Although Facebook has been talking about building a payments service for years, the project has only slowly rolled out.

One big part of payments, its Credits virtual currency, launched more than a year ago and the company began testing it with third party applications starting last May.

But now, things are picking up. Most recently, a posting on Facebook’s job listings for the position of “Strategist, Payment Operations” describes the company creating a new payments team:

Facebook Payment Operations is a brand-new team that ensures, monitors, and reports on all money moving into Facebook. As a founding member, individuals have an opportunity to shape this team’s culture, role within the company, and day-to-day operations. As part of the Online Operations organization, we work cross-functionally with the Product and Engineering teams to design tools and systems to serve our hundreds of millions of users and our ever-growing base of advertisers. Projects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook’s business…

> Continue reading on Inside Facebook.

The tech world has been talking a lot about augmented reality lately, but for all that buzz, it really hasn’t touched too much within the social gaming space. Until now. Last week we took a look at an assassination game using the iPhone camera called NinjaHit, but the technology goes one step further in the form of iPhone app GunMan, from Shadowforce. It brings a whole new meaning to the term “first-person shooter.”

GunMan is a game that makes direct use of the iPhone’s built in camera, superimposing a gun scope and minimalistic interface, and combines these with color recognition technology to take the concept of shooter games out of the virtual world and into the real one. Players can choose from three different game modes: One vs. One, Multiplayer (four players via WiFi), or Pro. When playing either of the first two, participants select a time duration of either two minutes, five minutes, or unlimited and the shirt color of your enemy. This is where the magic really begins as the game can actually recognize the colors of red, green, blue, gray, and white.

This is easily the coolest part of the game. If you claim that your enemy is wearing red, for example, if you pull the proverbial trigger with them in sight, you get a hit. Moreover, and despite our initial skepticism, this feature actually works phenomenally well with good lighting. What makes it even more fun is that every time someone gets hit, their iPhone vibrates and at the end of each game, players are able to not only see their accuracy and final scores, but it saves all of your shots and lets you Tweet your favorites.

The game also makes use of other iPhone technologies as well including shaking the device to reload and using pinch zooming to snipe distant opponents (though the game doesn’t actually inform you that this is possible). GunMan comes with a “Pro” mode that lets players run around and shoot 30 random shots at anyone around. Of course, this really only pans down to shooting random pictures, so it does get a bit old.

If there are any complaints to the game, it is that the color recognition is a bit sketchy in without really good lighting when indoors. It does still work most of the time, but not nearly as well as outside. Furthermore, if you don’t have the iPhone 3GS, the frame rate of the camera is a bit choppy and the image can become rather blurry when you’re whipping about trying to make a shot.

Nonetheless, the game is still a ton of fun if you have friends that own an iPhone, and seeing as how it is currently a free download, it is quite the bargain as well. Furthermore, according to the Shadowforce website, even cooler features are coming soon including location based features (like Foursquare), badges and achievements, leaderboards, and semi-automatic weapons and grenades. Whether or not such new features will be free is, of course, yet to be determined, but it certainly sounds fun, all the same.

When Facebook implemented a flurry of platform changes that curtailed some viral marketing tactics in early December, developers scrambled to revive tactics. There was the thought that this might level the playing field a bit, taking some wind out of the sails of the most aggressive viral marketers.

To get some initial feel for the impact of these platform changes — and to provide a benchmark for the industry — we looked at Daily Active Users (DAU), Monthly Active Users (MAU) and the resulting Sticky Factors (DAU/MAU) for top developers on December 7, 2009 (this was around the time the platform changes were starting to go into effect) and January 5, 2010. We assume that the impact of the holidays was across-the-board dips around Christmas and New Year’s Day for these titles. It also comes with the caveat that developer level numbers are not necessarily unique users as a user may play multiple games made by the same developer.

