July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Amazon launched its first digital currency today with a giveaway: 500 free Amazon Coins for every Kindle Fire customer. The coins, which are worth $5, can buy games, apps, and in-app purchases.

Kindle Fire customers who wish to buy apps or make in-app purchases can purchase Amazon Coins at a rate of 100 for every $1, but they can also get up to a 10 percent discount. Buying 10,000 coins earns you the full discount, and will cost Amazon customers $90.

One caveat: Amazon Coins are only available in the U.S. right now.

“Today is Day One for Coins,” Amazon VP of apps and games Mike George said in a statement. “We will continue to add more ways to earn and spend Coins on a wider range of content and activities.”

Source: http://www.flickr.com/photos/olivepress/6348546698/

Amazon Kindle Fire

Amazon announced the virtual currency back in February, when the company also said it would give away tens of millions of dollars worth of free Coins to customers. That’s a hint about the number of Kindle Fires sold — 10 million Kindle Fires would account for $50 million in free coins — as Amazon has never given device sales figures.

Virtual currencies can be useful for gift purposes, for children’s allowances, and for, perhaps, making it easer for customers to spend actual money since they may feel they are only spending virtual money. However, it is another layer of complexity, both for people and for the company issuing the currency, and mobile competitors Apple and Google have not released virtual currencies.

One of Amazon’s biggest goals is expanding the sale of digital content.

A full 12 of the 15 business highlights the company chose to include in its first-quarter 2013 annual earnings release were digital-content related. And that’s what Amazon Coins is all about: increasing the sale of virtual goods, which don’t have to be warehoused, packaged, mailed, and delivered.

As Mike George said:

“We are giving Kindle Fire owners $5 worth of Coins to spend on new apps and games, or to purchase in-app items, such as recipes in iCookbook, song collections in SongPop or mighty falcon bundles in Angry Birds: Star Wars.”

One important point for developers: They’ll receive their full 70 percent revenue share when customers buy items with Amazon Coins, even if the users earned a 10 percent discount on their initial coin purchase.

Image credit: Brian Sawyer/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In yet another move to differentiate the Kindle Fire from other Android tablets, Amazon today just announced Amazon Coins, a new virtual currency for purchasing apps and games on the Kindle Fire.

Amazon Coins is launching in the U.S. in May, and the retailer says it will also be giving out tens of millions of dollars worth of free Coins to customers. Developers will get the same 70 percent revenue cut when you pay for apps with Amazon Coins as they do when you pay with cash or credit cards.

Amazon is clearly trying to rev up its app store with the virtual currency, but it could also be a good way to get parents to spend more money. It’s far easier to give kids an allotment of credits for purchasing apps and games instead of giving them access to other forms of payment.

“Developers continue to report higher conversion rates on Amazon compared to other platforms,” Amazon’s vice president of apps and games Paul Ryder said in a statement today. “Now we have another new way to help developers reach even more of our millions of customers.”

Developers not in the Amazon App Store yet will have to submit and get their apps approved by April 25 to take advantage of Amazon Coins. It’s just one of several recent announcements by Amazon to make the company’s app store more inviting to devs — like Game Connect for virtual goods, and in-app purchasing for PC, Mac, and web apps.

Experience tells us it’s not that simple.  A number of considerations feed into a successful strategy, and each of them can mean the difference between profits and losses.

Here are 5 tips on getting the digital goods mode to work:

1. Understand the Art of Visual Merchandising

There’s an art to merchandizing virtual currency, but it’s easy to miss the basics. A common mistake is becoming too structured with virtual currency, where all price points have the same value ($10:100 Points, $20:200 Points, $30:300 Points, etc.).

