SGN is clearly trying to find the revenue-maximizing price for the game – it has varied from $9.99 (the price I paid in June), to just $1.99 today. The game will eventually allow paid-for upgrades to weapons and jets when the new version comes out as well, which will bring in more dollars from addicted users.

This is an extraordinary game and certainly not representative of the average revenue from other paid apps in the App Store. But it also isn’t even currently on the top list of paid apps, and it continues to pull in substantial dollars, spiking, we hear, to as much as $60,000 per day.

SGN is also planning to license the basic platform engine that they created to build F.A.S.T. to other developers as well, who can create their own interactive games.

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About a month ago, Michael got to test-drive (well, test-fly) SGN’s new jet dogfighter game before its official release in the App Store, and deemed the graphics to be ’stunning’. I’m embedding the demo video he recorded here below, but we should get an updated video of the gameplay from the company soon which we’ll add here as well. Or, as from today, you can also just go to the iTunes App Store and buy the premium version of the game yourself (it’s priced $9.99).

Update: new video

The name of the game is F.A.S.T. and the main difference with other jet dogfighter games for the iPhone like Top Gun and Flying Aces is the multi-player aspect and the incredibly good-looking 3D graphics of the whole thing. You can play the game against other people over WiFi (both one-on-one and two-on-two) and the game neatly switches to “God view”, that is an elevated view of the rest of the fight, when you crash or get shot down. You really ought to play it to get a feel of what it’s like to fire missiles and a machine gun from the jet and follow the path of a fired missile as if you were sitting on one, because it’s really hard to explain how much this game rocks without you actually trying it. Let us know your thoughts if you decide to purchase the game.

On a sidenote: if you don’t want to see a picture of SGN CEO Shervin Pishevar playing the game wearing an F14 Fighter Helmet, don’t click here.

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Social Gaming Network (among the first to exploit the iPhone accelerometer to create Wii-like games), is coming out with a new jet fighter dogfight game. The graphics are stunning, and you can fight against computer opponents or other people playing the game.

This isn’t the first iPhone dogfight game (Flying Aces and Top Gun are popular), but the graphics are way beyond what I’ve seen with the other games, the social fighting aspect is a first and unlike those games, SGN’s will be free. I had a chance to play it this morning in our offices, a video of that demo is below.

The application hasn’t been named yet and is still a month or so from launch, but SGN says if you email launch@sgn.com they’ll respond back when the game launches. The game will be free, and eventually users will be able to pay to upgrade their jets and weapons. In the first version users will train and add levels, but when the iPhone 3 comes out this summer, they say, a war is going to break out.

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The history of this powerful little app is dramatic. It was first created by Maestri while still employed at SGN’s former iteration, FreeWebs, under the pseudonym Jason Gilbert. That alone is evidence that the game actually belonged to his employer. Maestri left SGN in February 2008, and SGN sued Maestri for control over the game. For more background, see here.

Mob Wars, which is a game that lets players act as criminals and rise through the mob ranks by committing crimes, fighting other players, etc., brings in a lot of money. Players use real currency to buy weapons and other virtual goods on the site. Some estimates suggest revenue may have peaked at $1 million/month, and there are nearly 2.5 million active users of the application on Facebook today.

It has also spawned a number of copycats, including Zynga’s Mafia Wars, with 2.7 million active users.

Given that the settlement allows SGN to create its own knockoffs without fear of future litigation, suggestion is that Maestri will pursue Zynga and others for intellectual property infringement.

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In August I was disappointed that so few iPhone applications leveraged the network effect to spread virally. I used the chess apps as an example – there were lots of them, but none at the time that let you play against other people.

The chess problem has since been solved. But I am still amazed at how few applications let iPhone users interact with each other (other than the nascent mobile social networks, which continue to gain users quickly).

But SGN, which launched a bunch of sports-themed games that turn the iPhone into a Wii-like controller (and are experimenting with the iPhone as a PC game controller, too), is starting to experiment with multi-user games where players can compete against others who have the application installed.

First up is iBasketball (iTunes link). The app launched in November, but an update this morning lets players compete with others. So far it isn’t that great – you shoot free throws for a period of time while someone else does the same, but you don’t see them. At the end the scores are compared. (In the next update, SGN says you’ll be able to watch your foe take his/her shots real time, too).