This initial cut makes it appear that some of the biggest developers (Zynga, CrowdStar and Playdom) have done reasonably well, but each of these developers actually launched a significant new game during the period. Because new games typically haven’t reached a steady state (which inflates the sticky factor) and because we’re more interested in the impact on games existing prior to the platform changes, let’s look at the numbers without Zynga’s PetVille, Playfish’s Poker Rivals, CrowdStar’s Happy Island and Playdom’s Tiki Farm:

The total line is not for all developers on the Facebook platform, just the seven aggregated above, so there is some bias in the aggregated numbers because Zynga makes up over half of the total MAU and DAU numbers. But given this caveat, the total line suggests that so far, these developers are seeing on average a 4.6% decline in MAU and a 12.2% decline DAU which has reduced the sticky factor by 8%. I believe MAU numbers will continue to decline a bit more before they stabilize a bit.

The Winners…so far

Without the new games, CrowdStar appears to be the only developer that increased their MAU, but even this is somewhat skewed by the fact that Happy Pets had launched in mid-November and was still seeing some increase in the beginning of December. CrowdStar’s Happy Aquarium maintained a relatively flat MAU, but saw a steady decline in DAU (down 20% from 8.17 million to 6.64 million), driving CrowdStar’s overall sticky factor to the worst drop amongst the group. Another trend here is that each successive title launched seems to be reaching a plateau that is lower than the previous launch, mirroring something we pointed out for Zynga’s games recently. Happy Island is still only a month old, but it’s looking like the potential of sim games may be reaching a new ceiling.

The only developers with below average declines in both DAU and MAU were PopCap and Zynga. Pop Cap’s Bejewled Blitz has actually been impressively consistent, bouncing back after each holiday-induced dip — its addictive game play and short, 1-minute sessions (perfect for the Facebook audience) helped it make more than one top ten Facebook games list for 2009.

Zynga’s individual games have been a mixed bag: FarmVille is still down 2 million DAU from its December peak of 28.7 million, but Zynga Poker (which we previously thought might be losing focus with the rise of sim games) seems to be chugging along (its synchronous play, scale, and allowance of in-game friends made it less dependent on viral marketing to retain users). In light of the core changes to its business model, Zynga has been especially aggressive in trying to retain users, giving away items that usually required hard cold cash through a slew of promotions in its games that also drove gifting (especially helpful after the pre-game gifting interstitial was banned by Facebook):

• FarmVille pushed gifting of presents – every 20 presents received from friends helped grow your Christmas tree. Then after December 24th, users could open these presents to get a number of decorative vanity items like reindeer, cats, sleighs but also free 1-, 5- and 10-packs of fuel for tractors (usually only available for cash payments). FishVille had a similar gifting of presents, as did PetVille.
• Mafia Wars created a gift safe house, providing users free rare items, as well as promoting gifting that provided extra XP or health and reward points (which can usually only be earned by completing levels or by spending cash).

And those promotions are carrying into the New Year:

• FarmVille is in the midst of “free fuel week” where users can gain a tank of gas (something previously you could only buy for cash) each day they come back (it would seem to be a test of a daily lottery system to get users to come back each day).
• Fans of Roller Coaster Kingdom were given 75 Coaster Cash (something that would have cost users $14.50 in real dollars) in an effort to revitalize massively declining MAU and DAU numbers (it may also be a way to meet the issue that items like park expansion were still gated based on the number of friends a user has – a practice currently in violation of the new Facebook policies).
• While not cash driven, PetVille users had the fee for reactivating their pet waived to get users back after the holidays in one of the longest (text-wise) notifications I’ve seen to date.

It’s hard to say what the financial impact of these giveaways will have (it could provide enough users a taste of what they could be paying for to push them into buying them themselves), but if they are curtailed, I would expect the DAU and MAU numbers for Zynga to fall further than they have to date.

Losing Ground

Playfish, Slaskey and Playdom all had relatively higher than average declines in both MAU and DAU over the last 30 days. Playfish appears to be continuing their decline since the purchase by Electronic Arts in early November. Pet Society rebounded a bit with the launch of a daily lottery in early December, but it revised its slumped much like Restaurant City after the holidays without aggressive marketing promotion (PetVille passed Pet Society in DAU earlier this week). Now two months since the acquisition, EA appears to have done little to prop up Playfish’s position (newcomer CrowdStar passed Playfish in total DAU earlier this week).

