There is a $100M discrepancy in Facebook’s payments revenues

There is a $100 million discrepancy between what Facebook earned in payments revenue and what it paid out to developers, according to revenue figures in its IPO filing last week.

In the filing it says, “In 2011, our Platform developers received more than $1.4 billion from transactions enabled by our Payments infrastructure.”

But based on the company’s $557 million in payments revenue last year and its 30 percent share of transactions on the platform, Facebook should have paid out $1.3 billion at most. There is at least a $100 million discrepancy here. A company spokesperson declined to comment.

There are a number of possibilities:

Facebook may have comped free Credits for some developers: When Facebook began rolling out its virtual currency Credits, it would give them away for free to entice users to sign-up. Developers would have to eat the extra costs if  players bearing these free Credits showed up to play their games. They complained — loudly. But it’s possible Facebook comped some of this free Credits usage for certain developers.

(Sidenote: This only happened to gaming companies that used Credits as their in-game currency. Some developers like EA and Zynga didn’t change their in-game currency but still used Facebook to manage their payments.)

There may have been initial problems with fraud in the early months of Credits, which the company may have also comped for developers: One other developer told us that there were early issues with fraud and completion in Facebook Credits purchases (as you would expect with a nascent payments platform). So perhaps Facebook covered developers for these problems too.

Certain developers may have gotten a more favorable revenue share: It would be surprising if Facebook discounted its revenue share for favored partners. Facebook has always been adamant about taking a flat 30 percent cut across the board for all developers. Even Facebook’s special multi-year agreement with Zynga explicitly mentions the 30 percent payments share (although there are parts right around that number that are redacted in the contract, which was attached to Facebook’s IPO filing).

From the filing. (Anything marked [*] is a redaction):

“The amount of the service fee described in the Facebook Credits Terms that we charge to you at any given time to redeem Facebook Credits shall be [*] 30% per each Facebook Credit redeemed [*].”

Facebook started doing promotions on Credits with 80 percent discounts last November: One likely explanation might be promotions on Credits that ran from November to January. They gave certain players 80 percent discounts on the virtual currency, but still paid developers as if the virtual currency was priced normally, according to our conversations with gaming companies in the ecosystem.

There are a couple of ways to think about this. On the one hand, when we see individual developers engage in aggressive virtual currency sales, it can be a red flag. It’s a sign that they are sacrificing long-term revenue for short-term gains. They might be trying to boost financial performance to look better in an acquisition or funding round.

But Facebook isn’t a company that culturally operates for the short-term like that. By discounting Credits, the company is potentially getting more users to hand over their credit card data — which will make it more frictionless for them to pay for things down the road with Credits.

Right now, Facebook likely has payments data on just a small fraction of its users. If you consider that 50 percent of Facebook’s 845 million monthly active users play games, and then 2 to 6 percent of them monetize by paying for virtual currency, then a back-of-the-envelope calculation would suggest that they have payments data on around 30 million users. By comparison, Apple has more than 250 million iTunes accounts. Facebook needs more credit card data on more users if it wants to power payments for more interesting areas down the road.

So if the sales were successful in getting more users to hand over their credit card details, that’s a good thing in the long run. But if they just encouraged users who already pay with Credits to gorge on the virtual currency, then it could mean softness in payments revenue going into the first or second quarter of this year.

Zynga’s market cap climbs more than $1B a day after Facebook’s IPO filing

Zynga shares jumped almost 17 percent today after Facebook’s IPO filing yesterday revealed that the social network’s payments revenue climbed 20 percent quarter-over-quarter by year-end — suggesting Zynga might see a comparable boost in its own bottom line. Facebook added that the social game developer contributes 12 percent of its 2011 revenues.

At market close yesterday, Zynga was trading at $10.96 per share — slightly higher than the $10 price they debuted at in December‘s IPO. They opened today at $11.05 and peaked at $12.81 in just a little over an hour. By close, Zynga’s market capitalization was up 12 percent to $8.66 billion from $7.4 billion yesterday. Zynga’s Facebook traffic is also on the rise — up 1.9 million daily active users and 6.4 million monthly active users in the last seven days as recorded by our AppData traffic tracking service.

