While some kinds of Airbnb stays are much more controversial — for instance, someone who rents an apartment but doesn’t live there and posts the entire thing on Airbnb for rentals, without the landlord’s knowledge or approval – the host in question, Nigel Warren, was pretty much exemplary by Airbnb’s standards.

According to Warren’s testimony, he rented out his bedroom while he was out of town, he had only hosted on Airbnb three times, and his roommate continued to occupy the apartment while the guests visited (though the judge said he would have been happier if the roommate and the guests interacted, and if the guests visited the roommate’s bedroom as well, which seems like an odd quibble).

The ruling applies to the part of Airbnb’s business that the company saw as entirely unimpeachable. And even if the company can get it reversed, it will surely have a chilling effect on potential hosts who don’t want to be taken to court and fined.

As part of a larger statement indicating that it will likely try to help an appeal, Airbnb said, “[T]his decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes … 87 percent of Airbnb hosts in New York list just a home they live in — they are average New Yorkers trying to make ends meet, not illegal hotels.”

However, Airbnb is not a party in the case, and it was not assisting with or paying for Warren’s legal defense, so it’s unclear what the company’s standing is. The company is arguing that a 2010 New York law that limits illegal hotels should not apply to “regular people.”

Warren (well, actually his landlord, but Warren took responsibility) has been ordered to pay $2,400 in fines, and the case and context are well described in this CNET article. It appears that the main reason Warren was singled out was because after a complaint was filed, an inspector ran into his guests in the hallway.

Warren told CNET, “I like what Airbnb does, and I don’t want this ruling to stand in the way of what I think is, overall, a great startup.”

Meanwhile, Airbnb does not expect to change its practices as a result of the ruling, as its hosts are responsible for complying with local laws. In the past month, the company added an additional pop-up message during its host sign-up process that helps educate them about what exactly those laws are.

The pop-up memo doesn’t give any sort of explicit region-by-region legal advice, but it says in part:

“Some cities have laws that restrict your ability to host paying guests for short periods. … Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement. These rules can be confusing.”

Here’s the NYC ruling:

Decision and Order for NOV 35006622J

The Richfield, Minn., company reported another quarterly loss driven by weaker sales in its European business, which it recently shed. The company last month sold the rest of its stake in Best Buy Europe back to Carphone Warehouse Group PLC for about $775 million to help shore up its profitability.

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Correction: The initial version of this item incorrectly said the program would be rolled out nationwide. It will be expanded to a limited number of outlets over the year.

For $20, San Francisco-based Stitch Fix sends its members five items that have been personally selected for them based on a size and style questionnaire, their Pinterest page and other feedback they provide to an in-house stylist.

They can apply the $20 toward buying the items, and ship the unwanted items back at no additional cost. And they can sign up for a monthly subscription, but don’t have to if they don’t want to.

Over the past two years Stitch Fix has registered 80,000 users, and it still has a three-week-long wait list. In March it shipped 10,000 “Fixes,” with an average purchase of $100.

That may be a relatively small business now, but it does seem effective. More than 80 percent of Fixes see one or more items purchased. And unlike nearly every other e-commerce business, there are no discounts.

“We belive so strongly in our recommendations that we put our money where our mouth is and send the product to you,” said CEO Katrina Lake in a recent interview, noting that the $20 styling fee doesn’t cover the cost of two-way shipping and personalization by an actual human.

While Lake said she might have imagined Stitch Fix would be a product for the fashion conscious (that’s the focus of some male-oriented competitors like TrunkClub), that doesn’t seem to be the case.

“Our customer is the harried mom or the working gal. She normally buys at J.Crew or Banana Republic on sale, or The Gap,” said Lake, who did blogger outreach at Polyvore and went to Harvard Business School before founding the company.

“We don’t do fast fashion, we don’t do the black and white cutout bodycon dress — we do a black-and-white blouse. It’s classic with a twist. We had a navy tulip print blouse that just flew,” she said.

The challenge of honing those recommendations as a way to evolve the shopping mall experience has attracted Netflix’s former VP of data science and engineering, Eric Colson, and Walmart.com’s former COO, Mike Smith, to the Stitch Fix executive team. They run analytics and operations, respectively.

