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New Ad Exchange Delivers Mobile Video

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Get ready for more in-app messages like this: “and now a word from our sponsors,” as ad company Vungle today launched an in-app video ad exchange that will serve commercials to smartphones.

The 15-second video spots are meant to seamlessly interject into apps during breaks in the action, such as after a player loses a life in a game. The Vungle Exchange lets brands control their video ad campaigns with programmatic tools across 4,000 apps.

Digital video is a growing segment in the $31.5 billion mobile advertising market, according to eMarketer. However, studies in the U.S. have found that commercials on smartphones are big turnoffs.

EMarketer said in a recent report that only 12 percent of U.S. mobile users prefer video ads as opposed to say, banners, which are more easily ignored.

One reason for user discontent, however, is that videos could stall and load slowly. Vungle said it solved the latency issue, serving video ads in the blink of an eye.

Mobile digital video advertising is an attractive market, and even Rovio will start serving such ads in Angry Birds, offering in-game rewards for users to watch the commercials.


Facebook's Ad Network Promises to Make App Partners Rich

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The message from Facebook’s f8 developers conference: If we can change, our app partners can change—and everyone can cash in. Mark Zuckerberg and his team showed off the highly anticipated mobile ad network that will be key for the social network's financial goals, and will allow app partners to show very well-targeted ads.

Facebook is now generating 60 percent of its ad revenue from mobile, a market it grew from nothing just two years ago. It's expanding to serve ads outside its own network based on its trove of user data, and onto apps like the Huffington Post and Vinted, where brands like Target and Coca-Cola can now reach audiences in more places.

“For the first time we can help you monetize in a serious way on mobile,” Zuckerberg told developers today.

Facebook is a formidable entrant into the world of mobile ad networks, rivaling Twitter’s MoPub and Google’s AdMob. Analysts at SunTrust Robinson Humphreys expect the Facebook Audience Network to generate $9 billion in revenue by 2017, $3 billion of which Facebook would likely keep as part of its split with developers.

“Facebook arguably knows the most about its 1.2 billion monthly users,” SunTrust analyst Robert Peck said in a report to investors. “Adding this layer of information to the targeting capabilities of a mobile ad network could create one of the best ROI  generating opportunities for advertisers.”

The three buzzwords of today’s conference were: build, grow, monetize—and Facebook showed off the tools to help developers do just that.

“Our goal with Facebook is to build the cross-platform platform,” Zuckerberg said.

All of today’s announcements for developers and marketers were meant to solidify Facebook’s hold on mobile.

“It’s Facebook’s play for immortality and protect it from going the way of MySpace,” said Ragy Thomas, of the social media management platform Sprinklr. He explained that Facebook wants to be an indispensable player for apps on mobile—the place where they turn to acquire users and keep them engaged.

Facebook announced several key features and services to tighten its mobile grip:

1. Log-in permissions: They seem routine but are actually big hurdles for getting users comfortable with sharing their phone data. Facebook now gives developers a way to let users cherry-pick which permissions—like location, contacts and other data—they allow when signing up for new apps.

2. Anonymous log-in: Facebook's app partners can allow users to sign in anonymously to try their services without giving up too much information.

3. Last year, Facebook bought Parse, a startup that now has 260,000 app clients. Parse is developing tools to help its app clients deliver offline experiences that are not dependent on an Internet connection.

4. Applinks, also developed by Parse, let users navigate between apps in a way similar to how they move from website to website on desktop. Only now they can deep-link between apps and back, a typically clunky process.

5. Facebook’s head of partnerships, Ime Archibong, showed off new tools intended to keep audiences engaged with apps. He said apps can use them to target people, reminding them when an app has been unused for a long time. He also revealed new buttons that are familiar to Facebook users, including the Mobile Like, letting publishers add it to their app content for sharing on Facebook. There also is a Connect to Mobile button for app developers to find their users on mobile websites and prompt them to download the app.

6. The Facebook Audience Network was the final product announcement of the day, which promises to deliver highly targeted ads outside of Facebook, and help the app developers make money from their mobile products.

Ad of the Day: Yes, That's Kevin Spacey in the New Call of Duty Commercial

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On Thursday, Complex and a few other outlets found a SoundCloud file, with no context attached, of somebody who sounded an awful lot like Kevin Spacey delivering a bad-guy-sounding monologue about democracy—and not really being into that particular form of government so much. Comlex originally hypothesized it was a viral campaign for House of Cards.

Variety's Marc Graser ran a spectral analysis on the sound file (which, wow, Marc) and found a picture of a soldier holding a gun, and made the leap that it was from a new Call of Duty ad.

Late Thursday night, Activision put the full trailer up on its website for Call of Duty: Advanced Warfare, the latest game in the franchise, and sure enough, there's the digitized K-Space, telling the world he's sick of the Electoral College. (Really, though, this is like HoC Season 4, right? We're on our way there.)



