But shifting a more established game company to that style of development–without making an acquisition–can be difficult.

PopCap Games, which is preparing for an IPO, is giving it a shot by forming an internal experimental label called 4th & Battery. The label will give the company’s designers and developers “free rein to create smaller, simpler, and sometimes edgier games without the typical constraints of an established global games publisher.”

The label is named after the intersection in downtown Seattle where PopCap’s headquarters is located. Its first game, announced today, is Unpleasant Horse, coming free to Apple’s iPhone later this month.

The game definitely represents a shift from the company’s casual game style that’s approachable for the whole family. Previous hits include such titles as Bejeweled and Plants Vs. Zombies.

Unpleasant Horse can only be described as a vegetarian’s nightmare.

In the game, a winged horse flies through the air. The player’s goal is to direct the horse to destroy small birds and land on other innocent horses on the ground, which are then pushed into a meat grinder underground.

In a press release, Ed Allard, PopCap’s EVP of Studios, explained: “The PopCap brand has become closely associated with ultra-high quality, polish and attention to detail–which is a great thing. But our standard game development process is therefore long and involved, and doesn’t really accommodate all of the creativity pumping through our collective veins.”

4th & Battery will give it the creative freedom to “try really strange or marginal ideas,” he said. Jason Kapalka, PopCap’s co-founder and chief creative officer, added: “Expect weirdness.”

The new label is expected to produce several titles a year for games on the PC to Facebook and iPhone.

A spokeswoman declined to say what percentage of the company’s overall workforce that represents. Sony Online Entertainment, which is a subsidiary of Sony, will shift a lot of the work to its headquarters in San Diego.

In addition to the layoffs, Sony Online is also discontinuing production on an upcoming game, The Agency, which had been under development for four years and was slated for the PC and PlayStation console. The game studios are known for their work on EverQuest, Star Wars Galaxies, Untold Legends and Field Commander.

The decision to discontinue will allow the company to focus on two of its better known properties, PlanetSide and EverQuest. The layoffs and studio closures were initially reported by Kotaku.

Bloomberg reports that Sony Online Entertainment President John Smedley has said that the company plans to develop more free-to-play games, which aligns with the growing popularity of social games on Facebook. Those games require less money and time, he added.

Here’s Sony’s full statement:

“As part of a strategic decision to reduce costs and streamline its global workforce, SOE announced today that it will eliminate 205 positions and close its Denver, Seattle and Tucson studios. As part of this restructuring, SOE is discontinuing production of The Agency so it can focus development resources on delivering two new MMOs based on its renowned PlanetSide and EverQuest properties, while also maintaining its current portfolio of online games. All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern.

This strategic decision will have no impact on SOE’s current portfolio of live games; additionally SOE will transition development efforts for the Denver and Tucson studios’ suite of products to its San Diego headquarters. This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year.”

In an interview BoomTown did yesterday with Yahoo’s Chief Product Officer Blake Irving–the video of which will be posted later today–at the Silicon Valley Internet giant’s HQ in Sunnyvale, CA, he managed to actually give me some news to report: the hire of crackerjack user experience design head Tim Parsey.

Parsey’s title will be SVP of User Experience Design at Yahoo, which is now centralizing the important task, Irving said. Previously, in the 67-ring circus that has been Yahoo’s product organization, design was widely dispersed.

Parsey certainly has the cred in the industry, with stints at Apple, Microsoft’s entertainment and devices unit, Mattel and Motorola. Most recently, he was a principal at a Seattle-based design firm called shiftalliance.

The British native ran Apple’s design studio for five years in the early 1990s and and was the main dude behind Motorola’s freaky V70 switchblade mobile phone in 2001.

Best of all: Parsey was once responsible for Barbie, as you can read below from his bio from shiftalliance, which announced his departure several days ago on its site:

[Tim Parsey] co-founded shiftalliance to focus on higher order value creation in business. The company is built on three beliefs: 1. that higher order, or meaningful, value is the next value driver in mature markets; 2. that sustainable innovation needs to consider the whole business model and; 3. that establishing a people-centric continuous change process is critical for success in today’s markets .