Stitch Fix CEO Katrina Lake

It’s also bringing in a swarm of venture capitalists like Benchmark Capital’s Bill Gurley (he declined to comment) who’d like to invest in Stitch Fix, even though the company just raised a Series A round three months ago.

The balance between the algorithm and the human clicked early this year. “Sales are doubling every month and the customers are rabidly excited,” said early Stitch Fix investor Steve Anderson of Baseline Ventures.

Anderson added of Lake, “She was a beaten down soldier in the fall. She was like ‘What’s wrong with me?’ Now it’s the total opposite. I tell her, ‘Don’t spend time raising money because we have more important things to do.’”

(Lake, for her part, said it was an “open question” whether she would take the additional funding.)

Of course, Stitch Fix is no sure bet. I spoke with one investor who passed on a previous round and noted, “Starting a department store is expensive and logistically complicated. They’re under-appreciating how good you have to be at sales.”

Lake disagreed. “Where our model is really superior is we’re just inventory efficient,” she said.

So sure, Stitch Fix employs 42 people in San Francisco and just secured a 90,000 square foot fulfillment center in South San Francisco, and is in no way profitable. But the company today sells 90 percent of the inventory of the 150 styles it buys per month — at full price.

This one doesn’t sound at first quite as interesting, but from the point of view of complex computing tasks, it’s pretty cool. When you think about all the ways that companies have to try to engage with and then make their customers happy and the ways they can do that more effectively, you can probably imagine how a deeply analytical computer might be useful.

IBM calls it the Watson Engagement Advisor; it’s an offshoot its Smarter Commerce initiative. Consider that Watson is smart enough to understand the natural ebb and flow of human language and is designed to answer questions in much the same way humans do, and then quickly sort through a set of known information to determine the best answer, and you’ll realize it’s a fit for customer service.

In that way, Watson can learn over time, and like a good bartender with a lot of regulars, keep track of the unique likes and dislikes of customers and get better at it over time. And that’s important as consumers come to expect to be able to interact with companies pretty much wherever they are and on whatever device they happen to be using at the time: Whether it’s a smart phone, tablet, PC or whatever, they will expect — already are expecting — consistent experiences. Consumers, especially the younger ones, will expect companies to shift with the marketplace as tastes change and evolve.

Watson can be the voice that customers hear when they reach out to the company asking questions. Watson has only gotten smarter since its run on “Jeopardy,” speeding up its performance by 240 percent while slimming down the size of the system required to run it by 75 percent. Already the Nielsen Company and the Royal Bank of Canada are among those kicking the tires in trials.

Online design retailer Fab Inc. is in advanced talks to raise $250 million to $300 million in venture capital in a deal that would value the fast-growing but unprofitable company at $1 billion not including the new capital, people familiar with the matter said.

The deal and its list of final participants hasn’t closed, but it is expected to wrap up in mid-June, with existing investor Atomico is leading the round, the people said. Atomico did not respond to requests for comment.

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The payments company is in the midst of slowly, quietly rolling out a new product — dubbed Square Cash, natch — a way to send money to folks you know (and perhaps those you don’t) over email.

The concept is fairly straightforward, according to the site’s FAQ: Draft an email to the person you want to send cash to and CC a Square-designated email as well. Stick the dollar amount of how much money you want to send in the subject line and click the send button. Your friend will receive the “cash” after they link their debit card accounts to Square, and you, the sender, are charged a flat 50 cent fee.

While the site’s landing page is slick and the concept is cool enough, Square isn’t exactly re-inventing the wheel here. You can still send folks money using a PayPal account (and not incur a fee for it if you send it as a “gift”!), and Google’s commerce wing just added a money attachment feature to Gmail as well. And there’s no shortage of startups — Venmo, Stripe and more — doing similar things in micro-payments.

But I don’t think it’s necessarily a zero-sum game. The idea for Square here, methinks, is growth: Ultimately, this could be a faster way of getting more people to link up their checking accounts to Square’s service — especially those who either aren’t a small business using the product, or haven’t discovered the magic that is using Square’s special dongle, attachable to phones, tablets and the like. And I’d say there’s no better incentive to link your debit card account up to a service than an email notification in your inbox saying you’ve got twenty bucks waiting to be redeemed.

And of course, it plays well into Square’s social schtick. It’s a social payments startup, Square would say, not just some boring e-commerce company.