There's also the video below, produced by Activision and Vice, which holds its NewFront presentation on Friday, about the world of Blackwater/Xe Services-style mercenary organizations (euphemism of the day: private military contractors—please note that "private" can modify both "military" and "contractors," depending on how you choose to understand the phrase) much like the one Spacey heads in the new CoD. It's a news report ... except it's also an ad!



It's worth noting that this wasn't entirely how the CoD reveal was supposed to go down, though it is pretty close. With a few images and some hints here and there, Activision had prepared a countdown clock for Sunday, when the trailer was supposed to go live.

But tease enough reporters, and they start reporting: Gaming site Destructoid acquired a leaked copy of the trailer and posted it Thursday night, either blowing the lid off the reveal or moving it up slightly and creating a lot of buzz around a promotional video, depending on how you look at it.

Anyway, the whole thing is kind of brilliant: We bring to you highly sensitive information that is also a series of neato advertisements for a popular video game.

Report: YouTube to Acquire Twitch for $1 Billion

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Is YouTube making a play in the livestreamed video game world? It has offered to buy eSports streaming portal Twitch for more than $1 billion, according to a Variety report. The deal, which would be the largest acquisition ever for YouTube, could be announced soon.

However, The Wall Street Journal said the companies' talks are only preliminary. A purchase price has not been revealed, and the WSJ said that Twitch was also considering raising funds instead of selling.

Both YouTube and Twitch declined to comment on the reports.

Twitch, spun off from Justin.TV in June 2011, has become a popular online hub for gaming-related video content. It averages 45 million unique visitors a month who watch about 106 minutes of livestreamed video a day, according to the company.

But YouTube might be most interested in Twitch's ability to keep viewers glued to ads. The site gets 400 million to 500 million ad impressions a month and an impressive 90-plus percent completion rate. The industry average is a little less than 50 percent, per media mobile ad serving and analytics company Celtra.

Advertisers have been wary of YouTube, an issue that parent company Google is trying to address with Google Preferred, a new premium offering that allows brands to place promos against the top 1 percent and 5 percent of YouTube's videos

Twitch raised an additional $20 million in series C funding in late September 2013. It also let go of CBS Interactive's ad inventory in June 2013 in order to pursue its own internal advertising ventures.

GameSpot Ranks Interest in Upcoming Video Games

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To give brands, consumers and publishers more insight into which video games are being geeked out over, top gaming information site GameSpot will rank interest in upcoming games in real time on a new list called the GameSpot 50.

"Advance buzz is more critical than ever before," said Ben Howard, GameSpot's vp of content. "We really felt that there was room in the marketplace for something which looks at upcoming titles and what the world is going to be playing in the next few years and how our audience is getting into this stuff games six, 12 or 18 months before release."

Starting today, the list—also known as the G|FIFTY—will encompass several metrics, including video views and search traffic across the San Francisco-based web publication's online hub. Because much of the website's traffic is directed through Google searches, the site reflects larger online behavior, said Stan Kwon, vp of strategy and operations at GameSpot. Previously, some of the information was available for subscribers of the gaming information portal's B2B service GameSpot Trax, but the publication decided to make the knowledge public. 

"Video games really only have one chance of success at release. The stakes are higher than ever," Kwon added, noting that these games often have Hollywood blockbuster budgets.

Also, the list won't be limited to just PC and console offerings. G|FIFTY will encompass any upcoming game, which means mobile titles could climb up the charts. However, with the hardcore gaming community still swearing by traditional platforms, it's an unlikely scenario for now.

Video game publisher Ubisoft is interested in the list because it will show audience interest and intent for buying its games. Such data will provide insights into titles that lurk under the most popular 10, potentially giving the company time to tinker with its marketing strategies.

"We spend a lot of time trying to understand what's motivating gamers," said Jill Steinberg, Ubisoft's senior director of media and promotions. "It can change all the time. It brings to the forefront games that are very good games that aren't always exposed."

The information may be beneficial to people outside the gaming industry as well, according to Howard.

For example, one of GameSpot's main sponsors is Samsung. The Korean telecommunications company will support some of the gaming website's upcoming E3 events, which will be held June 10-12 in Los Angeles. While Samsung doesn't produce games, using GameSpot could help show off devices that players may be into.

Gamers Are Not Who You Think They Are, Study Finds

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A new study comissioned by gaming-themed online video platform Twitch and from Neil Howe and his team at LifeCourse Associates finds that today's gamers does not live in their parent's basement, and are, for all intents and purposes, an average young person. They are not, in fact, tethered to their consoles—they have real lives.

Sixty-three percent of Americans have played a video game in the last 60 days. When parsing out the information on millennials, that number jumps to 73 percent of that demographic.

"Gamers overall have a different profile than 10 years ago," said Jonathan Simpson-Bint, Twitch's chief revenue officer. "The sort of key takeaway before was that gamers have been a pariah group. That simply isn't the case now because they basically follow the profile of millennials."