Learn the three golden rules when merchandising virtual currency:

1. Offer a low price point (<$5) and a high price point (~$100, or more). A low price point will encourage the first purchase — “breaking the ice” with the first purchase is critical.  A high price point is important for “anchoring” the more affordable options and rationalizing their value.  For example, a first-time gamer might be hesitant to spend $99, but when used as a higher anchor price, it makes the $29 option appear to be a more “sensible” purchase.
2. Position the most popular price point just above the average price. Over time this helps drive up the average price by drawing gamers to the “popular” options.
3. Include a “best value” option.  Bottom-line: gamers appreciate value.

2. Avoid the Muddled Payment Wall

The common wisdom is that every payment method you add will earn you incremental revenue.

Unfortunately, many publishers do their best to follow the rule, but disregard design. The result is a cluttered checkout page that’s easier to navigate out of than navigate through.
The fix?  Show users a smart design and relevant payment options, and you’ll quickly monetize users and add new ones.

3. Design an Even Better Checkout Experience

It’s common for a checkout page to quickly clutter over time — and it can happen even with the best intentions.

It works like this. At launch, the checkout page is clean, intuitive, and streamlined. Pass Go – collect $200. Within a few short weeks requests are coming in to add text with customer service options or integrate certification language from the legal team.

These type of requests come one after another, and soon the checkout page looks unnecessarily cluttered with disclaimers, caveats, and warnings.

The fix? Look at market-leading checkout pages and recognize how intuitive they’ve become. Users should only have to log-in once, required fields should be well marked, and recognized trust symbols (i.e. Verified by Visa) should be made prominent.

In the digital goods space, the priority is a fast, easy, and secure checkout. Make it frictionless and functional, and you’ll keep gamers coming back.

4. Stop Giving Away Too Much or Too Little Virtual Currency

An easy mistake for game developers is giving away too much virtual currency. You may be thinking, “What better way to attract an audience than giving away virtual currency?”

But while gamers will quickly enjoy the premium features at no cost, they may be less inclined to purchase virtual currency at an additional cost. In contrast, dispensing too little virtual currency can also lead to problems.

It’s also not uncommon to see publishers offer an earned virtual currency, e.g. experience points, and a paid virtual currency — and that’s an excellent strategy. However, the psychological and mechanical divide between earned currency and paying for currency is larger than you might think.

Through experience, we’ve seen strong results by offering a small amount of paid virtual currency — where users can receive the psychological benefit as well as understand the mechanical routine of how it works.

Going through the process of paid virtual currency once or twice makes the act of buying virtual currency more familiar, natural, and probable.

5. “Buy More” Should only be One Click Away

Most games today monetize using virtual currency. Virtual currency has become the “gas” that keeps the game engine running.

However, it’s often hard to find the virtual currency balance during game play.

Here are two simple rules to follow:

1. Make virtual currency totals available and visible on every page of game play. Think of the virtual currency indicator as the speedometer on a car – ever present.
2. Next to your virtual currency option add a “+” or “add more” link/button to encourage and facilitate purchases.

Get bonus points by making the purchase experience in-app or mobile, so gamers don’t have to leave the gaming environment to make payments.

I’ve outlined five steps to improving your in-game monetization process, and the underlying theme to them all is this: simplicity is paramount when it comes to checking out. Gamers expect a frictionless experience, where it’s easy to find what they need and purchase what they want.

Do you have other ways to simplify the checkout process?  Let me know in the comments.

Mark Rose is head of product marketing for monetization platform PlaySpan/Visa.

[Top image credit: OtnaYdur/Shutterstock]

The idea is to create a form of virtual currency that can be securely and anonymously stored on phones, computers — even in the cloud. The competition is being judged by bigwigs like Google payments VP Osama Bedier but will eventually be decided by a public vote.

The project has drawn a lot of scorn from the Bitcoin community, which over the last two years has been hard at work trying to do essentially the same thing (create a secure, anonymous digital currency) but without any pesky governments or central banks attached. As one irate Bitcoin fan pointed out on Hacker News, “This is a big step backwards from the security of Bitcoin. All someone has to do is break open the hardware and extract its key (or take its key with a side-channel attack) and they can double-spend money.” The commenter also noted that because ever MintChip has a unique ID and every transaction gets logged by the sending and receiving devices, transaction records are all linked to each MintChip and aren’t as anonymous as they perhaps should be.