Want to sign up? Not so fast: You can’t use it quite yet, as right now only a select few are in on the invite-only testing period. For now, I’ve confirmed that employees at Pinterest, Box.com and Twitter are currently the only ones in this round of invites.

“We’re excited to share Square Cash with our friends. We’ll continue to invite others to try it out in the coming weeks,” a Square spokesperson told AllThingsD.

For now, you’ll have to stick to the kind of cash that folds.

That’s what David Goldstein, president of research outfit Channel Marketing, said of Apple after the grand opening of the company’s first retail stores in 2001. Yet 12 years later, the lights in Apple’s stores remain lit, there are 406 of them spread across 14 countries, and they boast hands-down some of the most valuable retail space in the world.

In the first quarter, Apple’s average revenue per store topped out at about $13 million, reaching its highest level ever for a non-holiday quarter, according to Asymco analyst Horace Dediu. And the company collected a record $57.60 in revenue per visitor, with about $12 of that being profit.

Impressive numbers for Apple, which continues to outperform all other retailers on a per-square-foot basis in the U.S., by a very wide margin. Apple Stores earn twice as much per square foot as Tiffany & Co., the second-most-lucrative U.S. retailer, and three times as much as Lululemon Athletica, the third-most-lucrative.

And the company’s average revenue per visitor will only improve as it expands internationally, particularly in big untapped markets like China. Apple essentially doubled down on its retail presence in greater China over the past year, raising the number of stores to 11 from six. And according to CEO Tim Cook, that’s just the beginning.

“This isn’t nearly what we need, and it’s not the final by any means,” Cook said earlier this year. “We’re not even close to that. But I feel that we’re making great progress, and I am very happy with how things are going.”

And whatever the China market may lack in individual wealth, it makes up for in volume.

“This is one of the great paradoxes in Apple retail: The more Apple expands internationally, the higher their average retail revenue becomes, despite them opening stores in emerging markets such as China,” said Carl Howe, VP for research and data sciences at Yankee Group. “As a proof point, the New York flagship 5th Avenue Apple store used to be one of the highest grossing stores in the entire Apple chain, pulling in somewhere around $350 million in revenue in 2010. Today — based on anecdotal evidence, but I believe this to be true — nearly every Apple store in China sells as much or more than the 5th Avenue store. China may have a lower percentage of wealthy people than the U.S., but they have more absolute numbers of them.

“What I think this all says is that Apple has itself as a global aspirational brand, and that people will go to amazing economic lengths to own Apple products,” Howe said. “So long as Apple maintains that premium brand and value, the only limits to its retail growth is how many stores it can build.”

The New York Internet giant, which has seen much change under CEO Tim Armstrong, has been working for at least several months on a new subscription commerce business that it is calling “Bling Thing,” according to two sources familiar with the plans, as well as a trademark application AOL has filed.

Whether AOL will bring this idea to the public seems to still be an open question inside the company, though. One source close to AOL said the idea has been shelved indefinitely as the company looks to focus on fewer brands within its content and product portfolio, rather than adding to it.

But a look at a trademark application for Bling Thing hints at what AOL has been working on: A business that would offer “subscriptions to receive boxes filled with assorted items in the fields of consumer products and consumer services.”

It’s not clear what exactly those products and services would be. Beauty products such as what Birchbox offers, for example, or something altogether different?

What is clear is that the move would at least partly be intended to give AOL another business line outside of advertising to help it diversify away from the shrinking Internet service business, which, as Peter Kafka wrote earlier this month, still accounts for all of the company’s profits.

It is also not certain what AOL is going for with the name, other than that Armstrong seems to have a thing for 1990s hip-hop references, if a postponed AOL TV commercial he helped create is any indication.

Name aside, it’s possible that Bling Thing could pan out to be a nice incentive for advertisers: Advertise with us, AOL’s pitch could go, and get your product or service preferred placement in our subscription packages.

That’s assuming that AOL could get people to sign up for the service. One way to do this would be to market the business to current AOL subscribers.

There had been some talk about Jon Brod possibly running the business, according to one source, but he will be taking over AOL Ventures following his recent resignation as CEO of AOL’s local content network Patch.

An AOL spokesman declined to comment.

It’s a totally obvious move that will make the popular bookmarking site more useful and less inspirational (a.k.a. full of pretty photos that don’t actually link to anything). You could think of it like the Pinterest version of Twitter’s Cards.

