MMOG) that it’s dubbed Copernicus. I inquired with the folks at 38 Studios about the status of Copernicus, and haven’t heard anything back yet, but I’ll be sure to update this space if they divulge any details on when we can expect a similar unveiling of the project.

[Update: a FAQ document at the "Kingdoms of Amalur: Reckoning" website, published today, states "Copernicus will take place in Amalur at a different point in the world's history. No details have been announced for the game, but more details will be revealed at a later date."]

38 Studios showed up on our news radar earlier this month when it was reported that the video game company was exploring a move to Rhode Island, in return for a proposed $75 million in loan guarantees from the state. This came just a few months after Schilling advocated the state of Massachusetts offer greater financial incentives to attract and keep companies in the gaming sector.

Comments (1) | Reprints | Share:          

38 Studios, the video game company founded by former Red Sox pitcher Curt Schilling, is considering moving its Maynard, MA, headquarters to Rhode Island, the Associated Press reported. The company is set to meet on Thursday with the Rhode Island Economic Development Corporation, to discuss a proposal offering up to $75 million in loan guarantees to 38 Studios if it moves its operations to the state. Schilling has previously called for Massachusetts to offer greater financial incentives, such as tax credits, grants, and subsidized office space, to better attract and keep video game companies in the Bay State. 38 Studios CEO Jennifer MacLean couldn’t be reached when I published this news brief, but I’ll update the story if I hear back from her.

Comments | Reprints | Share:          

When it comes to the video game industry in Massachusetts, “we have a major brand problem,” says Jason Schupbach, the creative economy industry director of the Massachusetts Department of Business Development.

“We have an amazing technology community here, but we don’t have a huge history of consumer-facing brands being based here,” he said at a panel discussion on Friday at the MIT Sloan Business in Gaming conference.

The result? The state’s $2 billion video game industry isn’t growing at the rate it could be. Massachusetts’ many colleges produce a slew of talented gaming professionals with skills in both the development and design facets of the industry, but many graduates flee to states more better known for creating hit video games, like California, panelists said.

Many of the Massachusetts technology companies focus on the infrastructure side of video games, and don’t have the flash of the consumer-focused companies that make big names like World of Warcraft or the Halo franchise. Massachusetts companies, by comparison are “really unsexy. A lot of the great talent wants to work for sexy businesses,” said Brian Balfour, co-founder and VP of product marketing at Viximo, a company that provides virtual goods products for social networking, online dating, and casual gaming sites.

“It’s almost like ‘I want to graduate and move to the big leagues,’” said panelist and former Red Sox pitcher Curt Schilling, who founded a gaming and entertainment company, 38 Studios, in Maynard, MA in 2006. (This was one of many baseball references he used during the roundtable. Schilling also likened state tax assistance for the video game industry to “steroids” for the economy, in the way that a similar film tax credit has brought movie makers to the state and boosted local businesses.)

Schilling, who had the ability to self-fund his company to the tune of $30 million, said the lack of financial support at the government level for gaming could deter young startups in the space. “If this state doesn’t find a way to bring tax credits to this industry, the best possible scenario is that this industry will stagnate,” he said. But tax credits are only a piece of the puzzle, he continued. Tax incentives in the form of payroll breaks wouldn’t affect small, young startups, which could better benefit from subsidized office space and grants, he said.

Schupbach, who Wade interviewed in October (and who will be leaving his position in May for a post in Washington, D.C.), said the state’s financial woes would most likely prevent it from offering a tax break to the industry in the next few years. Still, he says startup programs such as business plan competition MassChallenge, as well as startup workspaces and incubators, could spur more video game companies to get started in the state.

Panelists also noted that non-compete agreements at startups, which prevent employees from seeking jobs at competing companies for a fixed amount of time, have stalled the industry. The hiring clauses are not enforceable in California, making it easier for people to switch jobs, which helps the state recruit and retain video game developers. “Why would they come here [to Massachusetts] to have handcuffs slapped on them?” asked Bob Ferrari, vice president of global publishing and business development at Sanrio Digital, a company focused on social gaming and the publishing of interactive entertainment for the Hello Kitty brand. He’s also VP of business development at the company’s joint venture partner, Typhoon Games.

But, this is a problem that the industry doesn’t need lawmakers to fix, and can tackle at a grassroots level, Ferarri and others said. Even though it is legal in Massachusetts to use those clauses, startups and their investors should stop requiring employees to sign non-compete agreements, the panelists said.

Comments (6) | Reprints | Share:          

We know, we’ve been holding out on you. But don’t worry, we do plan to reveal the winners of last night’s Battle of the Tech Bands 3, for those of you who couldn’t make it. The evening saw a great turnout of people representing all facets of the tech, life sciences, and venture communities here in Boston. Each band played a riveting set, and captured the attention of audiences and judges alike.

