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Viacom Buys Xfire For $102 Million
The New York Times is reporting that communications company Viacom has purchased the Xfire gaming network for $102 Million. From the article: "Judy McGrath, the chief executive of MTV Networks, which will oversee Xfire, said it would stay focused on building a community for game players, but its technology might be adapted for broader network services. Xfire has attracted four million users since it was introduced in 2004. Of those, one million are active and spend 91 hours each month using the service. The company sells advertising on its software and Web site, both to video game makers and to mass market marketers, including Dodge, Pepsi and Unilever."
Viacom to Pay $102 Million for an Online Game Service By SAUL HANSELL Viacom said yesterday that it had acquired Xfire, a Silicon Valley company that makes an instant message system used by video game players, continuing its quest to build Internet businesses focused on young people. The company, which is the parent of MTV Networks, will pay $102 million in cash for Xfire, which is privately held. Xfire makes a program similar to other instant message systems in that it lets users communicate with each other while they are online. Its system, however, is designed for people who play game software on their computers. Users can see which games their friends are playing and can automatically link to join them in playing games online. "We want to be where our audience is," Viacom's chief executive, Tom Freston, said. "And we know that video games are a dominant form of media for young males." Xfire has some aspects in common with social networking sites like Facebook and MySpace, another area in which Viacom hopes to expand. Viacom explored acquiring MySpace and IGN, large game-oriented networks of Web sites; both were bought last year by the News Corporation. Judy McGrath, the chief executive of MTV Networks, which will oversee Xfire, said it would stay focused on building a community for game players, but its technology might be adapted for broader network services. Xfire has attracted four million users since it was introduced in 2004. Of those, one million are active and spend 91 hours each month using the service. The company sells advertising on its software and Web site, both to video game makers and to mass market marketers, including Dodge, Pepsi and Unilever. For those selling games, Xfire will allow ads to be shown only to those who frequently play similar games. It also distributes previews of games on behalf of publishers. Viacom declined to disclose Xfire's revenue. Ms. McGrath said that Viacom was looking for more acquisitions related to games, networking and user created content. Last fall, Viacom bought GameTrailers.com, another site devoted to video about games. Viacom has some video game programming on on its other Internet sites. And it bought Neopets, an interactive fantasy world for young children, which has advertising integrated into the game.
I can't wait to be playing Quake 4 or FEAR and get fragged. Suddenly, rather than hear my opponent or teammate, I hear a disembodied voice say, "You got wasted! How about you clean yourself up with Lever 2000, the soap that gets bloodstains our of anything! For all your 2000 parts, no matter where the frags end up!"
I don't respond to advertising for mainstream products. Therefore, Viacom, proprietors of so-called "Music" "Television," will have one more property in which I am not interested.
As a games programmer and non-US gamer, I've never heard of this XFire lot until now. A quick look at their website doesn't give me a real idea of what it is that they do, anyone fancy illuminating me as to why someone would buy this company? :)
Game dev and music blog
If they had advertisements that are related to what happened, making puns on other commercials, I would get a few laughs out of it. The issue would be if the ads are shown/heard too often. That would ruin any grunt/giggle/over-zealous laughter that would come with it.
When they say said it would stay focused on building a community for game players, but its technology might be adapted for broader network services.
what do you think that will entail? I am concerned about bloating.
Xfire is an amazing program, and most people I know online use it constantly, but it's memory footprint has been growing far too quickly. Right now it's using 25MB RAM. For most people who run demanding games, this is a significant chunk of RAM.
The only reason I have heard people not using this program is because of it's use of RAM.
I am concerned 'broader services' will mean this problem will get even worse. One can only hope they make some optimizations to dynamically grab more RAM when they need it. I only use tha basic components of xfire, like the friend status list and the test messageing. They support a myriad of otehr features like voice chat and video, etc, but I dont want those features loaded!
What's to stop a company, or a bunch of disenfranchised users, creating a free alternative to XFire? I'm not familiar with the technology used, but it is a tracker that determines what game you are playing, when, isn't it? In that case, if Viacom choose to go with embedded ads/possible spyware and adware, then it would be almost trivial with a large community movement to create a "Y-Fire" without the ads, wouldn't it? So any revenue attempts by Viacom would lose them money. Bad move IMHO.
"Sure there's porn and piracy on the Web but there's probably a downside too."
$102 per head customer acquisition cost?
They'd better sell a shitload of advertising.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
Its an advertizers dream. You get a system that narrows down a specific group of interested gamers, and it tracks what games people are playing, so you know what games people play, how much the play, and once you data mine that, you can target ads, based on what other gamers who are playing the same games.
i would say for an established user base, and a decent technology, and a fat cheque for Thresh thats a good deal imo.