The added information comes from a whole bunch of stores (e.g. Anthropologie), food publications (e.g. 101 Cookbooks) and movie databases (e.g. Netflix) that have partnered directly with Pinterest. There are some sizable names in there of brands that are willing to pass over a whole bunch of metadata to Pinterest and its 50 million or so active users: eBay, Target and Sony among them.

The features are only available to Pinterest users who have opted into its recent redesign, which was not universally popular but has been modified since launch.

mama_mia/Shutterstock

Today marks a year since Facebook’s rough-and-tumble IPO.

Since that disappointing day, Facebook has gone to great lengths to assure Wall Street that yes, it will one day be the social ad spinning, money-making machine that Wall Street hopes it will be.

The biggest potential, Facebook maintains, lies in what executives consider “long-term investments,” products with grand ambitions to change the way we interact with Facebook — if not the world — on a regular basis.

Therein lies the problem. Meaningful change won’t happen soon.

Consider Facebook Home, the mobile project years in the making that aims to shift the way we interact with our mobile devices, anchoring users within the Facebook experience. The potential for success with Home, if widely adopted, could be big. More time spent inside of Facebook’s products means more ads served by default — especially when Facebook finally brings ads to Cover Feed, one of the key features of Home.

And yet by many measures, Home has stumbled hard directly out of the gate. More than half of its user reviews on Google Play are scathing. And as of last week, just over one million people had installed the product, a trifling amount compared to the 1.1 billion users on Facebook’s network.

What Facebook really wants from Home is to catch on overseas. Create a mobile-focused product to capture developing world markets — where the phone is a person’s primary computing device — and you’ve got potential to spur growth. Home, however, runs only on certain higher-end Android devices, hardware that won’t be ubiquitous or cheap in developing countries for at least a few years.

Home isn’t the only long-term bet. Look at Graph Search, Facebook’s search product rolled out earlier this year. Almost immediately came calls saying “watch out Google!” from the public. Perhaps Google’s stranglehold on the search market could be upset by a social form of discovery.

But Graph Search is possibly in an even more nascent phase than Facebook Home; Graph Search has only been rolled out to a select amount of users, and Facebook has oodles of work to do if it wants to curb the way people make Web search queries and focus them on people, places and things inside of the Facebook network.

Granted, Facebook has made serious moves in the past year to spur profitability further, releasing a slew of new ad products, revamping its gaming platform partner ecosystem and pushing, however slowly, into online retail with Facebook Gifts. It has consistently hit its numbers in the company’s quarterly earnings calls. And as the Wall Street Journal’s Evelyn Rusli wrote, the company made significant internal shifts over the past year that have made more teams responsible for Facebook’s revenue.

And still, the needle hardly moves on Facebook’s stock ticker; it closed at around $26 per share on Friday, well below the $38 it opened at one year ago. For all of Facebook’s long-term posturing, the Street remains cautious.

“We don’t build services to make money,” CEO Mark Zuckerberg wrote in his company’s S-1 prospectus before Facebook’s Nasdaq debut. “We make money to build better services.”

Hopefully, for the sake of the shareholders, Facebook can do both.

And Animoca couldn’t be happier about that.

Co-founder Yat Siu calls them “fast food apps.” His 150-person company, a conglomerate of 12 smaller studios, has developed and published more than 350 apps, he said, currently at the rate of about four every week. Its goal is to one day crank out a new app every day as it expands its reach further into Asia and beyond.

Siu, who is also the CEO of Animoca’s parent company, Outblaze Ventures, said as much in a recent interview with AllThingsD. But he also had a lot more to say about the advantages of working outside of Silicon Valley, the maturation of Google’s Android ecosystem and why quantity is sometimes better than quality.

AllThingsD: What’s the difference between being based in Hong Kong and being based in Silicon Valley?

Yat Siu: In terms of our [Android] ecosystem, it is the dominant marketplace, whereas in the Valley, there’s a lot of focus on Apple. We don’t have that much venture capital available to us, so we have to focus on profitability and the bottom line very, very quickly. Our games aren’t all profitable, but our business is. And we’re just a small island city, so we do not have a domestic market. It’s go global or die.

How do your games fare in different regions?

