Toronto, Ontario – February 2, 2012 – Crowned the “Most Innovative Game” by the ‘Best App Ever’ awards for the Android Division, Cows vs. Aliens by XMG has become a blockbuster hit! The curious cows and annoying aliens were also able to herd a bunch of honourable mentions including “Best Game Controls”, “Most Addictive Game”, “Best Arcade Game” and “Best Kids Game”. Degrassi, XMG’s role-playing game also received an award from the prestigious designation and scored an honourable mention in it’s category as “Best Role Playing Game” for the iOS Division.

“Being #1 and at the top of thousands of games is no small thing!” says Ray Sharma, founder and CEO of XMG Studio “And the fact that the Best App Ever awards are the result of actual gamers’ votes makes the victory that much sweeter.”

Cows vs Aliens was created over a weekend Hackathon by a team of XMG staffers. The concept was developed within 48 hours and after a month of polishing, the cows and aliens were let loose on the Appstore. The aim of Cows vs. Aliens is to save herds of cows from invading aliens by pushing the cows safely into the barn and keeping the aliens out. Once launched in the Appstore February 2011, Cows vs. Aliens was featured in Touch Arcade, TUAW, Gizmodo and 148apps.com, and was also featured by Apple. In August 2011, the addictive herding game was launched in the Android Market and has been downloaded more than 1.5 million times since.

Nominations for “Best App Ever” awards opened in early December 2011 for both the public and a handpicked group of iPhone industry experts. From nearly 27,000 initial nominations 560 final nominees were chosen and up for public vote. Gamers cast over 1.5 million votes to support their best apps ever, making the awards the largest of its kind.

About XMG Studio:

XMG Studio is an award-winning developer of hit video games for mobile devices. Founded in late 2009, XMG has been pushing the app envelope to create innovative titles that provide a cool experience for casual gamers. The company’s core focus is to develop properties that allow players to actively immerse themselves in our games. Whether it is the incredible customization feature in Drag Racer Pro Tuner, or the experimental touch mechanic in Cows vs. Aliens, XMG’s portfolio of mobile casual games all seek to drive the maximum in user engagement through innovation. Based in Toronto, Canada, XMG is presently one of the largest independent mobile game studios in the emerging app economy. For more information visit www.xmg.com, follow XMG on Twitter.com/xmgstudio or become a fan on facebook.com/xmgstudio.

Now the potential exists to achieve similar success with the Indian media and entertainment industry, equally uninspiringly named Bollywood, and establish ourselves as the leading North American partner. Beginning Friday, a trade mission from Ontario will spend 10 days in India making new contacts and exploring how to make Ontario a more active player in the Indian industry.

The potential is enormous, since India’s entertainment industry is massive and growing. According to 2010 figures provided by PwC, the Indian film industry is projected to grow at an annual rate of 12.4 per cent, reaching $10 billion by 2014. The Indian television industry — moving from analogue to digital — will grow 12.9 per cent from 2010 to 2014, and is expected to reach $8 billion in 2014. Critical mass combined with Toronto’s credibility in digital media makes for interesting potential for trade. We could make advanced Bollywood movies in Toronto for sale worldwide.

Movie screens and television are just one part of the picture. Of particular interest to me is the often-overlooked mobile gaming industry. These are the games played on mobile devices, such as Angry Birds or Fruit Ninja. Games represent the biggest part of the applications built for use on smartphones. As can be seen from watching those around us, the app economy is huge and growing fast. In North America, the dollar value of apps is bigger than the recorded music industry. By 2014 the app economy will be larger than the movie industry and will be closing in on the video game industry itself.

Around the world, the popularity of games on iOS and Android is soaring. In India, it is the most dynamic part of the media sector and is expected to grow at a cumulative rate of 30 per cent over the next five years. By 2014 India’s smartphone market will also be larger than the entire U.S. population. The opportunities in mobile entertainment are enormous. We can customize games for the Indian market, and add our production and programming expertise to games content.

Toronto is ideally suited to offer the technical expertise and creative services necessary to grow our already substantial portion of the market.

