While virtual goods-based business models are gaining popularity in Western countries, the market remains much larger in Asia. How much larger?

According to an update from +8* | Plus Eight Star, Asia’s total annual virtual goods economy might be worth more than $5 billion, which is 25 times larger than the recently estimated $200 million in the US.

Asia’s tremendous numbers are led by China. Pearl Research estimated that online gaming revenues in China hovers around $2.8 billion total, with 70 percent of that being generated through virtual goods. TenCent, Changyou, The9, Netease, Shanda, and Giant have earned more than $200 million, respectively, in revenue with gross margins of about 50%. TenCent specifically tallied $1 billion in revenue for 2008, with 90 percent coming from virtual goods. Nearly 300 million people are now online in China.

Numbers are comparatively smaller in Japan, according to the report, but two social networks from that country, Gree and Mobile Game Town, are posting revenues of $60 million and $250 million respectively, with 80 percent of their revenue stemming from virtual goods. Korean companies earned about $1 billion.

As a side note, the report also provided an interesting breakdown of the most popular online games’ peak concurrent users. These numbers are truly impressive:

1. Netease’s Fantasy Westward Journey – 1.8 million
2. Giant’s Zhengtu Online – 1.5 million
3. TenCent’s Dungeon and Fighter – 1.2 million
4. Blizzard’s World of Warcraft – 1 million

New flavors of MMOs have been popping up in droves over the last couple of years. From Night Elves to Jedi, and from Legos to Conan, the genre has expanded in all shapes and sizes.

Now, Fragegg.com is the newest social gaming portal to emerge for the popular MMO scene. With customizable avatars, users can create their account and socialize with other players through social feeds, walls, comments, and more. Somewhat similar to other social gaming platforms like Raptr, Fragegg informs players of other users’ activity within the games.

Fragegg supports both browser and client-based MMO games, ranging from the most obscure to the most mainstream (i.e. World of Warcraft). As users play the games, they earn a virtual currency on the site called Staregg.

The addition of this currency adds another level of depth to the already addictive nature of many of these games. Fragegg provides a guide on its website listing the values of the currency. As an example, if someone plays the game Dark Orbit for the first time, they will earn 150 in Staregg. If they earn an “achievement” in World of Warcraft, they will earn half that achievement value in Staregg.

Using their Staregg currency, players can improve their avatars by purchasing various items and clothes. Since each avatar begins in nothing but their skivvies, there’s plenty of motivation to obtain the items. Fragegg should expand the number of items available, and it likely will. Some of the cool items already available include panda outfits and Darth Vader costumes.

As it only hit beta in March, the site is still very new. But due to the highly addictive nature of virtual goods and currency, combined with the addictive nature of many of the MMOs it supports (like World of Warcraft), Fragegg could mature into a popular platform.

Inside Social Games extends a big thank you to our fantastic sponsors for supporting the continued growth of Inside Social Games. Check them out below!

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The game of the day comes from Apple themselves with their popular iPhone card game: Texas Hold’Em. Costing around $5 in the app store, this poker game is well worth the money as it not only sticks with the official rules but is also rather easy for anyone learn. Okay, so maybe you won’t become a master overnight, but in time you will be betting with the best of them.

For those that have played the game, they can probably attest to the sometimes brutal nature of the opponents. Rare is the tell that gives away their hands. Nonetheless, there is still hope.

When you can’t win straight up, it’s time to cheat, and in order to do so, you will need to select “New Player” from the “Options” menu. To input each code, you will have to use the letter selection tool to input each cheat as the player name, and once entered, the iPhone or iPod Touch will jump to the checkmark character (be sure to hold Center until the code activates).

With the logistics out of the way, it’s time to get down to business: Start by entering in the code “YOUCHEAT” to open a menu with options to all tournaments, start you with $100,000 in cash, show tells and/or down cards, and even let you adjust the AI to fold normally, often, or never.

Of course, not everyone might need this cheat, but even if you can play cards, do you know how to play them in style? Enter in any of the following codes and prepare to take a trip as you play your hand in some rather… curious locals:

• BIGROCKS: Stonehenge Tournament
• THREEAMI: Apple Conference Room Tournament.
• PLAYDOGS: Dog Tournament (yes, you play against dogs)
• SPACEACE: Futuristic Tournament (apparently aliens play too)
• BARTUNES: iTunes Bar Tournament
• ALLCHAR: See Secret Characters

That’s all there is for now, but as always, if more are found, more will be posted. Just remember to go big or go home. Good luck.