When we first started [in 2011], the U.S. was our biggest market, but just because it had a larger ecosystem. That’s changing today. North America as a continent is now in second place to Asia because Japan and Korea are driving a lot of the revenues. … The people who are buying iPhones or Android phones in the U.S. today are not the first movers, whereas in Asia, a lot of the marketplace still has way under 50 percent smartphone penetration rates. In Japan, at the start of this year, it was under 30 percent.

Is Android fragmentation a problem for you? Putting most of your eggs in that basket means you’re dealing with phones that range from the very low end to the very high end, right?

Two years ago, we had a testing rack of 600 devices. Now, Samsung is outselling basically everyone else, except in China and Japan. The second thing that’s different now is that “low end” is no longer really “low end.” You used to have really poor devices with poor resolution and processing power. Even the so-called “cheap” devices that are sold in China today are quad-core or dual-core devices; they just cost $100, is all. And they’re all standardizing around Jelly Bean (the most recent version of the Android OS). The whole Android philosophy was, “Here, take the operating system. Do what you want. Good luck!” We had weird memory issues because people would be coding stuff on top. Now, with Jelly Bean, most of the stuff that’s going on in the operating system is going on in the application side.

Pretty Pet Salon is one of the more popular games Animoca has published, and started a “Pretty Pet” franchise.

Tell me about your games and how they perform. How do you evaluate success?

We look at every product as a gateway to another product. The key driver is popularity. Monetization will come, we think, once people are in there, but the ability to cross-promote to other games becomes important. We want to make sure that the user always has at least a few of our games to play, because we don’t believe that there is such a thing as a person who can play a game for years and years and years. It’s “fast-food apps.” People just want to consume quickly, move quickly and go on to the next thing. It doesn’t mean that they won’t come back to it, but they’re not prepared to invest console-style, sitting down and playing for four hours.

And if you spent $60 on a game, you’re probably going to invest a lot more time than if you spent nothing or spent 99 cents.

That’s true, too, definitely. But also, with mobile, whether it’s in trains or one-handed game time, sometimes it’s just when you’re lying in bed, the behavior that we’re seeing now is that a person is playing a game, and then after five minutes, he wants to move on to another game. He’s not necessarily playing the same game for an hour. He’s like, “I feel like something else.” It’s no different than people switching TV channels every once in a while, except they’re switching games.

So it’s not as much of a “hits-driven” business for you as it might be for others?

It’s all relative. What is a hit? Because it’s a global audience, a niche segment is pretty large. And yet, if you have a five-million-user niche, is that a hit? It’s probably a hit for an indie studio, but it’s not a hit for us because of the scale we operate in. Typically, we call anything a hit if it has over 15 million downloads, but as a franchise, as a series. We might have one app, and then if it does well and has a few million downloads and reasonable revenues, then we put sequels and additions on top of it. Out of the series, we may wind up having something like 20 or 25 apps.

For those games that aren’t sequels to existing games, how do your studios come up with new things to publish?

We have studios that are as small as six people. The producer is empowered to have his own budget and his own creative vision. There’s a weekly meeting where all the producers come together and talk about what they’re doing, and then go off and do their own thing. The advantage for the business is, if you start off with a studio of six people and it bombs, who cares? It’s not great for them, but the business can afford to do it. If they do well, they have a platform.

The independence of our studio is also attractive to our staff. They have the chance to be a startup without the startup risk. They don’t have to worry about payroll or finance, they can focus on the product and build their own team. The additional unintended advantage is that, in Hong Kong, we’re unique. So, if you want to do games and you want to publish your games, then, frankly, there’s nowhere else to go. People come to us because the other option is banking or finance — which is a good career, just not if you don’t like it. If we were in the Valley, we might end up getting slaughtered by the amount of recruitment and loss of staff. Who knows?

But it’s worth noting that you do also maintain an office here in San Francisco for non-game development roles like partnerships and PR.

In the past, the meccas of the global gaming space used to be different. They used to be Sony, Nintendo and, at one point, Sega. But it was never centered around Silicon Valley. That changed with the smartphone. Now the new mecca is the Bay Area, because Google Play is here and Apple is here. We have an office here because we have to pay homage to the new temples. Even though we’re not in the Valley, it’s absolutely required for us to go in. Every other app company that’s international that wants to succeed must do the same.

Almost all of your revenue, about 95 percent, comes from in-app purchases. Are you looking at other business models?