Prior to shiftalliance, he served as Partner, User Experience (UX) Director, Xbox Design at Microsoft, where he led a 22-person team responsible for the design and development of a new technology-enabled paradigm of interaction and entertainment that would not disrupt revenue streams from the existing Xbox gaming platform and contribute to the business in a more strategic way.

Previously, at Mattel as VP, Consumer Products Design, Tim was responsible for the Barbie, Hot Wheels and Fisher Price brands (in all non-toy categories) across 45,000 sku’s contributing nearly $2 billion in revenue worldwide. His charge was to establish the strategic and creative vision, and evolve the culture from a traditional licensing to a ‘leveraged innovation’ and ‘marketed product’ based approach. Key components of this evolution were to establish the first design languages for Mattel brands; lead design innovation for cross-functionally conceived marketing platforms (product, entertainment/web and 360 degree marketing); and nurture the individual licensee businesses and 5,000 designers across the portfolio into a community motivated to share and innovate together, thereby driving the business evolution at an appropriate pace. Before that, as VP, Wheels Design, he led 45 toy designers to advance the Hot Wheels, Matchbox and Pixar CARS toy design businesses. Activities included establishing product and brand design strategies, evolving the toy teams and building the first licensed consumer products design team, all of which led to re-energized business growth. This experience was a planned opportunity to understand toy design and specifically play innovation, and led to the formalization of the first play design methodology for Mattel.

Prior to Mattel, Tim served as Corporate Vice President at Motorola, where he built and led the Consumer Experience Design (CxD) group for the Personal Communications Sector (mobile phones) from an established industrial design team of approximately 22 in the US to a multifunctional design organization of approximately 150 distributed. This journey that included developing design as a competitive advantage for the company began 5 years after the StarTac and led to the design of Razr, the most successful brand and product range to be informed by a design strategy called ‘rich minimalism’. At the time, approximately 100 cell phones a year were being designed with a broad range of derivatives for different markets and carriers. CxD was distributed across Asia, North America and Europe and included Advanced Design and Design Planning groups that fed advanced thinking and strategies into the User Interface, Industrial Design and Human Factors groups. Specific achievements included establishing a collaborative industrial and user interface design methodology with key carriers.

Before that, Tim served as VP, Product Design and Development for ACCO, a manufacturer of office supplies and Manager, Design Studio at Apple after working as staff designer at ID Two (now IDEO) and other leading design consulting firms.

And here is a video of him speaking at a TEDx event about a year ago:

The Seattle-based company–which operates out of the city’s industrial and gritty Georgetown neighborhood, better known for artists and breweries–was founded by Dan Shapiro, who merged his last company, Ontela, with Photobucket.

Similar to the Kayak travel site, the Web site uses sliders to determine such features as price, speed and weight sensitivity. Other features that can be checked are “big screen,” “great for gaming”, “great for Photoshop,” and “3D.”

“This exists for travel, like Kayak and Hipmunk,” said Shapiro, who came up for the idea when he left Photobucket and was looking for a personal laptop that was cheap, lightweight and featured long battery life.

Because he was so baffled by the options, he actually hired a contractor in Pakistan for $50 to research his options and enter the information into a spreadsheet.

That’s the model the company now uses to get its data. Instead of searching the Internet or crawling retailers’ Web sites, Sparkbuy has hired a team of researchers to manually enter the information into a database.

Currently, it has 20,000 reports on roughly 2,000 laptops. There’s so many reports because each report is entered at least three times to ensure accuracy.

The company will make money on referral fees for sending consumers to a retailer’s Web site, similarly to how Kayak makes money when someone discovers a cheap hotel room.

The site launches today with links to Amazon.com and Newegg. Next month, it expects to add HP, MacMall, OnSale, PC Mall, and Toshiba Direct.