But for all our boasting that we’d settle the battle for coastal superiority once and for all, we did no such thing. The audience chose Boston’s gritty country rock band, The Dirty Truckers, who won in a very tight race (182 votes to 180) against electronica hipsters Deadbeat Darling. But the judges forced an East Coast-West Coast draw when they selected Lions Ambition of Seattle as Most Innovative Band. And few could dispute their choice after hearing the band’s seamless and energetic fusion of rock and hip hop sounds.

In addition to the audience’s affection, the Truckers took home seven hours of studio time, including engineering and production, from Bristol Studios. And the Lions headed west with a marketing package that includes one year of retail service from Nimbit and three hours of consulting from Ten Minute Media, known for designing websites for the likes of Mick Jagger and Lenny Kravitz.

As it did in its last Battle of the Tech Bands appearance, McAlister Drive went the extra mile (or yard, anyway) to work the crowd, with its lead vocalist jumping down off the stage and out onto the dance floor. And heavy metal band Juda’s Wake showed us that the Pacific Northwest can produce seriously intense sound (and some beautiful rocker locks).

In the end, it seemed the Boston and Seattle contenders were happy to set aside any coast-to-coast rivalry and share the spotlight. Following the competition, Deadbeat Darling returned to the stage to play a closing set for the audience. To our surprise (and delight), they invited the Lions to join them for spontaneous collaboration. If you didn’t think those two musical styles could go together, think again!

Thanks again for all who came. And a big shout-out to our event sponsors, Aerva, Bristol Studios, McNamee Lawrence & Co., Microsoft, and Nimbit; to Brad Feld, who chipped in to help us fly the Seattle bands out for the event, and to all our event partners and supporters. Thanks also to our incredible guest judges: Shawn Broderick, executive director of TechStars Boston, Bob Cramer, executive chairman of Nimbit, Laura Fitton, CEO of oneforty, Jennifer MacLean, CEO of 38 Studios, and Giles McNamee, Managing Director of McNamee Lawrence & Co.

Here’s a few snapshots from last night’s show, courtesy of Kevin Vogelsang. Click on the the images for a larger view. We hope to see you all at our next event!

The Dirty Truckers rock the house.

Lions Ambition roars.

Juda's Wake built a wall of sound.

Comments | Reprints | Share:          

We are barely 24 hours away from the biggest, most definitive East Coast vs. West Coast smackdown since Facebook got away: the Battle of the Tech Bands 3, which will take place Thursday night at the Middle East Nightclub in the heart of Central Square here in Cambridge, MA.

We have five great bands—three winners from previous Boston-only battles and two from our Seattle battle last summer —competing for handsome prize packages donated by Bristol Studios, Nimbit, and Ten Minute Media. And you, the audience, will choose one of the grand prize winners via text message voting. But you may not have known that there is a second grand prize for the bands—for Most Innovative Band. That will be awarded by a hand-picked quintet of guest judges who have graciously agreed to step into the middle of the East-West debate. They represent virtually every stage of the tech entrepreneurship scene: from incubation to startup to helping companies go public. It’s our pleasure to announce them here, in alphabetical order:

Shawn Broderick, Executive Director, TechStars Boston

Bob Cramer, Executive Chairman, Nimbit

Laura Fitton, CEO, oneforty

Jennifer MacLean, CEO, 38 Studios

Giles McNamee, Managing Director, McNamee Lawrence & Co.

These judges are BEYOND reproach. But I’m told by a few that they will listen to what you have to say if you buy them a drink. And even if you are a teetotaler, we all hope to see you there for a night of great music and to raise money for two great causes: Science Club for Girls and Year Up Boston.

Doors open at 7 pm. First band at 7:30 pm. Get your tickets here for just $25, or at the door for $35. Light fare is included and we’ll even buy you a drink or two. (Hurry, there are only a limited number of tickets remaining—and you wouldn’t want to miss out on a chance to win one of our amazing door prizes, which included everything from Rock Band bundles to Xbox 360 games, Roomba robotic vacuum cleaners, a dinner for two at Rialto, a night at Le Meridien ,and more).

Thank you, judges!

Comments | Reprints | Share:          

Massachusetts “digital gaming” companies have total revenues exceeding $2 billion, according to a survey being released today by the Mass Technology Leadership Council. And those companies are hiring aggressively, with plans to increase their head counts by an average of 20 percent in 2009, the survey found.

The gaming industry employs roughly 1,200 people across the state, in disciplines like software engineering, digital art, game design, and quality assurance, according to MassTLC—an industry-sponsored association that promotes technology entrepreneurship. Only 8 percent of the companies the association surveyed are public, meaning that most of the ferment in the gaming industry is happening within venture-funded companies (8 percent) or smaller angel-funded or privately funded companies (79 percent).

