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2013/07/26

| 07.26.13 | Zynga aborts real-money gaming plans

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July 26, 2013
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Today's Top Stories

  1. U.S. smartphone users spend around 300 MB per month on Facebook, report shows
  2. Zynga quits real-money gaming in U.S., reports dismal Q2
  3. Mobile app code of conduct released, but industry remains largely silent
  4. Gameloft reports 125M mobile users thanks to free-to-play trend
  5. Visa: 253 merchants, 90 financial institutions now support V.me digital wallet


Also Noted: Moovweb
Spotlight On... Android 'App Ops' to give users controls over app permissions
Google paid almost $1B for Waze; Nickelodeon launches HTML5 mobile gaming hub and much more...


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News From the Fierce Network:
1. TracFone bleeds 192K subs in Q2 as América Móvil shuts off inactive accounts
2. Samsung posts surging Q2 profit thanks to smartphones, but mobile momentum slowing
3. T-Mobile expands MetroPCS footprint by 50M POPs, adds $40 rate plan


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> Whitepaper: How Mobility Can Transform Your Business
> Whitepaper: Cisco ONE: Framework for the Internet of Everything
> Whitepaper: The Financial Benefit of Cisco's Elastic Core
> Whitepaper: 2013 Mobile Sophistication and Strategy Study
> Whitepaper: How HR Is Solving the Puzzle of Leave Management
> Whitepaper: Touch Technology Extends Mobile Gaming

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Today's Top News

1. U.S. smartphone users spend around 300 MB per month on Facebook, report shows


According to new data from Mobidia, U.S. smartphone users chew through around 300 MB per month accessing Facebook's (NASDAQ:FB) mobile offerings. And that figure is split relatively evenly between cellular and Wi-Fi access to the social networking service.

Click here for a larger version of this chart.

Mobidia shows that U.S. smartphone users on LTE connections consumed slightly more data than their 3G counterparts. Further, the firm's numbers indicate U.S. users consume more data accessing Facebook than those in the United Kingdom, South Korea and Canada.

Mobidia obtained its findings via its mobile app. Millions of mobile users across the globe use Mobidia's "My Data Manager" app on iOS and Android to manage their cellular data consumption. A portion of those users anonymously send reports on their data consumption and application usage to Mobidia, which the company said gives it a view into on- and off-network data consumption in over 600 different cellular networks around the world.

The company's findings, from April, are noteworthy considering Facebook was the nation's most popular smartphone application, according to January findings from research firm comScore. ComScore reported that Facebook's iOS and Android mobile apps were accessed by 85.6 million unique visitors in December, ahead of Google Maps, Google Play and Google Search.

Further, Mobidia's figures show that Facebook likely continues to consume a significant chunk of all mobile traffic. For example, Cisco reported that the average North American mobile user used an average of 752 MB per month total at the end of 2012. And recent data from NPD Connected Intelligence showed that iOS and Android smartphone users consume around 1 GB of cellular data per month.

To be clear, tracking such figures is a difficult task, and the numbers are always moving as more and more Americans purchase smartphones, and as their connection speeds continue to increase as wireless carriers deploy faster networks. Indeed, Cisco predicts that by 2017 the average North American mobile user will consume fully 6 GB of data per month.

Related Articles:
Cisco: Average N. American mobile user to consume 6 GB/month in 2017
Average Android, iOS smartphone data use across Tier 1 wireless carriers, through January
Google Hangouts continues to trail rivals in usage, according to report

Read more about: Facebook
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2. Zynga quits real-money gaming in U.S., reports dismal Q2


Social gaming company Zynga (NASDAQ:ZNGA) said it won't pursue a license for real-money gaming in the United States, and will instead refocus on its existing free-to-play social gaming business. The action appears to be one of the first strategic decisions by Don Mattrick, who took over Zynga's CEO position from longtime chief Mark Pincus earlier this month.

"While the company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States," Zynga said in its second-quarter earnings release. "Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings."

Zynga's new position is a dramatic reversal from the company's previous comments on real-money gaming: "We're excited about the entire category of the social casino, from poker to the growth we're seeing in other parts of free, like Slots and Bingo and integrated casinos, especially on mobile where we are seeing a very broad market for a range of products and a fairly broad audience," Pincus said on the company's first quarter earnings conference call, according to a Seeking Alpha transcript.