World-class organizations — Disney, Google, Microsoft, Facebook — have long recruited personnel from innovation hubs such as Waterloo and Toronto. When Bill Gates last visited Ontario in February 2008, he noted in a speech that the University of Waterloo is consistently one of the top three universities for producing engineers hired by his company.

Hiring by these giant U.S.-based companies resulted in a steady brain drain of Canada’s best to the U.S. But increasingly, students and graduates are no longer rushing south of the border. The jobs are coming to them. With a strong dollar, Toronto’s reputation as a world-class multicultural city, and Canada’s rising international prestige, we are retaining more talent in this country than ever.

We also have unique programs that make it easy for employers to hire great talent. Wilfrid Laurier University and the University of Waterloo have cooperative work programs between employers and students, while TriOS, OCAD and Sheridan Art have internship programs. It’s not well known but the University of Toronto’s R&D budget is the third largest in North America, behind Stanford and MIT. These programs give students relevant and real-life work experience.

Various art and design schools in the GTA attract companies such as Disney that practically set up shop on campus. Ryerson’s Digital Media Zone, the Perimeter Institute and the University of Toronto’s Human Computer Interface Lab are attracting PhD talent from all over the world. It is these research centres of excellence that are driving fundamental education and innovation across Canada.

Local startups are increasingly the biggest beneficiary of the academic talent in the GTA. BumpTop, recently bought by Google for its innovative software that transforms your computer home screen into a more lifelike experience, emerged from the University of Toronto. XMG Studio had hundreds of applicants in the last University of Waterloo co-op term for only a couple of positions, while Xtreme Labs is second only to RIM in co-op hires, roughly double from the same time last year. Both XMG and Xtreme Labs are heavily populated with grads from the GTA and Waterloo who would otherwise have gone to the United States.

In June 2011, Ontario hosted the International Indian Film Academy Awards in Toronto. The event was highly successful in terms of generating media interest, attracting tourists and heightening the visibility of Ontario. It also brought together key leaders from India and Ontario.

The stage is set for Hollywood North to meet Bollywood. I sure hope we don’t call it Bollynorth.

In his 2005 Stanford commencement address Steve Jobs told an audience of students who had just spent a small fortune on their Ivy league education that he didn’t see the value in getting a degree. He joked that his commencement address that day was the closest he had ever come to graduating. He then gave the students lessons on life and death.

Through these lessons, we can see how eastern philosophy touched his life and affected his work. Jobs had always been a big proponent of karma, fate and following the heart. In his early days, he would travel weekly to the Hare Krishna temple for a meal and some words of wisdom.

Later his beliefs would lead him to Buddhism.

Buddhism is considered the most modern form of Hinduism. Gautama Buddha himself was, like Jobs, a controversial figure, teaching that temple, ritual, priests and the entire organizational structure of religion were obsolete. This was radical thinking at the time and challenged the very foundations of the world’s oldest religion.

At the Stanford commencement, Jobs talked about dropping out of college and dropping into classes that appealed to his heart. Among them was a calligraphy class. Jobs later saw how he could bring the beauty of calligraphy to the computer experience through the use of fonts. Today we take for granted this ability to personalize our text. But it only came about because Jobs recognized the innate intelligence of the heart. It is a les-son we could all benefit from learning.

Apple and Steve Jobs created a love affair of their own with the world. Articles written on anything Apple quickly trend to the top of the mostread lists. The launch of any new Apple product becomes a benchmark for the state-ofthe-art in the technology industry.

Why is it that we admire Apple and Steve Jobs the way we do? There are many answers to this question, but one is universal: because of his ability to see the world in a way others couldn’t – his ability to innovate. His innovations in computers, digital movies, music and mobile industries were nothing short of historic. And why do we admire innovation? Because it appeals to our very souls, to our fundamental belief in the ability of humankind to evolve, to become better. Innovation is evolution.

This explains our excitement over any great idea. Our admiration for Apple and Steve Jobs emanates from their contributions to the evolution of the human experience.

Jobs remarked that the single biggest invention of life is death, that death was life’s change agent and that the old would soon be replaced by the new. Even in death Jobs saw the subtlety of evolution.