Zynga won’t share its fourth quarter earnings until Feb. 14, but that hasn’t stopped analysts from speculating that the company may report higher bookings for the quarter. If Facebook’s payments revenues went up 20 percent, Zynga might see a comparable rise. Facebook said its payments revenue rose to $188 million in the fourth quarter from $156 million in the previous one, suggesting that its platform may be doing a better job at converting gamers into paying for virtual goods.

In a research note republished on AllThingsD, Baird Equity Research analyst Colin Sebastian estimates that Zynga’s net bookings may have been $315 million in the fourth quarter.

Sebastian’s estimate is rough. Since Facebook reported $1.13 billion in revenue in the fourth quarter and Zynga contributes a 12 percent of that, Zynga may have contributed $135 million to the social network’s earnings. Baird believes 75 to 80 percent, or $101 to $108 million of that, is from virtual goods sales. If that $101 to 108 million is the 30 percent revenue share Zynga must give to Facebook, then the social gaming company keeps $235 to $250 million. Sebastian adds that an additional $65 million may have come from other platforms like iOS, Android and Google+.

Other gaming companies like Gameloft and Capcom have said this week that their mobile revenues ranged from $25.4 million to $52.6 million for the holiday quarter. That suggests that Zynga might easily have a $100 to $200 million-a-year mobile gaming business because it has similarly ranked games.

With Facebook delivering 93 percent of Zynga’s revenues, the two company’s futures are intertwined until at least 2015, when a five-year deal between the two expires. Zynga has taken steps to mitigate the risk of relying completely on Facebook by expanding into mobile and international markets.

Facebook, meanwhile, is trying to forge a stronger, more compelling games platform with improved discovery to offset rising costs to developers on its platform. Through Credits, Facebook takes a 30 percent cut of all in-game transactions. On top of that, social game developers are also a large source of advertising revenue for the company.

Zynga made up 12% of Facebook’s revenue in 2011

Revenues from Zynga games accounted for 12 percent of Facebook’s 2011 revenues, the social network’s S-1 filing reveals. No other customer represented more than 10 percent of total revenue in 2009 or 2010. Facebook reports that social game devs — most of all Zynga — are currently responsible for almost all revenue derived from Payments.

Aside from in-game transactions conducted with Facebook Credits — of which Facebook gets up to a 30 percent cut as part of a special agreement with the social game giant — and ads bought by Zynga, the CityVille developer also generates a large chunk of pages where Facebook displays ads. While Zynga is locked into Facebook Credits until May 2015, Facebook points out that any trouble in paradise with its biggest game developer could harm its bottom line.

Be sure to follow our sister site, Inside Facebook, for full coverage of Facebook’s initial public offering.

Facebook relents on Credits, allows in-app currency offers

Facebook announced today that it will give developers the option to provide in-app offers in their native currency, the company announced in a blog post Friday.

The change should help developers since users are more likely to complete offers that involve the unique currency of the game they’re playing. Completing offers in units of Facebook Credits might not be as easy to understand for users who have to do the math to know what Credits convert to. “In-app offers,” as Facebook noted in its announcement, are an important way for developers to monetize users who might not otherwise buy virtual currency. In these cases, advertisers cover the cost of the currency in return for the app bringing them customers.

By completing advertiser offers, such as signing up for a subscription service or shopping in an online store, app users can earn virtual currency. Since the transition to Credits, which was made mandatory in July 2011, all offers have been done in Facebook’s universal currency, except for games by a few large developers who Facebook allowed to provide offers in their native currency. Now, the company is allowing all developers who prefer transactions to be in their own in-app currency to offer them. Before the launch of Credits, many third party offer networks provided offers to developers in native currencies.

Facebook will leave Credits offers as an option, which developers can use instead of or along with in-app currency offers. The new offers documentation supports Offerwall and Dealspot. Details are available on the Facebook Developer site.

This article originally appeared on our sister site, Inside Facebook.

Facebook Updates Credits Payflow, Adds International Payment Methods, and Updates Transfer Policy

Facebook has announced several updates to Credits today with changes that resolve a known pay flow issue, add additional payment methods for international markets, and restrict applications from transferring Credits between each other without prior authorization.