Zynga had filed a preliminary application in Nevada for licensing, and the topic had generated notable excitement among Zynga investors. The company teamed with Bwin.party to offer real-money gaming services in the UK, with an eye toward eventually bringing such offerings to the United States.

As Zynga bows out of the real-money gaming market in the United States, other mobile companies are stepping up to the plate. For example, Glu Mobile (NASDAQ:GLUU) in May announced it will collaborate with cash and virtual currency platform Skillz (a 2013 FierceWireless Fierce 15 winner) to integrate skill-based cash tournaments into select Android titles in the United States.

Zynga's announcement on real-money gaming was included in the company's second quarter earnings report, which showed decreases in virtually all of the company's key metrics. Zynga's revenue clocked in at $231 million, down 31 percent year-over-year, and its monthly active users (MAUs) decreased from 306 million in the second quarter of 2012 to 187 million in the second quarter of 2013, down 39 percent year-over-year. According to VentureBeat, Zynga's numbers were largely in line with Wall Street expectations, though the company's shares were down around 12 percent to around $3 per share in after-hours trading immediately following the release of the company's results.

In mobile, Zynga recorded 16 million mobile daily active users and 57 million mobile monthly active users.

"Mobile bookings were up 1 percent quarter-over-quarter, that's down 12 percent year-over-year as new mobile game launches did not generate enough bookings to offset aging live games," said Zynga's Mark Vranesh during the company's earnings conference call, according to a transcript from Seeking Alpha. "Mobile bookings represented 19 percent of bookings a year-ago and 27 percent of bookings in the second quarter of this year. Facebook related bookings were 68 percent of total."

"The next few years will be a time of phenomenal growth in our space and Zynga has incredible assets to take advantage of the market opportunity," Mattrick said in explaining Zynga's second-quarter earnings. "To do that, we need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company. We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters. I'm privileged to lead Zynga and I look forward to spending more time with our players, employees and shareholders."

As Zynga struggles, the company's one-time partner, Facebook (NASDAQ:FB), is on the upswing. Facebook recently reported dramatic increases in its mobile advertising efforts.

For more:
- see this release
- see this Seeking Alpha transcript
- see this AllThingsD article
- see this VentureBeat article
- see this TechCrunch article

Related articles:
Don't bet on mobile real-money gambling in the U.S. anytime soon
Zynga CEO Pincus steps down, will be replaced by Microsoft Xbox Chief Don Mattrick
Zynga guts 18% of staff, shutters offices
Zynga's 'Draw Something 2' fades quickly after strong start
King passes Zynga with 70M DAUs across platforms, announces new mobile title

Read more about: Mobile Games, Mobile Gambling
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3. Mobile app code of conduct released, but industry remains largely silent


After more than a year of negotiations, a coalition of mobile app developers and consumer advocacy groups, working under the auspices of the National Telecommunications and Information Administration, released guidelines on what app developers should disclose about the data they collect on mobile users. The effort is the latest in a long series of attempts to explain to mobile users exactly what information smartphone applications are collecting about them.

The guidelines essentially would require participants to clearly disclose to users what information they collect (like contact lists, photos, Web browsing history, biometric data or health and medical information) and whether they share that information with any third parties (like mobile advertising networks or data analytics companies).

The goal is to ensure smartphone users are educated about exactly what information mobile apps can access, and is in response to concerns that mobile app providers are surreptitiously collecting personal data from users.

According to the New York Times, groups like the Application Developers Alliance, the American Civil Liberties Union and the World Privacy Forum participated in the creation of the guidelines. However, according to the NYT, major mobile app companies like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) have not said whether they will support the new code of conduct, making it unclear whether the effort will result in any substantial changes in the mobile market. The Federal Trade Commission would be able to enforce the guidelines on any company that agrees to follow the code of conduct.

Wireless trade group CTIA voiced support for the code but stopped short of agreeing to push it: "CTIA has been encouraged by the experience of parties working together in the multistakeholder process. While member companies will need to evaluate the final code thoroughly, CTIA supports company consideration of the draft Code of Conduct for voluntary adoption and support."

