Inside Social Games

The dynamic of buying or earning virtual goods in games is looking like a potentially significant new way to make money for social causes. Zynga is experimenting with this. Last Friday, it introduced a new a virtual sweet potato that you can plant in its hit virtual farming game FarmVille. If you buy a license to plant the potatoes, Zynga will donate half the proceeds to two non-profits working in Haiti.

So far, users have bought 128,000 sweet potatoes. At a cost of 25 FV cash (the game’s virtual currency), and with 5 FV cash costing $1, revenue so far comes out to around $640,000 total. Zynga says $321,000 is being donated as a result.

The other half goes to Zynga, so if a lot of users end up buying this good with philanthropy in mind, then it could prompt the company — and other game developers — to introduce more charity revenue-share goods.

The sweet potatoes also offer special benefits to users. Besides the charity donation, “the Sweet Potato crop NEVER withers, harvests in 1 day and yields 3 XP and 125 coins and promises a special gift with purchase,” as the blog FarmVille Freak notes.

However, buying seems to have slowed down. On Sunday, Zynga investor Fred Wilson posted about the charity-goods model, and said that 100,000 sweet potatoes had been sold. Today, Zynga tells us the number is now 128,000. There are all sorts of reasons why this change could be the case, like FarmVille itself having accessibility problems this week (it does for me, right now). The caveat is that the license for these seeds only lasts a week, then it has to be renewed for another $5, so next Friday might see a surge of satisfied virtual sweet potato farmers.

The larger point here is that users seem to be willing to participate in something that benefits themselves, Zynga and a social cause. FarmVille itself is the largest application on Facebook, having grown from nothing in June to more than 55 million monthly active users as of today.

Zynga should also be commended for disclosing how much revenue it’s sharing with charities, as a number of other gaming applications on Facebook purport to be dedicated to social causes, yet actually keep almost all of the money for themselves.

On a related note, teen social network myYearbook has been letting users donate virtual currency to causes. That effort is run through the company’s Causes app, rather than a game, but it’s relevant because the site’s currency itself is a game-style dynamic.

Here’s more about the sweet potatoes in the game:

Salutations, y’all! Today, FarmVille is proud to release “Sweet Seeds for Haiti”. In this event, y’all will be able to purchase Sweet Potatoes that NEVER WITHER, yield XP and 125 COINS PER HARVEST! Even better than that is the fact that 50% of the proceeds will go to helpin’ children in Haiti. What could be sweeter than lending a helping hand to children in need? You’ll also get a SPECIAL GIFT with your purchase so hurry on over to FarmVille and check it out!

And here’s more about the recipient charities:

Haiti is the poorest country in the Western Hemisphere and the 7th poorest in the world. Zynga’s mission of connecting the world through games is enhanced by our opportunity to support the health and education of these children and their families. For additional information on the recipient organizations, please see www.FATEM.org and www.FONKOZE.org.

FATEM is a non-profit organization based in Mirebalais, Haiti, and originally organized to bring information technology to the people in the region, thus helping with the economic advancement of the area. More recently, however, FATEM recognized the need for a sustainable means by which to support the general education of Haitian children and to ensure that these children have the necessary meals that will permit their young bodies and brains to learn and grow.

FONKOZE, based in Port-au-Prince, is an alternative bank for the poor. It is Haiti’s largest micro-finance institution and is committed to the economic and social improvement of the people and communities of Haiti and to the reduction of poverty in the country.