Slashkey and Playdom both saw some pretty large drops in the DAU of their farm sim games: Farm Town (Slashkey’s only title) dropped nearly 28% while Playdom’s (Lil) Farm Life dropped nearly 30% from its mid-December highs. Playdom’s numbers, though, could be partially explained as cannibalization by its new farm title, Tiki Farm – the rise in daily active users for Tiki Farm seems to nearly mirror the decline in (Lil) Farm Life:

Managing Churn Becomes Crucial

It is still early to assess the full impact of the Facebook platform changes, but there is no question that the core economic model (getting 2-4% of users to buy virtual items) is drastically modified when churn increases. Developers have traditionally stemmed churn by a) building better games or b) acquiring new players through ad buys and viral growth to replace the users that leave. With three core viral tactics removed or marginalized (and the eventual loss of Notifications on the horizon), developers need to build more compelling games and features to keep users or innovate with new tactics and spend a lot more in advertising to drive new users.

Based on the numbers above, it appears PopCap has been able to maintain an audience based on its proven hit casual game mechanic in Bejeweled Blitz and it will be interesting to see if any more Pop Cap titles make their way to Facebook or whether they focus on their own social free-to-play destination site.

At the other end of the spectrum, Zynga’s aggressive promotion and give-aways appear to be buying it time while it tries to figure out how to revive and develop new viral mechanics – a luxury afforded by the recent influx of investment that most other developers can’t match – as well as figure out what game mechanics to develop next.

Eric von Coelln is a casual games and MMO marketing veteran who focuses on emerging metrics in social games. He is currently a New York based freelance consultant to games and social media companies. You can find his blog here.

Virtual goods services provider Viximo has a few pieces of news today. It has hired a new chief executive, media veteran Dale Strang, and announced new partners including BlackPlanet.com, FanIQ.com and SmartDate.com. And, the company says its partner sites now add up to a total of 60 million monthly users.

The company provides a variety of ways for social networks, social games and dating sites to add virtual goods. These include a “content marketplace” of virtual goods from brands and individual artists, a white-label virtual currency system and analytics. Viximo says it has partnered with 40 brands and 24 publishers total to date; we’ve previously mentioned its work with Starbucks and Fotolog.

Strang previously co-founded online ad network 5to1.com, spent three years as the general manager of IGN Entertainment, and held an executive spot at Ziff Davis Media. Viximo raised $5 million from North Bridge Venture Partners and Sigma Partners in May. North Bridge investor Dayna Grayson had joined the company then as CEO and she’s still listed on North Bridge’s web site. The company didn’t provide details on the management change but we’ve asked and will update based on what we hear back.

December was a slow traffic month for most social game developers, partly because users were busy with other activities during the holidays, and partly because Facebook started stricter enforcement of anti-viral policies at the beginning of the month. But traffic appears to be back on the rise, at least for the 20 games that gained the most new daily active users (DAU) in the past week, according to AppData.

For the week ending December 29, the top 20 games gained a combined total of 2.06 million DAU. This past week, ending on January 5, the top 20 games more than doubled their DAU, gaining 4.10 million.

Top Gainers This Week – Games

Name DAU Gain Gain, % 1. FishVille 6,638,656 +534,335 +8.05 2. Tiki Farm 631,839 +375,780 +59.47 3. Happy Island 1,791,959 +344,312 +19.21 4. FarmVille 26,003,429 +341,835 +1.31 5. Country Life 1,944,457 +336,584 +17.31 6. Café World 9,347,792 +296,031 +3.17 7. PetVille 4,027,286 +262,436 +6.52 8. Texas HoldEm Poker 5,171,059 +232,598 +4.50 9. Island Paradise 1,867,514 +180,890 +9.69 10. Garden World 175,701 +175,483 +99.88 11. MindJolt Games 2,110,615 +147,850 +7.01 12. Bubble Popp 400,094 +124,513 +31.12 13. Mafia Wars 6,169,734 +115,258 +1.87 14. Super Hugs♥ 117,923 +114,434 +97.04 15. Bejeweled Blitz 2,886,107 +104,712 +3.63 16. Birthday Cards 1,231,300 +94,474 +7.67 17. Fish World 1,732,436 +92,371 +5.33 18. Zoo World 1,261,711 +79,399 +6.29 19. Treasure Madness 845,186 +77,888 +9.22 20. Tarjetitas 239,759 +69,637 +29.04

A lot of the usual titles made today’s list, although not in the order one might expect.FishVille, Zynga’s virtual aquarium game launched last fall, is on top, gaining more than half a million new users.