But they have something much grander planned for the next version of iBowl, which originally launched in October. The new iBowl Live will let you play against three other players, and watch their swings (or whatever its called when you roll a bowling ball).

Any Xbox user knows how quickly games get stale. Going online and playing against others on Xbox Live is what keeps people playing the same titles for months or years. I think many iPhone apps, especially games, will follow a similar path. SGN seems to be taking the lead in innovating in this space.

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Now SGN is rolling out something a little different. iFun turns the iPhone into a Wii-like controller, but the actual games are played on normal desktop and laptop computers.

The first title to launch is golf. If you don’t quite get it, see the video below. SGN says they may license other online games to add to the iFun platform, and will release an API for other developers to launch their games on iFun.

Super. Duper. Cool.

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London based Playfish has just raised a $17 million series B round led by Accel Partners and Index Ventures. Kevin Comolli, from Accel Partners and Ben Holmes from Index Ventures, will both join its board of directors. The company plans on putting the funds toward hiring for their 4 international offices and expanding their reach to other platforms.

The new round combined with a $3 million seed and $1 million bridge financing, makes Playfish one of three social gaming startups to take in $20 million or more in financing (Zynga – $39M, SGN – $20M). Playfish differs most from these competitors in its highly polished in-house game development. I’d call it the Wii of social gaming companies.

So why all the excitement? In uncertain economic times, social games have shown serious traction across platforms and a straight-forward revenue model. It’s also made social gaming an increasingly competitive space on social networks like Facebook. Playfish alone has grown to over 10 million monthly active users (around 1.7 million daily) and two billion monthly minutes of play time in under a year. Each of these users can be monetized through a combination of advertising, incentivized offers, or direct payments into the virtual economies on their applications. [Update: TechCrunch UK speculated it was the million-dollar Facebook app only last month].

While CEO Kristian Segerstrale would not mention any money metrics, he instead emphasized the growth opportunity in what many see as the frontier of video games, casual gaming for the common man. Unlike traditional video gaming, “people play our games with the same people that they would play cards, play board games or go bowling with in the real world”.

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Like the other games it’s free, and you use the accelerometer in your iPhone to control game play. The application includes applause and game sounds, vibrates when a hit is made, and supports left handed game play. You can also challenge your friends to play, asynchronously for now but with direct head-to-head play coming soon says CEO Shervin Pishevar.

More games are coming soon.

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Both games extensively use the accelerometer to control game action, resulting in a Wii-like experience. The only problem is the high chance of throwing the iPhone through the nearest window.

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Who needs a Nintendo Wii when you’ve got an iPhone? The Social Gaming Network, which released a Wii-like golfing game for the iPhone two weeks ago, has now followed up with a bowling game. As with iGolf (which has already been downloaded more than 900,000 times), iBowl uses the iPhone’s accelerometer to detect a player’s swing. You can twist your wrist to give the ball spin or direct it to the pins.

SGN is better known for its games on social networks like Facebook and MySpace. iBowl is free and you can challenge your friends to games. But there does not seem to be much of a social component besides that. Not that it needs one. Becoming the Wii of the iPhone is probably a big enough opportunity in its own right. But it would be cool if you could somehow challenge your friends Facebook or other platforms to play the same game, much like Mytopia does with casual games. Although, it probably wouldn’t be the same without the accelerometer.

That’s what’s so great about the iPhone as a gaming platform. It is not just a handheld computer that you can run games on, it’s the physical controller as well.

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The full email, along with a YouTube clip, are reprinted below with Pishevar’s permission.

I find myself in a hotel in Eastern Europe after 3 days of red eye flights across 8 time zones on a secret mission for my start up. I have slept only 2-3 hours each day since Tuesday. It is in these sleepless hours, propelled by my inner drive to make a dent in world, where I find the solace to connect with the deepest parts my own soul. Some find that solace in yoga, exercise, religion, music. I find solace when I ‘do’- when every cell in my body is telling me that I am doing something that will move my ideas from my brain into the hands of millions of people. This is when I am most alive. I feel the power that we all have inside of ourselves to bring life to the dreams we all hold in our hearts from childhood and beyond.

