New San Francisco startup Heyzap is providing website owners with a quick and easy way to incorporate casual Flash games into their pages using a simple widget. Originally launched back in January, the widgets are now embedded in more than 20,000 different web sites, with more than 12,000 free Flash games to choose from.

Run by Immad Akhund and Jude Gomila, Heyzap recently raised a round of seed funding from Union Square Ventures, with independent investors Naval Ravikant (Hitforge) and Joshua Schachter (delicious) also participating. The amount of funding was said to be “above $500k and less than $1 million.” This funding is a follow-on to the small Y Combinator funding it raised back in September.

Currently, a big part of Heyzap’s business strategy is to partner with major online publishers such as Current and Cooliris. These publishers can utilize Heyzap’s recently released API to choose contextually relevant games to appear inside their sites.

Heyzap is helping developers get better distribution as well. Thus far, revenue is garnered through in-game video advertisements powered by Mochi Media, as well as a recently launched payment system that allows consumers to buy virtual goods directly in the widget. Heyzap mentions the following scenarios where developers are integrating its payments platform successfully:

• Item purchases – buy swords shields
• Level access – let user access premium levels
• Mechanic upgrades – let users change gravity and other special mechanic
• Bonus upgrades – let players save time in the game
• Full version upgrades – let the user upgrade from a demo mode to a full version
• Content upgrades – let users access special content e.g. a secret video
• Social upgrades – let users perform special social interactions like private messaging each other

The company does have a good deal of competition out there when it comes to APIs and 3rd party products for web-based games. Kongregate, Games2Win, Gameyola, Addicting Games, and Come2Play are a few that come to mind – but Heyzap is growing nicely so far this year.

After seeing one clone after another on the Facebook Platform, it is refreshing to see something original. Then again, that’s nothing new for the folks over at Playfish. Today, we take a look at their latest release: Crazy Planets.

In Crazy Planets, players and their Facebook friends wage an intergalactic war against the likes of evil robots and aliens and their dreadful “Illudium Q-36 Explosive Space Modulators.” Okay… maybe not quite that far, but the robots do get bazookas and the like in a Worms-style fashion. Luckily players are armed similarly and must blow up enemy forces with a surprisingly modern arsenal.

Here’s how it works: Players are granted, at the start, with a simple bazooka and grenade weapon that follow basic physics allowing them to bounce and arc various projectiles. Of course it’s not as in depth as the original Worms games, but it does have that pleasant feel (sadly the terrain cannot be destroyed… yet). Each player can move around the planet, positioning themselves strategically and fire upon the enemies until one of them dies. What is interesting, however, is that as the player ascends levels, they earn extra troops in their galactic army.

Seeing as this is a social game, the soldiers under your command are none other than your Facebook friends, and you even get a little picture of them in a nifty spacesuit. Best of all, they don’t have to play to be in your army. You get to draft them! This adds a nice personal touch to the game with or without them, but their participation does help significantly – if they play, they also level up and become more powerful assets for your interstellar domination plans.

In addition to direct combat assistance, each friend that plays the game also gives you greater access to precious gems. On your own, you’re limited to a 24 hour supply. The more friends you have that play, the more gems you get a day. So more friends means faster upgrades.

Of course, it wouldn’t be Playfish if they stopped at just this. Crazy Planets also incorporates personalized virtual spaces. Each player has their own little planet that they can customize as they see fit using the money they pick up on missions. Decorative items range from bones, to high tech cities, to Alien eggs, to even planetary halos. Regardless of choice, it allows for some excellent expression of one’s inner Sci-Fi geek.

What is also nice is this game has a bit of built in progression with it. Other than MiniGolf Party (and to a lesser extent Geo Challenge), most Playfish titles allow the player to choose their own path. While there is nothing wrong with this, it is nice to have something feel linear now and again. As players level up, they earn larger armies, bigger weapons, upgraded old weapons, and a fairly decent amount of missions (over 40 at the moment). Certainly a large game for a Facebook app, and knowing Playfish, it’s going to get bigger.

Playfish has certainly earned the reputation it has as a top social developer. Over the time that the company has produced games, its titles have evolved from simple word games (Word Challenge) to some rather innovative ones like Restaurant City. Though Crazy Planets is reminiscent of Worms, it is not Worms. It has merely used a base concept and applied it in a unique way – and it really works in Crazy Planets.

oneTXT, a new mobile payments company based in New York City with offices in San Francisco, recently announced that it has raised $2 million in Series A funding led by Metamorphic Ventures. Several angel investors also participated.

oneTXT is joining an increasingly crowded market of companies focusing on user payments for virtual goods in social networks, online games, and social applications. The company says its platform will let publishers accept payments, create loyalty programs, and send out marketing information.