Number two is a surprise, though — Playdom’s new game, Tiki Farm, which had previously been seeing slower growth since launching last month. This past week, it grew by nearly 60 percent, or 376,00 DAU. We’re interested to see how big this title can get.

CrowdStar’s new Happy Island game came in third, gaining 344,00 new DAU, having seen healthy growth over the course of the month.

And while its not surprising to see Zynga’s FarmVille at fourth, right behind it is a title called Country Life — also a farming simulation, but made by a small developer. It has been steadily climbing our leaderboards, and gained 337,000 DAU this past week.

We’ve covered most of the other titles on this list in detail before. A new one that stands out, though, is Garden World, a slick-looking garden-themed iteration of the farming genre. Made by a developer by the name of Tim Saberi Jr. it has rocketed up from nowhere at the start of the new year to reach 175,000 DAU by today. [Update: Tall Tree Games is the developer, and it is cross-promoting the game from its larger Fish World, which helps explain the traffic.]

Customizable virtual spaces are always a popular number with people. There is something to be said about having the ability to build something in the way you see fit. However, a new app by the name of TrainSetGo takes this prospect and combines it with one of the most classic of hobbies: Train sets.

Train sets have always had an allure to them. Whether they catch your attention at a fancy hotel or amusement park, or you spend hours yourself, placing tracks and building models in order to create your own little world. Unfortunately, quality train sets are a bit pricy, and for the good ones, very space consuming. But not on Facebook.

This is the concept behind TrainSetGo. Users begin with a simple starter track and watch a 3D train go round and round a digital living room. Okay, granted this isn’t too much fun yet, but as it travels it stops at the train station to pick up random Facebook friends. Then, players earn tokens when it passes landmarks such as castles, cottages, or the post office. These are called “attractions” and the bigger the attraction, the more tokens are earned.

This is where the entertainment value comes in to play as this currency is then used to purchase more track, more decorations, and more attractions. It’s all very simple to work with (though the editing screen is rather busy looking with about 9000 grid lines) and can even be done in real time. Furthermore, players are also able to edit their train as well, adding cars, changing engines, and even getting a nice social car that cycles through random Facebook pictures (though it is a bit blurry).

As with most social games, nowadays, TrainSetGo also makes use of a purchasable virtual currency beyond the tokens – TrainStock. From what we’ve seen, no items are restricted so that they can only be bought with this currency; rather, items just cost significantly less with TrainStock than the in-game tokens.

Of course, there was one highly obnoxious issue in all of this customization. With each level gained from traveling about your virtual village, you learned about a new feature. First was shopping, then the train cars. Now, this style of tutorial isn’t an entirely bad thing, but the designers don’t even show the editing or shopping buttons until those levels are earned. While their heart was in the right place regarding new user experiences, new users might be left wondering if the game is even working right.

This nuance aside, the only other major complaint is visuals. Train sets are meant to be highly aesthetically pleasing, and while the concept TrainSetGo is pretty cool — even using the Unity Game Engine to provide the 3D interface — the artwork is very drab and sophomoric. At the start of the game you get to pick between a model or toy type train, but the model – which one would expect to be realistic looking – still looks very simple and blocky with relatively flat colors. As a virtual space type of game, having something look amazing is part of the goal, and more than anything a visual upgrade would be the best thing for this app.

In the end though, TrainSetGo is a very nice concept. There are many a user that would likely enjoy building something new for themselves to show off. Already we have seen people flock to customizing farms, restaurants, and aquariums, so why not trains too? Currently, TrainSetGo has about 4,500 monthly active users, which isn’t too shabby considering it’s only been tracked on AppData for seven days or so. With a little spit and polish, it could actually be something pretty cool.

With the official launch of Google’s Nexus One phone today, the Google-created software operating system that runs on it, Android, is getting even more attention. Launched more than two years ago, it is now running on 20 devices, available from 59 operators in 48 countries and in 19 languages, according to the company.

But is Android now an exciting new platform for social gaming developers?