Sparkbuy, which has raised $1 million in capital and has four full-time employees, is also collecting data on the myriad of tablets launching over the next few months. Today, it has data on 70, ranging from the $99 Pyrus 7″ Android tablet to the Windows 7 Asus tablet with keyboard for $449 and to the fully loaded iPad 2 for $927.

But, after Google decided that it wanted to be the Google of mobile search, Medio found itself too small to compete on either the algorithmic or ad side.

So the Seattle company hunkered down and plotted a second act. The once-loquacious startup went silent, scaled back from more than 100 employees to around 60 and slowly started building back its business around the recommendation engine that had formed a key part of its search engine.

These days the company is looking to sell access to that engine to phone makers and operators who want to use it to help figure out which services and products to pitch to their customers. The need is particularly acute when it comes to trying to sell mobile apps, of which there are tens of thousands.

“The problem is people don’t know they are there,” Medio co-founder and CTO Brian Lent told Mobilized. “There’s a discovery problem.”

It is a widely recognized problem in the industry, with many companies aiming to attack it from different angles–some by pitching their own app stores, others by pitching advertising options and still others, like Medio, by trying to help understand user interest.

Medio is announcing later on Thursday that its services have been widely adopted by T-Mobile, a longtime customer of Medio’s. Lent said the carrier has actually been using the analytics services for more than a year, but that the company wanted to wait until it could demonstrate results before going public.

Since taking over powering T-Mobile’s Web2Go service in June 2010, Lent said that the company has been able to help T-Mobile triple its number of sessions per user, while offering significantly faster response time as well as reducing the amount of data sent between handset and network by 40 percent.

Medio’s engine can help suggest which apps a user might be interested in based on their past purchases, location and other information. It can also suggest what other items to pitch, such as wallpapers or ringtones, or even a different rate plan. The Medio technology is also designed to make it easy for a phone buyer to have a device customized with their favorite apps, sites and news feeds.

While many are attacking the app discovery issue, Lent comes armed with some serious technical chops, having worked alongside Larry Page and Sergey Brin as well as early Yahoo employees at Stanford’s computing labs in the 1990s. He had the chance to join both companies very early on, but passed.

The company, which offers 48-hour sales events for all types of clothing, is bringing the music-club phenomenon back into style.

But this time, instead of teenagers getting a CD from an artist they potentially never heard of, fashionistas will get a pair of the latest shoes (I hope you have a large closet!).

It works like this.

Registration is free, and your shoe style is determined after taking a short quiz. Each question asks you to pick from a series of photos what best represents your style. One question asks of three Gwen Stefani looks, which do you prefer?

Based on your preferences, Sole Society will then send you an online selection of “designer-quality” shoes every month for $49.95 per month. The styles range from heels, wedges, flats or booties. In response to a question about what designer brands will be offered, a spokesperson said it is offering its own exclusive brands of shoes, including a brand called Marco Santi at launch.

Just like with the music clubs, you are allowed to opt out, however, you must remember to choose to do so by the 5th of the month, or else you will be charged for a pair of shoes and begin to accumulate credit. HauteLook says you will never accumulate more than $150 or three months at a time.

The terms are very flexible, but much like the original music clubs, the catch is whether you were disciplined enough to either pass when not interested or return unwanted to shoes.

There’s no limit to the number of months you can skip, and even if you choose to skip a month, you can change your mind and purchase as many shoes as you would like. If you are not satisfied with your shoes for any reason, you have 30 days to return the shoes for full credit with a prepaid UPS label.

As an added bonus, Sole Society members can earn a free pair of shoes if  they refer three friends to the site that result in a sale.

HauteLook is one of the companies competing in a new wave of e-commerce, which leverages group sales to offer discounts for limited time. Others include Gilt Groupe and Rue La La. The broader category includes Groupon and LivingSocial, which are focused more on offering deals for local services, including discounts to restaurants and spas.

Seattle-based Nordstrom announced last month that it acquired HauteLook for $180 million in stock. However, the transaction size could jump to as much as $270 million if the company meets certain performance goals.

HauteLook will operate an independent, wholly owned subsidiary, to be managed by its current leadership. The transaction was expected to close by the end of this month.