MassTLC says it collected the survey data between January and June from more than 30 Massachusetts gaming companies, including 38 Studios, GamerDNA, Harmonix Music Systems, Quick Hit, Rockstar New England, Turbine, and WorldWinner. The association says it will use grant money awarded to UMass Boston by the UMass President’s Creative Economy Initiatives Fund to continue its research and “take a deeper dive into the impact of the industry on the Massachusetts economy,” in the words of today’s announcement.

“The digital gaming industry is on fire in Massachusetts,” Massachusetts Governor Deval Patrick said in the announcement. “I am committed to supporting this and other creative economy industries, for the job opportunities they create and for what they do to elevate Massachusetts’ strengths as a center of technology innovation.”

Comments (4) | Reprints | Share:          

38 Studios, the Maynard, MA-based online gaming company founded by Red Sox pitcher Curt Schilling, said today that former CEO Brett Close has resigned, and that Jennifer MacLean, formerly the startup’s senior vice president of business development, has been appointed as his successor. Close has led development of 38 Studios’ massively multiplayer online fantasy game property, code named Project Copernicus, since 2007. He said in a statement that “I’ve had the privilege of building 38 Studios to become an established force of IP creation and entertainment…I leave with confidence in the future success of the company and have no doubt its products will excite gamers worldwide.” Schilling praised incoming CEO MacLean, who joined 38 Studios from Comcast in March 2008, as “a deserving and extraordinary member of the 38 Studios team.” The company said MacLean is chairwoman emeritus of the Independent Game Developers Association, and that she was named by gaming site Gamasutra as one of the “Top 20 Women in Games.”

Comments | Reprints | Share:          

Few major media markets are as lopsided as the online swords-and-sorcery game genre. World of Warcraft, owned by the Activision Blizzard division of Vivendi SA, has a population of 12 million players, each paying at least $12.99 per month to go on group quests for virtual treasure and glory. Westwood, MA-based Turbine, the maker of the next most popular subscription-based online fantasy games, The Lord of the Rings Online and Dungeons & Dragons Online, doesn’t release membership numbers—but the data I’ve seen puts it in a very distant second place. In a recent Boston Globe article, Brett Close, the CEO of Maynard, MA-based 38 Studios, which is developing its own online fantasy game, tellingly called fantasy-based MMORPGs—that’s gamer lingo for massively multiple online role playing games—a market “where there is a Coke and no Pepsi.”

Well, if you had a new cola and you wanted to compete with Coke, one strategy you might consider would be giving away your drink for free. And that’s exactly what Turbine plans to try. Starting on September 9, Dungeons & Dragons Online will join the ranks of free-to-play online games. In the new hybrid version of its game world, called “Eberron Unlimited,” most regions and adventures will be free and open to everyone, while a few premium areas will be reserved for “VIPs” who continue to pay a subscription.

It’s a strategy that game developers in other countries have been pursuing with notable success for years—the free UK-based MMORPG Runescape, for example, is reported to have more than a million players, and South Korea-born Maple Story has an astonishing 15 million. But American game companies have shied away from the free-to-play model, in part because their game systems weren’t built to allow alternative forms of revenue generation, such as microtransactions, in which players fork over small amounts of cash for virtual goods such as costumes or weapons for their avatars.

But one of the central elements in the free version of Dungeons & Dragons Online—which will replace the current “Stormreach” version—is a new Amazon-like interface where players can shop to their heart’s content, using “Turbine Points” that they can buy with real cash or earn by spending time online. And that’s not all that’s changing inside Eberron, as the mythical land that is the game’s setting is called. The overhaul, which has been in gestation for 18 months, includes so much new content and so many new features that the company recently delayed the relaunch by more than a month to allow for more testing and preparation.

(In a story later this month, I’ll write more about the games themselves, which senior producers Fernando Paiz, Kate Paiz, and Aaron Campbell demonstrated for me at length during a recent visit. This story focuses on Turbine’s business model.)

The risk Turbine is taking is that a massive influx of new free players might increase the burden on the company’s servers, and that nobody will buy anything. But it’s making an informed wager—based in part on observations of the company’s legion of beta testers—that players won’t be able to resist buying an extra sword here and a spell there, and that the revenue from microtransactions will more than make up for any loss of subscription revenue.

“Eberron Unlimited is an extraordinary event for us as a company, and industry-wide,” Jim Crowley, Turbine’s CEO, told me. “Nobody else is taking what we’d call a true premium online world into this free-to-play model, and removed those barriers to entry like we’re doing. We think it’s a great way not just to grow our business but to expand the overall pie.”