Within the realm of casual games, one of the most popular sub-genres are word games. We have seen many such games appear in the social space before ranging from Scrabble and Lexulous to Playfish’s Word Challenge and Zynga’s Word Twist, but aside from the Scrabble-type games, there isn’t much in the way of true multiplayer experiences. A new startup from Bangalore, India, iPlaySocial is looking to usurp the 80 year old game with its very own, and very different title, Grabbler.

This particular game plays almost like a reverse of Scrabble. Rather than placing words on a board from a pool of letters, players find themselves making a selection of words on a board. No, it is not a word find. Players are given a 12×12 grid of letters with four cubes selected in the center of the game board, and must create a word that builds from one of them. The trick, however, is that each cube can be selected and rotated to change the letter displayed.

The game continues until each player passes consecutively and cannot make any new words from the grid. Like with the initial four cubes, and like Scrabble, players want to try to interconnect and use their opponent’s letters for more points. As you can probably guess, the one with the most points at the end of the game wins.

Grabbler is certainly an interesting game but its most unique feature is a bit of a double edged sword. The human brain works and remembers most things through patterns (hence why people use mnemonic devices). Take Word Challenge for example: The player is presented with an empty list of possible terms of varying sizes to fill with words formed from a handful of scrambled letters. The way the brain is able to compose those words is by seeing patterns within the mess of letters.

What is the pattern? It depends on the person, but a common way is recognizing full words merely by seeing the first and last letters. Take a scrambled word like “hrsoe.” From these letters you can probably see “horse” because your brain picks up the first and last letters and fills in the rest with what it expects. Therein lies an issue with Grabbler: Since the you cannot see all six sides of a cube, finding a word becomes an effort in guessing. Granted, as the game progresses, there are less guesses to make, but you still end up flipping letters as you try to figure out words on the spot. Unlike Scrabble, you cannot plan ahead and strategize quite as well.

Nevertheless, Grabbler is still an interesting word game for those that like the genre. It’s different, clean looking, and is one of the few that allow you to play with multiple people. It is actually likely that anyone who plays the game for a while will develop tricks, strategies, and begin to see their own patterns. Assuming this is the case, Grabbler could very well take off, and surprisingly enough, it is the hope of the developer that the game will become popular enough to become a physical board game. At the moment, it is difficult to tell when and if this will happen, but if it does, it will mark a very curious first for the social gaming space.

New start-up Tengaged has modeled a social game after the popular reality series Big Brother. According to the Barcelona, Spain-based Tengaged, it represents the first “reality social network built around an eviction game like Big Brother.”

The game is very straightforward. When you sign up, Tengaged prompts you to create a cartoon-style avatar, reminiscent of Nintendo’s Miis. The avatars appear a bit bland — with limited customization options — so it shouldn’t take very long.

After you create your avatar, you are placed into a game with nine other players. Each game occurs during the course of seven days. At the end of each day, Tengaged nominates players for “eviction” based on its algorithm that detects player activity (posting blogs, comments, etc.). Other participants then ultimately vote their peers off the game.

Once voted off, most players may not join another game until the current one has ended. If you’re a good Tengaged citizen, however, you are not limited to one game necessarily. If players post positive comments, they earn “karma points,” which can eventually be used to play multiple games at once.

Since everything in Tengaged was built around this elimination concept at its core, the normal social networking interactions we see in other games have a secondary purpose. Yes, the more you do, the less likely you will be nominated for elimination, but Tengaged is mostly a popularity contest, plain and simple.

One interesting aspect of Tengaged is that the games are not limited to those created by the developer. Players can create their own niche user groups. Within these user groups, they can play unique games based on a specific concept chosen by moderators. These groups provide an extra level of interaction for Tengaged users.

Overall, Tengaged has utilized social networking capabilities in a unique way. Every action has a purpose because everything you do is judged. While you still interact and make friends, the game has an underlying factor of competition — and that’s not a bad thing.

The staying power of this Big Brother-style game is hard to predict. Since it was brought to our attention in January, Tengaged has been fairly active. We expect to see more features added so it may retain its existing user base, and perhaps attract more as well.

Social network Hi5 has been racking up the partnerships lately – most recently on the payments front with Paymo and PlaySpan. However, the company also recently struck a deal with Mochi Media, a company that helps developers monetize their Flash games with in-game ads.

Under the partnership, Hi5 will gain access to Mochi’s extensive game library. In turn, the social network will enable players to purchse virtual goods with Hi5′s universal virtual currency, Hi5 Coins. Of the 7000 flash titles available on Mochi Media, Hi5 will integrate its virtual currency with about 200 of them. More integrations will follow.

“Through this partnership, we will offer Hi5’s 62 million monthly unique users with non-stop, interactive entertainment, while providing a wider reach for advertisers and developers,” says Justin Wong, vice president of business development for Mochi Media.

