It’s day 6 of our 7-day auction to raise funds for two of our favorite causes, Science Club for Girls and Technology Underwriting Greater Good. So hurry to eBay, because as of this writing you’ve only got about 20 hours left to bid on the amazing Lord of the Rings Online Collector’s Edition boxed set, autographed by the game’s developers at Westwood, MA-based Turbine.

I explained the whole back story to the auction last week. In a nutshell, Turbine gave Xconomy the autographed set back in July as a memento of our visit, and we decided (with Turbine’s blessing) to auction it off and donate the proceeds.

Lord of the Rings Online is Turbine’s award-winning massively multiplayer game world based on the famous J.R.R. Tolkien novels. The boxed set includes two Windows program discs, a Music & Art Collection bound volume including “The Music of Mines of Moria” soundtrack CD, a premium cloth map of the game world, a Middle Earth poster, the Collector’s Edition Starter Guide manual, a product key and three free 14-day buddy keys, a quick reference card, and—perhaps coolest of all—a gold-plated replica of the One Ring (evil powers not included).

Bid now—click here to visit the auction page. To whet your appetite, here are a few pictures of the set and its contents:

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Do you love fantasy role-playing games? Do you enjoy collecting one-of-a-kind autographed artifacts? Do you like supporting good causes? Then this is your lucky week. Through the generosity of the good folks at Turbine, the Westwood, MA-based publisher of online fantasy games, Xconomy has obtained an amazing Collector’s Edition boxed set of Turbine’s most popular game ever, Lord of the Rings Online: Mines of Moria. This version of the award-winning massively multiplayer game world—based, of course, on the famous J.R.R. Tolkien trilogy—is signed by the actual developers who created the game. And we’re auctioning it off on eBay, with 100 percent of the proceeds benefiting two of our favorite local non-profit groups.

Click here to see the auction listing at eBay. The auction begins today and will conclude at noon Eastern time on Tuesday, November 17. We hope this unique item brings a good price—because we’re going to donate half of the proceeds to Cambridge, MA-based Science Club for Girls and the other half to Boston-based Technology Underwriting Greater Good.

Here’s the back story about this remarkable item. I visited Turbine’s massive headquarters facility back in July, and shortly afterward wrote a big feature article about the company’s decision to make one of its other online properties, Dungeons & Dragons Online, free to play. As a memento of my visit, the team at Turbine offered me the aforementioned autographed boxed set. I explained that as journalists, we can’t accept gifts from sources—but that we’d love to take the set and sell it for charity. Turbine enthusiastically agreed. (But the game has been sitting around my office ever since; I guess, like Gollum, I couldn’t bear to part with “my precious.”)

Aside from the program discs for Lord of the Rings Online (which spare you a lengthy download), the Collector’s Edition contains a variety of extras guaranteed to appeal to any fan of the genre. What makes this copy special, of course, is that the box cover has been signed in metallic-silver magic marker by about 20 of the developers involved in creating the game (see the photo below). But the stuff inside the box is pretty cool too.

The neatest item, to my mind, is the CD with the soundtrack music from the game. But Tolkien fans will also appreciate items such as the gold-plated reproduction of the One Ring, complete with Black Speech inscription, which, as everyone knows, reads “One ring to rule them all, one ring to find them, One ring to bring them all and in the darkness bind them.” (I tried it on, and for better or worse, I did not become invisible, see a fiery eye in the sky, or have delusions of ultimate power.)

Here’s the full rundown of the loot inside the Collector’s Edition:

• Two Windows program discs
• Music & Art Collection bound volume including “The Music of Mines of Moria” Soundtrack CD
• The aforementioned replica of the One Ring in velvet pouch
• Premium cloth map of the game world
• Middle Earth poster
• Collector’s Edition Starter Guide manual
• Product Key and three free 14-day Buddy Keys
• Quick Reference Card

Note that LOTRO is playable only from Windows PCs with broadband Internet connections, and that the game itself requires a subscription of $14.99 per month, separate from the cost of this Collector’s Edition.

A word about the two non-profit groups that will benefit from the auction: Science Club for Girls, founded in 1994, offers free after-school science literacy programs to K-12 girls in several cities around Massachusetts. Technology Underwriting Greater Good, founded this year by Jeff Fagnan and Dana Samuels of Atlas Venture and Hemant Taneja of General Catalyst Partners, promotes entrepreneurship and innovation programs for young people in New England. Bob profiled the organization last month.

They’re both great groups—so go and bid on the LOTRO Collector’s Edition now. You’ve only got until next Tuesday!

Here are a few photos of the Collector’s Edition. You can click on each photo to see a larger version.

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Zeemote, a Chelmsford, MA-based startup that developed a handheld game controller for use with games on mobile handsets, has closed its doors and is putting its assets up for sale, according to a story today in Mass High Tech. Founded in 2005 by Boston-area entrepreneur Beth Marcus, the company worked with handset manufacturers Nokia, Samsung, LG, Sony Ericsson, and RIM to make its Bluetooth-based device compatible with their phones. Mass High Tech spoke with a partner from Zeemote backer Commonwealth Capital Ventures who confirmed the closure but offered no further details.