Advertising will come, but it is not dominant yet. Primarily, the buyers for that now are other app companies, and we’ve got our own network. If we focus more on our cross-promotion, we get more out of that than necessarily opening up inventory to everyone else. Right now, ads are generally low-quality, and they’re also spammy, so it’s a bad user experience. But that will change. The experience is there already — think about how much time you’re spending on mobile versus PC — but [ads] have to deliver value to the user. Facebook has the right idea. People who like casual games, you should really only show them other casual games. Today, the targeting doesn’t exist.

What does your conversion rate of non-paying to paying players look like? The typical curve has a lot of people at the bottom paying nothing or almost nothing, then a long tail with a bump at the end, composed of a small number of players who pay a lot.

That is the hardcore type of model, where basically you have a very low conversion rate, something like 2 percent, and a very high consumable model where people can spend thousands of dollars. That’s not our model. If you look at games like Pretty Pet Salon, you’d be hard pressed to spend more than 20 bucks, just because of the game play. We are expecting to have more volume of titles with a larger frequency of players coming in from outside. So, for instance, Pretty Pet Salon has an 8 percent conversion rate. Now, when we start working with Forgame (Animoca recently accepted a “strategic minority investment” from the Chinese hard-core game maker), that is different. We will listen to their suggestions, and it does appear that that will be the strategy, because people are prepared to spend that kind of money. It’ll be a learning experience for us.

At $10.2 million and almost a year later, with 70,000 of 85,000 Kickstarter watches shipped to backers, and thousands more preordered on its own site, Pebble is returning to take venture capital on its own terms.

The company has now raised $15 million, largely from Charles River Ventures, led by CRV partner George Zachary.

Asked whether he would have changed anything about the Pebble design if he had access to this kind of capital from the start, Pebble CEO Eric Migicovsky said he doesn’t think so — just that production and hiring might have been quicker.

Plus, he’s proud that Pebble’s Kickstarter success made people pay attention to crowdfunding. “If we hadn’t been rejected by VCs, I don’t think Kickstarter would have had the same effect on early-stage startups that it’s had.”

So why did venture capital bite this time? Just because wearables are so hot right now?

“I just think they have a big lead. The revenue run rate is very substantial,” said Zachary, who usually invests in Web startups like Twitter and Udacity. He added that this, his largest Series A investment ever, brings him back to his roots working on Nintendo 64 at Silicon Graphics.

“Eric thinks the battle will be won with the developer community, so I decided to take a risk on that specifically,” Zachary said.

That’s not to say Pebble is a sure thing — not at all, since Apple and others are expected to soon compete for wrist real estate with devices of their own.

Not to mention competition from Google Glass, the other wearable device that’s making waves now. Zachary said he’s skeptical that people will want to wear computers on their heads, something he worked on 20 years ago at virtual-reality pioneer VPL Research.

As for competing on the developer front, Pebble is releasing staged access to functionality that’s already in the watch. Developers can make their own watch faces and games (5,000 of them so far, installed 300,000 times), and as of today they’ll be able to rig up two-way communication with smartphones.

That should open up space for people to build things like emergency apps (e.g., press two buttons to send GPS to loved ones) and to-do lists, Migicovsky said. Also: Weather, traffic, stocks and Bitcoin prices. “But we’re more interested in the use cases we haven’t been able to predict,” he said.

The report, obtained in advance by AllThingsD, shows just how different the new generation of mobile games is from the gaming-only devices that previously reigned supreme. For context, back in Q4 2012, total consumer spending on games for iOS and Android devices surpassed spending on “gaming-optimized handhelds” (that is, Sony’s PSP and Vita, and Nintendo’s DS, DSi and 3DS).

But the real bombshell is in the new report, which covers Q1 2013: In that quarter, consumer spending on Sony’s and Nintendo’s handhelds declined significantly, while iOS and Google Play spending both increased, also significantly. Combined, the phone and tablet crowd spent nearly three times as much on games as handheld device owners.

(And bear in mind, of course, that a new 3DS or PS Vita game costs about $40, while even brand-new mobile games are typically free or 99 cents to download, with many offering optional in-game purchases.)

But wait, you say. This is the first quarter of the year, being compared to the lucrative holiday-driven fourth quarter. How is that fair to Sony and Nintendo?