As big companies like Google and Paypal battle it out in the digital wallet market alongside the credit card companies, it’s interesting to see a government trying to get into the fray. If a secure, smartphone-based wallet could replace credit cards in Canada, consumers and merchants might end up saving a lot of money on fees. Or they might end up with a virtual bureaucrat between them and their hard-earned cash.

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Citing an unnamed source, the publication said the change will affect all developers of apps for Windows Phone, the Zune marketplace and Xbox Live. By the end of 2012, the transactions will be based on the region set on the purchasing account. Real money will be used to purchase all Windows Phone apps. That aligns the Windows Phone Marketplace with the practices used in the Apple App Store and the Google Android Market.

We asked Microsoft to confirm the story, but a spokesman declined to comment. Mobile app developers who have publisher agreements with Microsoft are being told to plan their future downloadable content and in-app purchases (where users buy things such as virtual goods in games) to match with the change. Customers who have existing Microsoft Points balances — 1600 points equals $20 — will receive the amount in their own local currency.

Microsoft Points are used to buy games and media on Xbox Live, the Zune Marketplace, the PC, and Windows Phone. Microsoft has gradually introduced cash purchases to Xbox Live, the most popular platform for Points. One of the criticisms is that the Points to dollar conversion ratio is confusing and it forces consumers to buy more Points than they really need for a transactions. The smallest amount of points a consumer can buy is 400, or $5 worth.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Baking Life currently attracts 730,000 monthly average users, and PopCap, which is owned by Electronic Arts, says that just isn’t enough. “The Baking Life player numbers have dropped in such a way that Baking Life is no longer performing well enough to justify continued support. As such, we are reallocating resources to games that we are developing for future release.” In its heyday, Baking Life was apparently pulling in 6.7 million monthly users, a figure that would make most Facebook developers blush.

Baking Life’s Facebook page has now lit up with players angry at the decision. One post says, “Electronic Arts has really destroyed a lot of wonderful Facebook games. They also bought Playfish and now if a game doesn’t get so many people that play every month, they just shut it down in the same manner they are doing with Baking Life.”

Understandably, the players who spent real cash on Baking Life are perhaps most upset at the decision. “You have a lot of nerve, I had the whole bakery completely enlarged and decorated. And I had several hundred thousand dollars. I spent alot of money on that game and don’t appreciate your handling of it,” reads one comment on Baking Life’s Facebook page.

The official Baking Life forum has also been swamped with angry users, with one saying, “Seriously, I’m really hacked off. … I have spent an obscene amount of money on this game, using Facebook credits etc only to be told it is no longer going to be available after the 31st January.”

The Baking Life virtual currency, called Zip Cash, is unique to the game and is available to buy in bundles ranging from 25 (costing $4.90) to 925 (costing $149.90). Virtual items can then be bought using this Zip Cash, with a ‘Triple Batch Oven’ costing the equivalent of $7.20.

Now that the game is closing, this Zip Cash is essentially worthless, and the Baking Life Facebook page says, “We encourage you to spend your remaining Zip Cash before January 31st. All virtual currency (Zip Cash) and virtual items will be lost after January 31st.” It points out that, “Any remaining Zip Cash (even if it was purchased and unused) is not transferable between or among different games or applications and is not redeemable for any sum of money or other monetary value.”

Rubbing further salt into the wound, there is now a link to a survey on the Baking Life Facebook page, asking for help in developing new games. One reply to this states, “How dare you ask any of us who were dedicated to playing Baking Life to vote in a survey to launch a new game to replace it.”

