Inside Social Games

A baptism of fire for social gaming – Last week, Facebook told large developers and offer providers that it would be cracking down on scammy offers. This was followed by a TechCrunch article over the weekend that blasted the industry for mobile quiz ads and other forms of scammy direct-response advertising that all too often have appeared in offer walls within social games. Although the severity of the scam problem is still not known, offer companies have been pulling out questionable ads, and a number of others have been making public pronouncements about their own scam solutions. And this week, leading offer company Offerpal got a new chief executive, George Garrick. In a company blog post, he wasted little time in admitting that a number of problems had occurred. Meanwhile, word also leaked out that Offerpal founder and departing chief executive Anu Shukla is in court with a former cofounder over ownership of the company. Social gaming is a tough, young little industry and this week was especially brutal. But most gaming companies make most of their money from direct payments, from virtual goods that users are more than happy to buy — and not all offers are bad. The increased scrutiny and criticism of the past week will end up helping social gaming prove its legitimacy.

Cyworld gives up on U.S. — Apparently North American and South Korean gamers are slightly different. Cyworld, a virtual world owner, spent three years and $110 million trying to crack the U.S. market, and now it’s closing its operation. The service also warns that current U.S. users better not use their acorns.

Ngmoco picks up Miraphonic — Miraphonic makes “Epic Pet Wars” for the iPhone, in which players level up pets to fight each other. More on touchArcade.

Storm8 sued for collecting phone numbers – The developer of iMobsters and Vampires Live is accused of illicitly pulling user’s phone numbers, according to a class action suit filed in Seattle by one Michael Turner. Storm8 said in August that a “bug” was causing it to collect numbers; the suit says that doing so requires “very specific and specialized software code.”

Glu Mobile still working on iPhone monetization — Glu Mobile reported $500,000 in revenue from next-generation cellphone platforms for its third quarter, out of total revenue of $19.6 million. The company lost $4 million.