This isn’t quite a bet-the-company moment for Turbine, since it is not altering the $14.99-per-month subscription price at its premiere property, The Lord of the Rings Online. (The company says that game world, which is based on the famous J.R.R. Tolkien trilogy, doesn’t lend itself as naturally to a microtransaction-based model.) But it does reflect … Next Page »

Comments (17) | Reprints | Share:          

Let’s say you live in Boston and you’ve just hit on a great concept for a cross-media property, with all the attendant merchandising tie-ins: a special-effects-laden movie, a console video game, a comic, a kids’ cartoon, action figures, a novelization, a persistent online world—in other words, the next Matrix or Transformers or Harry Potter. To make it happen, you’d probably need to hire filmmaking talent from Hollywood, writers and publishers and marketers from New York, programmers and game designers and media network providers from San Francisco and Seattle and Los Angeles, and so forth, right?

Actually, no. Most, maybe all, of the talent and technology you’d need to build your dream media empire is right here in New England.

While the rest of us weren’t looking, and without consulting one another, thousands of creative types have been flocking to the Boston area over the past decade. They’ve built a critical mass of game studios, film production companies, graphics software houses, 3-D modeling companies, digital marketing agencies, online hangouts, and the like—what amounts, in fact, to a self-sufficient digital entertainment ecosystem.

Of course, there would be no particular reason to build your media property using only New England talent. You don’t get green laurels or political-correctness points for restricting yourself to creative services from within a 100-mile radius, the way you arguably do if you buy locally farmed food. And in an age of Friedmanian flatness, your investors will probably force you to offshore as much of the work as you can anyway. My point is that you could find the services here if you wanted to. And that’s something new and remarkable.

We’re going to explore this emerging sector in depth during a panel discussion that I’m moderating on June 24 as part of the Xconomy Summit on Innovation, Technology, and Entrepreneurship. (This full-day event, featuring more than 50 speakers altogether, will be held at Boston University’s School of Management; the full agenda is here and registration information is here.) My panel is entitled “The Digital Entertainment Cluster: Boston’s Best Kept Secret,” and I’ve lined up participants from local companies and organizations that represent the whole spectrum of digital media production and delivery. Not coincidentally, these are all companies I’ve written about for Xconomy—just follow the links below to go deeper.

First, we’ll have Brett Close, CEO of Maynard, MA-based 38 Studios, which was founded by local baseball hero Curt Schilling and is building a cross-media property very much like the hypothetical one I outlined above; it’s based around a massively multiplayer online environment with the cheeky code name Copernicus. Then there’s Chris Gardner, chief marketing officer at Newton, MA-based Extend Media, which sells software that media companies can use to distribute a single piece of digital content to multiple devices, including PCs, televisions, and mobile phones.

Kyle Morton, vice president of product at Cambridge, MA-based EveryZing, will also be on hand; EveryZing is a spinoff of local engineering powerhouse BBN, and has turned its original speech-to-text technology into the core of a universal search engine that helps media companies catalog the digital content they own, facilitate consumer access, and monetize it through advertising. We’ll also hear from Brian Shin, the CEO of Boston-based Visible Measures, who will talk about his company’s project to index and track all the world’s viral videos, the better to help clients measure the success of their marketing campaigns.

Finally, we’ll be joined by Jason Schupbach from the Commonwealth of Massachusetts’ Office of Business Development, who has the coolest title of all the panelists: “Industry Director, Creative Economy.” Schupbach’s job is to connect people in the creative industries to the extensive resources offered by the state government. He’s one of the main people in the Patrick Administration promoting services like export planning, equipment loans, affordable housing programs for artists, and the 25 percent film tax credit. (That tax incentive, available to anyone who creates at least 70 percent of a film or digital media project in Massachusetts, is one of the main forces behind the state’s sudden emergence as a film-industry outpost; no fewer than four major movie studios are planned for construction in Massachusetts over the next two years.)

I’m very excited (or XSITEd, as we’ve been saying around here all month) to be gathering these particular panelists at one event, because I think they can tell a compelling story about why it’s useful to have so many elements of the digital media production and distribution pipeline available in one place; why Boston is an attractive place to build a digital media company; how having all of this talent in one place creates opportunities for projects that weren’t … Next Page »

Comments (2) | Reprints | Share:          

Evidently the word of the week for many New England’s tech firms was acquisition.

—Digital Lumens of Salem, MA, raised $6.3 million in a round of equity financing. The startup, whose investors were not named in the filing, aims to make lighting products that use only 10 percent as much energy as other products.

—Natick, MA-based OutSmart Power Systems closed a $2 million seed round of financing from Bainco International Investors, Clean Energy Venture Group, and Manifold Products, among others. OutSmart, which was spun off from Manifold in 2008, is developing systems to manage energy usage and other activities in commercial buildings.