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What’s the connection between hardcore, chest-pounding video game action and Niels Bohr’s interpretation of wave-particle duality? It’s an Iranian-American physicist-turned-entrepreneur named Shahriar Afshar. Five years after Afshar announced the results of one of the most controversial experiments in the recent history of physics—one suggesting that it is possible, contrary to Bohr’s long-accepted theory, to observe light behaving as both particles and waves at the same time—the Cambridge, MA-based startup he founded, Immerz, is about to launch an “acousto-haptic” device that lets gamers both hear and feel gaming action at the same time.

Immerz’s product, called Kor-fx, is essentially a pair of woofers for your chest cavity, designed to enhance the sense of being immersed in a game (or a movie or a song)—hence the company’s name. Immerz showed off the device for the first time last week at the i-stage competition in Phoenix, AZ, where the Consumer Electronics Association—the same organization that runs the giant CES convention in Las Vegas every January—chose it as one of the 11 most innovative consumer technology products shipping next year. The company plans to bring the product to market in the first quarter of 2010, focusing first on PC gamers, and later on console players.

Afshar’s switch from experimental physics to gaming may sound like a strange change of direction—and it is. But there’s some logic to it, just as there is beneath the perverse and often baffling world of quantum mechanics. “My mission in life, ever since I have been mature enough to have a sense of a goal in life, has been to reveal realities that are right in front of our eyes but we missed,” Afshar says. “It excites me that there are so many hidden realities out there that we can unravel”—including the hidden monster who may be sneaking up behind you in a video game.

The Kor-fx device consists of a pair of vibrating transducers attached to a yoke that holds them snugly against a gamer’s chest. They translate the same audio signal going to a user’s speakers or headphones into a shaking sensation that is literally visceral—the vibrations echo through the user’s chest cavity and vastly heighten the sense of immersion when playing an action-heavy PC game, watching a movie, or listening to music.

Because the transducers vibrate in stereo, and because the human tactile system is pretty good at translating vibrations into directional information, it’s actually possible for someone wearing the device to sense which direction gunshots are coming from in a first-person-shooter game like Half Life, and even to feel events occurring “behind” them in the virtual world. Afshar calls this the “seventh sense.” (I’m not just repeating public-relations verbiage here—I’m one of the first journalists who has had a chance to try out the device, which adds an almost frightening level of you-are-there realism to both video games and action movies.)

Immerz, a two-person company based at the Cambridge Innovation Center, has applied for patents on the transducers. It has what Afshar calls “big name” angel investors, though he won’t identify them yet. But it’s also seeking venture-level financing so that it can start to produce the Kor-fx units in mass quantities (the company outsources a lot of its design and manufacturing work). The next big public showing for the technology will be at Pepcom Digital Experience, an event for journalists, analysts, and industry insiders preceding the CES trade show in January.

Afshar obviously isn’t your typical game-industry entrepreneur; my interview with him yesterday started off with a 15-minute discussion of quantum mechanics. In 2004, I learned, the Harvard-trained physicist presented the results of a groundbreaking …Next Page »

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GamerDNA, the Cambridge, MA-based startup building an online community where avid gamers can find recommendations for new games, has cut its staff nearly in half, shrinking from 13 employees to seven, according to a story today in Mass High Tech. Jon Radoff, the company’s founder and CEO, confirmed the layoffs in an e-mail to Xconomy, but declined to discuss them further, saying he was “trying to focus more on the future than the tough decision we just had to make.” GamerDNA, formerly called GuildCafe, raised $3 million in Series A funding from Boston’s Flybridge Capital Partners in April 2008.

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Partners HealthCare’s Center for Connected Health is holding its sixth big Connected Health Symposium in Boston this week, and there’s definitely more optimism here that information technology is becoming more mainstream in healthcare than in years past. The big focus of the conference is on technology that is used to extend healthcare outside of traditional clinics or hospitals into the homes of patients—something often called telemedicine or, at least at Partners, connected health.

Telemedicine got a big boost when IT was identified earlier this year in the American Recovery and Reinvestment Act (a.k.a. the economic stimulus) as playing an important role in improving quality of care—and perhaps most urgently—reducing healthcare costs. Currently there are provisions in bills under consideration in Congress that would create incentives for healthcare providers to adopt, say, remote patient monitoring and teleconferencing technologies. Indeed, the healthcare reform train is moving fast in Washington nowadays, and major players in the telemedicine market such as Philips Healthcare and Intel—which both have strong presences here at the symposium—are working hard to jump aboard and ensure that technologies that allow connectivity between patients and doctors are part of the agenda.