In the inner sanctum of my own mind, solace focuses and clarifies the stream of my ideas and thoughts. I project these thoughts on the canvas of my life where I see them like moving picture frames interwoven with all the threads of my life experience. I look up at the window of my lonely hotel room on the 11th floor, illuminated by the white glow of my Mac Powerbook- a golden apple shining in the night- and see first my own reflection, and the world looking back at me- a world in forward motion. A world evolved; of knowledge and expertise no longer bound to geography or culture. Of experience and talent unbound and accelerating forward beyond the valley of our own experience and into every corner of the world. In my combined travels as an entrepreneur, I have seen an evolution in the last 10 years that is astounding. The world is us now and it’s pulling away.

A perfect storm has been brewing in my great country, America, whereby our competitive advantage- knowledge amalgamated with speedy execution propelled by an iron gut unafraid of risk- has now spread like a virus across the globe. We no longer have the monopoly on the classic American entrepreneurial spirit backed by angels and venture capital. The American Way has become the Global Way.

And yet this, I realize, at this very moment, is not a bad thing. It is a very great thing. It is the single greatest contribution we have made to the world. It now behooves us, the American entrepreneurs, to reach out to the talent that lies across the world, and embrace them. They need us as much as we need them-and it is a need that will not remain symmetric for long. They need us now but if we do not invest in building meaningful relationships and ties then they will evolve beyond us.

It is in this bridge that the future lies- it is in this future that hope lies. As much as we can teach others, we must be as open to learn from the world in return. We hacked our way into the American dream but we have not cracked the code on what that dream means in the 21st Century. This is the work of my generation. We must hack our way to a New American Dream in the 21st Century. While our financial systems lie teetering on near destruction, we realize we must build from the ground up a new system. That means our identity as a nation and culture will shift to reflect the quilted nature of a world not tethered by the traditional boundaries that kept out influences and isolated our evolution.

In the city I am in right now I was told that during the Communist regime they broadcast only 2 hours of television each day. One hour of that time was watching their ‘dear’ leader. There were no cartoons for children to watch. No movies to inspire. A generation was lost. I have seen the difference in the eyes of those born of that lost generation- an emptiness; a harshness; a coldness. But in the freedom generation who benefited from the fall of the Communist empire, you see a very distinct breed of American idealism, a hope for the future and the drive to get there. They haven’t figured out everything but they are hacking their way into that future. We must hack along with them.

Looking back at the window across the cityscape, I see reflections of my past and present- my immigrant family, my friends, my colleagues. I miss my two children, Cyrus, 11, and Darya, 8, who are so excited about the games I am building. I just got off the phone with them and Cyrus and Darya were pitching their new ideas for games. I raised them as a single dad for 7 years. My daughter, Darya, was in a Baby Bjorn (a Godsend for me), as I wrote my business plans in my garage. My son Cyrus, would attend Board meetings, crawling between Board members legs. They both would witness brainstorming sessions as they played with Legos and watched Baby Einstein.

I remember those moments and tears come to my eyes as I remember last week when Cyrus heard that our game iGolf had become the number one app on the iPhone. He said to me,” Daddy, I am proud to be your son. I am proud to have a father like you.” His statement hit me like a ton of bricks. Remembering all the sacrifice and hardships, I was floored by his love. It is moments like these that we live for.

Feeling nostalgic, I logged into Facebook to see pictures of my family and friends. As I logged in, I saw in my news feed a picture of Dave McClure’s son Dante dressed up as a Native American. I then went to view my albums and my kids. While viewing them I had another epiphany when I connected the dots between Facebook and a recent scene (please watch it below) from “The Wheel” episode of Mad Men. Draper is pitching a campaign for the “The Carousel”, the slide show projector, to representatives from Kodak.

In this scene, Draper, turns off the lights and begins to project personal pictures of himself with his family. As he speaks he says:

“[Teddy} also talked about a deeper bond with the product. Nostalgia. It’s delicate but potent. Teddy told me that in Greek nostalgia literally means ‘the pain from an old wound.’ It’s a twinge in your heart far more powerful than memory alone. This device isn’t a space ship; it’s a time machine. It goes backwards and forwards. It takes us to a place where we ache to go again. It’s not called the wheel. It’s called the Carousel. It let’s us travel the way a child travels; round and around and back home again to a place where we know we are loved.”

The look on the faces of the executives of Kodak as the lights come back on is so classic. Goose bumps rippled across my skin as I watched this scene. I remember my parents showing slides shows on their Kodak Carousel in the late 1970’s and early 1980’s. The dust in the air. The darkness of the room. The pride of my father as he projected our travels and vacations to us and friends. The delight in the eyes and voices of my parents and their friends as they watched and shared reflections of our recent past.

