Server Cloud Based Gaming – The future?

This is the new “hot” space for game Investment.
Less demanding game clients, heavy code running on server clouds.
Trion Taps Deep Pockets For Gaming
By Ty McMahan
9/24/2008
The explanation behind Trion World Network Inc.’s need for $70 million in fresh capital is simple, according to its co-founder.
“Amazing opportunities don’t come cheap,” Lars Buttler said.
Since its formation in 2006, the server-based gaming company has raised more than $100 million.
The massive Series C was co-led by Act II Capital and a large global financial institution, Trion said. All previous investors also participated, including first-round investors DCM and Trinity Ventures, and Series B investors Rustic Canyon, Time Warner, Peacock Equity – the joint venture between GE Commercial Finance’s Media, Communications & Entertainment business and NBC Universal – and Bertelsmann.
Buttler, the chief executive of Trion, declined to provide further details on the new, unnamed financial institution backing the company, only that “they’re one of the biggest and best.” He declined to disclose a valuation.
“My attitude toward this is there’s a giant opportunity out there: the next generation of electronic entertainment,” Buttler said. “That’s going to take a lot of money and you have to have the right players that can support that.”
Pete Moran, a general partner at DCM, the first institutional backer of Trion, said the new investors are a good fit for the company’s long-term vision.
“They’re not trying to release a new game, but change the paradigm of gaming,” Moran said. “To do that requires a tremendous amount of capital. In putting together this round we wanted to bring access to deeper financial pockets that can stick with the company over the long haul.”
The idea behind Trion’s platform is to create online games that fix the problems of packaged-goods software. Buttler said budgets for game development are exploding, sales channels are limited, piracy is rampant and every game is a gamble in terms of popularity.
Server-based gaming allows a title to be offered online in a very scalable way that doesn’t require an entire game to be developed up front.
“You build enough to go out, then keep building as you go,” Buttler said.
The model allows the developer to measure a game’s popularity without investing too much time or money. It also allows the developer to correct or enhance features for later sections of the game. Subsequently, cost and risk is reduced.
Trion already has announced two titles in development, to be published by Trion in North America and Europe. The first game is a fantasy massively multiplayer online role-playing game helmed by legendary designer Jon Van Caneghem; the second is an MMOG co-developed in partnership with NBC Universal’s SciFi Channel. The game will debut alongside a television show, the first such venture.
“The game sets the stage, and the TV show tells the story,” Buttler said. “After you watch the show, you can enter the game and explore the world in much more depth.”
Release dates for the games have not been announced.
Trion was founded by Buttler, former vice president for Global Online at Electronic Arts Inc., and Van Caneghem, a member of the Computer Gaming World Hall of Fame and creator of the best-selling “Might & Magic” and “Heroes” franchises. Trion is based in Redwood City, Calif., with offices in San Diego and Austin, Texas. The company has 150 employees on its payroll and many others through partnerships.