This leaves interesting opportunities for advertisers who want to target the average millennial, Simpson-Bint explained. Twitch has worked with brands like Mountain Dew, and movie studios like Lionsgate have worked with it to promote its movies. For example, Twitch held a Starcraft 2 tournament called the Enders Cup as a form of branded content for the movie Ender's Game. The deals have helped the company double its non-endemic revenue compared to this time last year, and it is on track to have 300 percent to 400 percent growth in the category by the end of 2014, per Simpson-Bint.

And, it's allegedly piqued the interest of YouTube, which reportedly may be bidding to buy it for $1 billion.

"Gamers are social, video is their language and Twitch is ultimately their platform," Simpson-Bint proclaimed.

It's not only that the majority of people are playing games, but that those who dabble behind the joystick are pretty social. Today's gamers are more likely to be living with someone else, be it their families, roommates or a significant other than non-gamers. They also tend to say their friends are the most important thing in their life (57 percent versus 35 percent of non-gamers). And, about three out of four gamers make offline time a communal activity with their friends.

The study didn't define what exactly constituted a video game, meaning that even casual mobile gamers were labeling themselves with the gamer tag.

"Not that long ago, I would present to the room of an agency and ask how many people were gamers," Simpson-Bint recalled. "A couple of people—almost always guys—would raise their hand and confess they play games."

"I don't ask that question anymore because literally everyone puts their hands up," he added.

Coca-Cola Bolsters QuizUp Content to Include 40 Categories

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On Wednesday, Coca-Cola will launch a new section of branded content in the QuizUp gaming app to include more than 18,000 World Cup trivia questions specific to each country competing in the tournament

There will also be helpful facts and information that are designed to help viewers better understand soccer. The soda giant began a soft roll-out of the sponsorship in April around a few topics. QuizUp is only one part of Coke’s bigger World Cup sponsorship, which also entails a user-generated content push that will feature an interactive "Happiness Flag."

"There’s nothing bigger than the World Cup, so creating this awareness around a long-term partnership with Coke just increases the visibility, scale and scope of the project," said Viggo Jonsson, vp of business development at QuizUp.

The gaming app’s content is also now available in five languages—French, Spanish, English, German and Portuguese. The company plans to add Turkish and Russian content next (although a date hasn’t been announced) and is also looking to move into Asia with content tailored towards the Korean, Japanese and Chinese markets.

The German content pieces rolled out on April 17, and per QuizUp, they netted 175,000 hours of games played in the first week. The Iceland-based company said gamers have spent more than 130,000 hours with Spanish trivia questions since launching on May 15.

QuizUp also reports that the average gamer spends 30 minutes with its content per day. One billion matches—or games—were played between November and March by iOS users before the game launched an Android verison.

QuizUp is one of the fastest growing games and is among a growing list of apps that are positioning themselves towards more branded content advertising options for marketers.

"The idea is very much to create a global trivia game," Jonsson said. "This language expansion has been our big thing in the past two months and continues to be for the next couple of months."

Dead Island 2 Trailer Isn't as Artful as the Original, but Is Still Plenty Horrifying

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The 2011 trailer for the original Dead Island is one of the most notorious video game ads ever made. It won a gold Lion in Cannes that year, yet it was booed at the screening in the Palais and is certainly tough to stomach—though incredibly artful as well, as the reverse footage gave it an otherworldly and strangely moving sense of dread. (Adweek named it one of the year's 10 best ads.)

This week at E3, the trailer for the much-anticipated Dead Island 2 was unleashed. It's still plenty gory, though less haunting and more goofy-scary. The game's setting is actually no longer an island but all of California, and the trailer takes place on a sunny boardwalk by the Pacific Ocean, as a jogger heads out for a run that quickly becomes infested with zombies.

This one won't win any awards, but it's a more than adequate reintroduction to the franchise. Now you just have to wait until 2015 for the actual game to come out.

Warning: Spot is graphic and may be disturbing to some viewers.


What Brands Can Learn From a YouTube Artist Like Lindsey Stirling [Video]

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Getting people to watch videos online is difficult. After all, there's no exact science. Or is there? Electronic dance violinist Lindsey Stirling has it figured out, and now everyone is taking notice.

Stirling uploaded her first video in 2007 with hopes of getting on The Ellen DeGeneres Show. She never made it on, but her video did go viral (by 2007 measures). Next came America's Got Talent, which she thought would be her moment to shine in front of an audience of millions. But after being eliminated by the judges in the semifinals, "Nothing changed," Stirling, 27, said in a video interview with Adweek. "There were no management companies, no labels hit me up. Nothing."

"Meeting Devin 'Supertramp' Graham was what changed my life," recalled Stirling. She admits she didn't even know what a YouTuber was back then. Now, the violinist is a seasoned veteran with nearly 5 million subscribers and over 670 million views.

In our video, Stirling discusses launching her viral videos and how it transformed her musical career. She also talks about why brands need to trust talent, working with John Legend, and most important, how to make it on YouTube.