This symposium is interesting because it attracts a rare mix of physicians, entrepreneurs, hospital administrators, academics, and technology executives. Big names in tech like Google, Microsoft, and Verizon Wireless have sent executives here. Meantime, there are plenty of folks from Harvard, MIT, and the multiple research hospitals in town involved in the discussions to add a strong clinical or scientific perspective to the conference.

I’m also seeing or catching wind of new innovations from the gaming and wireless industries that have the potential to help patients stay healthy in their homes. (However, I have to say that the Boston Park Plaza Hotel, replete with its great big crystal chandeliers and Romanesque columns, makes an incongruous backdrop for someone talking about how an academic used the popular video game Warcraft in her medical research.)

Here are five of the VIPs who spoke here on Wednesday at the symposium:

—Daniel Palestrant, CEO of Sermo. Palestrant, a surgeon by training, has led the growth of Cambridge, MA-based Sermo into an online community of 120,000 physicians.

—Paul Bromberg, vice president and general manager at Philips Healthcare. Bromberg, whose office is in Framingham, MA, heads Philips’ remote patient monitoring unit.

—Ben Sawyer, founder of Games for Health, based in Portland, ME. Sawyer, a devoted gamer who plays Rock Band and other games in his spare time, does R&D on gaming technologies that are designed to improve healthcare.

—Jamie Heywood, co-founder and chairman of PatientsLikeMe. PatientsLikeMe, based in Cambridge, provides an online forum and community for patients with diseases such as HIV/AIDS, depression, and multiple sclerosis to share information about their illnesses with each other.

—U.S. Representative Ed Markey, a Democrat representing Massachusetts. Though I wasn’t around for his panel, Markey and Partners CEO Jim Mongan talked about healthcare policy and politics in Washington.

Here, in no particular order, are a few of the themes emerging from the symposium that I think are particularly interesting:

—Philips’ Bromberg noted that 24 percent of patients treated for heart failure are …Next Page »

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In his 2006 run for the Massachusetts governor’s office, Deval Patrick campaigned on the need to make the most of the state’s “creative economy,” meaning industries such as advertising, architecture, design, digital media, film, gaming, marketing, music, publishing, tourism, and the arts. It’s a sector that employs at least 100,000 people in the state, and that has long been one of the Boston area’s strengths. But Patrick’s point was that putting even more emphasis on these industries, through public and private investment, could help to counteract declines in other fields such as manufacturing, bring in more high-paying jobs, and maybe even make life more interesting.

Well, the recession that set in shortly after Patrick took office and the state government’s resulting financial woes have pretty much ruled out significant new public spending on creative-economy programs. There’s even a movement to roll back the state’s one major economic initiative in the arts, the costly film tax credit enacted under Governor Mitt Romney in 2005 and expanded under Patrick in 2007. But Patrick has made good on his campaign promise in other ways, notably by launching a new Creative Economy Council to identify the biggest needs in the creative sectors and appointing a full-time “creative economy industry director” within the Massachusetts Office of Business Development to work directly with companies in these sectors.

The man who fills those shoes—and, so far as Xconomy can tell, the only person in any U.S. state agency explicitly tasked with helping local creative industries—is 33-year-old Jason Schupbach. While peers at the MOBD cover areas such as life sciences and defense, Schupbach’s primary job is to help for-profit businesses in the creative sector find the resources they need to grow in the state. (The MOBD is part of the Executive Office of Housing and Economic Development; last month we published an extensive two-part interview with Greg Bialecki, who heads that office.) Schupbach is also pinch-hitting right now as acting technology industry director while that title’s usual holder, Tito Jackson, is on leave to run for an at-large seat on the Boston City Council.

Schupbach seems omnipresent in the entrepreneurship community lately. If you’ve been to recent events such as the TechStars Investor Evening on September 11, the Tech Tuesday game-industry meetup on September 15, or the MassTLC gaming panel at the UK Consulate on September 24, you’ve probably run into him or seen him speak. His oft-repeated refrain at these events is that the Patrick Administration cares about the state’s innovators, and is ready to promote their work in any way it can. One recent mark of that recognition was Patrick’s proclamation of September 9, 2009 (the day Harmonix Music released Beatles: Rock Band) as “Video Game Innovation Day”; Schupbach showed off the signed, leather-bound proclamation at several local meetups.

A 2003 graduate of MIT’s Master in City Planning program, Schupbach studied under the late J. Mark Schuster, a well-known proponent for cultural policies in urban planning. “I was really interested in how the arts and culture and creative fields fit into the design of a city,” Schupbach told me in an interview late last month. “I wanted to be a city designer, but I wasn’t very good at the design part, so I ended up writing my thesis about the trend of cities trying to bring artists into their downtowns.” He won the best thesis award—and went on to do exactly what he had written about, working for New York City’s Department of Cultural Affairs and then for the Ford Foundation’s Artist Link project, which promotes affordable urban housing for artists.