I realized at that moment, that Facebook, is my Carousel. Facebook is my time machine. It is my projector. It is a digital place where I know I am loved by my family and my friends. It is the room where my friends are showing me their slide shows from their lives, their travels. It is a slide show of the human soul. Of the human endeavor. It is the projector that brings clarity and focus to the lives of others. It brings us out of our inner sanctum and to the outer world of our relations. It displaces time and space and brings us back together again no matter how far or long we have been apart. We have all had that experience where you see your friend after 10 or 20 years and it feels like only a day has passed. That is because bonded human relationships are truly timeless. Those bonds can get tighter and stronger when we tap into the power of Facebook.

Those inside of Facebook must know and be driven by a higher mission and cause. They must realize that they should not treat their jobs as normal jobs. They are and should be on a mission to innovate around and extend Zuckerberg’s genius and make it ever more elegant, relevant, personal and inspiring. Facebook is not a technology. It is not a portal. It is not a media company. Facebook is a new form of human communication. It is more akin to the invention of a new language. A new language the world is learning to adopt, appropriate and make its own. It is about anthropology and psychology. It is about humanity. It is about evolution. It is more than a job. It is a cause. A cause whose form can affect the function of our world.

If the cause is extended correctly as a new form of communication it can make an ever bigger dent in the universe. The challenge for Zuckerberg as he scales is to weed out those who are in it for the cause and those that are in it for something else. He has always surrounded himself with amazing talent who deeply believe in the cause- like Sean Parker and Matt Cohler. And he has amazing talent and leadership like Sheryl Sandberg, Dave Morin, Chamath Palihapitiya, Ruchi Sanghvi and others who are deeply driven by the cause. A cause this important must remain pure to become a once in a century contribution to how we live our lives and how we exchange ideas and goods together.

Those who are building businesses around this cause must also put the cause first. We must not dilute it. This new form of communication is what can bring us together across boundaries in ways that make it efficient for an entrepreneur like me to build a global gaming company with talent from everywhere. I see what I do as a cause too. I see Social Games as also a new form of communication and entertainment as important as email, instant messenger and television. I see games bringing people together in new and fun ways that they have never had a chance to connect before. (fluff)friends is a great example of a new community filled with love, that connects people together in totally new ways and engenders loyalty and communication. Users create totally new content like videos and even a children’s book that no one could have ever predicted. By focusing on inspiration and user experience we will help evolve the form and the function and make it a part of daily life.

This new branch of gaming would not have been possible without Zuckerberg’s bold bet that openness leads to greatness for all. It’s an idea and meme that is spreading to every other closed system. Closed systems must go. Increased transparency married with open systems and user driven extensions and content will lead to a better world for all.

It is now 4:46 am here. I now will try to get some sleep and wake up in a few hours. There is another city to travel to. More connections to make with talented developers and artists and more dreams and ideas to bring to life to share with you all in the near future. The Carousel turns.

-Shervin Pishevar
Somewhere in Eastern Europe
September 27, 2008

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The application uses the iPhone’s accelerometer to detect a golf-swing like motion with the phone. Choose a club and swing the iPhone just like a golf club. Save your high scores and challenge your friends to beat your distance. Our best score with the driver so far is 406 yards.

The app is free, which will be appreciated by those of us who’ve spent untold numbers of quarters playing Golden Tee at the local bar. TechCrunch writer Jason Kincaid tests the app – see the video below.

Try not to throw your iPhone through the window while playing. But if you do throw your iPhone through a window, please send us a video of you doing it.

Update: We just got screenshots of the unreleased next version of iGolf, which lets users play simulated games in addition to the driving range app:

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Social Gaming Network Tuesday announced that it has completed its acquisition of (fluff)Friends, a Facebook game that lets people adopt virtual furry friends and interact with friends who also have virtual pets.

(fluff)Friends users can choose from a group of “fluff” pets that can be personalized to match the user’s personality. Once created, the pet can interact with other users and the game’s currency exchange system (which is probably the main reason why Social Gaming Network wanted this title, considering it turns into revenue for the game) has grown by an astounding 192 percent since January per spender.

The acquisition price was undisclosed, but the Social Gaming Network did say that current (fluff)Friends users won’t see any difference in gameplay after the acquisition.

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Social Gaming Network, a startup behind a number of popular social network games, has partnered with the Arbor Day Foundation to create a Facebook game to raise money for, of all things, planting trees. SGN has created a game called “Space Movers: The Bloom Initiative”, and will donate up to $50,000 of the game’s advertising revenue to the cause. You can check out the app by going here.

The game itself plays almost exactly like Bejeweled, with a few goofy characters and icons that all fit under a vague “nature” theme. And while the gameplay may not be too original, the game has high production values, with a full soundtrack and animations.

The partnership is the latest in a string of unconventional promotions we’ve seen from developers on social networks, who are going to great lengths to increase exposure and help their games “go viral”. Last month Slide partnered with VH1 to to promote its application alongside a marathon of reality shows.

SGN focuses on games that include social interaction, and claims 1.1 million daily active users across Facebook, Bebo, MySpace, and hi5, with a reported 54 million application installs. The company has raised some serious cash, with over $20 million in funding and investors including Jeff Bezos. Zynga, its closest competitor, recently closed a $29 million Series B funding round led by Kleiner Perkins, and has raised a total of nearly $40 million.

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True to its name, “Friends for Sale” is an application that lets you virtually buy and sell your friends. The game is an ego driven form of “poking” (virtual nudges) that makes it abundantly clear who the most desirable players are, by listing a leader board of your most expensive friends. Every one of your friends, whether they have the app or not, can be purchased as a “pet”. Everyone starts at a base price that rises with every resale. You get more cash when you log in, are sold, or have one of your pets bought away from you. Users can spend that cash on kicking their pets, give them funny tag lines, or even virtual gifts.

That one game has also been supporting the growing company’s resources (20 Ruby on Rails servers and growing) through a mix of banner advertisements and sponsorships. While the company declined to state their earnings, they estimated the company could grow to 12 engineers without raising any financing. The financing allows the company to significantly ramp up their expansion plans.

But Lightspeed didn’t invest in Serious Business just for a single game. Founder Alex Le cites “Friends for Sale” as the first in a series of of games built directly around your relationships with friends. The idea is to create games for all social networks (Facebook, OpenSocial) that rely on leveraging social skills to win, instead of your twitch reflex or poker proficiency. While they’ll have some games to announce in the next 30 days, the founders briefly threw out the example of a battle game where your friends are the soldiers and success depended on your social skills.

Serious Business is not without competition. Zynga and SGN are well funded social gaming startups. However, Serious Business has a much larger hit than either, so far. “Friends for Sale” has also already been cloned as “Owned”, which draws about the same level of traffic some days. “Friends for Sale” itself is a variation on an earlier game “Human Gifts”. These startups are also in competition with the cycle that most applications follow on Facebook, amongst other potential difficulties. Applications tend to explode for a brief period (if at all) before settling at a lower activity level or completely dying.

Serious business indeed.

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Still, SGN is obviously serious about scaling up its business by hiring, acquiring, or partnering with the best Facebook app developers out there. The developers behind Free Gifts, Esgut, and Nicknames have now joined SGN as co-founders. “We are building a brain-trust of leading app talent,” says CEO Shervin Pishevar. He recently spun off SGN from Webs.com and moved his entire team from the East Coast to Palo Alto. And this morning it just released the sequal to its popular Warbook game on Facebook—Warbook:Rise of the Infernals.

The company has also launched its own cross-promotional advertising network for other gaming apps and is in the process of raising $10 million (says an outside source). (Update: That turned out to be $15 million). There are now 70 games and other apps on its Gaming Hub.

One of them, Free Gifts, is now part of SGN. More than 70 million virtual gifts have been exchanged between Facebook members so far. Brands sponsor the gifts, and there is a potential for direct consumer purchase of gifts as well within a gaming context. Pishevar is almost as excited about the prospect of virtual gifts as he is about social games:

It is real, it is happening, it is underground. I think it has a potential to become as important or more important than the advertising revenue.

The race between SGN and Zynga to become the biggest social gaming network is a race for talent, a race for active users, and most importantly, a race to see who can make money first. But while they keep elbowing each other for position, they shouldn’t forget that newer entrants with social-gaming platform ambitions are always trying to close in behind them.

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Here’s the thing: the games work across all of these platforms. You can be on Facebook playing cards with one friend on MySpace and another on Bebo. And you can control what people on each network see about you. For instance, you can present your real profile to your friends on Facebook, and a different Mytopia avatar to everyone else. These are the sort of apps that could one day break Facebook’s, or any social network’s, hold on its members.

Mytopia was founded by a young Israeli American, Guy Ben-Artzi, and his sister Galia Ben-Artzi. They grew up in Silicon Valley, but now split their time between the U.S. and Israel. Nearly all the company’s engineers are in Israel. Guy wants to bring the computing architecture and game-play behind massively multiplayer online (MMO) games like World of Warcraft to casual games with broader appeal. Guy explains:

What we have done over the past year is look at all the massive multiplayers and tried to analyze what makes those sticky and social. What is great about all of these massive multiplayers is you have people playing in guilds and trading with each other. We are building the MMO backend minus the 3D perspective and hard core genre.

Mytopia games include the ability to join teams, compete in matches, send in-game messages, win points for different skill levels, collect virtual currency and trade in-game items with other players. The company plans to explore different ways to make money including in-game sponsorships, premium subscriptions, and micro-transactions linked to game items and the in-game economy.

In May, the startup plans to open up its casual gaming platform to other developers. By delivering this write-once, deploy-anywhere capability, it hopes to challenge other social gaming networks with platform ambitions such as Zynga and SGN. This should be fun to watch.

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Venture capitalist and Zynga investor Fred Wilson accused me of not doing my homework in a post that set off a minor debate over the holiday weekend. After I commented on his post that the jury is still out on which of these young companies will succeed, Wilson responded:

Its not even debateable who is a real company and who is not.

Zynga CEO Mark Pincus also clearly feels that the comparison is not warranted. He told me of SGN:

It is just a thorn in my side. It is some bad ex-girlfriend who will not leave me alone. I think we are very clearly the leader in the space.

That thorn is about to get pricklier. Sources outside of SGN confirm that the company is about to raise as much as $10 million in a venture round. Multiple term sheets are on the table. None have yet been signed as the company studies its options. Says one competing VC who has done his due diligence and is eager to lead SGN’s round:

When all is said and done they will have as big a network as Zynga. Fred Wilson doesn’t understand what is going on.

Sounds like a debate to me.

If size is the determinant of a “real company” (which I don’t think it is), then SGN’s platform is already a whole lot bigger than just a week ago. In less than a week it has signed 10 Facebook games to its budding social gaming hub, including Jetman—one of the most popular games on Facebook—Pirates, and The Dot Game. It has also signed Free Gifts, a virtual gift-giving application on Facebook that includes the other seven of the ten games.

All told, the new apps will triple SGN’s daily active users from 200,000 to more than 600,000 on Facebook alone, bringing it substantially closer to Zynga’s 900,000. And in terms of the number of installs, the SGN network is getting much closer to Zynga’s 11.8 million (18.4 million including recently acquired CLZ Concepts and four other Zynga games not reflected in the stats), depending on how you count. Jetman alone has 3.8 million installs and 200,000 daily active users, SGN currently has 3.3 million installs, and Free Gifts has 10 million installs—but that is mostly for its gift giving app, which other gaming developers on the SGN gaming hub will be able to incorporate into their games.

Responding to Pincus’ quip, SGN CEO Shervin Pishevar says: “We are like an old girlfriend that got famous.” Noting that many of Zynga’s games are copycat versions of other games (Zynga’s Diveman is very similar to Jetman, for instance), he adds:

If you want to be a developer platform, you probably shouldn’t be copying developers’ games. If you want to compete with them, fine. That is why they are joining us.

So is it game over? Hardly. The games have just begun. But is SGN a real business? It is as real as any business built on Facebook.

Update: In an e-mail Pincus responds:

Wow erick.

A) you give them credit for traffic they don’t even own
And
B) you won’t give us credit for traffic (clz apps) we do actually own.

Do you even care how hypocritical sherwin is to accuse me of copycat games when he copied free gifts on bebo and risk on fb? Getting the irony? He is partnering with an app he literally copied in december while accusing me of this?

Erick, with all due respect I’m wondering if you work for sgn now?

I’ve updated the post to include the CLZ numbers, which are still counted separately by Adonomics, the data source I linked to. As for who owns what traffic, Pincus is right to point out that games Zynga owns and operates are probably worth more than games simply affiliated to any particular gaming network. But SGN’s deal with Jetman and Free Gifts is as tight as it gets without buying them outright. SGN will be hosting their apps, and Jetman’s developer will be creating more games for the SGN network. The battle here is over who will build the most powerful network and attract other developers, not who will buy up the most traffic.

Update 2: CLZ actually has 11.5 million installs, instead of the 5.3 million that Adonomics reports (it only counts 2 of CLZ’s 18 apps). But not all otehse are games (You’re Naughty, You’re a Hottie). I am beginning to really question how reliable Adonomics is. The SGN numbers are probably off as well. Also, all of these numbers come from Facebook, which currently has a bug with how it reports total installs. Daily active users is the better metric to use. Zynga has over one million daily active users, about double SGN’s (including Jetman and Free Gifts). Dead installs (i.e. inactive users) are only good for spamming.

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A fair point if spoken generally, although I’d argue that the quality of reporting done by many bloggers today, at least in the tech space, is equal to or better than most mainstream journalism. I think this is particularly true when we’re talking about breaking, non-embargoed news, where contacts and inside sources matter more than having all the time in the world to think about, research, write and edit an article. His point, therefore, should have been that all news writers need to step it up a notch and aim for better quality, which is sort of like saying nothing at all.

Normally I wouldn’t take issue with the statement, except that it was partially aimed at us. Wilson specifically called out our Erick Schonfeld for his post on social gaming platforms, as well as Matt Marshall at VentureBeat for a post he wrote about Like.

Wilson’s first gripe is that Matt, in his post about Like, didn’t give enough credit to competitor ThisNext. His second – that Erick, in his post on Zynga and SGN, suggested that the “two companies are neck and neck like Hillary and Obama,” when “Zynga is almost an order of magnitude bigger.”

Wilson fully discloses his conflicts of interest in the post – that he is a friend to the founder of ThisNext and an investor in Zynga. At that point, of course, a lot of the credibility behind his opinions comes into question. The two bloggers he is attacking have no conflicts with these startups.

He fails to realize that both Matt (San Jose Mercury News) and Erick (Fortune, Business 2.0) are seasoned mainstream journalists who’ve made the crossover to blogging. So his whole argument about blogging v. mainstream media loses yet more steam.

In reading the articles, it seems to me that Matt did an excellent job of highlighting a recent surge by Like while still noting relevant competitors. Erick’s post, which I am more familiar with, is in my opinion above reproach. Erick notes the strengths and weaknesses of both platforms and suggests that developers will ultimately make a decision as to which, or both, they will join. Erick also interviewed Wilson for the post and quoted him in it.

So what this really comes down to is this. Wilson didn’t like the coverage. But instead of simply disagreeing with and rebutting the points made in the posts, he went after the reputation of the writers themselves. That would be inappropriate even if he was right. But the fact that he was both conflicted and wrong makes it inexcusable.

Wilson failed to uphold the very standards of integrity that he demands from others. He failed to contact Erick or Matt before writing, and didn’t seem to have the facts to back up his argument. In a twitter exchange between us on this issue, he defended his sloppiness on the fact that he’s a blogger, saying “if you are a blogger you can say what you think, once you become a journalist, you have a different standard.”

Now, frankly, I’m confused. Bloggers can say what they think, but journalists can’t? I think what he’s trying to say is that Erick and Matt are no longer bloggers and now need to hold themselves to a higher standard – one that Wilson explicitly doesn’t hold himself to. That sounds like hypocrisy 101 to me.

Also, in a comment to his original post, he says “Erick didn’t get it wrong…but i think he missed the opportunity to get it right.”

How can you be both wrong and right at the same time?

Wilson partially retracted his post in a follow up, saying that he was sorry for singling out Erick and Matt, and saying that he “didn’t mean to take a shot at either of them.” But he then goes on to say that the whole exercise was a good one, since it started this great conversation on the issue.

That’s no apology, Fred. An apology would include you admitting that both posts were well researched and well written pieces. And that it was wrong to attack the reputation of these writers just because the conclusions reached by them were different than your own.

One last note. In the comments Fred says it isn’t even debatable that SGN is not a real company. From what we hear on the street, some very high profile venture capitalists are willing to bet some serious money that he’s wrong.

Update: Mathew Ingram says I went a little too hard at Fred here. I don’t necessarily disagree. Fred tends to come at people pretty hard, so I went hard back. But some readers won’t know that, so it’s worth pointing out.