The pay flow issue deals with one of the three callbacks generated by the Pay Dialog. A recent change to the callback status=settled resulted in some cases in which users were not getting the item that they paid for. To avoid this problem, Facebook is now asking developers to fulfill orders on the callback status=placed instead of waiting around for status=settled. To completely eliminate confusion, Facebook is removing the status=settled callback 90 days from now.

Next up, Facebook Credits now supports additional payment methods in Europe, Asia, New Zealand and Latin America. The new methods added are:

  • ELV (Germany)
  • MyCard Mobile (HongKong, Macau, Malaysia, Singapore, Taiwan)
  • Visa Electron (Argentina, Brazil, Chile, Colombia, Finland, Hong Kong, India, Japan, Malaysia, Mexico, Netherlands, New Zealand, Singapore, Taiwan, Thailand)
  • WebBilling Online Bank Transfer (Austria, Germany, Spain, Switzerland)

Find the full list of supported countries and payment methods here.

Lastly, Facebook has updated its Credits policy to restrict apps from transferring Credits between one another without prior approval from Facebook. The new policy:

2.14 You may not accept Credits in one application and deliver or transfer the purchase to the user in another app without our prior authorization. For example, an app solely designed to facilitate transactions is not permitted.

This will affect dubious apps that facilitate illegal gambling, and may also affect certain game developers that attempt to use one type of premium currency across more than one game running on different app IDs — but it sounds like Facebook is willing to make allowances for cases like that if the developer presents them.

Facebook also notes that developers should keep their company info up to date in order to receive payouts. The Facebook Credits documentation has also been revamped to address developer feedback.

This article originally appeared on our sister site, Inside Facebook.

Facebook Testing “Facebook Credits for Websites” That Helps Third-Party Sites Sell Virtual Goods

Facebook has just announced a closed, limited test in which for the first time it will allow websites to process payments for virtual goods using Facebook Credits. Facebook’s virtual currency is currently the mandatory payment method for all Facebook games on the web, a payment option for Facebook apps, and became available as a payment option to mobile app developers last week. The only initial launch partner for “Facebook Credits for Websites” will be online and downloadable games site GameHouse that until now only accepted payments through credit card and PayPal.

During the test, Facebook will closely monitor the demand for Credits as a payment method and the user experience of those that pay though its virtual currency. If a high enough percentage of users make purchases through Credits and feedback is positive, Facebook may expend additional resources to let more websites add Credits as a payment option.

Eventually, Facebook might open the option to all web developers selling virtual goods or digital media, allowing the social network to earn a 30% cut on transactions across the web. In exchange, sites will be able to provide an easier way to buy their goods and media than punching in credit card or PayPal details. Facebook has provided a signup page for developers that want to try Facebook Credits for Websites if the test is expanded.

GameHouse users that sign in to the site with their Facebook login and play Collapse Blast or UNO Boost will only see Credits as a payment option, not credit cards or PayPal. If they choose to buy virtual goods or proprietary in-game currencies, Facebook Credits will be deducted from the same account that Facebook canvas and mobile games pull from. Similar to how it works within Facebook, users without an existing balance of Credits will be able to purchase a bundle within the payment flow.

Unlike on Facebook where Credits are the exclusive payment method for games, GameHouse may still offer other payment options. However, Ian Fliflet who handles corporate strategy for GameHouse tells me that those signed in through Facebook won’t see the option to pay with a credit card or PayPal account. This could anger some long-time GameHouse users that try signing in through Facebook for the first time only to find their preferred payment options missing in the two test games. That in turn could negatively skew feedback on Credits for Websites.

If the test does indicate a demand for Credits as a payment option outside of Facebook.com, its unclear whether Facebook would require developers to use its virtual currency exclusively. It could simply make them an additional payment option, the way Credits currently work for Facebook.com apps as well as mobile apps and games. However, it might extend this test model so that sites that want to use Facebook as an identity and login provider will also need to use its taxed virtual currency.

The impact of Facebook Credits for Websites could be significant. It could assist independent game developers and digital media merchants with monetization, as customers might be able to quick make purchases rather than having time to reconsider while enduring the friction of entering their credit card information or logging in to PayPal.