In addition to the financing news, the company also announced that Lucy Hood will become an independent director. Most recently, she was the Executive Director of the USC Marshall Business School Institute for Communication Technology Management. Previously, she served as CEO of Jamba, a news company, where she worked extensively with mobile strategies.

She expanded Jamba to serve one billion users in 25 languages and helped build partnerships with MTV, Sony, Disney, and Electronic Arts. She also led the first mobile efforts of American Idol, the popular television show.

Earlier in the year, Gareth Davis of Facebook said that the company was “looking at” the creation of a universal currency system for the social platform. Recently, the company started testing its Facebook Credits-based payments system with a few third party application developers on the Facebook Platform.

However, with the success of universal currencies from competitors such as hi5, Facebook also been thinking about ways of internationalizing its virtual currency service more.

As many may know, Facebook currently has a virtual gifts system (a system that has seen significant attention in times past). These gifts, as well as Facebook Ads, can be purchased with Facebook Credits. In the past, buyers could only ever purchase the virtual currency using US dollars. Just this month, however, Facebook has released the ability to pay for the Facebook Credits in 14 different currencies (see below). Seeing as how approximately 70% of Facebook users live outside the United States, this could lead to an increase in Credit purchases from international users.

The exchange rate for the Credits will be, more or less, the same as current international rates. As an example, 10 Credits are worth $1, $0.10 is worth 54 Chilean Pesos, thus 54 CLP would be equal 1 Credit. Additionally, there is no charge for using international currencies so foreign users and developers can use the new system seamlessly for both gifting and advertisement respectively.

Unfortunately, whether or not this will be a great success is yet to be determined. Currently, Credits must be purchased using a credit card, and many foreign countries are primarily cash-based. Nevertheless, it has been reported that mobile payment companies such as Zong and Boku have been working diligently with Facebook app developers to mitigate this issue.

Obviously there are still kinks to work out of the system, but if the focus towards Facebook Credits continues, we might see a truly “universal” Facebook currency a lot sooner than expected.

Foreign Currencies Now Accepted by Facebook for Credit Purchases:

1. Australian Dollars (AUD)
2. British Pound (GBP)
3. Canadian Dollars (CAD)
4. Chilean Peso (CLP)
5. Colombian Peso (COP)
6. Euro (EUR)
7. Danish Krone (DKK)
8. Hong Kong Dollar (HKD)
9. Japanese Yen (JPY)
10. Norwegian Krone (NOK)
11. Swedish Krona (SEK)
12. Swiss Fanc (CHF)
13. Turkish Lira (TRY)
14. Venezuelan Bolivar (VEF)

We recently previewed the iPhone version of the Sims 3, marking yet another push by EA into more social spaces.

According to one of the project’s producers, Justin Taber, the mobile Sims 3 was a “huge initiative with our best team inside EA Mobile.” In fact, the production was one of the biggest undertakings to date, and was meant to be a test to see if big budget productions were worth while on the Apple platform. The question is now: Was it?

The iPhone and iPod Touch renditions of Sims 3, at the cost of $9.99, reached the #1 spot for paid apps within a mere two days of launch. Not only that, but it did so in 37 different countries worldwide, making it the third EA game to reach that position.

In addition to the mobile sales, the regular version sold over 1.4 million copies for the PC and Mac platforms within the first week despite the pirating issue the company had a few days prior to launch (according to the reports, an estimated 200,000 illegal downloads were tallied). Regardless, this marks one of the best PC launches in EA’s long history.

Curiously enough players have continued to add to these numbers with over 7 million downloads of player created content. This includes everything from houses to stories to even the Sims themselves. Though this is player content, it certainly suggests the extraordinarily potent potential for virtual goods within the franchise. While we cannot speak for the PC/Mac versions, hopefully updates for the iPhone’s 3.0 software will include such.

However, despite the successful launch, a number of fans have voiced their disappointment with some of the features that they felt were missing. Of all the game mechanics in question, many were most adamant about the player’s inability to be “god-like” as they were in The Sims 2. Furthermore, there has been no news beyond the vague 3.0 update to suggest whether or not EA will be adding said features with future expansions, patches, or other downloadable content.