Exactly. It’s not. With slower game production schedules and much lower device turnover, the holiday quarter matters a great deal to Nintendo and Sony. But for consumers with a steady stream of new games and newer, better devices on which to play those games, seasonality is mostly irrelevant.

IDC and App Annie’s numbers, then, amount to a double whammy: At both the best of times and the worst of times, new-school mobile games beat out their older counterparts.

A few other points of interest from the new report:

• The global install base for those “gaming-optimized handhelds” was about 200 million in Q1 2013. To put that in perspective, Gartner estimates that more than 2 billion phones and tablets are being/will be shipped this year alone. In other words, it’s through volume that mobile devices have closed and blown past the revenue-per-user gap.
• Although the total amount consumers spent on mobile games was far greater on iOS than on Android, gaming amounted to about 80 percent of all consumer spending on Android, vs. about 70 percent on iOS.
• The report splits consumers into four geographic zones: North America, Western Europe, Asia-Pacific and the rest of the world. For both Android and gaming-optimized handhelds, the Asia-Pacific share of total spending increased by more than 10 points (see the chart embedded below).

This report is the second such collaboration between IDC, which tracks videogame and entertainment hardware, and App Annie, which tracks mobile software and in-app revenue.

The move comes on the same day of the Google I/O developer conference in San Francisco, in which Google is set to launch a paid subscription music-streaming service akin to that of Spotify AB. In the past, the company has used this conference to preview music-related initiatives.

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If you said “gambling,” then nope. Or not yet, anyway. If you said “betting,” it’s probably just because you read the headline, but yes, good job! And if those two answers sound totally interchangeable to you, read on.

Zynga recently began to test the waters in the U.K., but real-money online gambling (that is, betting on games of chance like slots or bingo) is still outlawed in 47 states, and only operating in one, Nevada. In the U.S., though, players can legally bet cash on “games of skill” in 36 states; the appropriately named startup Skillz is now trying to make something out of that legal distinction on Android.

Gamers are familiar with betting virtual (fake) currency on games, said Skillz CEO Andrew Paradise — think Zynga Poker, which sells virtual poker chips in packs that can cost between 99 cents and $99.99. Skillz’s SDK, which launched in open beta late last month, cuts out the middleman: After a developer’s game has been reviewed and approved by Skillz, the company flips a switch that lets players directly bet on their ability to beat another human in a multiplayer game.

In other words, both players pay an entry fee, a cut of which gets split 50-50 between Skillz and the game developer. Then, one player finishes the game with a profit, and the cycle can restart.

Skillz spokesperson Molly Gerth said engagement and user retention for Skillz-enabled games has increased since the SDK launch, in one case by 110 minutes of additional gameplay per user in the two weeks with Skillz vs. the two weeks prior. Another game saw its total revenue triple in a little over a week, Gerth said.

Paradise made sure to say, though, that Skillz can complement rather than replace existing business models: Players can be served ads regardless of whether they bet with real money or virtual money, which is why those engagement numbers matter. He also proposed that the entry fee for a real-money game could be bundled with power-up items that would otherwise be bought in an in-app store as a sort of cheap sample (that is, rather than a free one).

Most of the people who play Skillz-enabled games currently do so with virtual currency, he said.

Skillz has to review the games that want to fully use its SDK because, in those states that allow betting on them, “games of skill” have to fairly allow players to improve over time with practice. “Skilled” players must be able to beat “unskilled” players in at least three out of every four games, Paradise said.

This is interesting because many popular multiplayer mobile games are already games of skill, or close enough to the legal definition that they could be tweaked to be in the clear. However, for the time being, Skillz’s baby beta is only available on 10 Android games, including one it publishes called 3D Cave Runner.

And why Android? Paradise said it’s because iOS has historically monetized far better than Android, even though the latter has a much larger user base. It’s not a gamble, though; he quickly added that he’s “excited about working with Apple in the future.”

That, in part, is the philosophy behind Square Stand, the payments startup’s new point-of-sale product unveiled on Tuesday morning. Sleek and stark white like Square’s other hardware, it’s like something out of the Braun catalog.

But it’s not all about the looks. The hallmark of high design, for some, is matching form with function, and much of Square’s pitch involves the speed and utility of the new product’s design.

“Good design uses form to illuminate function,” Jack Dorsey, co-founder and CEO, told me at an event on Tuesday morning. “But elevating the look of a product is what makes it timeless.”