The OS is Google’s attempt to drive more mobile web usage, thereby increasing its ability to provide its search product and applications to users, and make more money from its ad business. It is also a way to counter the threat of Apple’s iPhone, as well as the latest attempts by other mobile handset manufacturers to create compelling software they control.

So, here’s a quick look at how the Nexus One, and Android, might affect social gaming:

First, there are still big questions about Android as a developer platform. Android is mostly open-source, and the manufacturers and carriers who use it can alter it for their own purposes. While this may help Android spread, it also creates multiple versions of the software, in often inferior environments. Social game developers who built for Google’s OpenSocial platform ran into this problem, as apps built for one social network using that standard would then need to be re-adapted to others based on differences in code, features and user habits. It’s easier for developers, especially smaller ones, to focus on the biggest and potentially most lucrative platform. This is what has happened with Facebook, and in terms of mobile, with the iPhone.

However, Nexus One could be so successful that it creates a new market for apps that run on the device. And Google will certainly be looking at ways it can make Android more hospitable to developers, in general. As the overall size of the Android market increases, due to the Nexus One, Verizon’s Droid, and the many other Android devices expected to come soon, the attractiveness of building for Android will also increase despite compatibility issues.

Another intriguing angle here is that Google is trying to tie in some social features to Android, most notably contacts from apps like Gmail. What if you could easily invite a friend in Gmail to download and play a game on the Nexus One with you? Sure, Facebook Connect is available for Android in some form, but Google is increasingly trying to offer its own social graph, of sorts, as can be seen with its profile features. The company has so far not had many successes with building social networking services, but maybe it will in the future.

Google also provided some more details about the Nexus One today that could also affect developers. Users will be able to charge their phone bills directly for applications they want to buy, similar to how mobile payments companies let users buy virtual currencies on social networks. The Nexus One currently only provides 190 megabytes of its 4.5 gigabytes of memory for storing apps, far less than the iPhone. However, Google said today that it plans to address this issue by greatly increasing app storage space within a future software update. A couple other notable features. Like other Android devices, this new one will let you run apps in the background, which may be useful for some game designs. Adobe also says that Flash will be available for Android and Nexus One, which may be appealing to developers who build in the plug-in.

It’s not clear how billing and storage are going to work on other Android devices, but these changes should create more opportunities for apps to be sold and downloaded.

While we have not heard any stories yet about social games succeeding on Android devices, the overall growth of the ecosystem along with Google’s ongoing guidance of the software suggests games — and other apps — have a bright future.

While everyone from Zynga on down in our AppData leaderboards saw social gaming traffic drop last month, some got it worse than others. Most obviously, up-and-coming developer CrowdStar grew in the first weeks of the month, when other big developers were leveling off.

Today, CrowdStar is the second-largest Facebook application developer by daily active users, with 10.8 million — behind Zynga’s 62.4 million. While CrowdStar’s DAU count has fluctuated around this number since slightly before Christmas, the cause appears to be players going offline for the holidays. Facebook’s stricter enforcement of anti-viral polices at the beginning of December also appears to have affected CrowdStar less than many other developers.

The company’s growth, meanwhile, is being driven by the fact that its most recent titles are also its biggest ones. While many other developers have big games, most of those games launched many months ago and have already, from what we can tell, reached their traffic peaks.

CrowdStar has developed a wide range of apps in past years, most of which did not prove very popular. But it learned lessons from those efforts, and broke out with Happy Aquarium in September, then followed up with Happy Pets and Happy Island later last fall. It’s not entirely clear what is making the company successful in spite of intense competition and the viral restrictions. Company chairman Peter Relan ascribes the recent growth to focusing on quality games, and on coming out with a new one every month.

Now we’ll get a better chance to see how CrowdStar does versus rivals, post-holidays. Relan says to expect another game later this month. “There are games in genres out there that are goofing around and not really exploring the mechanics,” he threatens. “We’re going to come in there and kick some ass.”

Zynga’s Texas Hold’Em Poker has proven to be one of the more durable social games on Facebook. Most newer card games that have sought to dethrone it have also limited themselves the same style of poker play. Well, a new app by the name of Broadway Poker is changing that by offering not one, but four ways to play. The developer, notably, is the Agarwalla brothers, the folks behind early social gaming hit Scrabulous, a title that helped show the potential of social gaming before running into intellectual property issues.