The indie game development community is larger than ever, and every day new coders and creatives are living their childhood dream of making video games and joining the community. Although I’ve made little games my whole life and have followed the industry for years, I only recently was able to officially call myself a part of the “community”. But, as the community grows it seems that we often lose sight of what the essence of indie game development is. Creating lasting game experiences for the player with minimal resources and whatever technology you have available. It was never about revolutionary technology, but about revolutionary gameplay on existing technology. That indie mindset enabled the giant shift in the industry everyone is still talking about.

So, when I hear or read of discussions about what the next greatest technology would be. Or, developers conflicted with whether they should make an iOS, XNA, Flash or HTML5 game because they aren’t sure which platform is going to win out, I feel that we’re starting to miss the point again.

Before the recent shift, game development was always a technology chasing industry. Everyone was trying to be the first to develop the newest graphic technology, in hopes that it would let them be the leader in the next generation of video games. Chasing such technology proved to be the failure for many such as Sega’s hardware devision, or long anticipated projects like Duke Nukem Forever, which changed engines several times until no one would fund the project anymore. We all thought Nintendo was untouchable before the Playstation was introduced. And we all counted them out of the console game before the Wii was created. No one can predict the next leading platform, whether it’s tablets, html5, or onlive as much as they could have predicted the success of the Playstation or the Wii.

As indie game developers, we need to remember to stop chasing the next exciting technology, and create your game on the platform that suits it and your style/skills best. That is the core of indie game development, and what has led to it’s rise in popularity. Some of the greatest indie title of our recent time started as flash games. They weren’t concerned about the next platform or using the latest graphics technology. They knew the game they needed to make, and found the platform/technology that allowed them to create it and share it with the world. It doesn’t matter what platform your game starts on, if people play it and enjoy it they will tell people about it. That is how a game like Flow ended up on the Playstation after being a popular flash game. Or, how Machinarium has recently found renewed success on Steam, then the iPad, and soon on the Playstation 3.

Find the game you want to make. Then, choose a platform/technology that works for you and enables you to create the game you want. Focus on creating a lasting experience for the player no matter what platform you choose. That is why they are playing our games. Because they want to have those experiences. Sacrificing our game in order to put it on what we believe is the next greatest technology will remove from the player experience. So, use the technology you know. If it’s HTML, then make a next generation web game. If it’s Flash, then instead of being crippled by all those “Flash is dead” posts, just make your game. Let’s get back to making games. The essence of indie game development cannot be forgotten by chasing the next great technology.

At the centre

Smartphones bring the potential of transmedia to life.

They enable interactions that go far beyond the simple brand extension of the movie tie-in game, or ancillary toys, TV, and music products. This is because mobile applications make it easy to introduce these other forms of media, driving usage and enabling feedback loops between them.

At XMG, we have signed commercial agreements in television, toys, comics, movies, and music. We know through this experience that traditional entertainment companies are scrambling to figure out how the app phenomenon will impact their industry. It’s interesting to notice how Microsoft under-invested in the internet, Google under-invested in social and now Facebook appears to be under-invested in mobile.

The broader media industry is under-invested in all three, but it’s keen to learn.

Always there, always on

The reason a mobile application is important in transmedia is that it can steer the user to the other media, without the user leaving the device or travelling physically themselves.

For example, we can build a game in which a user accumulates merit through some form of collection. This is then used inside the game store to choose other activities, such as in-game boosts, video downloads, or buying a ringtone based on game music. When combined with the freemium model, a mobile game then becomes the natural entry and control point for additional relevant content.

A good example of the direction we’re headed is our iOS Degrassi mobile game released in early July. It is based on the long-running Degrassi high-school television drama that North American teens love. With our app, fans can take on the life of a Degrassi Community School student.

Are you in or out?

Each monthly-released episode of the game features three interconnected storylines.

To help ensure our game stays true to the Degrassi brand and philosophy, we have one of the television show’s writers create our content. This lets us co-mingle style and storylines. Using this, we plan some surprises during the season which will show a clear integration of the app and television show.

Just like in high school, players realise decisions have consequences and based on their actions, their popularity could rise and fall.

But we can also directly drive interactions; for example, alerting users when the TV show is going to be on, with a simple pop-up reminding them “Degrassi is on at 7pm tonight on Much Music.”

