With over 9 million monthly users on Facebook last month, and nearly 12 million total players on MySpace, Mafia Wars is one of the most popular game on social networks. Today, players can join the underworld on the go as Zynga has just released the iPhone version of Mafia Wars.

Mafia Wars is Zynga’s third title released for the iPhone after Live Poker and Scramble Live. As it stands, the new app is available for any iPhone or iPod Touch, and is free. However, Zynga says that the game will also have premium versions ranging anywhere from $10 – $40 that will be made available soon. Additionally, Mafia Wars for iPhone is not launching with Facebook Connect integration, though we’d expect it to be released soon.

With Mafia Wars for iPhone, Zynga is focusing on what they know best rather than implementing totally new ideas for the mobile platform. Users can expect the same familiar game play for the iPhone version: Build up your families, manage cash, health, energy, and stamina, gear up, and take out other players. However, while these elements are the same, players can expect a whole new look for the game, as it contains brand new art, animations, and sounds while they track friends’ progress through real-time newsfeeds and ladder systems.

Already released mob titles on the iPhone include SGN’s Mafia: Respect and Retaliation, iMafia, and Mob Wars.

Mafia Wars can currently be downloaded from the iTunes store here. You can also check out the promotional trailer here.

Over the past few months, virtual currency has become increasingly popular as a means to monetize virtual worlds, social networks, and games. While companies such as OfferPal, Super Rewards, Peanut Labs, Sometrics, and Gambit have all been prominent providers of virtual currency monetization services, there has never been an overriding universal currency within the Facebook ecosystem of applications.

At the GamesBeat conference in San Francisco in March, Gareth Davis of Facebook said the company was “looking at” such a currency system for the Facebook Platform. Facebook already has a virtual gifts system, and last week Facebook started experimenting with virtual currency gifting in the feed.

However, Facebook has given no clear indication that it is interested in actively developing a currency system that would exist across all Facebook applications in the near future. Such a system would be complex to build and administer, and would make companies helping application developers monetize increasingly concerned.

In addition, it’s not even clear that a Facebook-run system would necessarily perform better than third party solutions, many of which specialize in providing services to users in particular age or geographic segments.

Unlike hi5, which launched a new API around its hi5 Coins virtual currency a few weeks ago at SXSW, Facebook is operating with much longer time horizons. We think it’s likely to be a while before a universal virtual currency system for Facebook app developers exists.

While the iPhone gaming space has enjoyed tremendous growth, Apple has enacted new policies that may discourage some developers from building gaming apps for the iPhone platform.

Apple’s new refund policies grant iPhone users up to 90 days to receive a refund for their application purchases. Because most applications experience a staggering drop-off in app retention after the first day, this could harm the revenue streams for many iPhone developers. It also represents a departure from traditional return policies, which stipulate that a buyer cannot return a purchased game for its full price after the wrapper has been removed.

Under Apple’s return policy, the developer must return not only the money from the sale, but Apple’s 30 percent commission as well. So, in effect, the developers must pay back Apple for 100 percent of the sale.

Here’s Apple Contract Refund Clause:

“In the event that Apple receives any notice or claim from any end-user that: (i) the end-user wishes to cancel its license to any of the Licensed Applications within ninety (90) days of the date of download of that Licensed Application by that end-user; or (ii) a Licensed Application fails to conform to Your specifications or Your product warranty or the requirements of any applicable law, Apple may refund to the end-user the full amount of the price paid by the end-user for that Licensed Application. In the event that Apple refunds any such price to an end-user, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the end.”

According to a post by TechCrunch, Apple claims this section of the contract is new and must be signed by developers if they want to sell on the next generation App Store (iPhone OS 3.0). However,  some iPhone developers saw similar language in a contract signed in December, leaving the true refund policy unclear.

This 90-day refund policy creates an inherent problem for iPhone developers: less than five percent of users that download a gaming app still play it after 30 days (according to Pinch Media).

Depending on how it’s carried out, Apple’s refund policy could hinder the overall growth and health of the iPhone platform. If the policies drive off developers, Apple will surely revisit how it’s structured these policies.

The full contract can be found below:

After the whole legal battle with Scrabulous, toymaker Hasbro hired Electronic Arts to create an official Scrabble game for Facebook. The popular board game was also made available for the growing iPhone. The only problem was that Facebook Scrabble users couldn’t play their iPhone counterparts.