A lot of Baking Life players have had their fingers burned by the decision to shut the game down, and many are saying they will avoid any EA or PopCap published Facebook games in the future.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Sometrics, with 450 games and an audience of 225 million gamers in 200 countries, is a smart acquisition for Amex. Sometrics has moved more than 3.3 trillion units of virtual currency through its payments platform. The company has a virtual currency exchange with Facebook as well as partnerships with many of the world’s largest game publishers, including Playdom, PopCap, Habbo and IMVU.  Sometrics’ technology platform supports more than 80 different payment options.

“American Express is a 160 year old company that’s innovating quickly with a closed-loop system,” Sometrics CEO and founder Ian Swanson tells VentureBeat. “We’ve been in communication with Amex for a while  and, from the beginning, we were incredibly impressed with their leadership. It’s rare to find a large company that prides culture and innovation. We asked every one of our employees and investors if they would want to do this — be a part of Amex — and they said absolutely.”

It’s probably pretty fun for a company like Sometrics to get involved with Amex, which is playing catchup in the realm of mobile payments. Being somewhat of an underdog, Amex is going to be open to the Sometrics team’s input and ideas. Amex’s progress has fallen behind Goliaths like Visa (partnering with AT&T, Verizon and T-Mobile on a mobile wallet called Isis, which is due to launch next year), Microsoft and Google. There’s also competition from determined underdogs like Square, Paydiant, and Pago (shout-out to New Zealand-based startups!).

The currency is designed to remove the middle man in transactions. That can be a transaction provider like PayPal or a bank when someone makes a purchase with a credit or debit card. When someone makes a transaction, the Bitcoin is automatically transferred to the recipient through an encrypted transaction that ensures Bitcoins can’t be hacked or created artificially. New Bitcoins are added to the market through the “Bitcoin Mining” — a process where individuals run servers that handle Bitcoin transactions and get paid in Bitcoins for doing so.

The number of Bitcoins available to users is algorithmically limited — meaning the number of new Bitcoins introduced into the economy decreases over time and reaches a cap of somewhere around 21 million. That means that, similar to days on the stock market where there is low trading volume, smaller moves in the market are able to cause greater swings in the value of the Bitcoin. An 8 percent swing in the value of the Bitcoin throughout the day is pretty typical.

“All of that volatility comes on an average Bitcoin volume of something like 20,000 per day. If I put in an order for $15,000 worth of Bitcoin right now, I’m pretty sure I could move the market between 5 percent and 10 percent to the upside,” Internet economist Adam Cohen said in a later post on Hacker News. “It’s probably even worse to the downside. Call me a skeptic, but with that kind of easy price manipulation, I’m not quite ready to denominate my paycheck in Bitcoins yet.”

There’s been incredible inflation in the value of the Bitcoin, which reached a price of somewhere around $28 before experiencing a “black Friday.” The Bitcoin then lost around a third of its value but has since climbed back up to around $22 per Bitcoin. The 8 percent swing in the value of the Bitcoin is already nearly an order of magnitude more volatile than the typical stock market, which experiences daily shifts of around 1 percent on a more active day and less so on typical days. Foreign exchange markets also experience a smaller amount of volatility.

Cohen said the process of adding new Bitcoins to the market was a way to enrich early adopters and promote usage of the currency, but that puts new adopters and users of the currency at a disadvantage. There are ways to exchange real-world dollars for Bitcoins at the current market price. As the price of the Bitcoin goes up over time, it’s less likely people will want to use their Bitcoins in transactions because they will become too valuable and they will just want to use them as an investment to generate a return.

The whole Bitcoin ecosystem is also inevitably linked to computer systems. That means that any failure in any part of the Bitcoin creation and transaction process could create a crisis of faith in the currency and trigger a “run on the bank” of sorts, where Bitcoin owners try to convert their Bitcoins into real-world dollars before the value decreases any further, Cohen said. And there have been plenty of instances where even some of the best online services like Amazon’s cloud computing have failed for significant periods of time.

So serious that it’s formed a subsidiary, Facebook Payments, Inc., and is registering it in a host of states.