Currently, many independent game developers have to distribute through portals like GameHouse that have built a base of users that have already provided their credit card details. Facebook Credits for Websites could give them the opportunity to distribute directly to fans in way that gives them more control over branding. The tax that third-party game portals take on credit card or PayPal transactions may vary widely, so Facebook’s 30% cut could be less or more than developers are used to paying.

Facebook has much to gain from Credits for Websites, though. The more places they’re accepted, the more users that are likely to buy and maintain a balance of Credits, and the more transactions Facebook will get a cut of. A user might buy a bundle of Credits to spend them on a gaming portal or to buy a band’s album, but then spend then become a paying customer of a freemium game on Facebook.com.

More users maintaining a balance of Credits also makes Facebook a more lucrative platform for developers. Typically only a few percent of gamers ever pay to play, but if they already have a balance they may be more likely to spend. Facebook may need to initially reduce its tax or not demand any exclusivity as a payment method to get websites hooked on Credits. With time, though, Facebook Credits for Websites could become a significant revenue source and powerful way to attract developers.

Zynga Announces Zynga Direct, a Social-Mobile Network Enabled With Facebook Connect

Zynga CEO Mark Pincus announced a service called Zynga Direct today that seems to be the final form of the long-rumored ZLive platform.

ZLive was first reported more than a year ago and at the time was seen as a direct threat to Facebook’s games ecosystem, if indeed the platform allowed Facebook players to play Zynga games without Facebook. At that time, Zynga was also struggling with Facebook’s evolving platform requirements and Credits integration. Now, however, the market has changed and Credits are fully integrated in the Facebook platform across all games. In present conditions, Zynga Direct comes across more as a social club for Zynga gamers than a game-oriented Facebook alternative.

As Pincus explains: “We’re building a platform for play. For us it’s a platform. We’re not trying to be the company that’s trying to make the next hit game. We’re trying to have this experience make up a platform for play. Similar to what Facebook’s doing, but at a game level.”

Pincus put off the technical explanation for later on in the event. He did say that Zynga Direct is the deepest possible integration of Facebook Connect, and made a point of calling Facebook a launch partner of the platform, much as Zynga was Facebook’s launch partner for its mobile platform launched yesterday.

UPDATE: Zynga’s COO John Schappert announced what seems to be a separate product called Project Z, which is a web-based social network for Zynga players. It’s not live yet, but you can reserve a “Ztag” virtual identity here. It is also a Facebook Connect-enabled network.

UPDATE 2: Ah, it’s not a separate thing. Project Z is Zynga Direct. Both names are probably working titles only as the service isn’t live.

Facebook Makes Its Move: Brings Viral Channels to HTML5, iOS Apps

Facebook finally unveiled its long-awaited effort to help mobile developers market their native and HTML5-based apps through its platform today. iOS developers will get to take advantage of bookmarks, requests and the news feed in the same way that Facebook canvas developers do.

The interesting parts of today’s launch are:

Facebook is playing nice with Apple on viral distribution for native iOS apps, not just HTML5-based ones: If a developer wants to distribute a native application, Facebook’s notifications will send users to the iTunes app store.

So Facebook is not pressuring developers to build HTML5 apps in order to use its viral channels. This is a big deal because it means Facebook’s mobile platform will have greater adoption by iOS developers who don’t want to split their limited resources between developing natively and on HTML5. While promising, HTML5 apps still have a noticeable performance disparity compared to native iOS applications. It’s especially pronounced with games, which are the largest revenue driver on both platforms.

It’s unclear if Facebook will get affiliate revenue for the downloads it drives like other mobile-social gaming networks such as GREE’s OpenFeint do.

Parallel viral channels on Android will be coming soon. There’s no official date though.

Facebook Credits have arrived for mobile web apps (as was widely anticipated): HTML5 developers that want to use Credits as their payment mechanism must use it exclusively. Native iOS apps have to use Apple’s payment system, however. This split in payments between web-based and native apps is expected given that Apple is unlikely to give up revenue from in-app payments and paid downloads.

We were the first to report that Facebook might use an HTML5 platform as a way to extend Credits to mobile back in February, four months before any mainstream outlets wrote about it. And we also correctly reported the launch date as three weeks away from f8 while other blogs incorrectly said this would launch last week at Apple’s event.