Until now.

EA recently announced that it would utilize Facebook Connect to help connect the two platforms. Now all online Scrabble users, whether connected to the game via the iPhone or Facebook, can communicate and play with one another.

The integration also allows iPhone users to see Facebook profiles within the list of available games. They can view other users’ stats, and invite them to play regardless of whether or not they currently have the app installed. Players on either the iPhone or Facebook can now play each other in real time, simply by taking turns.

The bridge between the two platforms was sorely needed. The official Facebook Scrabble game has been less popular than the original unlicensed game, Scrabulous (now called Lexulous).  Part of the problem with the official Scrabble game for Facebook is the geographic disconnect that players are forced to endure. With Lexulous, players can play with anyone from anywhere around the world. But for the official Scrabble, Hasbro and Mattel walled off users from one another depending on their geographic location, dividing the game into a U.S. and Canada (Scrabble Beta) version and a Worldwide version (SCRABBLE® Worldwide).

The success of future gaming apps on the iPhone will be tied to incorporating social features into their design. Creating games that segment users geographically is an unbelievably foolish venture. Whether they’re on Facebook or the iPhone, users play social games to be social. Any efforts to curtail the social aspects of a game effectively limits its success.

With this new Facebook Connect upgrade, it appears the game makers are making progress with the social aspects of their game. Hopefully, in time, the companies will merge the local and international Facebook versions as well.

Remember all those days back at the school playground trading cards? Baseball, football, basketball — and probably about a dozen other types of cards that have nothing to do with sports at all. Many parents told their kids not to waste their money on pieces of cardboard, but the young collectors coveted their cards of choice, buying and trading them, hoping one day their collection would be “complete.”

Sadly, that was at least 10-15 years ago. Since then, the love of card collecting has slowly withered away. However, just last month, in an effort to rekindle the passion for card collecting, Upper Deck and Flying Lab Software launched a beta virtual world for kids called UpperDeckU.

Though the ultimate goal of UpperDeckU is to revitalize the love of card collecting, the virtual world has some significant monetization values tacked onto it. As it stands, the world will utilize three different forms of revenue generation:

1. Upper Deck will still continue selling the cards, but within the packs, collectors will find “Insider Access” codes that can be utilized within UpperDeckU. These codes will then allow users to access new features within the virtual world (i.e. team merchandise that can be used for room decoration).
2. In addition to the physical cards, users will also be able to purchase virtual sets as well (if mom thought the cardboard was “useless,” try explaining this one to her).
3. Finally, micro-transactions, via the purchase “Gold Coins” (an in-game currency), are expected to come online at some point. They will allow users to buy any number of “special items.” Unfortunately, what exactly these “special items” are remains unknown.

“The vision is that this is a marketing tool we’re using to engage kids into collecting cards more,”  says Louise Curcio, VP of Marketing for Upper Deck. “That being said, there’s also the possibility that it could be a viable business. But we’re really not doing it from that perspective [yet]. Like any business, you always want that other leg to stand on. I know a lot of the other players out there, Action AllStars being one, is doing it to make money. We’re doing it to extend the life of baseball, football, and hockey cards. But we’d be remiss not to include [revenue options].”

[via Virtual Goods News]

This is a guest post by Sachin Rekhi, currently an Entrepreneur in Residence at Trinity Ventures. Previously, Sachin co-founded Anywhere.FM, an innovative web music player that was acquired by imeem. At imeem, Sachin led emerging monetization strategies, including introducing imeem’s virtual currency. You can read more from Sachin on his blog or follow him on twitter.

Winners from the Mochis Award Show @ Flash Gaming Summit

Last weekend I had the opportunity to attend Flash Gaming Summit, the first annual conference dedicated to flash game development organized by my fiancee Ada Chen from Mochi Media.

What’s often most exciting for me about events like these is hearing different metrics tidbits from the speakers who are knee deep in the space. This conference was no exception, with a variety of different stats shared throughout the day. I’ve summarized some of the highlights below.

Flash Game Distribution & Advertising Market Size

Mochi Media is by far the largest flash games distribution and monetization network. They reported that they are now seeing over 100 million unique users who play games across their network each month, as well as over 1 billion monthly game plays. In addition, Mochi offers MochiAds, an advertising product allowing flash game developers to embed ads into their flash games. In 2008, MochiAds paid out over $1 million to flash game developers. While Mochi is definitely not the only distribution and monetization player in the flash gaming space, it definitely commands a healthy share of the market and thus these numbers can give you a rough sense of magnitude in the space. While the game play stats are impressive, the advertising revenue generated for developers is still modest and definitely suggests the need for alternative revenue sources like micro-transactions and virtual goods.