Additional features we’re including, which demonstrate the potential of transmedia, include in-app purchases of ringtones, music, downloadable episodes, bloopers and behind-the-scene content.

The app encourages fans to watch television, and the TV show is tweaked to relate to our app. It’s a very simple idea but one that helps integrate the two media, allowing for internal cross-promotion in the brand.

In this fashion, the Degrassi mobile game is becoming the remote control for allDegrassi transmedia content.

Here at XMG, approximately two-thirds of our revenue now comes from virtual goods, up from only 10 percent a year ago. For the app industry as a whole, virtual goods easily represent half or more of the multi billion dollar annual industry revenues.

The reason is simple – selling virtual goods means that a small enthusiastic user base can carry a game’s economics.

We can choose, for example, to try to sell a game broadly for a dollar. Alternately, we can offer the initial download for free, capture a million installs, from which 50,000 become enthusiastic users who love the game and will pay for virtual goods.

Based on our experience, one million free downloads and 50,000 engaged users can drive modest sales in the hundreds of thousands dollars. Things get even more interesting when users engage over a number of months and pay several dollars each month.

From the mouths of babes

It’s easy to understand the appeal of virtual goods. My eight-year-old son Tristan asks me to spend $2 on a virtual light saber for his Xbox avatar. He says it makes more sense than buying a real light-saber toy for more than $20.

“Dad,” he tells me, “My Xbox light saber will never get old or broken, and I can’t lose it. It’s way better than getting the real thing!”

Virtual goods is truly a phenomena best appreciated by the Internet generation. I may not be inclined to buy my wife a Facebook Starbucks for a dollar but my kids surely have no problem doing so.

Open for all

Indeed, virtual goods are the logical outcome of the democratisation of app development.

Removing barriers to sales have resulted in new gaming models where the enthusiastic carry the economics of the entire system.

Zynga is the poster child of this virtual goods industry. Zero to $200 million in revenue faster than any technology company in history thanks to folks buying virtual helpers for their online social game experience. Zynga exemplifies making a mass market out of virtual goods.

Power of compulsion

All this contradicts the notion a game developer can’t make money from free. Revenues from our Drag Racer game doubled after implementing in-game credits. It captured second place in the 2010 bestappever awards for racing game of the year. (EA was #3!)

Inspector Gadget sales soared when we moved it to freemium in February. It saw a million installs in four days and was #1 in the App Stores of 17 countries.

The game is simple. You guide Gadget through increasingly challenging platforms to jump on while avoiding the objects and traps that Dr. Claw sets up for you.

It comes loaded with unlockable features including 10 of the best Inspector Gadget TV episodes of all time, Dr. Claw’s mysterious face, a ringtone, sound board, concept art, power ups, and upgrades.

Our revenue from the game jumped tenfold and all of the incremental sales were from its virtual goods.

Building a sector

Most of top grossing apps in the Apple App Store and on Facebook are free. Yet in Canada at time of this writing 9 of top 10 grossing apps in App Store are free, with their revenue being generated via virtual goods.

At the Apple App Store, Tap Zoo and Tap Pet Hotel were #1 and #2,while Zynga Poker was #4.

The most popular follow-on purchase at the free game Tap Zoo was a Vial of Stars for 99 cents, followed by Pouch of Stars for $1.99. At the Tap Pet Hotel it was a Vial of Treats for 99 cents. The Zynga Poker app is in a different snack-bracket, and its top in-game purchase was 600,000 chips for $4.99. Clearly it’s a high rollers game.

Over at Facebook, the top apps were Cityville and Farmville, both free to play but you can lay out 200 coins for features such as limited edition cupid corn.

The freemium model is here to stay, and for good reason.

One of the many things I love about the mobile gaming industry is its democratic nature. Anybody can join in.

For example, XMG Studio has just finished running the Great Canadian Appathon.

Based on the hackathon model, it’s an event that challenges contestants to start from scratch and create a great mobile gaming app in 48 hours. First prize: $25,000.

The Appathon took place over a weekend, with close to 300 students from colleges and universities across Canada competing. Canada has the third largest game development industry in the world, and this was a great chance for our company and co-sponsors to raise our profile in this community.

48 hours of Red Bull, adrenaline, and creativity

We set up seven campus hubs across the country, and had staff on hand to answer any questions.