In our interview, snippets of which are highlighted below, I asked Schupbach to describe his more recent role at MOBD and to talk about the office’s biggest creative-economy initiatives. While the state’s revenue crunch means that his job is largely about directing businesses to existing resources, along with a good measure of cheerleading, Schupbach says a recession is actually a good time to think and plan (that’s one of the roles of the Creative Economy Council, which he coordinates). “The state budget will come back. Things are cyclical,” Schupbach says. “This is the time to plan and write law for when there is money around.”

On the state’s new focus on retaining local innovators:

We are never going to be the state that pays a zillion dollars to move Boeing here. We don’t have oil money like Louisiana. What we have is an enormous amount of talent that’s here already, and we have to figure out the best way to get them to stay here so that we’ll have the next billion-dollar company here. That’s why you see us trying to …Next Page »

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Seattle-based PopCap Games dropped a bit of a bombshell this morning. The casual games developer and publisher announced it has secured $22.5 million—the first outside funding in its nearly 10-year history—led by Meritech Capital Partners, a late-stage investment firm based in Palo Alto, CA. Also participating in the round are Larry Bowman, a PopCap board member, and John McCaw, a mobile and finance guru. The funding represents a minority stake in the company.

The news is surprising because PopCap has been profitable since its inception, and has shunned taking outside investment up to this point, even as the company has grown dramatically. From 2003 to 2008, PopCap’s consumer game sales shot up from $10 million to $170 million. Bejeweled, a puzzle game that involves lining up gems in a grid, made up about 40 percent of PopCap’s revenue as of last year.

The funding raises the question of whether the recession, which has hit video games hard, necessitated more capital for PopCap’s operations. The company’s chief executive, David Roberts, said the reason for the funding is to accelerate PopCap’s global expansion and distribution of its games. “We’re excited to have additional working capital that lets us be more aggressive with our expansion into social media and reaching new geographies,” Roberts said in a company statement. “We’ve been pursued by investment firms for many years and have resisted taking outside capital, but we liked Meritech’s style and believe there’s a tremendous opportunity to grow and evolve our business at a time when many other video game firms are retrenching.

Brian Fiete, Jason Kapalka, and John Vechey founded PopCap in 2000. It now employees 240 people in Seattle, San Francisco, Chicago, Vancouver (BC), Dublin, and Shanghai.

PopCap’s news represents the third large funding round for a Seattle-area gaming company in the past year. In September 2008, Big Fish Games landed $83.3 million led by London-based Balterton Capital, and in August 2009, Smith & Tinker revealed it has raised a total of $29 million from DCM, Vulcan Capital, Foundry Group, and others.

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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.”

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For a long time, Second Life was stuck in the cyber equivalent of the silent-movie era: people communicated by typing, and their words showed up in little thought bubbles above their avatars’ heads. All of that changed drastically around 2007, when Linden Lab, the company behind Second Life, hired an obscure outfit called Vivox to equip its 3-D virtual world with a voice communication system. Now any Second Life citizen who has a headset connected to their computer can simply speak, and everyone whose avatar is standing nearby will hear them in living stereo.

For the Gloria Swansons of Second Life, like myself, the changeover from typing to talking was a bit traumatic—and indeed, 20 percent of Second Life citizens still abstain from voice communication. But the other 80 percent gab for a billion minutes every month, which is a rather convincing demonstration that most people inside 3-D computer environments prefer talking to texting.

And now Vivox, a four-year-old startup based in Natick, MA, is about to introduce its technology to three new communities that could vastly increase its user base. The company announced this morning that it has formed a partnership with Redwood City, CA-based Electronic Arts (NASDAQ: ERTS), the world’s largest entertainment software company, to add its voice services to several online EA games. First up is Command & Conquer 4, a continuation of EA’s hugely popular real-time strategy game that’s expected to launch early next year.

At the same time, Vivox is announcing the launch of Vivox Labs, an incubator-within-a-startup where the company is trying out different ways of delivering its voice services over the Web. And the first two Vivox Labs experiments are aimed at big targets: Facebook, where the lab’s “Vivox Web Voice for Facebook” application will allow members to invite their friends to instant Web voice conferences; and World of Warcraft subscribers, who will be able to use a new Vivox-powered website called Puggable to assemble teams of players for in-world campaigns. Both the Facebook and Puggable applications are in private beta testing and are expected to go public by January.

“We started the company about four years ago with the goal of making voice a seamless, natural part of every online experience,” Vivox co-founder and CEO Rob Seaver told me when I visited the company last week. “Our view at the time was that more and more human interaction would take place online, and the richest form of communication we have is talking to each other. So we thought there would be an opportunity to turn the Web from this silent, barren place into one filled with the warm sounds of human voices.”

That’s exactly what could happen if even more gaming, virtual-world, and social networking communities turn to Vivox’s services. Not bad for a company that started out as a wacky idea from Jeff Pulver, the founder of the company that became Internet phone service provider Vonage.