And here are the key viral channels for mobile developers:

Requests: This may be the most effective new viral channel for iOS developers launching today. If a user gets a request from a friend to join an app, they can respond to it from their iPhone. Then they’ll be sent to either the app’s mobile website or to the iTunes store where they can download the native version.

News Feed: Users can click on news feed items and be directed to the HTML5-based app or the iTunes store, where they’ll be able to download the native version.

Bookmarks: Like on the web, users will get to save bookmarks to app they use. If users tap on a bookmark, Facebook’s iPhone or iPad app will launch the app if it’s installed or they will send the user to the iTunes store. (Given that bookmarks are already buried one layer deep in the Facebook app, we suspect users might be more inclined to launch apps directly from their phone.)

Social Gaming News Roundup: Women are Profitable for Papaya, Zynga’s Games are Engaging, Tiny Speck Launches Glitch

RockYou Finds Social Gamers are Flush with Friends and Disposable Income – Social gamers are socially active, increasingly sophisticated, highly suggestible consumers according to a study commissioned by social gaming company RockYou. Some of the highlights of the study included:

  • Social gamers spend 13 hours per week on social networks and an average of 9.5 hours per week on social games
  • Social gamers have made 20 new friends through social gaming
  • 24% of players report they have clicked on an ad in a social game and made an online purchase
  • Social gamers make frequent purchases in real life, especially on entertainment

The study was conducted by market research firm Interpret on behalf of RockYou, and polled 2,000 social gamers (60% of whom were female) over the age of 18 who lived in the US and played at least one hour of social games a week.

Chinese Social Game Maker Papaya Finds Women Most Profitable – Beijing based PapayaMobile has found its most profitable gamers are women. According to Papaya, 4% of the players of its social mobile games are “whales” and 69% of those whales are women. Whales are defined as the most enthusiastic and dedicated players, willing to spend more than $100 on a game and responsible for 60% of the company’s revenue. PapayaMobile was last on Inside Social Games in February, when executive Si Shen contributed a guest post about the rise of location-based social games in Asia.

Setgo Teaming with Teepee to Expand Its Gaming Portal – Games discovery portal Teepee is expanding its offerings, partnering with startup developer Setgo to bring its new game Castaways to the platform. Teepee games offers casual gamers a curated experience, giving members access to a selection of games based on their profiles and incorporating the social features of Facebook, Twitter and Youtube. Both companies are based in the UK.

Facebook Credits Prove Profitable for Double Down – Double Down Interactive is reporting a massive surge in transactions since adopting Facebook credits as its in-game currency. According to a press release from the Seattle developer, revenues are up 50% in since their game Double Down Casino made the switch. On July 1st it became mandatory for all Facebook games with virtual goods to use Facebook credits, a move that was praised by some developers for promoting cross-game liquidity.

Zynga Goes Sequential with Mafia Wars 2 Comic – Zynga is prepping its fans for Mafia Wars 2 with a digital comic that reveals the back story and main cast of the upcoming social game. While larger game studios such as Ubisoft and Capcom have been using comics to promote high profile launches for some time, the move is a first for Zynga. The comic was created in collaboration with UDON, a Canadian art collective specializing in promotional artwork for the entertainment industry.

Real Prizes Coming to Facebook Games – Two new companies are seeing if combining social games, real world prizes and Facebook could be the next big thing in social media advertising. On September 29th Titan Gaming launched a beta version of a new games network on Facebook called Games and Prizes, the same day that startup Dobango released a Facebook version of its game play2Win. While each service is slightly different, play2Win focuses on letting players earn coupons and gift cards with smaller, local retailers, while Games and Prizes focuses on driving user engagement through branded games, the end result is the same — both services give Facebook gamers the chance to earn discounts and real prizes, and both services reward players for referring friends.

Google+ Gets Big Fast – Google+ has seen a huge influx of new users and traffic since entering open beta last week. According to data from analytics firm Experian Hitwise, traffic to the site is up more than 1200%. The total number of users is also likely to have crossed 50,000,000 according to analyst Paul Allen, who estimates the site is gaining 2 million users a day. We covered Google+ this week as social gaming heavyweights Zynga and Kabam brought their popular CityVille and Global Warefare games to the new social network.