The move could signal an intent by the world’s largest social network to get more broadly involved in the payments business while also making its business operations more efficient. Right now, it appears unlikely that Facebook will roll out any kind of consumer-facing payments service analogous to eBay’s PayPal — but it could set the stage for such a move down the line.

The subsidiary was formed in Florida in December 2010. Facebook CFO David Ebersman, general counsel Ted Ullyot, and vice president of business development Dan Rose form the entity’s board. Facebook is hiring a controller for the business, which it describes as a “rapid growth, very dynamic subsidiary.”

Facebook is already in the payments business in a big way. While most consumers use the site for free, it processes hundreds of millions of dollars a year in payments from advertisers. It also has a modest but fast-growing business in Facebook Credits, a Facebook-only currency it sells to consumers to let them buy virtual goods in games like Zynga’s FarmVille and Crowdstar’s Happy Island. Facebook splits revenue from Facebook Credits with app developers, meaning it has to disburse funds as well as collect them.

Facebook confirmed as much in a statement. “As is common in many company structures, we have established a subsidiary called Facebook Payments Inc. that helps handle payments to developers related to our Facebook Credits program,” said Jonathan Thaw, a Facebook spokesman.

But the subsidiary could do much more for Facebook. When you handle that volume of transactions, credit-card processing fees add up fast. Facebook Payments could form direct ties to Visa and MasterCard’s payment networks, cutting out a merchant-bank middleman and saving on costs.

Also, state and federal regulators tend to take an interest in sizeable money flows. Facebook’s move to register Facebook Payments in multiple states suggests that its subsidiary will take on the prodigious task of complying with a host of local regulations. Early on, PayPal struggled with a similar regulatory burden — but doing so gave it an advantage over competitors that hadn’t done so. Facebook board member Peter Thiel, a cofounder and former CEO of PayPal, is certainly familiar with this history.

One other reason Facebook might need a Facebook Payments subsidiary: the possibility, long rumored in the industry, that Facebook could start its own ad network in competition with Google’s AdSense, which places ads on third-party websites and shares revenues with their publishers. Facebook already has planted a presence across hundreds of thousands of websites with its “Like” and “Share” buttons, comment functions, and other social plugins. It would be easy for Facebook to sign those publishers up for an advertising network powered by Facebook’s detailed demographic information. But then it would have to start cutting checks on a massive scale — something that would be eased by a dedicated payments-processing operation.

Facebook must also be preparing for a future in which mobile payments become big. Facebook mobile chief Erick Tseng said at last year’s MobileBeat 2010 conference that it wants its mobile platform to offer the same features as its Web platform. That presumably includes Credits and other payments functionality.

Finally, we’ve heard murmurs from inside Facebook’s developer community that the social network really wants to push e-commerce on its platform. While Facebook has abandoned past attempts at selling directly to consumers, including a virtual gifts business and a classifieds-ads offering, it makes sense that it would want to run the payments part of any commerce happening on its platform.

And there’s something powerful about the idea of transactions between people with verified, real identities; one has to think Facebook would have an advantage in controlling fraud over rivals like eBay and Amazon.com.

Facebook’s formation of a subsidiary doesn’t make any of these possibilities a guaranteed outcome, of course. But it certainly lays the groundwork for moves that could rattle PayPal, Amazon.com, and the banking industry.

The site already hosts a number of these kinds of deals in its discussion forums. But the latest move is a way to formalize those discussions into an actual marketplace. It will essentially become an eBay that specializes in gaming, said Roy Hui, the company’s founder. While eBay already sells some virtual goods, such as accounts for online role-playing games like World of Warcraft, it hasn’t been effective enough, he said.

“eBay is very generic, it won’t be very tailored to gaming specifically,” he said. “We want to create a specialized eBay that actually tastes like gaming.”