In a nutshell, Hold’Em is a game where two cards are dealt to all players with five community cards placed on the table over four rounds of betting. Using basic poker rankings, the player that can make the best hand using one or two of their cards and three or four of the community cards wins. Simple enough, right? That’s why Hold’Em has always been a popular online card game.

Part of Broadway works the same. Players join a table, cards are dealt, and they call, raise, or fold as it becomes their turn. As usual, all the chips are a simple in-game currency with no monetary value. What is nice though, is that the game does have a bit of a safety net to allow users to keep playing. If you lose all your money, then you can simply go to the cashier for another 2000 credits (every three minutes).

Beyond the means to get money when you’re broke, the element of this app that makes it interesting is that it offers more than just Hold’Em poker. It actually allows three other modes of play: Omaha Hi, Omaha Hi-Lo Split, and Double Dash. As far as the play is concerned, Omaha Hi requires players to use two cards from their hand and three cards from what is called the “flop” (the second round where three community cards are set on the table), and Omaha Hi-Lo Split has players making a “hi” hand and a “lo” (ace-to-five) hand using the five community cards and their two cards.

Of all the games, however, Double Dash is the most interesting. This style of poker plays more or less like Omaha Hi, but you get two “flops” instead of just the one in the second round and players must use two of the cards from the first flop and the remaining two from the second.

If this all sounds a bit confusing, that’s because it really is until you’ve tried it (or you’re an active card player). While the prospect of offering other card games is attractive, most people who aren’t avid card players are going to struggle at first. Thankfully, the developers of Broadway Poker did provide fairly detailed help section to aid beginners, but, again, it really takes some actual play to get the hang of it.

Beyond the card games themselves, Broadway Poker is a bit on the bland side visually. Other than the Las Vegas-style female character (who looks, um, almost exactly like the character used in Zynga’s Texas Hold’Em), there really isn’t that much to look at. The tables and menus are all very clean, but overall feel a bit drab and basic. Granted, it is a card game, but at least some visual spice would be nice.

Overall, Broadway Poker is a decent poker title. It isn’t too much to look at, but it offers some nice new ways to play for poker advocates. That said, though, non-poker players may have some initial trouble understanding the Omaha and Double Dash versions of the game. Of course, seeing as the game is brand new with only a handful of monthly active users (under 1000), we will have to wait and see if it catches on or not.

The United States Patent and Trademark Office has proven to be the place to watch for new Zynga titles, in the sense that the company has been busy trademarking names for future games. FishVille was one example from last fall, then PetVille was another, and now Games.com has noticed that the company has trademarked 21 new games on either December 16 or 21 of last month.

The list includes a range of new and old-sounding genres that use words like: hospitals, hotels, zoos, animals, treasures and crime. Straight from the USPTO:

Readers will note that many other games in these genres already exist. In the hospital category, we have Vojo World‘s Medical Mayhem. In the animal/zoo category, we have Rekoo‘s Animal Paradise, RockYou’s more recent Zoo World, and many others. We haven’t seen blockbuster hotel or “frontier” games on social networks yet, but it’s pretty easy to imagine a simulation game that lets you run your own hotel or create a frontier town. We’re also intrigued by the appearance of gambling-related titles like Poker Blitz, Casino Blitz and Casino World — Zynga had a big hit with its Texas HoldEm poker game but it has appeared to be more focused on sim games these days.

Overall, the list of trademarks suggests that Zynga is continuing its strategy of picking promising genres, then making games that are good in their own right but also tap in to Zynga’s massive cross-promotion ability on its other games and its big warchest for advertising.

Company chief executive Mark Pincus laid out his thoughts on this year in an interview with us from late last month. He emphasized that Zynga is going to try to make its games even more social — so you’re having lots of social interactions with friends inside of games, rather than on Facebook or other platforms. He also said that he expects his company’s games to stay focused on the mass market of social gamers, rather than trying to increase complexity for niche hardcore types:

I think there’s a continued trend towards greater simplicity. We learned that lesson this year. While our games are more accessible than hardcore games, nobody realized making them more simple would unlock more users. Nobody would guess that one of most popular categories would be fish swimming around in a bowl. I would be shocked if it didn’t get even more simple.