Serious Business was one of the earliest developers of social games on the Facebook Platform with its now-famous game Friends For Sale. Since then, the company has focused on monetizing its audience through virtual currency sales and sponsored virtual gifts, as well as continued game development efforts on new titles.

Recently, we spoke with Siqi Chen, CEO of Serious Business, about the company’s plans going forward.

Inside Social Games: Siqi, what’s Serious Business’s strategy at this point going forward?

Siqi Chen: There are two large categories of games that we’ve dipped our toes in. One that we pioneered with Friends For Sale – where it’s really social and you’re trying to meet hot people. It’s not really an RPG but a “social social” game. We also recently launched Happy Hour in this category. It replicates club experiences, and we sell luxury items for hundreds of dollars. It’s done well for us because distribution is so easy.

The other giant category is casual RPGs. We dipped our toes in with Rock Legends, but honestly it’s had an extremely tortured development cycle. We originally planned for it to be more like Friends For Sale, but it really wasn’t working for us, and we got more inspired by the things that were working in the game.

The main thing I learned is content is king. It’s not replicating the core mechanics fo RPG systems to make them work well – the best thing you can do is to periodically release content for users to grind though. For example, a new city, new gear. Whenever we do that, our revenue doubles for the next week. Our revenues are not as good for users initially after they join.

Another thing that you’d be surprised by is how making changes the flow from levels 1-10 can have a major impact on revenues. You can only do that in online social RPGs – not in traditional game development.

What kind of testing systems has Serious Business built to help with game development?

We’ve built a pretty sophisticated testing system internally that allocates test groups for you. It gives you a Z score so you know if you’re getting statistical significance. We run all kinds of tests – revenue tests, flow tests, copy tests.

See slides from Chen’s recent presentation with David King on metrics for social games.

What trends are you seeing in monetization and payments?

We work with all the offer providers. Targeting them smartly makes a big difference. We actually don’t know what we’re doing that they’re not able to do for themselves. but apparently we can improve on them by having another layer of targeting on top.

In addition, credit cards internationally are hot right now. For some reason, the Czech Republic became the top country for Friends For Sale after we internationalized in terms of users. Rock Legends is really big in Indonesia.

Are you working on new games?

We are. We’re really good at taking good ideas that already work and making them way better. There are only so many categories out there – poker, farming, X wars.

We have less than 10 engineers. For us, launching a new product really involves asking what we want to give up in terms of our existing apps. We have a really good company culture, and we run extremely lean. We have 3 launched apps with more than a million users each, and working on a new app, which is pretty good for our size.

Which social game developers do you respect the most?

All of them. They all doing something different right. Playfish brought extensive game design and high polish games to Facebook, and they’ve done extremely well. They haven’t exactly been dumb on the metrics side either – they’re extremely sophisticated.

And I respect Zynga just for the sheer willpower to dump as many resources as they have into one idea – both in terms of acquisitions and developing original IP. They bet on this space hard and are a big winner.

Mochi Media has long provided game developers with a means to monetize Flash games through its Mochi Ads service. The company says games it supports now reach more than 100 million users. This isn’t a surprising figure, considering Mochi games are found inside popular portals like Meebo, RockYou, and (recently) hi5, which has over 60 million users alone.

While games that utilize Mochi’s stats and in-game advertisements are played more than 1.5 billion times a month, advertisement revenue, especially in the current economy, has been rather low. According to TechCrunch, the current industry average is approximately $0.50 per 1,000 game plays.

To diversify revenue streams beyond advertising, Mochi Media recently launched a virtual currency called MochiCoins. It allows for the easy purchase of virtual goods and services through Mochi supported titles. MochiCoins can be purchased with credit cards, PayPal, and Super Rewards.

Even though the platform is brand new, there have already  been reports of its monetization potential. One of the early adopters is Ninjakiwi’s SAS: Zombie Assault 2. According to the same post, early testing has increased average revenue per 1,000 plays from $0.50 to $6.50.

Furthermore, Mochi’s platform is decentralized. This means that no matter where the game is located on the web, it is still making money for the developer and Mochi Media. Considering the increase in revenue after only a few days, the capabilities of the new payment platform should be encouraging for developers who are looking to diversify their revenue potential beyond ads without having to manage their own virtual currency payments service.

When people think of game developer and publisher Electronic Arts, they associate it as one of the largest and most profitable game companies worldwide. Now, after four consecutive quarters in the red, EA is increasingly turning to social games as part of its efforts to strengthen the company’s digital efforts.