—Mobile marketing software developer Celtra of Cambridge, MA, raised $1.2 million in a Series A round of financing from Slovenian venture firm RSG Capital. Celtra plans to establish its European hub in Ljubljana, Slovenia.

—38 Studios of Maynard, MA, nearly doubled its size by acquiring Maryland-based Big Huge Games. Wade took a look at the history behind the deal and what it means for the future of the Massachusetts video game company, which was founded by Boston Red Sox star Curt Schilling.

—Waltham, MA-based Crosscheck Networks, a maker of tools for testing Web-based applications before they’re deployed, acquired Waltham-based Forum Systems, a maker of security and authentication tools for Web-based software.

—Scenic Technology, a Needham, MA-based maker of Microsoft .NET-based software for tracking barcodes and RFID tags, raised $1.4 million of a planned $2.1 equity round.

—EMC (NYSE:EMC) announced plans to acquire Colorado Springs, CO-based Configuresoft. The deal will help Hopkinton, MA-based EMC increase its presence in the market for software to manage physical and virtual servers, Wade explains.

—Proteon Therapeutics, a developer of drugs for kidney and vascular diseases based in Waltham, MA, raised $12 million in a second close if its Series B financing, bringing the total for the round to $50 million. The new financing came mainly from Bessemer Venture Partners and Devon Park Bioventures.

Comments | Reprints | Share:          

38 Studios, the Maynard, MA-based video game company founded by Boston Red Sox star Curt Schilling, has filled a gap in its lineup. The company said today that it has nearly doubled its size by acquiring Big Huge Games, a Maryland-based company that’s behind such role-playing and strategy games as Rise of Nations and Age of Empires III.

Big Huge Games (BHG), whose lead designer Ken Rolston was the co-creator of an extremely popular Xbox game called Elder Scrolls IV: Oblivion, was founded in 2000 and has been bouncing around a lot of late. Just over a year ago, in January 2008, it was acquired by PC and console game publisher THQ of Agoura Hills, CA. But this March, according to the video game news site Crispy Gamer, THQ said it would be forced to sell BHG due to deteriorating economic conditions–and that if it couldn’t find a buyer, it would shut the studio down.

So 38 Studios is a bit of a white knight for the older company. After a round of layoffs instigated by THQ last year, BHG has about 70 employees, compared to 38 Studio’s complement of 75. The acquisition won’t lead to any further job cuts: “All necessary layoffs at BHG occurred before the acquisition,” a 38 Studios spokesperson tells Xconomy. “Retained staff has been planned according to project planning and future product delivery.”

BHG’s jump from THQ to 38 Studios immediately launches the Massachusetts company into the console game market, given that the purchase includes all of Big Huge Games’ technology, intellectual property, and games-in-progress. That includes an as-yet-unnamed role-playing game being developed for the Xbox 360 and Playstation 3 platforms; when it was originally unveiled in a joint announcement with THQ in 2007, that game was scheduled for delivery this year.

Bringing in a group that has such extensive experience designing fantasy-based, 3D game worlds—not to mention the software to run them— should help 38 Studios advance its own multi-year effort to create a massively multiplayer online game (MMOG), code named Copernicus. With Big Huge Games’ real-time strategy engine, 38 Studios will be able to “accelerate the realization” of Copernicus and publish it on multiple platforms, 38 Studios CEO Brett Close said in a statement.

Close also tells Xconomy that the BHG acquisition should translate into a boost for the region’s video game cluster. “New England enjoys a unique intersection of exceptional universities, incredible talent, and innovative companies, which makes this area a prominent industry hub for game development,” says Close. “Acquiring BHG further extends and diversifies our capabilities and creates a conduit between the two studios to capitalize on the talents and advantages of both areas. The whole is greater than the parts, which only enhances what and how we can contribute to the business fabric of the New England area.”

At bottom, though, the acquisition may be a sign of a growing realization at 38 Studios that it needs a larger team if it’s going to deliver the ambitious Copernicus property on schedule in 2011. The Copernicus game world, being designed under the direction of noted comic-book artist Todd McFarlane and fantasy author R. A. Salvatore, will reportedly be the foundation for a cross-media extravaganza, encompassing a console game, an online game, movies, comics, toys, books, and a TV show.

It’s not the first time 38 Studios has turned to established video game companies for help with Copernicus: last year, for example, it hired Travis McGeathy, former lead designer of Sony Online Entertainment’s Everquest franchise, to lead systems design for the property.

The core team at Big Huge Games, including Jason Coleman, David Inscore, and Kerry Wilkinson, as well as Train and Rolston, has a huge list of games on its collective resume, including Catan XBLA (pictured above), Sid Meier’s Civilization, Civilization II, Alpha Centauri, Rise of Legends, European Air War, Magic: The Gathering, and Elder Scrolls III and IV.