Cost Per App Install Is 30 Percent Less Than Expected On Twitter, Lyft Says

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Twitter is starting to sell app install ads to all, and the car service Lyft said that these campaigns cost 30 percent less to acquire a new customer than the company planned. The social messaging company said today that app makers globally would be able to build mobile app campaigns like the ones already tested by Electronic Arts, Lyft and TwoDots.

Twitter has been experimenting with app-install buttons in Promoted Tweets for months, and such direct response marketing is becoming ever more important to its ad business. App promotions are helping drive the mobile industry in general, and Twitter’s top rivals like Facebook and Google are all competing for developer attention.

Kelton Lynn, revenue product manager at Twitter, described how marketers are using Twitter to target based on TV viewing habits, interests, gender, device and other areas. Twitter is charging developers only when a user clicks install and goes to the app store.

“People turn to Twitter to connect with their interests, and discover new ones,” Lynn said in a blog post today. “During the mobile app promotion beta, our clients have been able to reach Twitter’s highly engaged audience to drive a large volume of cost-effective downloads.”

Developers sometimes face significant costs for download campaigns, and many have found marketing efforts hard to justify given the eventual lifetime value of customers.

However, advertising advancements such as retargeting on Twitter and Facebook allow brands and developers to reach more likely customers, ones that visited your website, for instance.

“We were able to quickly and effectively reach our growth goals via Twitter for 30 percent below the originally targeted cost," said Daniel Riaz, mobile acquisition head at the car service Lyft.

EA said that cost per app install on four of its top games was "at or below single digits," but it would not be more specific than the less than $10 range. A report today from app tracker Fiksu found that typical costs per install were around $1.30, in the industry in general.

Twitter also sells Promoted Tweets that link to already downloaded apps, yet another area that attempts to boost the value of a user. Twitter charges per click.

Twitter also made notifications that pop up after a download completes to encourage users to dive in.

“The notification is designed to drive activation of your app when user intent is highest,” Lynn said.

Cats Like Tablet Games, Too

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It's common knowledge by now that the intuitive design of tablets has opened up gaming to everyone from infants to the elderly, but there's one group using tablet gaming apps that may still surprise you: cats.

There's even an "Animals Playing on iPads Compilation" video on YouTube mostly featuring cats (with over 2 millions views), and, as Kill Screen reports, developers like Martine Carlsen are developing apps specifically designed for our feline friends. Carlsen decided to try her hand at developing apps for cats after her own cats—Sonny and Cher—were disinterested with the cat gaming apps then available via the app store. Her first cat gaming app was called "Catch The Mouse," a game featuring a tiny virtual mouse moving across the screen while making "real mousey sounds."

Her website now lists a host of cat gaming apps, including a gaming suite app that includes fly, goldfish, butterfly and spider "Catch" games in addition to the original "Catch The Mouse," as well as paw painting and cat music apps.

As Carlsen noted in her interview with Kill Screen, "The design of the game has to appeal to humans to ‘persuade’ them to purchase it, and it has to appeal to the cat to be a success. One without the other is not enough."

And, like humans, cats have preferences about which games they like. "Some cats will gladly attack everything that moves on the iPad screen, while others are more picky about even the most lifelike (virtual) mouse," she explained. "I try to make games with catch objects that appeal to as many cats as possible, but you can’t please everybody (or every cat). It’s like buying an expensive toy for your kid; they take out the toy and play with the box instead. You never know!"

Cats and tablet gaming are a perfect fit. Felines are naturally playful, using their paws to attack and play with objects around them. And, according to Kill Screen, "the touch screen on a tablet is just as sensitive to the pads on their feet as it is to human fingertips." So while cat gaming is only in its infancy, don't expect it to go away any time soon.

Marketers Pick Apart Google's Twitch Purchase

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The Internet-based video game ad space has had its shares of ups and downs—as the likes of Zynga have seen revenues plummet. But marketers are not going to give up on a billion-dollar industry.

And Google clearly isn't. Reports today indicate that the digital giant has finalized a $1 billion purchase of Twitch.tv, a video site that's become popular with gamers and could serve as a complementary marketing platform for brands in tandem with YouTube ad efforts.

Twitch.tv gets 400 million to 500 million ad impressions a month and a wildly impressive 90-plus percent completion rate. In terms of that latter stat, the industry average is a little less than 50 percent, per media mobile ad serving and analytics company Celtra.

But opinions vary in the industry on just how big of a deal Twitch will be to Google's sprawling enterprise. 

"I think Google/YouTube was already a serious player in video game ads," said Lewis Ward, gaming industry analyst for researcher IDC. "There has been some grousing that Google is a quasi-monopolist in the area of search of course, an argument that I don’t think holds water by the way. But my point is that since search is a huge piece of the total online ad market, Google is [already] a key ad player in games by default."

Satish Polisetti, CEO of AdsNative, disagreed.