EA Moving Into Social Game Marketing With New EA Legend Platform – EA announced this week it has developed a new game marketing platform called EA Legend. The platform was designed to help developers market their mobile, social, online and console games, by giving them access to EA’s existing user base of 300 million people. EA Legend will be officially unveiled on October 4th. In the announcement, EA touted that it had increased its audience by 30% this year, a great deal of that upswing coming from EA new Facebook game The Sims Social, which now has over 60 million monthly active users.

Raptr Finds That Zynga Draws Core and Casual Gamers – Zynga is great at engaging and converting players, and the appeal of their games is increasing even with hard-core gamers, according to a new report. Gaming based social network Raptr surveyed its membership and found that fans of Zynga’s “Ville” series log as much time on the social games as fans of the top core gaming franchises. In addition a third of XBox 360 gamers have played a Zynga game, a 50% increase over last year. The study also found that Zynga players logged in, on average, 8 times a day, and that Zynga games are played for three times longer than the rest of the top 10 social games combined. The full report can be read here.

Kobojo Commits to Expansion in Latin America – Leading French social games publisher Kobojo is beginning an aggressive international expansion, opening an office in Madrid and bringing on European games industry veteran Nicola Cencherle to oversee operations in Iberia, Italy and Latin America. According to Cencherle, Kobojo’s goal is to localize its games for 10 new languages before the end of the year, expanding that number to 20 by 2012, with a particular focus on Latin American countries. Kobojo recently translated their flagship Facebook game PyramidVille into Portuguese.

[Launch] Tiny Speck Finally Releases Surreal Social Game Glitch – San Francisco/Vancouver based developer Tiny Speck released their long incubating social game Glitch this week. The brain child of Flickr founder Stewart Butterfield, Glitch is a surreal social game that tasks players with expanding and exploring and expanding the Glitch universe. The catch is that the persistent world comes with it’s own highly unique rule set — for example, eggs come from eggplants, and pigs hatch from eggs. Players can do almost anything they want, but the game is designed to be highly social and cooperative.

[Launch] Vostu’s New Social Soccer Game Golmania on Facebook, Orkut – Brazilian social gaming company Vostu unveiled its latest title this week, Golmania, a real-time, multiplayer soccer game that enables players from all over the world to join teams, play in real soccer stadiums and organize private tournaments. The game is available in Portuguese, English and Spanish and utilizes Vostu’s multiplayer engine, which allows players on separate social networks to play and chat with one another.

[Update] Big Bang Theory Facebook Game Sees Solid Growth – The sitcom The Big Bang Theory launched a Facebook tie in game last week called The Big Bang Theory: The Mystic Warlords of Ka’a. The digital card game, based on the character’s favorite game in the show, has seen decent growth since its launch, currently sporting just over 60,000 monthly active users. The game was developed for Warner Bros. Interactive Entertainment by Dire Wolf Digital.

Social Gaming News Roundup: Lots of Zynga, Grasshopper Manufacture, Big Talk from EA and More

Showtime Pumping DEXTER Facebook Game With Sweepstakes
Showtime is promoting its new DEXTER Facebook game, Dexter Slice of Life, with a pre-launch sweepstakes that includes weekly prizes of $500 and a grand prize of an all expenses paid trip to Miami.  As we reported earlier, Dexter Slice of Life is being developed by Ecko Code with gameplay directly tied to the plot of the show’s sixth season, and fans of the show can play out the events of each episode the day after it airs. The season premiere of DEXTER is October 2nd, and Dexter Slice of Life launches on Monday, October 3rd.

Adobe Hoping Flash 11 Will Fend off HTML 5
Adobe revealed Flash 11 and the Flash-based AIR 3 to the world this week, placing a lot of emphasis on how the new software can be used by game developers, calling Flash 11 and AIR 3 the “game console for the web.” The new tools have been designed to be easier to install, more powerful and compatible with more systems, working with 64-bit on Windows, Mac and Linux. The move comes at a time when Adobe is looking up to shore up Flash as a development platform in the face of growing competition from HTML 5, the still-evolving development platform championed first by Apple, and now Microsoft, who are building their Windows 8 operating system to use HTML 5, blocking Flash entirely.