Big Huge Games won’t leave its current location in Timonium, MD, a suburb of Baltimore, 38 Studios said. Tim Train, the CEO of Big Huge Games and one of its four founders, said in the acquisition announcement that the two companies “share a common vision—to deliver the most engaging, compelling, original experiences possible…Joining the 38 Studios family allows us to continue translating our passions into great games.”

Schilling himself, a longtime gamer, called Big Huge Games “a phenomenal team and, culturally, a natural fit” with 38 Studios.

Comments (1) | Reprints | Share:          

At the Nantucket Conference, an invitation-only gathering of New England-area CEOs, entrepreneurs, venture partners, and select others, first-time attendees get a single blue dot on their nametags. Alumni get another dot for every year they’ve attended, and veterans of five or more conferences get a gold starfish pin.

About a third of the participants at the tenth annual conference, held April 30 to May 2 on Nantucket Island, MA, had one blue dot, including myself (I was one of a handful of journalists invited by the conference organizer, Shayne Gilbert of Future Forward Events). But strikingly—despite the obsession among attendees with the economy’s drastic downturn and its effects on entrepreneurship—several of the starfish people said afterward that it was the best, most energetic edition of the conference they’d been to. It seems that the crisis has inflamed the classic innovator’s itch to get on with business—and to invent new ones.

In past years, the proceedings of the Nantucket Conference were off the record to journalists unless a source explicitly agreed to be quoted. This year, the organizers reversed the policy, so everything was on the record, unless a speaker indicated otherwise—which only happened once the entire weekend, to my knowledge. That meant attendees were free to indulge their social media passions, blogging and tweeting freely (you can see the whole conference Twitter stream here).

It also means I’m able to bring you a few of the main themes from the conference. Though the program included panels on topics as diverse as getting venture funding, robotics, gaming, energy, and the roots of the economic crisis, a few ideas seemed to frame the mood of the conference (and perhaps of the entrepreneurial set in general these days), a mindset I’d call pragmatic optimism. Some of the main elements:

Fundraising is getting harder—especially for new companies, but even for established ones. Michael Greeley, a general partner at Flybridge Capital Partners, pointed to estimates that only 600 new startups will win venture funding nationwide this year, down from 1,171 in 2008. VC firms have become exceedingly cautious, keeping $5 in reserve for every $1 they invest, rather than the more traditional 2-to-1 ratio, Greeley said. Jana Eggers, CEO of Leipzig, Germany-based Spreadshirt, a T-shirt customization company whose North American headquarters are in Boston, said that even though her company is cash-flow-positive, it had a very difficult time raising its most recent round of growth capital. The terms offered by potential funders were “shocking” and were “clearly based on the economy, not on our fundamentals,” Eggers said.

In areas such as robotics where New England has clear strengths, venture capital is largely absent, pointed out MIT roboticist Rod Brooks, a co-founder of iRobot who now leads stealth-mode startup Heartland Robotics. In the energy and cleantech space, according to General Catalyst‘s Hemant Tenaja, money from hedge funds and strategic investors has largely dried up, and the spigots will stay off until Congress and the Obama Administration work out energy and climate bills. And heaven help the startups that need cash quick: Each of Boston-Power‘s three funding rounds took a year to negotiate, according to CEO Christina Lampe-Onnerud. “The best time to raise capital is when you don’t need it,” said Andy Palmer, co-founder of Vertica Systems, former CIO at Infinity Pharmaceuticals, a veteran of Bowstreet (acquired by IBM).

On the other hand, companies need less money—and should probably be lowering their sights anyway. John Landry, a software industry veteran who is managing director at Wayland, MA-based Lead Dog Ventures, used his pulpit as moderator of a panel on “Getting and Staying Funded” to argue that infotech startups “don’t really need a lot of money” these days thanks to technologies like … Next Page »

Comments (2) | Reprints | Share:          

38 Studios, the Maynard, MA-based game development house founded by Red Sox pitcher Curt Schilling, announced today that it’s repeating the “Massachusetts Game Challenge” it launched last year. But the company is extending eligibility beyond New England this time to all U.S. and Canadian college and university students.

The contest is designed to cultivate and highlight talented up-and-coming game developers by challenging them to come up with new video games involving the 38 Studios cartoon mascot, Munch, and its evil twin Mean Munch. Teams of up to three students are given access to art of Munch and Mean Munch and asked to submit finished, executable video games on DVD or CD-ROM by March 2, 2009. The company says it will evaluate submissions based on originality, graphics and artistry, technical achievement, degree of finish, and “fun factor.”

The team that creates the top-ranked game will be awarded $1,500 per team member. The second-place team will receive $1,000 per member and the third-place team will get $500 per member.