The code, released by the NTIA, is one of a number of attempts to add clarity to the rapidly evolving market for mobile applications. For example, CTIA in 2011 attempted to institute a Mobile Application Rating System, but both Apple and Google declined to participate in the program (both offer their own ratings systems). Other efforts, such as the Association of Competitive Technology's App Trust Project, have shown little progress. Moreover, Apple, Google and other app store managers generally already offer alerts and information about what information specific applications are accessing.

Nonetheless, the issue appears to be important to mobile users: According to a Pew Internet and American Life Project survey last year, 54 percent of respondents said they had backed out of adding an app to their smartphone when they realized what kind of personal information they would be required to hand over. 

For more:
- see this NTIA page
- see this New York Times article
- see this Verge article
- see this Broadcasting & Cable article
- see this CTIA post

Related articles:
Report: Majority of app users will uninstall over privacy concerns
Mobile privacy concerns spawn the App Trust Project
Mobile app transparency should be led by developers, not the government
NTIA-led group inches closer to mobile app code of conduct
Apple adds age rating tags to App Store descriptions

Read more about: CTIA, Apple
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4. Gameloft reports 125M mobile users thanks to free-to-play trend


Paris-based mobile gaming powerhouse Gameloft reported notable increases in sales in its second-quarter earnings report, and predicted continued successes throughout the rest of this year. Specifically, the company said sales in the second quarter grew 10 percent year-over-year to $73 million, and that 125 million people across the world played one of the company's games during the past month.

Gameloft said users in Europe, the Middle East and Africa accounted for 33 percent of its second-quarter sales, making the region the company's biggest. However, Gameloft said North America was its second-biggest region, accounting for 25 percent of sales in the second quarter.

In the first half of this year, Gameloft said its smartphone sales grew by 45 percent over the same period last year, and represented fully 61 percent of the company's total sales.

Interestingly, Gameloft said that 80 percent of its smartphone revenues are coming from sales of virtual goods and advertising. "This business model increases the longevity of the company's products. Games dating from 2011 and 2012 such as Ice Age Village, Modern Combat 4: Zero Hour, World at Arms, MY LITTLE PONY, Order & Chaos Online, and Six-Guns have contributed to the solid performance of the company in the first six months of 2013," the company said.

Further, Gameloft said the trend toward freemium, free-to-play games is dramatically expanding its reach--the game maker said that in the past 30 days, 125 million people have played a Gameloft game on their smartphone or tablet. The comments are notable considering Gameloft historically has made a business selling complex, high-end mobile games for as much as $8.

Gameloft said it expects to report between $311 million and $318 million in total sales this year, "as well as an increase of profitability and net cash."

Gameloft isn't the only mobile games maker that's scoring successes with the free-to-play model, where games are free to download but generate revenues through the sale of digital goods such as character and equipment upgrades. For example, Electronic Arts earlier this year announced it has no plans to release any new premium-download mobile games in 2013 and will instead focus its efforts exclusively on the free-to-play model. Shortly after EA's announcement, Gameloft's VP of Publishing Baudouin Corman confirmed to FierceMobileContent that in 2013, "a majority of our titles will be free-to-play, but we will still launch some paymium titles throughout the year."

According to mobile market researcher Distimo, more than three-quarters of all revenue was generated via in-app purchases among the highest-grossing 250 apps in Apple's (NASDAQ:AAPL) App Store in February.

For more:
- see this Gameloft release

Related articles:
Gameloft, FDG Entertainment committed to freemium, premium app strategy
Electronic Arts ditches premium model for free-to-play mobile games in 2013
Distimo: In-app purchases pay off for iOS developers
Report: Gameloft shuts down India studio despite Q4 mobile sales surge

Read more about: Gameloft
back to top



5. Visa: 253 merchants, 90 financial institutions now support V.me digital wallet


Visa announced that 90 U.S. banks, including Bank of America, PNC Bank, BBVA Compass and others, now support its V.me digital wallet service. That number is almost double the 50 that supported the offering in November. Further, Visa said that fully 253 merchants have agreed to support the company's V.me service, a number that includes 72 merchants signed on during the second quarter.

"So there is a lot more coming here, there is a fairly significant pipeline of merchants," said Visa CEO Charles Scharf during the company's recent earnings call, according to a transcript from Seeking Alpha.