The Appathon attracted amazing coverage from major media, including newspapers, TV, blogs, campus newspapers even radio. Co-sponsors Telus, KPMG, Microsoft and the National Post help run the event.

In the end, we evaluated 60 games; more than 10 of them offer solid game concepts and we think three are commercially viable. We will work with the top three to bring their games to market.

Double edged advantage

To me, the Appathon illustrates how totally wide open the mobile gaming industry is. We’re completely different from the console gaming industry, which takes years and tens of millions of dollars to bring a game to market. In contrast, the mobile gaming market has very low barriers to entry.

A good mobile game with a simple concept can be brought to market quickly and generate a great return on investment. Creativity is king. The game doesn’t need to be complex; one polished hook is all it takes to succeed.

The biggest challenge to creating a game is time management, and the best teams in the Appathon knew when to start cutting features in order to meet the time lines. Call it reverse feature creep.

Yet as a game developer, the Appathon is both exciting and sobering. It’s exciting we can bring a successful game to market so quickly, but sobering to know our competitors can do exactly the same.

The power of fast

Earlier this year, before the Canada-wide Appathon, we ran a pilot-project appathon within XMG. Teams of XMG staffers had a weekend to create a game, and the winning game is now the commercially available Cows vs Aliens.

The concept was developed within 48 hours, but it took a few more weeks of polishing to bring it to market. Cows vs Aliens was eventually featured in Touch Arcade, TUAW, Gizmodo and 148apps.com, and was Apple’s App of the Week. It had the best launch ever for new game at XMG.

Casual games are a perfect fit for the mobile experience. Mini Halo-like experiences such as Infinity Blade will have a market but I see the gaming industry heading in a direction where users have a portfolio of games.

There will be high-end game experiences that are console-oriented, Facebook time-killers, and then mobile, with simple new games constantly appearing – some of them created over a Red Bull-fueled weekend.

Ray Sharma is CEO of XMG Studio, a mobile developer based on Toronto, Canada. It’s released titles such as Little Metal Ball, Inspector Gadget andCannon Cadets.

One of the wonderful things about working as a Game Designer here is the excuse I have to look at the world through a game design lens. What I’ve learned over time from peering through it is that we are constantly surrounded by potential new wonderful game ideas. We are all born gamers, ready to compete in this game we call life. Our daily lives are fraught with win and lose states, each carrying its own set of consequences. It’s a system that our brains seem to want to naturally follow. Once you start looking, it’s surprising how many things around us can be gamified. Part of recognizing good game inspiration is to be open to the gamer within. I often look to the world around me for game design solutions and inspiration.

Standing next to the Toronto tracks as the subway powered by with seemingly unstoppable momentum, I got the idea for the subway sections in Inspector Gadget’s Mad Dash. At the time we were looking for fun new level sections to add and the supremely dangerous nature of the speeding train seemed perfect. Most everyone who has ridden a subway can attest to the fear they feel if they get too close to the tracks of an oncoming subway. It’s a very visceral experience that rattles your teeth. It seemed like a natural fit for Gadget’s Dash. In the game, Gadget has to be quick to jump over the speeding trains. We further reinforced the magnitude of the trains presence by making the screen shake before the train arrives. I’ve seen a lot of people playing actually jump when the train arrives! Mission Accomplished.

One great thing about XMG is that everyone here has tons of great ideas and input into the actual game design. I feel lucky to be surrounded with such creativity everyday. We usually find it’s a matter of narrowing down the plethora good ideas rather than not having enough.

One of our highly talented developers, Lake Watkins, was sharing some ideas with me, along with some of the games he created as a child that were inspired from the world around him. At the beach, as a child he would purposely build his sand castles close enough to shore so that the incoming waves could destroy them. He made a game of it by seeing how long he could keep building walls around it to protect it from the water. If only he would have know how wildly successful “Tower Defense” apps were going to be! As usual, Lake was way ahead of his time.