MMGN’s marketplace will give gamers a way to make money off of some of their extra exploits across video games, or trade the virtual goods for things they can use. World of Warcraft players, for example, typically pick up pieces of equipment like swords and armor that they cannot use or don’t need. They can jump onto MMGN’s online marketplace and post those items for sale.

Those virtual goods can range from equipment in online role-playing games to perks in Farmville, Hui said. The site has to tread some careful ground to make sure the site does not violate the terms of service for some online games. Most games consider the virtual goods within the game as personal property that cannot be traded or sold by gamers. World of Warcraft is well-known for cracking down on “gold farmers” who sell gold, the game’s virtual currency, for real-world dollars.

MMGN will charge $2 per transaction, Hui said. For smaller transactions and virtual goods, it probably doesn’t make sense to charge that much, so the site will figure out a more reasonable model. But for the time being, the marketplace will be free to use — at least for the first three to five months, Hui said.

“Initially looking at the more hardcore gamers, they really want the super-duper noble 21 platinum horse,” Hui said. “They’ve been trying two weeks to get it but there isn’t an efficient way to get that horse — we’ll give them a more efficient way of getting it.”

The Australian gaming site already attracts around 500,000 monthly unique users and can hit around 1 million users during peak times — such as before a holiday.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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According to virtual goods company PlaySpan, sales of Ultimate Game Card prepaid cards for online games were up 48 percent on Black Friday compared to a year ago. Sales were also up 69 percent from the week before Black Friday. PlaySpan has a good view of the business because it operates a platform used by a lot of big players in the industry who want to make money from online games.

PlaySpan sells the Ultimate Game Card prepaid online game cards, which can be used in more than 1,000 online games, in more than 50,000 retail locations. Users buy the cards and enter a code online. They can then get virtual currency to spend in their favorite online games. Since the Ultimate Game Card is used in so many games, its sales are a good proxy for the health of the online game market, said PlaySpan chief executive Karl Mehta.

The Santa Clara, Calif.-based company also operates a virtual goods platform that game publishers use to add virtual transactions to their games. PlaySpan also runs the PlaySpan Marketplace, a site where online gamers can shop for virtual goods in a wide variety of games.

The PlaySpan Marketplace saw a 56 percent sales increase on Black Friday compared to a year ago. For the entire four-day holiday period, sales were up 19 percent from a year ago on the marketplace. By comparison, the console video game market in the U.S. is down 8 percent year to date, according to market researcher NPD.

Virtual good sales are still fairly small in the grand scheme of the game business. The virtual goods business in the U.S. is expected to hit $1.6 billion in 2010, according to Inside Network. That’s substantially less than $20 billion expected for the console game business in the U.S. But the growth rates are worth noting.

Online games have long offered virtual currencies, usually earned by performing actions within a game. The currency can then be traded for in-game objects which help players progress within the game. But they have not traditionally been something one can purchase legally. As a result, booming bootleg economies have sprung up around these games, leading to illicit operations in China and other countries known as “gold farms,” which pay third-world workers to play games hours on end and then trade in-game objects for real money.

Zynga’s twist on this business model has been to embrace and profit from gold-farming behavior. Rather than force players to go on the black market to buy in-game objects, Zynga freely sells its game currencies, like FarmVille Cash and FrontierVille Horseshoes.

For some of its games, like Zynga Poker, the use of virtual currency might fall under state gambling guidelines. Online gambling is highly regulated in some states, illegal in others. But Zynga’s patent application stresses that one of its virtual-currency innovations is that the currency exchange is one-way: Players can send cash into the system, but they can’t take cash out, arguably avoiding the risk of regulation as gambling.

The patent filing, on which Zynga CEO Mark Pincus’s name is listed as one of the inventors, is arguably defensive, potentially orestalling intellectual-property claims against Zynga. But it could also give Zynga leverage in its negotiations with Facebook, the social network which connects most of Zynga’s players with each other.