While Nordstrom is now a department store, offering a full range of items for sale, it kicked off as a shoe store. In 1960, it was considered the largest independent shoe chain in the U.S., and its downtown Seattle store was the largest shoe store in the country.

Today, the tech duo launched the all-new GeekWire, after quietly giving notice to the business journal last Thursday.

Cook says he will serve as the co-founder, CEO and Seattle editor focused on covering startups and venture capital, while Bishop, who is co-founder, president and national editor, will be tasked with covering Microsoft, Google, Apple and other publicly held companies.

The two reporters turned entrepreneurs, who were former tech reporters at the Hearst-owned Seattle Post-Intelligencer, are known locally for their solid and consistent startup reporting, and even for the occasional national scoops, such as Bishop’s exclusive interviews with Microsoft’s Robbie Bach and J Allard the day their departures were announced.

The two are also known for bringing the tech community together by hosting an annual awards and other regular tech meet-ups, including one that even BoomTown’s own Kara Swisher attended.

So, why the departure?

Cook said after spending so many years reporting on entrepreneurs, it was time for him to be one.

“We feel like there’s a real need for a tech news source that’s based out of Seattle, rather than Silicon Valley or New York. That’s always been a niche that Todd and I have pursued,” he said.

Cook said they have secured enough funding from an angel investor to get the venture off the ground and to keep both his family and Bishop’s fed.  And, in true startup form, Cook declined to discuss how much capital the two raised or from whom, but said to expect an announcement soon.

The sudden departure of Cook and Bishop from TechFlash leaves the site’s fate a little bit up in the air.

Emory Thomas Jr., the publisher of the Puget Sound Business Journal and TechFlash, said he is committed to rebuilding the site after losing its two original employees.

“I’m comfortable with ability to move forward and go beyond where we’ve taken TechFlash today, and I’m not just saying that,” he told us.

In a post announcing their departure, Thomas disclosed that the site was profitable, and said in the interim, the whole PSBJ staff, led by reporter Greg Lamm, will write and edit the blog.

Cook said the entire site was created over the weekend after they gave notice on Thursday with the help of  a number of Seattle-based companies that provided legal advice, web development, design and hosting services.

A story in the Seattle Times this weekend detailed the company’s growing pains as it nears an end to a years-long process to relocate from a number of buildings around town to a centralized campus in downtown Seattle.

The e-commerce giant now occupies seven buildings covering 845,000 square feet, and has long-term leases to occupy more than 1.7 million square feet, including four buildings still to come.

On a worldwide basis, Amazon is gobbling up talent right and left.

In 2010, its ranks swelled by 9,400 positions to 33,700 employees.

It now lists openings for 1,900 jobs in Seattle, which is twice as many as a year ago, The Seattle Times reports. Of those, more than 900 are for technical positions.

Amazon has chosen to relocate in an area just outside of the downtown core that is being revitalized by Paul Allen’s Vulcan Real Estate venture. Called South Lake Union, Allen envisions the area being a magnet for biotech and other tech companies.

Since Allen started investing in the neighborhood, it’s become home to a ton of new lofts and townhomes, a mix of new restaurants, hotels, stores and an electric streetcar that connects the corridor to downtown.

Separately, Vulcan Real Estate announced today that it had completed the third phase of Amazon.com’s new headquarters, with two new office buildings now fully occupied. When completed, the project will have five phases, totaling 11 buildings, some new and some historic. Phase IV is currently under construction and includes three buildings set to open this spring. The final phase, which includes one new office building, has also broken ground and will open in 2013.

Given how much people talk about cloud computing and the number of companies that use it, you’d think the cloud was a huge business for Amazon Web Services–or AWS for short. It’s not. Amazon doesn’t break the units results out specifically, and instead lumps it into the “other” category for financial reporting purposes, which amounted to $953 million in 2010, or about three percent of Amazon’s total sales. But you can get sense of its growing importance elsewhere within its financial reports: Capital expenditures in 2010 were $979 million, more than 2.5 times the amount it spent in 2009. Amazon didn’t detail exactly how it spent that money–some went to offices, some to infrastructure for AWS–but it did say this: “We expect this trend to continue over time.”