"I would not say they are a serious player yet," he said. "Google/Youtube has been all about celebrities to date, and Twitch will be their first move to go more broad into a very engaged community—gamers."

More than anything, said Corey Weiner, CEO of HyprMX, Google's purchase shows it is taking content more seriously. Twitch will be "be very important for YouTube’s profitability and revenue growth," he said. "By acquiring one of the leaders in one of the most popular content categories on YouTube, Google increases its profitability on those content assets. But this presents a problem for other content providers in the gaming video space; Google now controls not only the supply of advertising, but also content and discovery."

As if Google—which is on pace to rake in $60 billion in revenue this year—needs help. Yet others agree with Weiner that Twitch could make a notable impact on Google financials.

"[The purchase] will only increase their reach to one of the most-coveted advertising audiences on the Internet," said Michael Anderson, CEO of GameWisp. "By acquiring Twitch, gaming channels will now be looking to Google to distribute and, more importantly, monetize both types of content. The more interesting question is what this means for gaming channels. Gaming channels look primarily to advertising for their revenue, and YouTube has traditionally taken a fairly large share of any revenue generated. With Google controlling both sources of revenue, gaming channels are understandably nervous."

Ward from IDC compared Twitch's $1 billion price tag to Facebook forking over $2 billion for Oculus Rift. "Twitch’s audience is massive by comparison," he said. "I'm a tech analyst not a financial analyst, but in my book either Google got a steal or Facebook overpaid—or both."

Jay Gould, CEO of Yashi, suggested that Google chief Larry Page has hit a home run.

"It's unimaginable how large Twitch can grow to by integrating with Google's Hangouts on Air as well as further deep integrations with YouTube," he said. 

Google and Twitch declined comment.

Per a VentureBeat article, Google's YouTube team is in charge of the acquisition, which the publication suggested would be announced soon. 

'Help, I'm Addicted to Kim Kardashian's Game'

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Kim Kardashian’s game is starting to take its toll. People are crying for help on anonymous social networks like Whisper to confess their addiction to this mindless app.

The Kim Kardashian: Hollywood app, made by Glue Mobile, is making almost $2 million per week in virtual sales. And with advertising it could be a $200 million annual moneymaker. It has spent most of its time since launch among the top 5 downloaded games.

The app is simple: You just tap your way from a virtual nobody to a virtual A-List celebrity (still an actual nobody) by going to photo shoots, shopping and climbing the superficial rungs of Hollywood by going on dates and to parties. It’s like a "Choose Your Own Adventure" without any actual adventure, and it often involves you paying—up to $99—to accelerate your progress.

Making progress in the game has indeed become a full-blown obsession with some people. They’re proclaiming their compulsion in anonymous forums like Whisper, displaying all the stages of addiction from denial to acceptance. Some are even enablers—women dragging their boyfriends to join them.

Here are the signs you’re addicted:

At first, you just don’t get it.

The Kim kardashian game is stupid and boring idk how people play it

Sure, it’s stupid, but you can’t seem to resist.

I think the Kardashians are stupid ad hell and don't see why they are famous. But I am addicted to Kim's new game.

Addiction creeps in.

The Kim Kardashian game is my new addiction

Then your new addiction takes a sinister turn.

The Kim Kardashian game is slowly taking over my life! Send help.

You start pushing it on others and they’re now addicted.

When I told my straight boyfriend that I'm addicted to the Kim Kardashian game his first reaction was "not you too". I made him make an account so he could be my bf in the game too and now he's addicted and plays without me. He's on my level after a day

It starts interferring with those other activities that used to bring so much joy.

I think I'm addicted to that Kim Kardashian game.  I played it during sex :(

It’s getting in the way of your work.

I just did a happy dance at work because I made it to the A list in the Kim Kardashian Hollywood game.

Life itself has a little less joy.

I'm more invested in the Kim Kardashian game than in my real life

And just like that the will to live is gone.

Downloaded the Kim kardashian game. I've lost the will to live. Good-bye cruel world.

Bomb Gaza and 6 Other Mobile Games Banned by App Stores

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The Israel-Palestine conflict is playing out in app stores with games like Bomb Gaza being used as a new kind of information warfare. In fact, Google started pulling apps from its Play store that it found unsuitable for its mobile platform. 

This week, Bomb Gaza, Gaza Assault and Whack the Hamas were banned. And it’s not the first time real conflict caused virtual ramifications. In past wars, Apple removed an app called Third Intifada, a hub for pro-Palestinian information that Israeli officials said incited violence.

Even with Bomb Gaza and the other games removed from the Play store, there are still titles inspired by the Mideast conflict. There are games based on Israel’s Iron Dome defense, which has been successful during the latest fighting in limiting damage from rockets fired from the Gaza Strip.

Another whack-a-mole style game disappeared today—Hamas a Mole, which was similar to Whack the Hamas where terrorists pop out of holes in the ground and need to be bashed back down.