Ad Revenue From Portal Versus In Game

John Cooney from Armor Games provided some rough stats on the ad revenue difference from in-game ads versus ads around the game on a game portal page. John stated that the ad revenue from portal ads was at least 4x greater than the revenue from in-game ads. John attributed this large difference to a variety of drivers, including the ability to have higher quality multimedia ad units on a portal page, having 3-4 ads per page, as well as simply getting the user to play more games on your portal.

The message was heard loud and clear by flash game developers that it is going to be very difficult for them to make serious money from their games without building their own portal or partnering with existing portals (through revenue share or sponsorship agreements).

Conversion Rate of Active to Paid Players

Both Paul Preece from Casual Collective and Daniel James from Three Rings shared some interesting stats from their own games on conversion rates associated with paid players (players who purchase levels, virtual goods, etc through micro-transactions). Paul said that for their single player games, they see that 2% of their active players have converted to paid players. Keep in mind this stat is for “active players” who come back to the site regularly, not overall unique visitors. What was interesting was that for his multi-player games, 3% of active players converted to paid players, suggesting their may be some additional conversion lift from multi-player games. Daniel James echoed Paul Preece’s numbers, suggesting 3-4% of Three Rings users pay as well.

The key thing they stressed was that only a very small percentage of your users end up converting, because first they need to become active users that come back and are retained by your game as well as be eager enough to pay through one of a variety of ways.

Per User Transaction Value & Lifetime Value

Daniel James went on to share that his company’s Puzzle Pirates game was seeing an average transaction size of about $20, with a per user lifetime value averaging $125. This suggests that while its difficult to get people to pay, those that do pay may pay significantly.

Its thus important to ensure for that small number of users, you provide enough reasons and the ability for each user to plow a significant amount of money into the game if desired.

Leaderboards Drive More Retention

While everyone would agree that leaderboards drive additional retention of users who go on to compete with strangers or friends, Jameson Hsu from Mochi Media shared some details on exactly how much additional retention can be expected. Jameson said that they have seen leaderboards increasing retention by up to 30%.

This suggests that adding your own leaderboards or integrating with existing leaderboard platforms is often a worthwhile exercise to drive additional game play and retained users. Given that monetizing through micro-transactions typically relies on highly active users, this becomes even more important for driving lucrative monetization.

Social Games are Where the Money is at

Bret Terrill of Zynga gave a fantastic presentation enlightening flash developers on the large opportunity in social games, both in terms of traffic and monetization.

Bret mentioned that one of their social games, Mafia Wars, was getting 1.7 million daily players on Facebook. Texas Hold-em, in addition, gets over 1.5 million daily players. Bret also mentioned there were social games out there making $20-30K/day in revenue. These large numbers trump what most classic flash game developers would expect in terms of traffic and monetization.

Adam Caplan from Super Rewards, which provides payment and ad offers to fuel micro-transactions, said that they are now paying out over $10 million/month to social game developers, an equally significant figure. And Super Rewards is just one of many providers in the space.

While Bret encouraged flash developers to get into this space, he cautioned them that they won’t win by simply porting their game over. They need to design their game with the right mechanics targeted at this audience, including making the game playable in 5 min chunks, appealing to user’s desire for status, and focusing on reciprocity loops of gifting and social grooming.

For those of you who missed the event, you can check out the recorded sessions, event photos, tweets, or Mochis award show video.

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!

Super Rewards is a leading monetization solution for applications and games running on social networks like Facebook.

Offerpal Media is a leading managed offer network for social applications and online merchants.

Social Gaming Network (SGN) is a leading global development platform for social game distribution.

Zong is a leading provider of mobile payments serving the digital content, social media, and gaming industries.

Kramaley Games is a leading developer of social games on Facebook.

In its continuing strategy to “go with what’s working,” Zynga has created a RPG for the army soldier in everyone on Facebook with Special Forces.

Special Forces, like virtually all of Zynga’s other RPGs, follows the same familiar formula: Earn money, do missions, spend energy, and level up. In general, each of these games all have a different premise and style applied to them, but the style really works.