You’ve probably heard of Voice over Internet Protocol, or VoIP; it’s the technology behind Vonage and Skype, and the one that has turned the telecom industry upside down by transforming phone calls into digital data packets and routing them over the open Internet. Vivox’s system works on similar principles, except that …Next Page »

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It’s a banner day for the Boston-area gaming industry. In what’s either a bizarre coincidence, a piece of arcane marketing numerology, or just a sign that the enormous PAX gaming conference in Seattle has ended, three local companies in the console and online gaming markets picked 09/09/09 to take the lid off big new products.

There’s Turbine, which is smashing down the old subscription wall around its Dungeons & Dragons Online title; Quick Hit, which is kicking off its online football simulation; and Harmonix Music Systems, which will take console gamers on a magical mystery tour with The Beatles: Rock Band. And oh yeah, there’s a little company out west that’s mounting a big media event today around a gadget called the iPod.

Here’s the full scoop:

Dungeons & Dragons Online: Eberron Unlimited

As we reported last month, Westwood, MA-based Turbine has decided to take a big gamble with one of its premier titles, Dungeons & Dragons Online (DDO). Formerly available only to subscribers who paid $14.99 per month, DDO today becomes the first major online fantasy game from an American game publisher to go “free-to-play.” It’s been a successful model for many Asian game publishers such as South Korea’s Nexon, whose free virtual world Maple Story has 15 million users. But for Turbine to avoid losing money on the changeover, which has been in the works for almost two years, it will need to entice users of the role-playing game to engage in microtransactions at the new DDO Store, where they can equip their avatars with everything from armor to healing potions to—in the company’s words—”massive cans of kick-ass.”

The currency at the DDO Store is Turbine Points, which players can obtain by putting in time online or by paying real cash. For the benefit of users who prefer the old model, the revamped game world, called Eberron, includes new areas or “adventure packs” that are open only to subscribers; these “VIPs” get a monthly cache of free Turbine Points to spend at the store.

Fernando Paiz, the executive producer of Eberron Unlimited, told me that Turbine hopes that the free-to-play model will draw more casual users into the DDO world. “One of the top barriers to any massively multiplayer online game today is the subscription,” he says. “People will say, ‘I like role-playing games or online games but I just don’t play enough to sign up for a $15 monthly subscription.’ We didn’t want that to be a barrier.”

The company is hoping, of course, that some free players will end up spending $15 or more per month on Turbine Points. Behavioral economists might call this a good bet: experiments have shown that consumers are more averse to losing money, even if it’s on something intangible like an unused game subscription, than they are to spending the same amount for a more visible and immediate reward.

“The DDO Unlimited Beta program has been a huge success and the initial response to the game from both press and players has been nothing short of phenomenal,” Turbine CEO Jim Crowley said in a press announcement today. “In response, we have already more than doubled our capacity to handle the increased demand.”

Quick Hit

[Delay of game! -- Quick Hit (see comment below) has just let us know it is putting off opening the site to the public while it works on last-minute adjustments. No word on the new kickoff time as of yet.] My sports-fan friends inform me that the official NFL season gets underway tomorrow night with a game between the Pittsburgh Steelers and the Tennessee Titans. But if you just can’t wait another day, you can try Quick Hit, an online football game that melds elements of fantasy sports, role-playing games, and console games into a …Next Page »

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Pacific-Northwest Armani Exchange it isn’t, but it is totally the height of Geek Chic. Penny Arcade Expo (PAX) has become the ultimate destination for gaming fans.

Since 1995, every gamer has dreamed of being able to sneak into E3: the video game industry’s annual closed-to-the-public trade convention, where new games and products are introduced and sneak peeked. PAX has become E3 for the public. While Gabe and Tycho just wanted to throw a party about the joy of gaming and hanging out with other gamers, they have helped to level the playing field for the promotion and distribution of games by giving individuals and small companies the opportunity to promote their games directly to consumers in a cost effective method. Traditional tiered systems, typified by trade-only conventions such as E3, mean that consumers receive their information about games via others such as the press and retailers. But with today’s distribution becoming increasingly direct to consumer via download, the need exists to promote directly to consumers as well. PAX can play a large part in helping game publishers of all sizes do so.

But PAX is not a trade show that is open to the public, it is a festival of all things geek: with seminars as varied as “The art of the Dungeon Master” to “How the iPhone has Changed Portable Gaming”; tournaments as varied as “Settlers of Catan” to “Halo 3”; and a Saturday evening concert featuring geek musicians. Of course, there is a little geek in all of us, or a lot of geek in my case, and since the conventions founders Mike “Gabe” Krahulik and Jerry “Tycho” Holkins love tabletop games to casual games to hard core first person shooters, their convention embraces this diversity as well, meaning that the audience is as broad a demographic slice as you could imagine.

