There is real money to be made in virtual goods and micro-transactions provided that game developers deliver high-quality products to users.
There are many differences between the console games we all know and see commercials for, and online Flash games we all play for a bit when we're bored.According to Mochi Media co-founder Jameson Hsu, the big difference between Flash and console games is quality--of graphics, service, and general game-play.
But as Flash games become more sophisticated and interactive, and business models emerge that take advantage of the low development costs of the platform, the line of delineation between the two mediums is beginning to close.
ComScore released a study a few weeks back that showed the U.S. audience for online games grew 22 percent since last year to 87 million visitors this past May. By comparison, console game sales plummeted 31 percent in June from the previous year.
Mochi Media is launching Mochi Coins on Tuesday, a micro-transaction platform that allows developers and game portals to make real money off quality Flash games. Mochi Coins lets gamers sign in through their Facebook accounts and buy game upgrades (weapons, level unlocks, etc.) directly through the game by PayPal, credit card, or marketing offer.
In the past, Flash game developers relied on advertising or licensing as primary revenue streams--both, however, require an immensely popular game to make big-time money. Micro-transactions can change the landscape of the entire Flash games industry by rewarding innovation and creativity--the better product developers turn out, the more gamers will be willing to spend on in-game offerings.
While the idea of selling upgrades directly to gamers is not necessarily a new one, there have been substantial barriers to developer adoption in the past, such as the ability to retroactively make updates to games after their release.
According to Hsu, "Mochi Coins facilitates the Flash games industry's shift to micro-transactions by enabling developers to test and optimize price-points and game upgrades through analytics and updating features." In layman's terms this means that game developers can experiment with monetizable functions and see what works best.
In a short beta test of Mochi Coins from mid-June to mid-July, Ninja Kiwi, the developer of the popular "Bloons" series, generated an effective RPM, or revenue per one thousand game plays net to developer, of $7 on its game "SAS: Zombie Assault 2." Micro-transaction revenue from this one game was rivaling total advertising revenue from the rest of Ninja Kiwi's game catalog.
Micro-transactions open up a new world of options for Flash game developers and could play a part in ushering in a new era of better, more creative, interactive, and successful Flash games. As these games mature and more people become comfortable and aware of this alternative medium, they will continue to encroach on console games and develop into a serious competitor.
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