Facebook has sought to push Facebook Credits as the medium of exchange for virtual currencies in games played on Facebook. It reportedly takes a 30 percent cut of Facebook Credits transactions, an additional cost which Zynga and other app makers have bristled at paying. Facebook and Zynga have signed a five-year agreement committing Zynga to the use of Facebook Credits. But the patent, if granted, could give Zynga leverage in ongoing negotiations on other commercial issues between the companies. (Zynga is believed to be one of the largest advertisers on Facebook.)

A patent on how virtual currencies operate would also secure Zynga’s position as the dominant player in social games. Zynga is already the largest developer of games on social networks like Facebook. But there is a good bit of competition from other social networking game companies like Playdom and Playfish. Disney recently acquired Playdom for about $760 million, while gaming giant Electronic Arts picked up Playfish for around $400 million.

San Francisco-based Zynga is one of the fastest-growing gaming companies in history, with more than 1,200 employees now across studios in 12 cities. The company recently took a seven-year lease on a new headquarters in San Francisco’s South of Market district. That office can accommodate as many as 2,000 people. It’s been on a bit of an expansion kick as well, opening up offices in Dallas and Seattle.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Facebook

Deborah Liu (pictured below, right), manager of product marketing for Facebok Credits, said in a talk at the Virtual Goods Summit in San Francisco that the deal with PlaySpan coincides with a big expansion of the use of Facebook Credits across Facebook’s social apps.

Facebook Credits is a virtual currency. Users can buy it with credit cards or other payment methods and then use the credits to purchase virtual goods in social games, such as fuel for tractors in Zynga’s FarmVille game on Facebook. Facebook keeps a 30 percent stake in every transaction. In return, it promises to deliver more liquidity and user participation in transactions for its app partners.

More than 75 developers are using Facebook Credits in 200 games on Facebook now, Liu said. Twenty-two of the top 25 games use Facebook Credits.

Now, beyond using credit cards, users will be able to choose from 20 new payment options via PlaySpan’s Ultimate Pay service, allowing for more international purchases. Since credit cards aren’t used in every country, PlaySpan offers more payment options that are used in certain regions. That expands the reach of Facebook games — and the ability to make money from them through credits purchases — to a wider audience.

The PlaySpan payment options will roll out in the coming months, supplementing current payment systems such as credit cards, mobile phone payment services, and PayPal. Through Ultimate Pay, some of the new options include prepaid cards such as PaySafeCard, Wallie-card in Europe, MyCard and Gash cards in Taiwan, and other regional payment services.

Liu said the goal is to make Facebook Credits into an international virtual currency. The analogy is Europe’s euro, the currency whose introduction resulted in the broadening of trade beyond country borders. Roughly 70 percent of Facebook’s users are outside the U.S.

Currently, many games require you to register, log in and then pay for your currency. If you had to do that every time you played a game, you would be less likely to spend money, since virtual currency purchases are often spur-of-the moment decisions, much like cash purchases.

PlaySpan’s payment and other monetization services are used in more than 1,000 games.

Jessica Rovello (pictured, left), president of casual game publisher Arkadium, said that her company is using Facebook Credits in five games on Facebook today. Rovello said that her company doubled its revenue from those games after introducing Facebook Credits in them. That more than makes up for the 30 percent fee that Facebook takes on the transactions.

Game maker Digital Chocolate, meanwhile, is using Facebook Credits in its Millionaire City game. Thomas Chung (pictured, middle), director of partnerships at Digital Chocolate, said his company also saw a several-times increase in conversion, or the percentage of players who convert from free game play to paying for something in the game.

Liu said that Facebook will now add four or five times as many developers to the Facebook Credits program than it was doing before.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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RockYou

The Redwood City, Calif.-based company has been integrating the Deal of the Day into its own games such as Zoo World since March. In the deal, users encounter a screen in the midst of a game where they have to decide whether to spend money or not. If they don’t want to buy virtual currency with a credit card to pay for a virtual item, they have another option — the deal. If they choose to accept the special offer (like the one pictured above from Pantene, the shampoo brand). If they take it, the user can proceed to the transaction, getting their virtual currency in exchange for a promise to do something, such as watching an ad.