The largest Internet gaming segment, women over 30, was well represented and interested in all the new “casual” games from PopCap, Big Fish, and the like. Younger kids flocked to the new Nintendo DS games and Nanovor (had to throw in a plug somewhere). Tabletop gamers had plenty to do with Privateer Press’s skirmish game WarMachine and Well’s Expeditions new mass action miniature game Arcane Legions. Card players competed in Hasbro’s Magic the Gathering and laughed all night with endless Munchkin games from Steve Jackson Games. Of course, the majority of the show reverberated with sounds of either machine guns or wailing guitars as the seemingly endless variety of first person shooters and music-based games continued to entertain the console core demographic of 18-to-35 males in huge numbers.

You can imagine that a festival started by guys who love gaming, but also make their living by humorously skewering both games and gamers in their enormously popular online comic penny-arcade.com, the show featured both planned and unplanned humor and provided a venue for other critics of geek culture such as Mega64 and RedvsBlue.

Gaming of all types has always been and will always be a social activity, and PAX embraces that in its very essence, providing a great experience for gamers of all types and a terrific opportunity for consumers to directly engage with creators.

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The Labor Day holiday weekend is finally upon us. If you’re a video gamer or a game developer, this means only one thing: Penny Arcade Expo (PAX) is happening in Seattle.

PAX has become the biggest trade show in North America for computer and video games. It draws tens of thousands of people for a weekend of game exhibitions, demos, panels, gaming tournaments, parties, and concerts—this year’s band lineup includes Jonathan Coulton, Freezepop, and MC Frontalot. The expo is billed as a festival of gaming technology and culture. (And for all my East Coast peeps, just a reminder: PAX is coming to Boston next spring, March 26-28, 2010.)

All the action starts today at the Washington State Convention & Trade Center in downtown Seattle. It is completely sold out, so if you don’t already have tickets, you are out of luck. Judging from the security at the event last year, you’d have only slightly less chance of breaking into Bill Gates’s house as crashing the PAX sessions.

If you do have an entry badge, though, here are my top 10 most interesting sessions to watch:

—How Can We Make Online Gaming Communities Suck Less? (Friday, 2:30 pm)
Attempts to answer the universal question, “why are we awesome in person and bastards online?” And explore what can be done about it.

—Prepare to Drop (Friday, 3:30 pm)
Join members of Kirkland, WA-based Bungie for an in-depth look at the soon to be released “Halo 3: ODST,” and discussions around the game’s development.

—Original Gangstas: Why Table-Top Gaming Still Packs Heat (Friday, 6:00 pm)
In a digital age, trading cards, miniatures, and traditional boardgames are holding their own at the kitchen table and increasingly on Xbox Live Arcade.

—Culture Wins in Game Marketing (Friday, 6:00pm)
How to market different types of games successfully. Includes representatives from Wizards of the Coast, Ubisoft, and other companies.

—Twitter and Beyond—New Game Communities Online (Saturday, 1:30pm)
Online game communities are changing rapidly thanks to social media. No longer are gamers primarily congregating on official game forums. They’re using Twitter, Facebook, and …Next Page »

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Thirteen weeks, 123 stories, and about a million cups of Starbucks’ finest later, my internship at Xconomy in Seattle is over. But as a parting gift, I am going to share some of my favorite articles from the summer here. I hope you enjoy reading them (and my other articles) as much as I enjoyed writing them.

—One of the most memorable opportunities I had was to test-drive not one, but two alternative energy vehicles. In June, I test-drove a hydrogen-powered SUV from Fort Lewis to Seattle, a trip made even more interesting because it was a GM vehicle and took place the day GM declared bankruptcy. Just a few weeks ago, I borrowed a modified hybrid electric car for a few days and got to see what it’s like to treat a car like any other electric appliance at the end of the day. Bottom line: both cars are perfectly satisfactory vehicles; the real issues are, how much does it really help the environment to drive one, and does it ultimately save the driver money?

—Concerns about the economy pervaded everything this summer, but I managed to write about some potential bright spots in the current financial gloom. There are alternatives to using dollars, especially here in the Northwest, and the recession gives companies like Dibspace a boost in demonstrating those alternatives. Whether or not the economy is in recovery, it’s nice to know there’s an easy way to exchange goods and services without needing cash.

—No matter how bad the economy gets, people always want entertainment, and covering Casual Connect, the casual video games expo last month, showed me that there’s more demand than ever for games. Venture capitalists are not blind to the trend, even if some think the best video game business model comes straight out of Dante’s Inferno. For gamers looking for a slightly more refined way to play, you can’t go far wrong with Her Interactive, makers of the Nancy Drew computer game series whose capture of the elusive girl gamer market led me to profile the company in June.

—But no story sums up the summer for me better than the dancing, singing, experimenting high school students at the Student BioExpo in May—one of the first stories I wrote, and a great experience all around. Perhaps the best thing I can take away from my time at Xconomy is the advice Nobel Laureate Mario Capecchi gave: “Always dream big.”