Zynga has discovered that they can reach different demographics by changing the theme around the same core game play mechanics. There is Mafia Wars for those that want to play the bad guy, Vampires and Dragon Wars for the fantasy types, Fashion Wars for the proverbial “pop-princesses,” and Special Forces for those that enjoy modern military games. For Zynga, it’s certainly about covering their bases, and considering the overall success of their games, they are obviously doing something right.

As for Special Forces itself, the game starts players off as a recruit in a place called “The Command” with the sole purpose of affecting the world stage. As with its counterparts, the player has their standard stats, energy, stamina, health, and cash. Players purchase various upgrades and recruit others to join their squad in order to complete missions and level up, but as expected, each mission utilizes energy and the player must wait for it to recharge in order to do more. Of course, if your energy is gone, you can always pick a fight or try to assassinate someone on the bounty list using your remaining stamina, but that’s not all that is included into game play.

One thing that is different and interesting about this app is the strategic element of “contracts.” Players are able to spend their cash on more than just weapons and armor in Special Forces, as they can actually invest into these contracts by “bribing” corrupt individuals that reside in “high” places. What this does is provide the player with hourly payoffs to provide a consistent source of income, meaning that a player can earn decent money without having to play constantly. Furthermore, as you rank up, so do these contracts. You spend more, but you get more back in return.

As standard as Special Forces may be, it works. And players of other Zynga titles would certainly enjoy it (assuming they like the concept of being a special forces operative). The only really unique feature is the contracts, but for Zynga, it isn’t about creating totally new game play every game. It’s about applying a new theme with each rendition of a tried and true formula with the occasional new feature.

AppData for Special Forces

We all have something to say, be it good or bad, about the news, life, people, ourselves, or even about our friends. Most people like to just sit back and have a good laugh, and one of the more common ways of doing so is through talking about each other (flaws, trips, hobbies, and so on). This idea that drives the concept behind a very simple application dubbed “25 Random Things.”

Created by Inherently Viral Apps, the game is an improvement on the Facebook notes meme, where you write about yourself (and only yourself) and forward the note to your friends via tagging. In essence, 25 Random Things is the same concept as the Notes meme, but you are also encouraged to write random things about your friends as well. The sole objective of the app is to start a stream of conversation by tagging your friends so they talk about you and vice versa.

When the player begins, they can start by either writing 25 random things about themselves, or create a new list of whatever they want. The rules are fairly obvious. Should you ever become tagged by a friend, you write 25 random things and tag the person who tagged you and any of your other friends as well in order to spread the “conversation.” Simple, right? Of course, if you ever find yourself stumped and don’t know what you should write, you can always browse some random things about friends of friends, or simply check out the random Spotlights featuring some of the comments that other people have talked about.

The game is not intended to be anything terribly complicated and is described by the developers as a “great example of a fast-moving and short-living internet meme transitioning into something more permanent and interesting.” Essentially, the makers of 25 Random Things seem to be trying to improve on the Facebook interface, bringing up a user’s constantly changing Wall. However, when a thread drops off a Wall, the conversation is lost, and as such, Inherently Viral is attempting to prevent that and drive everlasting, interesting, and, well… random conversations. Suffice to say, if you are a highly social person on Facebook, this might be a game worth checking out, and if not, it does make for a fairly interesting distraction.

Today, SGN announced its latest hire as the company appointed Eric Lindstrom as Chief Creative Officer. Lindstrom comes with deep video game design experience with both Crystal Dynamics and Electronic Arts. His most recent responsibilities were creative director and principal designer of Tomb Raider: Underworld and story designer, screenplay editor, and co-writer of Tomb Raider: Legend.

Lindstrom has been in the industry since 1988 working as a senior game designer, game concept developer, and writer for EA on multiple titles, the most popular of which being the James Bond series. At SGN, Lindstrom will be responsible for internal and external game development, direction of game art and audio mechanics, managing story editorial, scripts, and dialogue.

Since getting its start on Facebook with apps like (fluff)Friends and Free Gifts, SGN has been focused on building its network of rich social games that span both social networks and the iPhone. The company is well known for its gesture-driven games like iBowl, iGolf, and iBasketball, and says more games are coming soon.

“Eric brings over 20 years of world class expertise and vision in game concept design and scope, creative writing and delivery of virtual experiences that will help enrich the experience of every SGN game player,” said Shervin Pishevar, CEO of SGN.