Has Facebook Added $15 Billion to the Economy?
A study conducted by the University of Maryland claims that Facebook apps have created an entire new segment of the high-tech industry, adding at least 182,000 jobs in the US alone. According to the findings, the so called “app economy” created by Facebook has lead to  53,000 new jobs specifically in companies that develop applications for the social network, and that has lead to job creation in connected sectors, which has pumped an additional $12.19 billion in wages and benefits into the U.S. economy.  While the claim seems to be good news, tech blog Gigaom is raising doubts and criticizing the report for using too many estimates and not enough hard data. For those interested in the numbers, and the methods used to obtain them, the full report can be found here.

American Express Gets into the Virtual Goods Market
American Express is following in the footsteps of rival Visa with the purchase of virtual currency company Sometrics. The deal, worth $30 million, will expand Amex’s Serve digital payments platform, giving it access to Sometrics’ existing customer base. Before the acquisition, Sometrics’ served 250 million customers. In February, Visa bought game monetization service Playspan for $190 million. According our Inside Virtual Goods Report, the virtual goods market will be worth approximately $1.2 billion in 2011.

Zynga Goes on Defensive Domain Buying Spree
While Zynga was announcing Mafia Wars 2, they were going to great lengths to protect that new IP.  Zynga purchased over 75 web addresses on September 20th, according to information uncovered by Fusible. The addresses cover almost every possible iteration of the Mafia Wars name, from insulting – mafiawars2sucks.com, to fawning – ilovemafiawars2.com, to purposely mistyped – wwwmafiawars2.com. While none of the domains seem to go anywhere yet, the complete list can be found here.

Tagged Acquires Startup WeGame to Strengthen Gaming Ties
Social networking service Tagged, which bills itself as the social network for meeting new people, has acquired social gaming service WeGame. While the announcement was short on specifics, the two services essentially serve the same purpose. Tagged allows users to make friends by browsing user profiles, playing games and sharing gifts, and adding WeGame to the mix allows Tagged to offer its user base more gaming focused social discovery tools and more monetization options. In the last year, Tagged has launched a new mobile website and beefed up its in-house game development.

Facebook to Make Big Bank off Credits in 2011
According to a report by eMarketer, Facebook’s revenue from Facebook Credits will top $470 million dollars in 2011, more than three times what it made from credits in 2010. In 2009 credits contributed to 5% of the social network’s revenue; thanks to the growth of social gaming and virtual goods, the currency now makes up 11% of Facebook’s income. According to an eMarketer interview with VentureBeat, one reason for the jump was the July 1st change that made Facebook Credits the mandatory currency for social games, standardizing the Facebook social gaming platform and giving Facebook a 30% cut of every transaction.

Grasshopper Manufacture Partners with DeNA for Social Games
Japanese studio Grasshopper Manufacture, most well known for the surreal titles its CEO Suda51 dreams up, is adding social games to its portfolio. Grasshopper is partnering with DeNA, the Japanese mobile and social gaming juggernaut to bring its games into the smartphone market. In an interview at the Tokyo Game Show, Akira Yamaoka, Grasshopper’s chief creative officer said that Japan’s game industry “absolutely cannot ignore mobile games.” The partnership seems to be a natural move for DeNA, who recently purchased ngmoco:) and Punch Entertainment’s Vietnam studio bolster its Mobage platform.

Sony Unveils a New, Much More Social Home
Sony has unveiled the new look for its integrated social network PlayStation Home. Originally created as a virtual world for hardcore gamers, the new Home, which is currently in closed beta, will have distinct districts that showcase different genres of games, making it easier for Home users to quickly navigate to the kinds of games they want to play. The games will be lighter, more casual and free to play, but supported through virtual goods transactions. Currently 30 developers are creating games for the new version of Home.