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Turbine, the Westwood, MA-based maker of online role-playing games profiled here last week, has obtained $6.57 million of a planned $50 million Series D round of financing from its venture funders, according to a document filed today with the Securities and Exchange Commission. The funding was first reported by Dan Primack at PE Hub.

So far, the funding appears to be coming entirely from Turbine’s existing investors. Michael Hirshland of Polaris Venture Partners, Bob Davis of Highland Capital Partners, Carmen Scarpa of Tudor Ventures, Jeffrey Patterson of Columbia Capital, and Hany Nada of Granite Global Ventures are listed in the regulatory filing as board directors involved in the new round.

The company has not issued an official announcement about the funding round. Turbine executives and investors did not immediately respond to my requests for comment. [Update, 4:30 p.m., 8/10/09: I reached a representative for Turbine, who said the company has no comment on the financing.]

The new round would bring Turbine’s total venture funding to $145 million, including a $40 million Series C round that closed in April 2008. The 15-year-old, 300-employee company runs two major subscription-based online role-playing game worlds, The Lord of the Rings Online and Dungeons and Dragons Online, as well as Asheron’s Call, its original title. It’s about to launch an overhauled version of Dungeons & Dragons Online that, for the first time for a major U.S.-based online role-playing game, will be free to play. CEO Jim Crowley told me that the company is also on the verge of announcing its first console-based game and may also be about to acquire a new entertainment property similar to The Lord of the Rings and Dungeons & Dragons.

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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 »

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Smith & Tinker, a Bellevue, WA-based game company launched a new, hybrid game combining online and offline play today, according to a press release by the company. Called Nanovor, the game has an online aspect where players can collect, modify, and train small Pokemon-esque monsters called nanovors. Later this year, the company will start selling handheld devices called Nanoscopes, which players can download their creatures onto and use to battle other creatures on another device offline. This is the first game released by Smith & Tinker, which is run by serial entrepreneur Jordan Weisman.

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“Gaming will save us all,” proclaimed Tim Chang this morning. A principal at Norwest Venture Partners, a venture capital firm out of Palo Alto, CA, Chang spoke at Casual Connect Seattle, the three-day casual video game conference that ends this evening. Chang’s topic was emerging trends in casual gaming, and as a proud gamer since 1980, he was happy to tell the crowded room that casual games, integrated into larger “metagames,” are not only the future of gaming, but the future of digital media as well.

Essentially, Chang said, instead of games and other media being sold and consumed in one lump, there have to be different kinds of activities available across different platforms to get and keep customers. Thus, Casual Connect is more important than ever, because other meetings, like the annual Game Developers Conference, are not taking notice of the rising meta and casual game trends. “GDC is stuck in old crusty console land,” he said. Rather than just developing a game and selling it, companies now have to use add-ons, episodic storytelling, and other ways of encouraging people to keep playing. “Everything has to be an ongoing service,” Chang said—and companies have to provide that service and make money from it.

It’s not just gaming that has to change the way it thinks, though. “Traditional media is dead,” Chang explained, as are their business models. The interactive and social components of gaming are rapidly becoming the obvious solution to the loss of interest in old-fashioned media formats. Guitar Hero and Rock Band are particularly good examples, Chang said, because people who wouldn’t pay 99 cents for the MP3 will gladly fork over a couple of bucks to pretend that they are a rock star playing the song at a concert. “We gotta get into gaming because we sure as hell can’t sell CDs anymore” is the only conclusion music label executives can draw, Chang said. And that approach applies to casual games just as much as console games, he said, because it’s the “affinity of a flashy lifestyle” that attracts customers, not necessarily the quality of the music.

Gaming’s real success, though, and the answer to the future of digital media is …Next Page »

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Casual games are a serious business.

Seattle-based PopCap Games’ Bejeweled and Big Fish Games’ Mystery Case Files were cheap to develop compared to most modern computer and console games, and the cost to buy them is similarly low, but games like these are played by millions of people around the world. Between the recession and the ever-rising development costs for new games, the so-called “casual” video game seems ripe for an extension of its already massive success. For developers, entrepreneurs, business strategists, and others, the place to network, show off products, and learn new techniques is in Seattle this week.

Casual Connect Seattle, a three-day conference combining seminar, lectures, and networking opportunities started today, filling Benaroya Hall in downtown Seattle with a strange mixture of video game exhibitions and business meetings. While men in suits discussed adjusting costs to hang onto consumers, a woman dressed like a medieval princess took pictures with men wearing a crown to promote King.com, a games website. “This is a really important conference for your industry,” Washington Technology Industry Association president Ken Myer told a crowded auditorium this morning in his welcoming remarks. More than 2,000 people are expected to attend the event from companies all over the world.

Casual Connect occurs three times a year—in Seattle, in Kyiv, Ukraine, and a rotating European location (this year Hamburg, Germany). Seattle is home to a large cluster of video game developers of all stripes, including divisions at Microsoft and RealGames devoted to casual games. “We’re very proud of our gaming industry here in Washington,” Myer said.