Games that cause outrage have been a staple of mobile apps since Apple launched its iPhone software store in 2008. Apple is tight about regulating content in its App Store while Google has fewer restrictions on the types of games and products it allows. Still, they both have cracked down on offending games.

Here is a look at some of the most controversial games:

Weed Firm
Players grow pot and build a drug empire. Apple pulled Weed Firm from its store this year. 

Smuggle Truck
You can drive immigrants through the desert but don’t let them bounce out the back of the truck. Apple rejected this game in 2011. 

Boyfriend Trainer

Whack, slap and put your boyfriend on a leash are supposed to be part of the fun in this game from last year. 

Dog Wars
This 2011 app let players train dogs for fighting before Google removed it. 

Zombie School
Turns out a shooting game in a school wasn’t a good idea, even if the targets were zombies. Apple removed the game in 2008. 

Baby Shaker
Perhaps the most tasteless of all, this game was about simulating newborn deaths by vigorously shaking an iPhone. It was pulled after slipping through the Apple censors in 2009. 

Microsoft Reports $400 Million Loss on Xbox One

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Xbox One might not be the juggernaut gaming console that Microsoft hoped it would be. The Redmond, Wash.-based technology company's earnings report for the last fiscal year shows it spent $400 million more than it earned trying to get gamers interested in the Xbox One.

While Xbox console sales increased from 9.8 million units in 2013 to 11.7 million units in 2014, manufacturing and distributing costs went up to $2.1 billion while platform revenue only reached $1.7 billion. The news is coming hard on the heels of the earlier announcements that it would lay off 14 percent of its workforce—largely related to its Nokia acquisition—and shutter its Xbox TV studio

Today's headline suggests that Microsoft may have to throttle back its ambitions, at least when it comes to the gaming console. On Xbox One's website, the device is marketed as a way to use multiple Microsoft products and services simultaneously. "Talk with family and friends on Skype while watching TV," it suggests, or do a Bing search while playing a game.

But, in an interview with the Financial Post at the E3 consumer electronics show last month, Xbox strategy head Yusuf Mehdi acknowledged that a number of non-gaming features had to be removed from the XboxOne, such as app streaming and digital game purchasing, in response to user feedback. To win over gamers who only want to play games, Microsoft also removed its bundled motion capture device Kinect in May so it could lower the price of Xbox One to match market leader Sony PS4. 

Despite losing nearly half a million dollars on the Xbox One since its launch last fall, Microsoft itself still has plenty of cash to spare. It still reported revenue of more than $23 billion last quarter.


Bomb Threat, Hack Attack Disrupt Sony PlayStation

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Sony's PlayStation Network is back up and running today after a cyber attack caused a weekend-long outage. No user information was breached, according to a Reuters report.

In a denial-of-service (DoS) attack, hackers sent a crippling volume of traffic that effectively shut down the system. None of the 53 million PlayStation users' account information was compromised. On the PlayStation blog, Sony issued the following update: "We have seen no evidence of any intrusion to the network and no evidence of any unauthorized access to users' personal information."

Also, there was a bomb threat on Sunday against an American Airlines flight carrying Sony president John Smedley. The flight was safely diverted to Phoenix Sky Harbor Airport, and then reached the final destination of San Diego. 

The cyber attack and bomb threat were both posted on Twitter under the account @LizardSquad. 

Today, a few tweets have alluded to possible issues with Microsoft's X-Box Live network, but company spokesman David Dennis told Reuters the threats are unfounded: "We don't comment on the root cause of a specific issue, but as you can see on Xbox.com/status, the core Xbox Live services are up and running."

How an Oil Painting Two Centuries Old Inspired PlayStation's Latest Salute to Gamers

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IDEA: There would seem to be a large cultural gap between 19th century art and 21st century entertainment. But BBH didn't see it that way.

"The team came in with a super simple observation: The greatest heroes through time have been immortalized in oil paintings. They thought PlayStation heroes should receive the same treatment," said executive creative director Ari Weiss.

Thus, a fun campaign was born—spanning outdoor, online video, social and more—centered around Emanuel Leutze's 1851 painting Washington Crossing the Delaware, reimagined to feature heroes from PlayStation games (and one lucky gamer) in place of George Washington and his men.

ART DIRECTION/TALENT: Weiss said BBH had three criteria for finding a famous work to reference: Would it be instantly recognizable? Did it have a prominent hero leading a group? And could the agency execute it beautifully?

Leutze's painting was a yes on all counts, so the agency hired Swedish artist Andreas Englund to recreate it. "He's a photorealistic painter, which was perfect for capturing each game character in exacting detail," said art director Daniel Burke. "He also has a subtle sense of humor to his work, which can be seen in his series about an aging superhero."



Englund left the Washington character blank, and fans were asked to pick a famous gamer, from among five choices, to take the coveted spot. (Joey Chiu, who was the first person in line to buy a PlayStation 4 last November, won that vote.)

The campaign launched with a giant mural, mimicking Englund's painting, at the E3 conference in June.

