iSwifter snags 500K users to play Facebook games on the iPad (updated)

iSwifter, the company that can stream Flash-based Facebook games so they can be played on the iPad, said that users have downloaded the iSwifter app more than half a million times since the launch of version 3.0 in June and (updated) version 4.0 more recently.

That’s a strong start for a technology that circumvents Apple’s walled garden on the iPad, allowing Facebook and other Flash content to run properly on the tablet. Normally, Adobe Flash games (which are ubiquitous on the web) don’t run on Apple’s iPad, thanks to a technical dispute between the companies. But after a period of negotiation with Apple, iSwifter made it impossible possible with the launch of version 3.0 of its app, which comes with a subscription-based game browser.

iSwifter executes games on its own servers and then streams images to a user’s iPad in the form of a video. The execution is so quick, the user never knows the game is running in a server, not on the iPad itself.

Peter Relan, chairman of Youweb — the incubator that owns iSwifter — is making the announcement today at the GamesBeat 2011 conference in San Francisco. 500,000 people are playing nearly 2,000 Facebook games available on the iSwifter game browser. About 40 percent of all gaming time on iSwifter is spent on Zynga games. This shows that users are not waiting for Zynga and other Facebook game makers to adapt their games to run on the iPad.

That’s an interesting notion, Relan says, because the company charges a subscription fee for iSwifter. Zynga games, meanwhile, are free-to-play. That is, users play them for free and pay real money for virtual goods. But with iSwifter, Zynga players are actually willing to pay money so they can play Zynga games on the go on an iPad. About 20 percent of iSwifter users are willing to pay using in-app purchases to get access to a Facebook game on the iPad. And iSwifter users spent nearly 2 million minutes on Facebook games in the past few months (using earlier versions of iSwifter).

The most popular Facebook games on iSwifter are Zynga’s CityVille and Empires & Allies. Other top 10 games include FrontierVille, Dragons of Atlantis, Gardens of Tim, Backyard Monsters and SlotoMania.

iSwifter CEO Rajat Gupta said the company’s success shows that disruption is occurring in mobile games, where portals such as iSwifter, making it harder for social game publishers to lock their customers on certain platforms.

“While we hear the Facebook app for the iPad is coming soon, we know it won’t include the ability to play games,” said Gupta. “Almost all the big games on Facebook are built in Flash, which doesn’t run on iOS. But iSwifter has created a large following of paying users who love playing Facebook games on their iPads.”

With iSwifter’s game-browser app, iPad users can log into online games like World of Warcraft or play social games such as CityVille on their iPads, even though those games aren’t playable on Apple’s device in any other way.

Users can get the iSwifter app with a regular web browser that can play Flash videos and other web content on an iPad for a subscription of $4.99 a month a flat fee of $4.99 Both deliver Flash and game content — including any social games or massively multiplayer online games.

The first couple of versions of iSwifter let users to watch videos and play a limited number of Flash games on an iPad. But version 3.0 allows you to log into Facebook and play a variety of Flash-based games such as FarmVille, Gupta said in an interview.

Apple approved the previous versions of iSwifter without much interchange. But the 3.0 approval process was lengthier and tougher because iSwifter introduced a new monetization feature. Gupta said he wanted to launch a subscription service where a user would sign up once for iSwifter and the subscription would automatically renew at the end of each month. But Apple balked and required that iSwifter’s users approve the subscription at the end of every month. That way, users won’t get surprised by monthly bills. It isn’t exactly clear why Apple required this restriction for iSwifter, but Gupta said he had to go along. Now, to reduce confusion, iSwifter has eliminated the subscriptions in favor of a single download fee. With version 4.0, users can download it for free and play it for a half hour. If they like it, they can pay the flat fee.

When you load the app, you have two options. You can browse web sites or play games. With the web sites, you can choose from one of the featured links or just type in the web address to go to any web site. For games, there is one game that is available for free each week. The others are available as free-to-play games. After a couple of minutes of playing, the user is prompted to make an in-app purchase to continue playing. If there is a drawback to iSwifter, it is that it needs a constant Wi-Fi connection in order to run, as the video has to be streamed in near real-time to create a continuous and good experience for the user. Gupta says that the amount of bandwidth required to support the app isn’t huge.

Gupta says that iSwifter would be useful on Android systems as well, even though Flash is going to be available on those devices. That’s because all of the capabilities of Flash aren’t available on those devices. Right now, iSwifter runs on just the iPad.

It’s worth noting that many Flash web sites are written for PCs and need a mouse and keyboard. That means they won’t work well on a mobile device unless they are redone in a touchscreen-friendly way. But iSwifter has built software — an abstraction layer built into the cloud platform — that captures a user’s touch-based gestures and converts them into mouse and keyboard-style inputs that Flash games can understand. That conversion is done in real-time.

Developers who have free-to-play games may be particularly interested in making their games accessible via iSwifter 4.0. That’s because iSwifter can extend distribution for the web-based games to the Apple platform. If users buy virtual goods in those games, the developers can make money from the purchases. Apple still gets paid, meanwhile, because it gets 30 percent of the revenue from subscription fees generated by iSwifter, per Apple’s business rules.

The iSwifter browser competes with the Skyfire browser, which costs $4.99 on the iPad. But the Skyfire browser isn’t really built to handle games or Flash animations, particularly since it can’t convert finger touches into mouse clicks.