Sandy Diep, vice president of advertising, said in an interview that the deals are particularly effective. Only a few percent of users will pay for a game item with a credit card. But some Diep said 10 percent of users click on Deal of the Day offers. And about 50 percent to 70 percent of those users accept it, a particularly high take rate.

RockYou says deals that offer to give users something if they watch a 15- to 30-second video work particularly well. The offers also ask users to engage in surveys or polls, or they ask them to play mini games. RockYou says it reaches millions of users already with the Deal of the Day. Overall, RockYou says developers can increase their ability to make money from users by three times to four times. On top of that, a number of big Fortune 1000 brands, like Coca-Cola and Hewlett-Packard, are participating in the deals, bringing high-end brands into social gaming.

RockYou, founded in 2005, reaches more than 280 million unique users a month and produces 15 billion monthly ad impressions. Backers include Sequoia Capital, Partech International, Lightspeed Venture Partners, DCM, SK Telecom Ventures and Softbank.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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TechCrunch had previously reported that Google was buying the maker of the Social Gold currency platform for $55 million, with another $15 million to $20 million in earnouts, or conditional payments to the company’s founders and employees.

The move will shore up Google’s capabilities in monetizing social games and social apps. In turn, that will ready Google for its upcoming war with Facebook. Google is widely believed to be working on its own social network, for launch this fall, in direct competition with Facebook.

To ready for that, Google is investing an estimated $150 million in Zynga and it also acquired social app maker Slide for $228 million.

Here’s the text of the letter from Jambool’s founders, Vikas Gupta and Reza Hussein:

We are excited to announce that Jambool is becoming a part of the Google family today.

Jambool started as a social collaboration platform in 2006. In 2007, we shifted our focus to build applications on social networks. Along with success, we found fun and lucrative ways to monetize our apps – specifically virtual currency and goods. That led us to create a platform to help developers create, host, manage and monetize their virtual economies.

Social Gold has grown by leaps and bounds since it went live in 2008. In the first half of 2010, we’ve processed more than double the entire payment volume we processed in all of 2009. And we’ve welcomed hundreds of developers to our platform. The fact that our highest revenue day was in the last week attests to the continued growth of online gaming.

Our vision is to build world-class products that help developers manage and monetize their virtual economies across the globe. When the opportunity arose to join forces with Google to execute against this vision, we couldn’t pass it up. We are thrilled to bring the Social Gold platform to Google’s global users. And we invite you – our customers, partners, and friends – to continue on the journey with us.

Over the last few years, we have had the great fortune of working with an incredible team. Every day, we are amazed and humbled by what they have accomplished. We have had terrific support from our partners, investors and advisors; and we are
lucky to have worked with each of them. Thank you!

As a team, we remain passionate about innovating on behalf of our customers. We aim to deliver the most frictionless, seamless transaction experience inside applications and games on every platform. We are thrilled to be part of Google, and we look forward to the exciting road ahead.

The game has only just begun.

Vikas & Reza

“We are really experts are the impulse buy and in giving that frictionless user experience,” said Hill Ferguson, the company’s head of marketing. “We let people playing games have minimal disruption when they’re paying for goods.”

He added that the company expects revenue to grow fourfold this year and said the company is facilitating total payments volume of in the “hundreds of millions.” Zong takes a small 5 to 10 percent cut of every transaction it processes.

About one-third of Zong’s activity is in the U.S., another third is in Western Europe, and the rest is in other parts of the world. The new round of funding will go toward breaking into other smaller Asian markets. Ferguson said the company has kept its powder dry in the bigger Asian markets where virtual goods and mobile payments are quite mature.

Dana Stalder, a general partner at Matrix and a former PayPal executive who built up the company’s mobile offerings and developer platform, joins Zong’s board of directors. “