Before he left for hot social gaming startup Playdom a couple of weeks ago, former COO John Pleasants told paidContent.org that digital downloads through OnLive, microtransactions, and even social games are all in the works. EA hopes to generate $500 million in digital revenues this year.

In addition, EA is adding more online and social capabilities to some of its most popular titles. EA Sports has been leading the way: Tiger Woods PGA Tour and NCAA Football 2010 both allow for online competitive play.

However, this is only the tip of the iceberg. Before he left, Pleasants said microtransactions from social games will create the most revenue. To meet these future revenue goals, he says EA has gone into “investment mode.” EA will be “announcing deals with companies that will be of note some time in the near future.” J2Play could be high up on the list, as we’ve heard the company was recently acquired.

In addition to possibly buying more social gaming companies, Pleasants says that EA will be building out four new social network games from scratch.

But as Daniel Nations points out, Electronic Arts’ track record in isn’t always the strongest, but EA has had strong related releases too. One of the primary examples is the FIFA franchise. The latest online version just launched in China. In four days, it reached a million registered users and generated $254,000. Furthermore, with the FIFA 09 expansion, Ultimate Team, players can build up their teams with digital cards. EA sold $10 million worth of them in the first four weeks.

Many industry analysts think EA should focus on the type of games it does best, but the success of the social games and virtual goods revenues cannot be ignored. EA seems confident in the potential of these younger business models. Time will tell if the behemoth developer can build healthy, long term revenue streams around them.

What happens when you take an MMO phenomenon that has captured the attention of millions worldwide and combine it with one of the leading social communication tools? The answer is the emergence of a new hybrid that combines World of Warcraft and Twitter into a new creation known only as TweetCraft.

Ironically, the combination of these two time sinks might actually save some time. Insane sounding, its true, but TweetCraft is actually a new, in-game client for WoW players that actually allows you to send and receive Tweets within the fantasy realm of Azeroth. That means all your Tweeting and leveling can now be done simultaneously!

Of course, as all Azerothians know, the realms of WoW tend to get a bit busy (with all that questing and player vs. player), so the app actually has a very nice queue system that lets you Tweet when it is convenient (something that more social apps could benefit from). Moreover, and in the spirit of social gaming, TweetCraft even incorporates a simple means to upload in-game screenshots using the Twitter photo sharing site, TwitPic.

While interesting, the most potential for the application lies in its ability to send AutoTweets. Such concepts have been seen in Twitter-based games such as Spymaster, SNODS, and 140 Mafia, but neither of these titles have (or likely will ever have) the following that World of Warcraft does.

A myriad of sites follow the going-ons of guilds and PvP teams throughout the game world; so much so that streaming broadcasts of raid instance runs (some of the most difficult encounters built by the developers) or arena matches (high end player vs. player) are common place. In fact, these broadcasts often see thousands of viewers each time they are shown.

TweetCraft is already capable of sending AutoTweets when a player logs in, enters an instance, or earns an achievement. However, it is extensible so that AddOn authors (and there are plenty for WoW) can register messages or events to AutoTweet.

What does this mean? It means that in time, players utilizing Twitter will be able to broadcast accomplishments such as tournament wins, raid boss kills, and god knows what else. Not only will this give gaming news sites a new source of information, but actually creates a bridge between World of Warcraft and social networking. The only question is – how much will this bridge grow? That will depend, emphatically, on how well the AddOn creators accept and incorporate this new, and potentially powerful, application.

Traditionally, Coinstar has dealt with transforming loose change into more manageable bills. More likely than not, most everyone has seen a Coinstar kiosk in grocery store or big box retailer, but in recent months, the company has been building more partnerships with online games and payment companies.

Back in April, Coinstar partnered with Rixty to create an alternative payment platform that turned loose change into “Rixty Cards” at Coinstar kiosks. These cards, the same Rixty cards you would see on rack displays, can then be used for the purchase of virtual currency within the Rixty platform. Furthermore, and more recently, Coinstar also delved into the realm of prepaid online gaming cards with partnerships with game companies such as Aeria Games, Spare Change, and Wild Tangent.

These are new waters for the folks over at Coinstar, but we recently spoke with Wayne Waxman, Marketing Manager for the company’s E-Payment Services group, to take a deeper look into the company’s plans.

[Inside Social Games] Thanks for taking the time to speak with us. First off, why is Coinstar getting involved in online games?