EA Aiming to Be the Social Kings in Three Years
According to a speech by CEO John Riccitiello, EA has set a $3 billion goal for online revenue in the next two to three years, with the ultimate goal of surpassing reigning champion Zynga as the biggest social gaming company in the world. Currently the majority of the 100 million people playing EA’s social games are from The Sims Social, which now boasts more than 51 million users. In related news, EA announced that it is creating a spin-off of its NHL franchise for Facebook called NHL Superstars that will launch in October. Meanwhile the gaming giant has signed a distribution agreement with Aeria Games to bring games from its Play4Free division (such as Battlefield Heroes and Need for Speed World) to the 23 million strong gaming network.

MapleStory Adventures Already at Three Million Players
The Facebook version may not be out of beta, but that hasn’t put off fans of the MapleStory franchise. According to Nexon, their first Facebook app MapleStory Adventures has already attracted more than three million users.

Angry Birds + Starbucks = BBFs?
According to report uncovered by Edge, Rovio is in talks to bring Angry Birds to the one of the most ubiquitous franchises in the world, Starbucks. While few details are known, Rovio may be bringing Angry Birds leaderboards into Starbucks as way to encourage people to play the game while they’re getting their daily caffeine fix.

Social Games Can be Hardcore Too
It turns out hardcore social gamers are a lot like regular gamers, according to a study funded by Kabam. In a national research survey, statistics showed that a growing number of young men are “hardcore social gamers” – i.e., they are playing social games from “hardcore” genres like FPS, strategy, RPG or MMO. 82% of hardcore social gamers are also console gamers, and according the study, the lure of the social game experience is siphoning time from consoles. 27% of those surveyed reported a decline in their gameplay on other platforms. The study also showed that the social gaming demographic is growing quickly – 41% of U.S. Internet users reported having played a social game. A full breakdown of the statistics can be found here.

Social Gaming Network Face Up Gaming Goes into Beta
Developer Game Face Gaming is hoping there’s room in the crowded social games landscape for its new online gaming platform, Face Up Gaming. The platform is a non-wagering poker site that combines social networking elements with competitive online gaming. According to CEO Felix Elinson, the goal is to create a global gaming platform that supports cross language play that’s accessible from any internet device. Players will be able to log on, play a game and maintain connections they make with fellow players after the game is over. Face Up Gaming just went into limited beta, with plans to move forward into an expanded beta by October.

GetGlue Adding Social and Game Elements
GetGlue, the check-in based social network for media, has updated its iPhone app and website to incorporate more social elements. Users now have a conversation stream that shows them check ins from their friends and the general user community. GetGlue has also added leaderboards, which show users which of their friends are checking into the service’s most popular content. GetGlue currently has 1.5 million users.

Hanging With Friends Comes to Android
Zynga has brought the latest offering in its With Friends franchise to Android. Hanging With Friends made its Android debut on September 20th as a free download. As a result of the launch, the game is now cross-platform, allowing users on both iOS and Android to challenge one another in the word guessing game.

Capital One Comes to CityVille
On September 20th Capital One launched a major three-game promotion, adding Capital One branded content to CityVille, FarmVille andPioneer Trail.  This is not the first time Zynga has teamed with Capital One, but it is the first time a company has launched a promotion across multiple Zynga games simultaneously.

[Launch] Big Bang Theory Comes to Facebook with Mystic Warlords of Ka’a
The hit CBS show The Big Bang Theory celebrated the debut of its fifth season with the launch of a new Facebook game called The Big Bang Theory: The Mystic Warlords of Ka’a. Based on the character’s favorite game in the show, The Mystic Warlords of Ka’a is a digital collectible card game, where fans can collect and trade cards with one another, play with characters from the series and challenge their friends to matches. The game was developed for Warner Bros. Interactive Entertainment by Dire Wolf Digital.

Inside Social Games Sponsors
6waves TinyCo SocialClicks Kontagent maudau Peak Games Frima
Featured Company
Jobs of the Day

Northwestern University
Evanston, IL

TinyCo
San Francisco, CA

Squarespace
New York, NY

More Research & Information from Inside Facebook

Sign up for free email updates beyond today's news.

 

WebMediaBrands
Mediabistro | All Creative World | Inside Network
Jobs | Education | Research | Events | News
Advertise | Terms of Use | Privacy Policy
Copyright 2012 WebMediaBrands Inc. All rights reserved.