Next, The Mill helped bring the painting to life in a 60-second online spot. "They featured the painting textures beautifully, creating a realistic depth of field. There wasn't a more honorable way to reveal this masterpiece," said art director Diego Fonseca.

COPYWRITING: Heroic voiceover copy on the spot was taken directly from Thomas Paine's famous pamphlet series The American Crisis. "These are the times that try men's souls," the narrator says over close-ups of the characters, now moving slightly. "Yet we have this consolation with us—that the harder the conflict, the more glorious the triumph. It matters not where you live or what rank of life you hold. I call not upon a few, but upon all."

"We figured if it was good enough to inspire General Washington and his revolutionary army to fight for a country's freedom, it was probably good enough to inspire gamers playing for their own greatness," copywriter Evan Benedetto said of the text.

The spot ends with the on-screen line "Where the greatest play" and the campaign tagline, "Greatness awaits."



It also points viewers to a microsite, where they can create their own "Gamer Masterpieces" (using three classic works of art and a number of characters and backgrounds), upload them and ask for votes. The top 50 vote getters are getting a real-life version of their Gamer Masterpiece; the top 10 will get the same, plus a new PS4.

SOUND: The music on the spot is a quietly stirring original orchestral track by Human. "We wanted a piece of music that added emotion while letting the voiceover really be the star," said Burke.

MEDIA: The campaign was interactive at its core, but had various touch points.

"Our audience doesn't experience ideas in siloed ways—they just grab a bit here, see a bit there, and it all needs to reward them in some way for spending time with it," said BBH New York chief creative officer John Patroulis. "In this campaign, interactivity and participation became the gravity that pulled all the elements together."

THE SPOT:

CREDITS
Client: Sony PlayStation
Guy Longworth: Senior Vice President Brand Marketing
John Koller: VP Platform Marketing
Franco de Cesare: Senior Director Home Consoles
Tyler Vaught: Senior Brand Manager Home Consoles
Cristian Cardona: Brand Manager Home Consoles
Cody Morales: Assistant Brand Manager
Mia Putrino: Assistant Brand Manager

Agency: BBH, New York
John Patroulis: CCO
Ari Weiss: Executive Creative Director
Evan Benedetto: Creative
Daniel Burke: Creative
Amanda Brencys: Creative
Diego Fonesca: Creative
Carey Head: Head of Production & Technology
Kate Morrison: Head of Content Production
Douglas Stivers: Senior Integrated Producer
Kelly Bignell: User Experience Director
Anthony Terruso: Creative Technologist
Deb Archambault: Art Buyer
Rachel Freed: Senior Print Producer
Simon Joseph: Associate Producer
Sean McGee: Business Affairs Manager
Armando Turco: Head of Account Management
Mark Williams: Account Manager
Mike Mueller: Account Executive
Eric Schwerdtfeger: Account Executive
Julian Cole: Head of Comms Strategy
Benjamin Zoll: Comms Strategist
Sarah Watson : Head of Strategy
Kendra Salvatore: Brand Strategy Director

Oil Painting Artist: Washington Crossing the Delaware
Andreas Englund

Digital Experience
we are resn: design, art production, development and animation

Gamer Masterpiece Film Production: Mill+
Creative Director: Rama Allen
Executive Producer: Danielle Ameral
Producer: Stephanie Katritos
3D Lead: Christian Nielsen
3D Artist: Isaiah Palmer
2D Lead: Nick Tanner
2D Artist: Rob Roth
Editor: Ryan Mckenna
Editor Assistant: Leanne Belgiomo
Colorist: Mikey Rossiter

Music: Human

Sound Design: Henryboy
Sound Designer: Bill Chesley
Executive Producer: Kate Gibson

Audio Mixing: Sound Lounge
Tom Jucarone: Mixer/Audio Post
Mark Ledwidge: Assistant Mixer/Audio Post

Activision's $500 Million 'Destiny' Launch Shows Power of Online Video

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With gaming giants Activision (Call of Duty franchise) and Bungie (Halo franchise) behind it, yesterday's release of Destiny was bound to be a big pre-order event. But the game exceeded expectations, with more than $500 million already tallied for orders by stores, to easily become one of the largest wholesale launches of a new game franchise in history.

Indeed, Activision's $500 million investment in marketing the game seems to already have payed off. A gameplay trailer was released in late August and has racked up almost 6.5 million views on YouTube. The live-action trailer for the game, released last week, has already eclipsed that figure, with almost eight million views already.

For the second trailer, Activision collaborated with agency 72andSunny, production company Reset Content, Academy Award winning VFX studio Digital Domain and Academy Award nominated FX studio Legacy Effect. The two-minute trailer, directed by Joseph Kosinski (Oblivion, TRON: Legacy), features voice acting from Peter Dinklage (who also appears in the game), as well as licensing Led Zeppelin's "Immigrant Song," and seems more like a preview for a Hollywood blockbuster than a video game. 