A team from Becker College in Worcester, MA, won first place in last year’s challenge for a game called “Munch’s Vacation.” The game, designed by Andrew Silvernail, Patrick Walley, and James Grant, is a difficult-to-describe takeoff on a cruise vacation that pays homage to classic arcade games like Pac-Man and Space Invaders.

The second-place prize went to Chris Barrett, Chris Gingras, and Alex Gray of NHTI in Concord, NH, for their Flash-based game “Infectious Munch,” in which Munch chases, and is chased by, microbes inside a living organism. Third place went to Morgan Quirk, Andrew Tremblay, and Adrian Mejia of Worcester Polytechnic Institute for their game “Super Munch 2 Turbo.”

38 Studios CEO Brett Close told Xconomy last year that the Game Challenge was intended partly to demonstrate that the Boston area is an emerging powerhouse in video game development. But by extending the contest to all college and university students in the U.S. and Canada, the company stands a better chance of generating excitement about video game development as a career, attracting young developers to potential jobs at 38 Studios, and of course, receiving high-quality game submissions.

Comments | Reprints | Share:          

Everyone knows the gaming industry is huge in Seattle. Well, this weekend it will get even huger. Today marks the start of the 5th annual Penny Arcade Expo (PAX) at the Washington State Convention & Trade Center in downtown Seattle. Since 2007, when the E3 convention in Los Angeles was majorly downsized, PAX has become North America’s biggest trade show for computer and video games. It draws tens of thousands of people for a weekend of game exhibitions, demos, panel discussions, free-play areas, gaming tournaments, parties, and concerts (this year’s lineup of bands includes the OneUps, Freezepop, and Jonathan Coulton).

The weekend is billed as a festival of gaming technology and culture, and the entry fee is pretty low ($45 if you pre-registered). Besides the promise of meeting lots of interesting folks in the industry, I spotted some talks and panels having to do with gaming, business, and society. So, for anyone who isn’t too busy fighting the traffic on I-5 this weekend, here are a few sessions to watch:

—Game Developer Parents: Raising Our Kids On Games (Sat, 10:30 am). This is an obvious topic: how to manage your kids’ development and activities in an age of ubiquitous gaming. The panel, which includes people from Maynard, MA-based 38 Studios (which we’ve written about here and here) and San Francisco, CA-based social game network Zynga, is billed as “refreshingly pro-gaming.” I wonder if they’ll tackle any difficult issues, or just have a lovefest about the educational and social benefits of gaming.

—PC Hardware and Gaming Technology (Sat, 11:30 am). How will Moore’s Law affect gaming? How will games push the state of the art in computing technologies? This panel, which includes Jeff Kalles of Penny Arcade and Chris Melissinos of Sun Microsystems (who knew that Sun had a chief gaming officer?), will tackle the tech questions of next-generation games and consoles.

—Is Casual Killing Core Games? (Sat, 6:00 pm) From the talks at the Casual Connect gaming conference last month, I’d guess the answer is no—there seems to be a lot more overlap between the “casual” and “core” gaming markets than most people thought. But maybe the core game developers have something to say about that. Rob Gruhl of Microsoft’s game platform strategy team moderates a panel of industry experts.

—Sex in Videogames: A Comparative Study (Sat, 7:30 pm). Not sure what this is about, but I bet there was a lot of research done. Pink Godzilla, a Seattle-based video game store, will be part of a panel that discusses cultural differences between the U.S. and Japan when it comes to sex in video games. Interesting that the session is on a typical date night. (There’s also a session the next morning called “How to get your girlfriend into gaming.” I’m not making this up.)

—Cambridge, MA-based Harmonix Music Systems is doing a panel on the company’s history (“The Rockening,” Sat, 1:00 pm), from its early days as an MIT spinoff to its success with Guitar Hero, Rock Band, and the $175 million acquisition by MTV Networks. Offline, I plan to get the scoop on Rock Band 2 and other gossip from Harmonix senior developer Dan Schmidt, who [full disclosure] happens to play in this awesome band with me.

There are several other sessions that might be of particular interest to startups and entrepreneurs: Pitch Your Game Idea (Sat, 5:30 pm); Engaging Online Communities (Fri, 6:30 pm); Advertising and PR: The Endless Struggle (Sat, 10 am); MMO and Virtual World Business Models (Sun, 12 pm).

It says something about the gaming community that the convention doesn’t start until 2 pm today and runs through Sunday of Labor Day weekend. It’s not work—gamers and game developers eat, drink, and breathe this stuff. I think the website of Bellevue, WA-based Valve, creator of game franchises Half-Life and Counter-Strike, says it best: “Members of the Valve staff…collectively define sunlight as ‘that which makes a computer monitor difficult to see’ and free time as ‘when we get to play games instead of make them.’”

