MySpace COO Amit Kapur revealed at last week’s Web 2.0 Summit that MySpace is indeed working on it’s own microtransaction monetization platform. Given the current state of advertising rates and associated revenue generation, both developers and social networking platforms are looking for a new way to monetize. A casual glance at the gaming industry makes this a no brainer for Kapur and Zuckerberg.
While Facebook has it’s own virtual gifts system in place, they’ve yet to open it to developers (although 3rd party developers currently power a massive slice of facebook’s virtual gift economy).
We’ve already seen proof that the second a social network begins charging for an application or virtual gift, usage drops. However, the overall value of the app is in direct correlation to the number of people using it (and their friends, and their friends of friends using the app). Obviously, a high profile, well-developed application or virtual gift with a large number of users, will fair well in a microtransaction economy, and hopefully lead to elevating the entire industry.
Whether Facebook and/or MySpace users are already used to, or have already used some form of microtransaction is up for debate, but given the overall general demographics of both platforms, I’d be willing to make the bet that 75-80 percent of these users have made an iTunes song or iPhone application purchase within the last 12 months.
If either MySpace or Facebook manage to get their microtransaction payment systems houses in order, they could be set to revolutionize not only the social networking platform, but also the microtransaction industry as a whole. This development has a number of positives for the free-to-play; microtransaction based gaming economy as well, thereby predisposing a much larger audience to the concept. Exposure leads to understanding. Understanding leads to acceptance. Acceptance leads to interest. Interest ultimately leads to development and creation of better and better products.
Oh and MySpace and/or Facebook…if you’re listening…fatfoogoo has already been down this road, and we’re here to help. Zuckerberg and Kapur…call me.