Given the game's initial success, analysts are already predicting the title will be the year's top-selling game, moving 12 million to 20 million copies for over $1 billion in revenue, according to USA Today.

"Since the beginning, we’ve been confident that our investment and belief in Destiny would pay off," said Eric Hirshberg, CEO of Activision Publishing, in a statement. "But not many people believed we’d be able to say it did so on day one."

For comparison, earlier this year, Ubisoft announced that its Watch Dogs release was the "best-selling new [game] at launch across the video game industry" after wholesaling roughly four million copies in its first week. The retail equivalent of that number of units would equal no more than $250 million—much less the $500 million wholesale figure claimed by Activision.

Check out the Santa Monica, Calif.-based brand's trailer below.

Reading Rainbow Host LeVar Burton Binge-Watched Game of Thrones Before He Read the Books

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Specs
Who LeVar Burton
Age 57
Claim to fame Emmy-winning actor (Roots, Star Trek: The Next Generation); host and producer of Reading Rainbow; author of the children’s book The Rhino Who Swallowed a Storm (available Oct. 7)
Base Los Angeles
Twitter @levarburton

What’s the first information you consume in the morning?
My email, followed by my Twitter feed, followed by the Today show. Twitter is where I get the majority of my news.

What other social platforms are you on?
I have a Facebook account which enables me to keep up with friends and family, but I’m much more of a voyeur there. I don’t do a whole lot of posting. It really just gives me an opportunity to stay current with what the family’s doing. I was an early adopter on Twitter, and it’s like a relationship. You have to invest in it, you know? I don’t have an Instagram account. I’m all in on Twitter, for better or worse.

Who do you follow on Twitter?
I like to follow people who make me laugh, so I follow Rob Delaney, I follow Gloria Fallon—I find Jimmy’s sister Gloria hysterically funny—I follow Jesus Christ, I follow Stewie Griffin. I really do get a lot of value out of those unexpected laughs throughout the course of the day.

Your Kickstarter campaign to revive Reading Rainbow raised $5.4 million. Had you ever done any sort of crowdfunding before?
I had pledged to a couple of campaigns, but this was my first crowdfunding effort. I had been aware of Kickstarter for a couple of years and watched it mature, and with the success of Zach Braff’s movie and the Veronica Mars campaign, it really felt to me like it had come of age, and that gave me some confidence that we would be able reach our goal, which was $1 million.

What’s your favorite app?
I travel a lot, so my weather apps are really important to me. I use Clear Day and WeatherPro. I also use Flight Tracker a lot. And I get about 200 emails a day, so I love Mailstrom. It gives me the ability to go through and organize and clean up my various email inboxes.

What TV shows do you watch?
I’m a huge fan of the binge-watching model. I just finished watching Luther. I think that Idris Elba should be the next James Bond. I knocked out four seasons of Game of Thrones in two and a half weeks and am reading the books now. I’ve got the Syfy series Defiance in my queue now, and I still have to start House of Cards and Orange Is the New Black. That’s my fall television viewing.

What’s on your reading list?
Like I said, right now I’m reading Game of Thrones. I’ve always got science fiction on my reading list so I’m rereading some Octavia Butler. Her latest book is in my queue as well, but I haven’t had a chance to get to it because Game of Thrones has had me totally wrapped around its gauntlet.

How do you wind down at night?
I read! I put my iPad in night mode so as not to wake my wife, but also because it’s said that the bright screen actually interferes with your sleep patterns. That way, there are no arguments and everybody gets what they need. I get to read, she gets to sleep.

Now You Can Get In on the Facebook Ad Network That Made Millions for the Kardashian Game

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Facebook is taking the wraps off its mobile ad network after saying the early results helped lead to big gains for apps like Shazam and game makers like Glu Mobile, the developer behind Kim Kardashian: Hollywood. The company said today that the Facebook Audience Network is now open to all advertisers and publishers after a limited launch at April's F8 developers conference.

Facebook said Shazam, the app that identifies songs, increased its ad revenue by 37 percent just by plugging into the Audience Network. Also, Glu Mobile made twice as much money from ads on the Audience Network compared to the price commanded from other mobile ad networks. The Kardashian game has been a hit since launching and is said to be on pace to tally $200 million in ads and in-app purchases.

In fact, probably not coincidentally, just yesterday the Kardashian game launched as an app within Facebook. The game is all about dating your way to the top of Hollywood.

As for Facebook, its Audience Network is helping the site expand to mobile advertising outside its own walls. Last week, Facebook launched an ad server, Atlas, that would help advertisers target ads across the Web using the social network's unique personal data.

The Audience Network started with just app-install ads, but it's branching out with new formats, including link ads, "meaning any advertiser can use the network to drive traffic to its mobile website," Facebook stated in its announcement today.

Facebook said advertisers are seeing value from their ad campaigns. Walgreens saw clicks jump on ads from the Facebook network: the click-through rate increased five times. HarperCollins increased impressions by 16 percent.

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