Comments | Reprints | Share:          

A few weeks ago we profiled a call-center-software startup whose name, Exony, stands for ex-Sony, in reference to the herd of employees who left Sony to start the company. Boston’s video game industry is building up an ex-Sony club of its own—Curt Schilling’s Maynard, MA-based 38 Studios. The company announced today that it has hired Travis McGeathy, former lead designer of Sony Online Entertainment’s Everquest franchise, as systems design lead for its own massively multiplayer online game, code-named Copernicus. 38 Studios design director Jason Roberts and director of community development Steve Danuser also hail from Sony Online Entertainment.

Comments | Reprints | Share:          

Curt Schilling’s known for a few things around these parts—and the country: bloody socks, great pitching, conservative politics, and a love of video gaming, as evidenced by his founding of Maynard, MA-based 38 Studios (named after his uniform number).

Wade wrote a nice profile of 38 Studios and its new game-creation contest a couple months ago. And today, as part of their just-launched digital media blog, our friends at VentureBeat are running a Q&A with the Red Sox star. It provides Schilling’s take on things like the firm’s big MMO (massively multiplayer online game) project, code-named Copernicus. The game is being created under the artistic direction of Todd McFarlane, who created the comic series Spawn, and the creative direction by R.A. Salvatore, who fashioned Drizzt Do’Urden, the dark-elf star of a slew of fantasy novels set in the Dungeons & Dragons “Forgotten Realms” universe.

Schilling also discusses his view of VCs and just why he launched a game company in the first place. Here’s a glimpse:

“I want to be the best in the world at something else. Absolutely. That’s the challenge.”

He also very briefly covers his support of John McCain, hiring key people from Electronic Arts, and the idea that he will be devoting his full-time to 38 Studios after one more year on the mound: “It will be interesting after this season is over and it becomes a full-year thing. I think the hard stuff of getting it up and running is done. There is a leadership aspect. We have a Monday morning all hands every week for 15 minutes. We say where we are at and boom, let’s go. Don’t come in at 9 and then get charged up by noon. Let’s go. Remember, I stitched up my frigging ankle and kept playing. So let’s go.”

Comments (1) | Reprints | Share:          

Things have been eerily quiet on the venture front lately—and then there was the Mascoma deal. Dare we dream that that, combined with Clarus Venture’s juicy new life sciences fund, bodes better for the coming months? More on those, and the rest of last week’s deals, below.

—East Coast/West Coast Life sciences venture firm Clarus Ventures raised its second fund, worth $660 million. The firm has offices in Cambridge, MA, and South San Francisco.

—Novell (NASDAQ: NOVL) of Waltham, MA, entered the virtualization race with the $205 million acquisition of Toronto-based PlateSpin. The Canadian firm makes workload management software for virtualized data centers.

—Organogenesis—a Canton, MA-based developer of biomaterials and tissue-engineered products—announced it will acquire Baton Rouge’s NanoMatrix. Financial terms were not disclosed for the deal, which gives Organogenesis access to NanoMatrix’s technology for making three-dimensional scaffolds for tissue growth.

—Software maker Proficiency of Marlborough, MA, raised $4.25 million in a venture round led by Catalyst Investments of Israel and joined by Carmel Ventures and Pitango Venture Capital.

—Waltham, MA-based Lionbridge (NASDAQ: LIOX) announced plans to buy back $12 million worth of its stock in 2008. The so-called localization firm translates product documentation such as software manuals from English into other languages.

—Maynard, MA, game development firm 38 Studios announced it will license virtual-world servers and development tools and game servers from Australia’s BigWorld Technology.

—Biomed research toolmaker Caliper Life Sciences (NASDAQ: CALP) of Hopkinton, MA, cut a cross-licensing deal with San Diego’s AntiCancer. The agreement was part of a move to end a long-standing patent battle between the firms.

—Automated voice messaging firm SoundBite Communications of Bedford, MA, and Mobile Collect, of Rochester Hills, MI—which makes software for text-message-based marketing and debt collection—struck a merger agreement worth $500,000 plus up to $2 million in payments contingent on text-messaging revenue.

—Boston cleantech firm Mascoma, which is working on cellulosic ethanol technology, raised $50 million in a Series C financing led by General Catalyst Partners and joined by Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, Atlas Venture, Pinnacle Ventures, Khosla Ventures, and Flagship Ventures. $20 million of the round was in debt financing.

—Biogen Idec (NASDAQ: BIIB) sold $1 billion worth of senior notes. The sale was a means of converting to permanent debt a bridge loan taken out to finance a $3 billion stock buyback that the Cambridge, MA-based firm completed last summer.

—Arthrosurface of Franklin, MA, which develops less-invasive joint resurfacing systems, raised some $4 million in a Series F financing from Boston Millennia Partners and private investors

Comments (1) | Reprints | Share: