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July 28 2011

ePayments Week: Freemium is fruitful for mobile games

Here's a few payment stories that caught my attention this week.

Freemium revenue rises

In-App purchaseA report this week from Flurry Analytics, which tracks mobile games and other apps, says the freemium (also called free-to-play) model is rapidly becoming the dominant track for generating revenues from mobile games. Earlier this month Flurry had reported that the percentage of revenue from freemium games (free download, then in-app purchases for new capabilities or levels) in Apple's U.S. App Store had jumped from 39% in January to 65% in June. This week, Flurry's general manager of games Jeferson Valadares, followed up on that report with a post noting that the average in-app purchase in a freemium game is $14. Averages can be tricky, and a small share of high-end purchases pulls this amount higher than we might otherwise expect. Looking closer at the stats, 71% of transactions are for less than $10, 16% are between $10 and $20, and 13% are for more than $20. Up at the high end, 5% of the transactions are for $50 or more.

All of this revenue comes from the 0.5% to 6% of players who make even a single in-app purchase on these free-to-pay apps; the rest never get engaged enough to pay for it. But Valadares and Fierce Developer's Jason Ankeny both note that the revenue from this small percentage is now greater than it might have been had developers charged $0.99 for their games. In other words, a free download followed by in-app purchase makes it possible to create the widest possible opening of the funnel to find a large group of hardcore gamers willing to engage at a deeper level with a game — $14 deep, on average.

Flurry estimates that game revenue on iOS and Android platforms will top $1 billion in 2011 — a symbolic number that should help mobile developers gain a little respect from the old-guard gaming platforms, whose executives have, from time to time, dissed mobile games for lacking the excitement of console games. To help make sense of the various platforms, Gamasutra published this week a rundown of pros and cons for the two leading smartphone platforms and Windows Mobile, with insights from leading game developers about the relative pain points of each.

Android Open, being held October 9-11 in San Francisco, is a big-tent meeting ground for app and game developers, carriers, chip manufacturers, content creators, OEMs, researchers, entrepreneurs, VCs, and business leaders.

Save 20% on registration with the code AN11RAD

Report: iOS 5 to offer facial-recognition APIs

Last week I reported on common iPhone passcodes and lamented there was no easy way to put more sophisticated technology to work in securing the data in increasingly important smartphones. One reader commented that biometrics would be a welcome addition. This week there's news that Apple is moving quickly in that direction. Apple-watching site 9to5Mac reports that iOS 5 will include facial recognition as a public developer API for iOS 5 applications. So don't expect to see it soon as a security preference in the iPhone's settings, but we might see third-party apps with a biometric lock available at some point, perhaps this fall. 9to5mac also reports that the technology is most likely from Swedish facial-recognition developer Polar Rose, which Apple acquired in 2010.

Here's a video showing the Polar Rose tech in action:

Credit cards on webcam: Payment through video capture

This isn't exactly what we meant by swipe-and-pay, but mobile payments start-up Jumio introduced this week another new way to pay online with old credit card technology. Jumio's Netswipe would let a consumer pay for goods and services purchased online by holding their physical credit card up to the webcam on their computer. The idea isn't just to capture the 16-digit credit card number. Netswipe uses video streaming to guard against fraud detection, noting characteristics of the card, including how the letters are raised, its size and depth, and even what material it appears to be made of. Tapping in your 3-digit CVV code from the back of the card adds yet another layer of security. Netswipe forces users to mouse-and-click on a graphical keyboard rather than keying in the numbers, for further security against automated hacks. A mobile version supporting smartphone cameras is planned for later this summer.

Here's a demo of Netswipe:

Got news?

News tips and suggestions are always welcome, so please send them along.

If you're interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O'Reilly and PayPal.


June 10 2011

Radar's top stories: June 6-10, 2011

Here's a look at the top stories published on Radar this week.

Facebook's face recognition strategy may be just the ticket
Facebook's face recognition may provide a great strategy for cutting the Gordian Knot on this thorny privacy problem.
Why a JavaScript hater thinks everyone needs to learn JavaScript in the next year
If you've avoided JavaScript, this is the year to learn it. And if you don't, you risk being left behind.
The secrets of Node's success
What is it about Node.js that makes it interesting to developers? The key factors are performance, timing, and focusing on a real problem that wasn't easily solved with other server-side dynamic languages.
Algorithms are the new medical tests
Predictive Medical Technologies' system uses real-time, intensive care unit monitoring data to predict cardiac arrest and other health events. CEO Bryan Hughes discusses the system and the application of diagnostic data.
Google Correlate: Your data, Google's computing power
Google Correlate is a new tool in Google Labs that lets you upload state- or time-based data to see what search trends most correlate with that information. Here's a look at how it works and what you can do with it.

OSCON Java 2011, being held July 25-27 in Portland, Ore., is focused on open source technologies that make up the Java ecosystem. Save 20% on registration with the code OS11RAD

June 09 2011

Strata Week: The fears of face recognition

Here are the data stories that caught my attention this week.

Face recognition and Facebook

Face recognition technology isn't really a new Facebook feature, but until now it's only been available for U.S. users. The switch was flipped this week and face recognition made available for international users, prompting an outcry about privacy and an EU probe into the matter. The concerns involve using face recognition technology to tag users in photos without their consent.

As TechCrunch's Jason Kincaid points out, however, the fact that people can be tagged in photos without their consent happens with or without the face recognition technology:

To reiterate: the EU may conclude that Facebook users should be able to pre-approve their tags, and I don't necessarily think that would be a bad thing (I'm sick of tag spam, for one). But conflating this with the spookiness of facial recognition seems like a mistake — we should save that outcry for when companies really do start doing creepy things with the technology.

Facebook suggest tags option
Screenshot of Facebook's "Suggest Tags" menu (user photos were edited out of this image).

Tim O'Reilly wrote here on Radar that, in fact, Facebook's strategy for rolling out face recognition technology may be just the ticket:

Face recognition is here to stay. My question is whether to pretend that it doesn't exist, and leave its use to government agencies, repressive regimes, marketing data mining firms, insurance companies, and other monolithic entities, or whether to come to grips with it as a society by making it commonplace and useful, figuring out the downsides, and regulating those downsides.

Analyzing hacked passwords

bad passwordMuch of the uproar around recent hacks and security breaches has focused on the weaknesses of corporate systems themselves, as well as the impact stolen data might have on customers. But software architect Troy Hunt has turned his attention to a different matter, analyzing the passwords that were stolen.

Hunt has examined the 37,000 some-odd passwords that were made available via BitTorrent, just a small section of the million or so that LulzSec claimed to have taken in its latest breach of Sony Pictures. Hunt looked at the passwords in terms of length, randomness, uniqueness, and character types — generally accepted as the standards for password entropy. In other words, the more of these variables that you have, the stronger your password.

And no surprise, he found that most passwords aren't particularly strong.

Ninety-three percent of accounts were between six and 10 characters in length, and 50% were less than eight characters. Length is only one indicator of strength, and Hunt found that less than 4% of the passwords he analyzed had three or more character types (as in, capital letters, lower case letters, numbers, and so on). Half the passwords had only one character type, and of those, 90% were all lower case letters. Furthermore, less than 1% of passwords contained a non-alphanumeric character. There were a fair number of identical passwords, with "password" "123456" and "abc123" among the most common, and 20% of the passwords in this particular batch were repeats.

OSCON Data 2011, being held July 25-27 in Portland, Ore., is a gathering for developers who are hands-on, doing the systems work and evolving architectures and tools to manage data. (This event is co-located with OSCON.)

Save 20% on registration with the code OS11RAD

Just as problematic as these weak passwords, of course, is the repetition of passwords acros multiple databases. Although only 88 email addresses in this batch taken from Sony Pictures can be found in a similar data-dump from the stolen Gawker email addresses, two-thirds of those people used the same password to register on both sites.

"Based on the finding above," writes Hunt, "there's a statistically good chance that the majority of them will work with other websites. How many Gmail or eBay or Facebook accounts are we holding the keys to here? And of course 'we' is a bit misleading because anyone can grab these off the net right now. Scary stuff."

While the recent exploits demonstrate some of the ongoing problems around system security, Hunt's work highlights that there are a fair number of Internet users who are still not protecting themselves.

Archival data helps game developers recreate 1940s Los Angeles

LA NoireThe new video game L.A. Noire was released last month to great reviews, with many praising the accuracy of the game's 1940s Los Angeles setting.

Nathan Masters explains how the game's developers contacted archivists at a number of different collections in order to piece together the data about the city. Detailed WPA maps were found at the Huntington Library. U.S. Geological Survey data and photos were used from the UCLA Department of Geography and the Spence Air Photo Collection. From the Dick Whittington and Los Angeles Examiner photography collections at USC came images of cityscapes from the era. Numerous other libraries were consulted as well.

The Atlantic's Alexis Madrigal makes the wonderful suggestion for the game makers Rockstar Games to release the model for others to study and remix.

Got data news?

Feel free to email me.


Facebook's face recognition strategy may be just the ticket

Most of the commentary on Facebook's new face-recognition strategy has been negative, with many folks posting instructions on how to opt out. I, on the other hand, think that Facebook may have come up with a great strategy for cutting the Gordian Knot on this thorny privacy problem.

Face recognition is here to stay. My question is whether to pretend that it doesn't exist, and leave its use to government agencies, repressive regimes, marketing data mining firms, insurance companies, and other monolithic entities, or whether to come to grips with it as a society by making it commonplace and useful, figuring out the downsides, and regulating those downsides.

This is part of my general thinking about privacy. We need to move away from a Maginot-line like approach where we try to put up walls to keep information from leaking out, and instead assume that most things that used to be private are now knowable via various forms of data mining. Once we do that, we start to engage in a question of what uses are permitted, and what uses are not.

Overall, I think our privacy regimes need to move to a model similar to that applied to insider trading. It's not possession of secret information that is criminalized; it is misuse of that information to take advantage of the ignorance of others.

Google and others have shied away from releasing web-based products that include face recognition technology because of privacy concerns (though both Apple's iPhoto and Google's Picasa apply it to photos stored on your local hard drive and under your control). No one wants to take the arrows or the possible legislative and/or regulatory scrutiny that may ensue.

What I like about Facebook's approach is that they aren't using the technology to actually tag people in photos; they are using the technology to alert people on your friend list that you might have appeared in a photo, and relying on those people to add the tags. This modified approach will result in better data, but also may mute just enough criticism that users will come to accept it.

When it comes to privacy, putting our head in the sand about what's already possible with data mining and machine learning (and what will become even more possible with every passing year) is short-sighted. Unless we're prepared to ban face recognition technology outright, having it available in consumer-facing services is a good way to get society to face up to the way we live now. Then the real work begins, to ask what new social norms we need to establish for the world as it is, rather than as it used to be.


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