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In the social gaming category alone, a battle is brewing between the Social Gaming Network (SGN) and Zynga. Tomorrow, both will launch separate developer platforms for other gaming applications. (Info here for SGN developers, here for Zynga developers). The appeal to smaller social game developers is similar: join one of the gaming networks and see your game promoted on the toolbar or gaming page when people are playing other games in the network. Fred Wilson, the partner at Union Square Ventures, who invested in Zynga, explains to me:

It is the exact same value proposition why you would want to build your app on Facebook as opposed to the Web. You can rapidly develop an audience. It is access to audience and monetization.

Both companies have varying claims as to how large their audiences actually are. SGN CEO Shervin Pishevar says, “We are able to promote the developers’ games across millions of users and 700 million pageviews a month.” SGN’s most popular games on Facebook and its own site are Warbook, Street Race, and Fight Club. Zynga, for its part claims 1.3 million daily active users across Facebook, Bebo, Meebo, and Friendster. It’s most popular game is Texas Hold’Em poker (with 609,000 daily active users in Facebook alone), followed by Blackjack, Attack!, Scramble, and Sea Wars. At least on Facebook, it appears that Zynga has more daily active users. (See Zynga Facebook stats here and SGN Facebook stats here).

Zynga, I have learned, has also recently acquired two smaller gaming developers: one is behind the CLZ group of apps, which have 365,000 daily active users, and the developers behind the Superheros app (34,000 daily active users). The company is also trying to avoid the as-yet-unresolved fate of Scrabulous, a Facebook game that is being threatened to be shut down because it is a copy of Scrabble. Zynga recently renamed one of its games Sea Wars from Battleship. (Guess what game it is based on?). Attack! is similar to Risk, and Scramble is a digital version of Boggle. So there still might be some issues there.

Later tonight, SGN will launch a set of APIs for developers and its Gaming Hub application on Facebook, which will attempt to create a “gaming graph” that connects you to other games in the hub, particularly the ones your friends are playing. Joining the hub will let Facebook members keep track of what their friends are playing, their high scores, and will move all game-related feeds from their profile pages to the hub. Explains Pishevar:

What is annoying is there is a lot of noise on people’s profiles. That gaming graph belongs inside the gaming hub. It is a portal to all your games.

The gaming hub will also eventually become a mini ad network for games, although not at launch. Zynga, on the other hand, will have advertising baked into its hub, splitting any ad revenues with game developers. But the ads will be secondary to the cross-promotion.

So game developers will have to decide whether to go it alone, join one of the gaming hubs, or join both. May the best hub win.

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So why is Scrabulous still up on Facebook? A flurry of behind the scenes deal-making has been going on between Hasbro, Scrabulous, and Electronic Arts, which has the license in the U.S. to the online version of the game. Hasbro is trying to get Scrabulous to sell itself for a song to Electronic Arts, or else shut down completely by the end of the day today. Scrabulous has been trying to shop itself to other buyers as well, but its legal liability is scaring away any potential white knights. Unless it gets some sort of reprieve or agrees to sell to Electronic Arts, Scrabulous will be no more, despite the more than 46,000 Facebook members who have joined the “Save Scrabulous” group. What choice does it have, really, but to sell?

And it might not end at Scrabulous. One industry source tells me that Hasbro is going after other knock-off games as well, and sending cease-and-desist letters to Facebook along with the infringing app developers, since it is the one hosting the games. So who might be next? Zynga, for one. The Mark Pincus startup that just publicly launched earlier this month—with $10 Million from Union Square Ventures, Peter Thiel, Reid Hoffman, Bob Pittman, and others—has games that are based on Risk (Attack!), Boggle (Scramble), and Battleship (Battleship). Zynga claims on its Website to have 1.4 million players of Attack!, 293,000 players of Battleship, and 257,000 players of Scramble. Battleship, Boggle, and Risk are all owned by Hasbro. If Mark Pincus has not already received a cease-and-desist letter, he will soon.

Social networks have been a boon for casual online gaming, because now it is easy to find someone you actually know to play with. But a safer strategy than knocking off traditional board games without licensing them first is to actually create original games. That is the tack the Social Gaming Network (SGN) is taking. It’s popular Facebook games include WarBook and Fight Club. Collectively, its games are generating more than half-a-billion page views a month. There is a business in there somewhere. SGN, which is part of Webs.com, is in the process of spinning off as a separate company. Maybe it should try to license those board games from Hasbro. Somebody should.

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