Shigeru Miyamoto of Nintendo has constantly drawn from his environment for game design inspiration. Mario was named after his feisty Italian landlord. Princess Zelda received her name from the wife of his favourite author, F. Scott Fitzgerald, Zelda Fitzgerald. The main character in his book “The Great Gatsby” was also the inspiration for Mario’s character and “do good” attitude. It’s no surprise that one day while gardening with his wife and watching all the little methodical insects going about their various duties in nature, he conceived the idea for the hugely successful and original Pikmin.

It’s undoubtedly important to play games and keep up with current trends, but perhaps it’s just as important to step away from it all and tune in to the world around you. So if you find yourself trying to come up with that next great game idea, don’t hesitate to put down the controller and go to the beach or ride the subway. Look at the world around you. Inspiration is everywhere if your mind’s eye is open to it. Once you become accustomed to seeing the world through the eyes of a game designer, the amount of ideas you’ll find is almost endless. Try it and you will surely see how much fun gameplay around you is just waiting to be discovered.

What keeps you from having your job outsourced? That’s a question that many people are asking themselves these days. Seth Godin’s book Linchpin deals with this subject in its entirety – but we want to focus on one thing that unifies all of us – is Canadian talent competitive?

We know that world-class organizations from Disney, Google, Microsoft, to Facebook and more are actively recruiting from innovation hubs such as Waterloo and Toronto. And these company’s are represented by no less than the top executives. The last visit by Bill Gates in February 2008 was just prior to his final days at Microsoft. And Gates mentions in a speech (1) that Waterloo is consistently in the top-3 of university’s for recruitment of engineers at the World’s largest software company.

All of these great opportunities had previously resulted in a steady IQ drain of Canada’s best to the US. But what’s changing is that students and graduates are no longer rushing south of the border. This is because all of the great jobs for students and graduates are moving into their own backyards. Add to this a par dollar, Toronto being a cool international city, Canada’s rising international prestige and the result is that we are retaining more talent in this country then ever.

Waterloo is the home of Research in Motion and also tens of thousands of the smartest people in Canada. This talent hub is home to both the University of Waterloo and Wilfrid Laurier University, both top-ranked Universities. Waterloo was also home to Stephen Hawking over this past summer as he studied Theoretical Physics at the Perimeter Institute. What does this all amass to? Waterloo was named the smartest city in the world in 2007 (2), and it is no wonder that top tech companies are recruiting from there. Research in Motion has been tremendously influential to this success and has trained thousands of the best and brightest all of whom with invaluable mobile engineering experience. These graduates are forming the basis of the new generation of app entrepreneur.

There are also many other unique programs in Canada that are making it easy for employers to hire great talent. Laurier and the University of Waterloo have co-operative work programs between employers and students whereas TriOS, OCAD, and Sheraton Art have internship programs. These programs give students relevant and real life work experience. Various art and design schools in the GTA attract company’s such as Disney who practically set up shop on campus. Ryerson’s Innovation Lab, Perimeter Institute, and the University of Toronto’s Human Computer Interface Lab are attracting PhD talent from all over the World. It is also notable that the University of Toronto receives the largest funding of any Canadian university by a large margin. (3) Furthermore, the University of Toronto is the 3rd largest Research entity in North America spending almost “$3 million a day on creating new knowledge”. (4)  It are these research centres of excellence that are driving fundamental education and innovation across Canada.

Local startups are increasingly the biggest beneficiary of the academic talent in the GTA. Bumptop, recently bought by Google for its innovative software that transforms your computer home screen into a more lifelike experience, emerged from the University of Toronto. XMG Studio had hundreds applicants in the last University of Waterloo co-op term for only a couple of positions whereas Xtreme Labs is hiring over 20 students per term, roughly double from the same time last year. Both XMG and Xtreme Labs are heavily populated with grads from the GTA and Waterloo that would have otherwise gone to the US. Even local startups who have been largely funded and located in the valley such as Kontagent (a recipient of Facebook FB Fund capital) hire and retain engineers and co-ops in Toronto while maintaining headquarters in San Francisco.

From a macro perspective, Canada ranks number #3 in the world for the best student performance on Reading, Scientific and Mathematical Literacy Scales, while the United States ranks #33 (5). So the next time you’re asked what is keeping your job from being outsourced, respond that you are Canadian. We have the privilege to have one of the most effective education systems in the world that train our youth to become great prospects for any organization. Outsource that.