For better or worse — Dorsey would argue better — the $300 product is incredibly simple. Merchants can strap an iPad 2 or iPad 3 to the white plastic stand, and use the company’s Register software to control the back-end analytics and calculating of orders and items. A built-in swiping card reader is located at the lower front end, facing the merchant, but can swivel around to let the customer swipe their own card, as well. The package, which comes with stand and installation materials, doesn’t come with an iPad or with peripherals like a ticket printer.

This raises a question. Right now, any merchant with an iPad can download Square’s Register software for free, perhaps fashioning their own, home-brewed stand to hold the tablet and take orders. They don’t need to spend three hundred bucks for what essentially amounts to a well-designed prop-up stand.

But that, Dorsey said, is where the point of the product comes in. Two areas are being served by POS systems right now — the very small merchants, who use the company’s existing card reader software out there (or ones from competitors like PayPal or Intuit), and the big, cumbersome (and rather ugly) POS systems used by restaurants and others, which cost somewhere in the area of ten grand or more. For Square’s setup, you could slap a $500 iPad on a $300 stand and perhaps buy one or two of the ticket-printing peripherals to go with it, and be set up for under $1,000.

That middle group, I imagine, is the group of people who would be best served by Square’s new hardware release. And despite Square’s hard push into creating functional software over the past few years, Dorsey maintains that his startup is all about the hardware.

“Hardware has always been a big part of who we are, it’s who we want to be,” Dorsey said. “We always want to use hardware to make experiences better.”

Preorders for the stand start Tuesday, and will begin selling at select retailers in July.

Rakuten, the Japanese e-commerce giant that is also a major investor in Pinterest, is upping its bet on the Grommet.

The Grommet, which rebranded from the Daily Grommet, declined to say how much the investment is this time, but Rakuten will become the majority stakeholder in the Lexington, Mass.-based online marketplace. Before the two Rakuten investments, the startup had raised about $6 million since its launch in 2008.

Last year, Rakuten was the lead investor in a Series B round for the Grommet, whose motto is “fresh finds, true stories.” The site highlights an unusual new daily product by featuring it with a story about its origin, using video and creative text, calling its effort “Citizen Commerce.”

Both the Grommet and Rakuten have focused on linking small- and medium-sized retailers directly with consumers, using discovery and social tools and large marketplaces.

“If I had to pick one element of the Grommet which best represents our platform, it’s our investment in ‘Citizen Commerce,’ a term we created in order to describe a new level of responsibility and ingenuity both for product development and purchasing power,” said Jules Pieri, co-founder and CEO of the Grommet, which she has often compared to a Kickstarter for products, in a statement. “We are proud of what this philosophy stands for and we know it will impact and restructure the consumer landscape in the coming years.”

“I’ve often spoken about omotenashi, the Japanese term that refers to the Japanese service mindset — something that’s rare to find outside Japan and hard to attain online anywhere,” added Rakuten CEO and founder Hiroshi Mikitani. “The Grommet brings a similar spirit to their business by discovering and launching products that delight the consumer in a warm and friendly online environment that promotes communication, creativity and purpose.”

That’s $5 worth of Coins each, a promotion Amazon says will cost it “tens of millions of dollars.” That’s a lot of real money to spend to generate buzz for yet another virtual currency, but Amazon has good reason to do so.

Like other virtual currencies — Facebook credits, for example — Coins is notional, which makes it easier to spend. As in gambling, the abstraction of converting real money into virtual money makes it harder to keep track of how much of the former you’re actually doling out. And, of course, once you purchase Coins from Amazon, it becomes the only place to redeem them. (Note: When you buy an item with Coins on which Amazon is required to charge sales tax, Coins are used to pay sales tax.)

The implications of that are interesting. Right now, Amazon accepts Coins for apps, games and in-app purchases, but the company has plans to extend beyond that. Said Amazon VP of apps and games Mike George, “We will continue to add more ways to earn and spend Coins on a wider range of content and activities.”

Is the master plan here to extend Coins beyond digital goods to all purchases on Amazon.com? If the company is able to use the currency for virtual and digital goods, surely it’s capable of using it for real-world ones as well. Will it? We’ll see in the months ahead.

* Amazon will continue to accept traditional forms of payment for apps and games.