Posts Tagged ‘mobile platforms’

Challenging economy not slowing growth of Microtransactions

Thursday, April 16th, 2009

While we all know that the ‘traditional’ advertising market has been taking a beating over the past few months, according to a recent Insidefacebook.com survey, social applications and games monetizing via direct or indirect payments has been less affected.  While a number of analyists offer up their opinions and site the entertainment industry’s traditionally strong performance during economic downturns (more free time and the increased desire for diversions) or the overall attractiveness of a low cost purchase (vs. buying that new car), Facebook applications developers have or have not (depending on how you look at it) been hit by the current economic state.

Facebook application payment providers in particular are reporting tremendous growth at a time when more and more businesses are looking at closing up shop.  Although no specific names or figures were named, Insidefacebook.com reports that overall, payment providers have seen on average a 35% growth in overall transaction and associated dollar volume rise over the Q1 2009, with some even reporting as high as 300%, due in part to new distribution partnerships.

And while a majority of these numbers are flowing from facebook, payment providers also reported that the demand for virtual currencies across other social networks (MySpace, hi5), mobile platforms (iPhone) and in online games in general have also spiked.  Consequently, developers large and small are reaping the benefits of this demand.  Zynga for example, one of the largest app providers on Facebook and MySpace is rumored to be pulling down quarterly revenues in the $10-$15 million range, while Playdom, the developers of MySpace’s #1 game is reporting similar numbers.  And obviously, for every major developer, there’s 10-15 smaller developers standing right behind it, working on their own unique application segment.  What does this all add up to?  Besides positive reinforcement in an area that’s been traditionally flogged as the black sheep, these types of numbers are making big waves in Silicon Valley, and VC’s that weren’t currently watching the space, sure are now.

But wait…isn’t facebook rolling out their own virtual currency?

In German, there’s a perfect word for this: Jaein, which is a combination of Ja, meaning yes, and nein, meaning no.  As we’ve previously reported, facebook has been flirting with the microtransaction/virtual currency tree for quite some time now, but have yet to make a full commitment to the project.  They have however taken great steps in the right direction, and perhaps even started introducing users to the concept (think Facebook Credits), the company still remains focused on growth over monetization.  Both devs and publishers of facebook applications would find a facebook currency advantageous, a number of them are also quick to point out that not even facebook themselves would be likely to deliver better services than a number of 3rd party payment providers.

All in all, while virtual currency monetization is obviously something we’ve been working on for quite some time here at fatfoogoo,  a revolution definitely seems to be afoot and we’re quite happy to be able to answer that all important question, “Can you?”  our answer?  “Yes we can, how soon would you like to get going?”

Find out more about fatfoogoo’s social networking monetization packages by visiting our solutions page.

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PlayMesh introduces virtual goods monetization to the iPhone via iMafia

Monday, January 26th, 2009

Over the past year, we’ve seen a dramatic increase in social games, those that are played over social networks like facebook, myspace, Friendster, etc., but if San Francisco based PlayMesh have their way, 2009 could be the year of social games making the leap to mobile platforms. What’s more, PlayMesh’s iMafia has found an innovative solution to offering virtual goods on mobile platforms, traditionally a challenge for most iPhone applications.

If you’re on Facebook, there’s a pretty good chance that one of your friends has at one point or another tried to recruit you to join their ‘Mob’ via Mob Wars.  Building on the popularity of this game play format, PlayMesh co-founder Charles Ju says that the time is ripe to bring the concept from social networks to the iPhone.  iMafia, which was released on Friday, has been on a juggernaut course over the weekend and already ranks at number 55 (as of Monday morning, 26 January 09) on the Apple iPhone AppStore.

Capitalizing on the iPhone’s unique UI, iMafia players use screen gestures to navigate through the game world map.  Actions such as entering a building are accomplished via a simple tap function.  Similar to Mob Wars and other ‘domination’ type games, iMafia’s concept is simple, yet highly addictive: climb the ranks of a crime family, each ‘job’ requiring more and more skills/abilities.  Billed as (technically) an MMORPG, players can play against each other (and as it’s turn based, players do not need to be online at the same time), and may purchase virtual goods along the way to help them with quests.

So far, so good.  Not really much we’ve not already heard.  But here’s where things become interesting.  Ju says that iMafia is a mold breaker, as it successfully relies on virtual goods sales to monetize a social network in a free-to-play game context.

But hold on a second…Apple doesn’t allow developers to present free-to-play’s that rely solely on virtual goods sales to monetize, right?  I mean, call me crazy, but if this is the case, wouldn’t developers be giving away their apps as free-to-plays and seeking alternative payment options for monetizing their virtual goods?  Remember, the BigMac keeps a healthy 30 percent of all revenue generated from paid game sales, while others’ fees can be dramatically lower.  What gives?

What gives is that PlayMesh has put itself in a win-win situation, by circumventing Apple’s rules in so much as purchases of the companies’ other titles, Chess Puzzles, iType and Speed Shapes for example, count as ‘payments’ for virtual goods within iMafia.  Purchasing ‘Chess Puzzles ‘for example would grant the player premium points that can be used to increase your health, purchase bigger and better guns, or recruit more mafia members to your clan within the game.  However, what’s interesting to note is that the free versions of these applications have been removed, and are being replaced by paid versions, pending Apple’s approval.  This should be an interesting one to watch development, as it seems as though there’s more than just an App approval process going on here.  If Apple approves these paid applications, and PlayMesh uses them to fund virtual goods within another of it’s applications, the precedent is set, and I wouldn’t be surprised to see a deluge of other developers falling in line ASAP.

http://www.vimeo.com/2913153

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70% of Games Lose Money, microtransactions can recoup costs

Wednesday, August 13th, 2008

Former Sony executive Chris Deering recently stated at the Edinburgh Interactive Festival that only three in ten games will ever make enough money to break even, much less see a profit.

Kicking off this week’s Festival, Deering delivered his keynote and served up some juicy predictions for the gaming industry.  Based on his findings and correlations drawn from Screen Digest and other industry sources, Deering expects that by 2011, there will be 2.5 Bn potential gamers worldwide.  Traditional gaming platforms such as the DS, Wii and PS3 are expected to have a base of 500m by 2011, with alternative mobile platforms and gaming PCs splitting the remains with a billion users each.

Looking at the numbers, Deering warned that “traditional revenue sources will not be sufficient to fund games development” and as the market grows, studios must seek alternative revenue sources now in order to avoid becoming obsolete.

Citing the growth of new players to the market; mobile network carriers, cable, satellite, and DSL providers all working towards a ‘competitive array’, this competition is only going to get stiffer.

“Something is going to have to be there to make up the difference,” he said, citing a “creative use of hybrid online/offline advertising revenue models” as one key way to succeed. “These business models must be explored.”

Deering went on to cover areas and trends that he believes will sustain a 2.5bn person market.  On the development end these include WiFi, lighting and voice recognition, massive game worlds, cinema-real presentations.  On the player end; microtransactions and in game advertising topped Deerings list.  He also covered user generated and user enhanced games.

Perhaps planting a new seed, Deering also went on to unfold his vision of another potential revenue source; gaming.  “Gambling will become a source of development funding,” said Deering. “Perhaps not directly, but this area can provide some sources of income which eventually be directed back to the developer.”

Prior to his appointment as president of Sony Europe, Deering served as the head of Sony Computer Entertainment Europe during the launch of the original PlayStation, PlayStation 2 and PSP, which gave him significant knowledge of Sony’s internal and external development strategies. He resigned from Sony in 2005.

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