Next week, Amazon Web Services will hit its five-year mark, so with that milestone in mind, I took the opportunity to ask Selipsky first about its beginnings, before diving into its future.

NewEnterprise: Adam, I remember vaguely the day that Amazon announced it was getting into the vaguely worded “Web Services” business, and really scratching my head at it. How did all this start?

Adam Selipsky: We built it out of necessity. We wondered why projects were taking longer than it seemed they should, and so we did a study and found that our engineering teams were spending about 70 percent of their time on non-value-add work like provisioning and managing their server and IT infrastructure, and not innovating on behalf of customers. That was a big aha moment. We got a blinding glimpse of the obvious, we realized we were not the only ones with this problem. We figured out there was a broad need for these basic technology infrastructure services.

When I think of all the companies that I know have started out using AWS, my head spins. Who’s your biggest customer?

We wouldn’t break that out. Zynga is one the biggest, obviously. Look at their growth. They couldn’t have grown the way they did without AWS. Netflix is another highly significant one. They said they have moved most of their infrastructure to AWS. They have a talented set of engineers who could build and manage their own infrastructure if they wanted to, but the point is that they don’t want to. They’d rather work on Netflix rather than the underlying infrastructure.

You’ve recently added a service called Elastic Beanstalk. Are you going to continue to add services like that through the year?

As fast as we knock out new services and features, the list of what our customers want from us continues to grow. I think that’s because this is so new, and since we’re replacing the data center, there’s a lot of things built up over the decades that run in those data centers. There’s going to be a long list of mission critical services that we need to bring up.

What’s the big one that people are asking for?

More flavors of databases. We have RDS, the relational database, and we’ve said we’re going to do an Oracle engine. So there’s more to do on databases, not only adding new flavors, but also just being more scalable. There’s big demand for really highly scalable, high-performance databases, and I think we’ll continue to work on that. And I think that there will be more stuff around ease of use. There’s going to be more features to help you figure out and deploy whatever you need.

We’re starting to see a lot of talk from other companies like Google and Microsoft and IBM who want to get into the cloud services business. What kind of competitive threat to see coming at you?

We’ve been in business for five years with real paying customers, with large companies down to guys in basements, and I think we were lucky enough to have a real first-mover advantage. A lot of technology companies have not followed quickly in part because they haven’t wanted to follow quickly. They make money by getting seven-figure purchase orders, which is good for them, but not so good for their customers, so they have a real dilemma about making the transition.

Another thing I’m hearing a lot of these days is talk of private clouds. Companies are wondering why they can’t build their own clouds themselves, and still maintain the on-premise control of their data. Do you sense any threat from that?

There are a lot of companies with large sales forces who are banging the private cloud drum very loudly. When they all do that in concert, some customers are going to listen. But you have to parse that talk from the reality. I think some customers have to be very careful because they lack some fundamental characteristics of the cloud. If you’re still writing a very large check, and not operating in a pay-as-you-go fashion, you’re losing one of the key advantages of the cloud. If you just bought machines that had to appear on a loading dock somewhere, then what you have isn’t instantly scalable. Most importantly, it doesn’t take the heavy lifting out of your hands so you can focus on the things that your customers care about and instead focus on things that are really just table ante at the end of the day. CFOs and CIO are going to have look really closely at the benefits that are being advertised to them. A lot of those models look like yesterday’s economic model.

What about hybrid models? Along with private clouds I hear a lot about mixing cloud and on-premise.

I don’t want to come across as some kind of religious zealot for the cloud. We’ll live in some kind of hybrid world for many years to come. But I think that what hybrid principally means is when there’s cases where there’s applications that can’t move because of government regulations or it was just built in 1978 and it’s just not conducive to moving–you see that a lot actually–but you want to run other things in the cloud. One of our jobs is to make it really easy for enterprises to live in that hybrid environment.