Xconomy wrote about the recognition of casual games as increasing sources of revenue at last year’s conference, and the surprising resilience of casual game profit margins despite the recession. Understanding that, the keynote talk given today by Big Fish Games president and CEO Jeremy Lewis focused on what he called “building value”—growing a casual game company into the best shape possible. Lewis talked about his own personal journey to his current position, using various artistic pictures as analogous illustrations. It’s easier said than done to grow value, he admitted, but he offered some lessons he had learned such as putting aside ego, making culture a priority, and looking for ways to expand the audience. For Big Fish, the audience “is what we call the chief household officer,” Lewis said.

What really drew the attention of the crowd, though, were the announcements Lewis made for the first time. He showed a brief preview of a new game called “Drawn: the Painted Tower,” and said it is the first “cinematic game”—a more graphically intensive story-based kind of game that Big Fish will be focusing on more. He also announced an exclusive deal with People.com to put games on their site, which, with 32.6 million unique visitors a month, should build value for Big Fish quite well. And 88 percent of those visitors are female. “That’s a lot of chief household officers,” Lewis remarked.

Tom Prata, senior director of project development at Redmond, WA-based Nintendo of America was the other main speaker this morning. He expanded somewhat on what Lewis said, focusing on what exactly creates avid gamers and retains them. The main area of development has expanded beyond just the linear improvement of graphics because of a combination of cost and complexity, he said. Ten years ago, “the cost of developing titles was increasing at an alarming rate,” Prata said, and games were becoming so complicated that many potential customers were dissuaded from buying them. Today, however, with the rise of casual games, the video game market has expanded enormously, with around 30 million new players in the last two and a half years. “There have never been more opportunities for game developers than right now,” Prata said.

Judging from the eager energy and purpose-filled stride of people in Benaroya, Prata is not alone in his belief. Dozens of companies have booths to talk about their latest products, and there are certain to be a number of deals between different companies and organizations in the works before the end of Thursday. And office workers everywhere can look forward to a new crop of games to absorb them. “Everyone enjoys video games,” Prata said.

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After just a couple of weeks, Ryan Morel was hooked on Bumper Stars, a free game on Facebook. He and his co-workers were but a few of the tens of thousands of people playing the game, a mixture of ping-pong, pool, and shufflepuck, every month. Morel only wished someone would make a mobile version of the game so he could play it even more. Then he remembered that, as vice president of business development at PressOK Entertainment, based in Seattle, he could make that happen. After a few months of negotiation and six months of development, PressOK and Large Animal Games, the game’s original developer, rolled out Bumper Stars Mobile for the iPhone last week.

Translating games from one format to another is not new, but in the rapidly changing world of smartphone applications, it is an emerging trend. PressOK is one of the first mobile gaming companies to import a game in this manner, although it is rapidly becoming popular among game developers. “Developing a new game is much more difficult than translating a game,” Morel explained.

PressOK was born last September in a merger between mobile game makers Mobliss and Reaxion. Reaxion still exists as a development company based mainly in Russia and Belarus. PressOK is a publishing unit, with the combined game catalog and intellectual property of both companies before the merger, Morel said. Bumper Stars was created by New York-based Large Animal in 2007.

Bumper Stars, which is available for $2.99 in the Apple app store, “is the first real PressOK release,” Morel said. Mobliss had focused on games distributed by AT&T and Verizon to traditional cellphones. The new focus of PressOK is on games for smartphones like the iPhone and the Android, which will be getting its own version of Bumper Stars Mobile soon. Some of the games will be original, and some will be new versions of games in the PressOK catalog. About 80 percent of PressOK’s focus will be on smartphone games from now on, Morel said, including ports, original games, and translations of games in other formats. Morel said there is a revenue-sharing plan with Large Animal, although he could not provide any details.

Morel isn’t concerned that people might hesitate to buy a game that can be played for free online. The company plans on doing advertising and marketing for the next few months, at least, to boost the popularity and sales of the game even as they start working on the next one.

PressOK is one of many companies that sees new opportunities in smartphone games, where possibilities are not available to more old-fashioned mobile games. “In traditional mobile games, there’s a little bit of a sink or swim mentality,” Morel said. If a game does not succeed immediately, it tends to disappear from easily accessible options for games to play on the phone. In contrast, he said, there’s a lot that can be done to boost the profile and sales of iPhone and other smartphone games.

Success would be to get Bumper Stars into the top 25 of paid apps, but it doesn’t have to happen overnight. “The good news is that your success can be built over time,” Morel said. “Once it’s developed, it costs us really nothing to keep it in the app stores.” An existing Facebook version of the game helps, as there are only a few phone games with online versions. “It already has a substantial user base. We can tap into the existing group of people who enjoy the game,” Morel said.

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