Visa, which has said it has been working on digital wallets since 2011, said V.me exited beta testing late last year. The company said the product enables consumers to make real-world and online purchases via smartphone, tablet or PC--instead of entering their account number, billing data and shipping information for each transaction, shoppers simply input their username and password. In addition to Visa cards, V.me also supports cardholder accounts from rivals MasterCard, American Express and Discover. Consumers can visit www.V.me to enroll and begin shopping at online retailers including 1-800-Flowers.com, Shoebuy.com, Cooking.com and others.

Of course, Visa' V.me is one of a large and growing number of digital wallet and mobile commerce offerings. The space is filling with the likes of Square, PayPal, Google (NASDAQ:GOOG) Wallet and Isis, spearheaded by Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile US (NYSE:TMUS).

During Visa's second quarter earnings conference call, Scharf addressed the increasingly complicated space, which he broadly dubbed "tokenization." He argued Visa is working to both compete and cooperate where necessary.

"Successful tokenization initiatives must also be interoperable and standardized and do several very important things. Number one is they need to deliver value to all stakeholders, that includes issuers, consumers, merchants, acquirers, payment gateways, and everyone involved in the digital commerce platform," Scharf said. "It's got to be standards based, technology agnostic such that a tokenization solution builds on the existing open nature of the payments industry while also aligning with emerging payment innovation systems mobile and digital wallets. As I said before, it needs to deliver at least the same level as transparency and reliability that exists today. And equally important it needs to address the needs of everyone globally, not just in the United States."

Concluded Scharf: "We're committed to working on this broadly with all of our partners. It's something that we are working on and we feel very good about the progress that we're making with our partners on this one."

Though it's no surprise that Visa is focusing much of its energy on the space. The head of mobile for Visa Europe, Sandra Alzetta, recently predicted that by the end of the decade over half the transactions made in the region would be conducted on smartphones. 

For more:
- see this Seeking Alpha transcript

Related articles:
Visa's Gajda: Mobile payment space is not fragmented, and NFC will rule the market
Visa's payWave to be incorporated into Samsung's next-gen phones
Visa's V.me digital wallet exits beta, mobile apps due in early 2013
Visa, Orange team on mobile payments for emerging markets

Read more about: Visa
back to top



Also Noted

This week's sponsor is Moovweb.

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SPOTLIGHT ON... Android 'App Ops' to give users controls over app permissions

According to a post from Android Police, Google (NASDAQ:GOOG) appears to be preparing a new function in Android 4.3 dubbed "App Ops" that will give users more control over what functions and information their Android apps can access.

As the Verge notes, Apple's (NASDAQ:AAPL) iOS platform has long offered these kinds of controls through the Settings app, but now it appears Google is updating Android to offer similar, and more fine-tuned, control. For example, the service will allow users to see whether an app can access their location information, their Wi-Fi connection, their contact data, their calendar information and other such functions. Users can then click into the settings for each app and turn each permission setting on or off. Article

Quick news from around the Web.

@FierceMobiCo: Impressive: The word "mobile" did not get mentioned once during Amazon's second-quarter earnings conference call: TranscriptFollow@FierceMobiCo

> Nickelodeon launched a new HTML5 mobile gaming hub featuring free games sporting its various characters. Article

> Another Google app is being retired: Google+ Local will be shut down Aug. 7. Article

> LinkedIn is taking a page from Facebook in its pursuit of mobile ads. Article

> Nokia released an augmented reality app for job seekers. Article

> Google paid almost $1 billion for Waze, according to new documents. Article

> Facebook paid around $67 million in stock for Parse. Article

> The official Pearl Jam iOS app is now available. Article

> Famigo announced a new line of mobile offerings alongside a new partnership with Mobile MUM. Release

> Wikipedia is now allowing mobile editing of posts. Article

Wireless News

> Samsung Electronics reported that its net profit soared 50 percent year-over-year in the second quarter, thanks in large part to its booming smartphone business. Article

> Less than three months after its merger with MetroPCS, T-Mobile US said it has expanded the MetroPCS footprint by 50 million POPs. Along with starting service in 15 new metro areas, T-Mobile also said it is expanding its bring-your-own-device service to all MetroPCS customers. Article

And finally… Canonical's Mark Shuttleworth hosts a Reddit "ask me anything" in support of the Ubuntu Edge smartphone crowdfunding campaign. Post


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