With around 100 million unique visitors a month, Mochi makes most of its revenue from its ads. Terms of the revenue share were not disclosed.

hi5 recently laid off a good portion of its staff and has been refocusing on a social game portal model. These partnerships reflect the company’s hopes that it can monetize its audience of 62 million users across 33 countries through virtual goods transactions.

The human mind is fascinating – on any given day, the average person uses only 10% of its capacity. However, with so much complexity and so much potential, how is it that this phenomenal processing device can be so easily fooled?

Optical Illusions Challenge by Fendoo on Facebook is a quiz that does everything it can to mess with your head. Perhaps it isn’t the brain that is easily confused, but rather the senses that cannot be trusted as they are what is lying to the brain. As cliche as it may sound, “your eyes can deceive you, don’t trust them” (Star Wars). It’s true though, and Optical Illusions utilizes some of those most classic ways to confuse the eye’s perception of reality.

When you play the game, you are presented with an optical illusion and a question about that illusion. Some ask you about colors, others are about letters, and others about shapes. Furthermore, when you start the quiz, you are asked to invite a few friends in which to compare scores with.

Unfortunately, as interesting as the optical illusions are, the quiz is relatively short and there isn’t anything beyond it. Furthermore, the quiz develops a pattern as you progress through it. Usually, when designing any multiple choice quiz, you generally want to have at least one completely wrong answer, one partially correct/partially wrong answer, a right answer, and an answer that only looks right.

The multiple choice answers in Optical Illusions don’t really make those answers close enough to really warrant extensive thought once you discover the pattern. For those wondering, this pattern is that the seemingly wrong answer is almost always the right answer. You begin to learn that your eyes are tricking you, and thus what would look like an obvious wrong answer is the actual right answer through simple logic, thus defeating the entire purpose of the quiz.

For what it is, Optical Illusions Challenge is entertaining for a few minutes, but it offers little beyond that. The addition of comparing scores to friends is nice, but you can easily “fake” your actual score without even looking at the images sometimes. Nevertheless, the images are quite interesting to check out, if nothing else!

Currently, Optical Illusions Challenge sports over 400,000 monthly active users on Facebook.

Almost everyone has felt the effects of the down economy as companies cut costs or even file for bankruptcy. Despite this trend, however, the social, casual, and mobile gaming markets have continued to grow.

That growth has been especially fast on the iPhone, where new companies have emerged to build gaming products for the surging platform. Portable Zoo, started by EA veteran Don Traeger, is one such start-up.

Traeger worked at EA Sports back in the 1980s. After his time there, he moved on to start Locomotive Games in the late 1990s, which was eventually purchased by THQ. He worked on games such as Jet Moto 3, Jungle Strike, Road Rash, MX 2003, and MX Superfly. As the economy worsened back in November, THQ cut the studio. As a result, Traeger and four other Locomotive employees were forced to make a change.

So why did Traeger leave the traditional gaming environment in favor of the iPhone platform? “The economy is just a convenient excuse for the disruption,” Traeger told Dean Takahasi. “The business has changed drastically toward platforms like the iPhone.”

Other industry vets have chosen this road as well. Eric Huynh, Vivendi Games’ CTO at VG Mobile, joined SGN as its new CTO and VP of Engineering.  SGN also hired EA’s Eric Lindstrom as its Chief Creative Officer. Brandon Barber, formerly the senior director of global marketing at EA, recently joined social developer Zynga as its VP of marketing.

Thus far, Traegar has self-funded Portable Zoo. He hopes the company will grow quickly and efficiently over the course of 2009 up to 35 employees, as he tries to attain outside financing.

Portable Zoo already has two iPhone titles already under its belt – a word game dubbed “Letter Bug” and “Quick Turn.” Each had a fast turnaround time (one month for Letter Bug), and many expect the company to enjoy fast growth as a result.

In fact, according to Portable Zoo, new 3D titles are already on the way. They will eventually be available on both the iPhone and other portable devices.

While Facebook has focused its Platform efforts over the last 18 months on growth over monetization, several payment providers have moved quickly to fill the gap by providing payment processing services to Facebook Platform application developers. Based on what we’re hearing, those payment companies experienced very strong growth in Q109.

Although most of the companies we spoke with did not want to publicly disclose specific revenue figures, Inside Facebook’s survey of leading payment providers on the Facebook Platform shows that payment providers overall experienced about 35% growth in both overall transaction volume and dollar volume on Facebook for the first quarter. Some reported growth as high as 300% for the quarter, largely due to new distribution partnerships.

>> Read More at Inside Facebook