[Wayne Waxman] We entered this space for several reasons. The online gaming market potential is exploding. It’s a high-growth category that really caters to a young demographic, specifically teens who may not have access to credit. According to Mercator Advisory group, an estimated $3.8 billion will be loaded on game and ring tone prepaid cards in 2009. This number has grown from the $2.8 billion that was loaded in 2007.

This really is an exciting opportunity for us and for our retail partners. Prepaid gaming cards help drive repeat visits from the loyal gaming audience and the products’ low price points drive trial – pricing starts as low as $5 – and hopefully encourages adoption.

[ISG] Entering into this market has meant a lot of partnerships. We alleady know of the partnerships with Aeria, Spare Change, Rixty, and Wild Tangent, but whom else might you have in mind?

[WW] On the prepaid card side, we are always looking for new product offerings and partners that will help drive traffic to our retailers and increase their shopper’s overall market basket. This is true for all our categories including online games.

[ISG] Let’s talk about Rixty for a moment: When we first saw the concept of turning change into virtual currency, it did seem logical, but very unorthodox. What sort of numbers and revenue are you seeing?

[WW] We just launched Rixty in June, so it’s too early to discuss. What I can tell you is that we are excited about the potential of reaching this youth audience.

[ISG] How about demographics? Is it primarily the teen audience using the new service, or are you seeing other trends?

[WW] We’ve defined the primary target audience as youth aged 13-24. The teen segment is certainly making up the greatest portion of purchasers at this point.

[ISG] Okay, so for the readers that don’t know, customers can go to a Coinstar machine and choose the virtual currency voucher to redeem on the Rixty website. However, it can only be used within Rixty’s partner platform. With so many online games and games platforms out there, do you have any plans to offer this service to other game platforms?

[WW] The Rixty product that is available on the Coinstar kiosk is what’s referred to as an eCertificate. A code is included on the voucher that is printed at the end of a coin counting transaction that can then be used to set up/add to a Rixty online account.

Since Rixty is a payment platform that can be used with a large number of online games, it made the most sense to partner with them through the Coinstar kiosk, which offers a limited number of products that carry a very broad appeal. As Rixty continues to look at expanding its product offering, Coinstar users benefit from a growing platform that continues to add new games and applications.

[ISG] What about subscription-based games?

[WW] Our focus is currently on prepaid products for ‘free to play’ online games where users can purchase small dollar virtual goods on an ‘as needed’ basis. In this model where small denominations and unpredictable purchase patterns are combined with the large number of teens without credit cards, prepaid at retail becomes an attractive and profitable option.

The subscription model on the other hand has a standard denomination charge that’s usually higher in dollar amount than virtual goods. Payments tend to hit on a monthly basis resulting in users being more apt to tie a credit card to their account for convenience and simplicity.

[ISG] This leads me to the more recent prepaid online gaming cards. Just for clarification, it currently works for titles associated with Aeria Games, Rixty Inc., Spare Change, and Wild Tangent, yes?

[WW] Correct. Aeria Games, Rixty, Spare Change and Wild Tangent prepaid cards are all available through Coinstar’s in-store racks. For Coinstar coin counting, it’s only Rixty.

[ISG] We have heard that cards for Facebook and MySpace games are coming. Will there be others that will eventually utilize these cards on social platforms?

[WW] The Spare Change prepaid card is already available through our prepaid card racks at retail and is the first and largest micro-payments system for social networks. In fact, Spare Change is accepted by more than 700 games and applications on Facebook and MySpace and is growing virtually every day.

[ISG] What are your predictions on growth in this new market?

[WW] We believe the industry will continue its high-growth mode for quite some time. This is mostly due to the following: 1) the ongoing evolution of online gaming and other digital entertainment applications. Product providers will continue to find new and exciting applications to engage a demographic that constantly demands it. 2) The demographic continues to grow. The youth population (aged 13-24) is expected to hit 47 million by 2010 according to the U.S. Census. Seventy percent of this audience engages in digital entertainment and 20 percent of their spending is on digital entertainment. Yet, the majority of this demographic is considered “Unbanked” – that is they have no banking or credit relationship.

The end result – high demand growth – the CAGR growth rate from 2005-2011 is estimated at 17.9 percent according to Mercator Advisory. Ultimately, the outcome is further monetization of these new virtual applications.

[ISG] Well, before we wrap things up, one last question: What does this mean for Coinstar, and what is next on your agenda?

[WW] Coinstar will continue to develop new products and services to deliver at retail that make life easier for the consumer and drive new traffic and new revenue streams for our retailer partners.