Michael, from Social Gold, talks about using virtual currency to monetize your online and mobile games
You can download the podcast here…
Or listen to it here…
Interviewer: I’m here at Casual Connect, and with me today is a special guest. How about you introduce yourself?
Michael: I’m Michael Haswell. I’m VP of Business and Legal Affairs at Social Gold.
Interviewer: And what’s Social Gold about?
Michael: Social Gold is a payments and virtual economy platform. We actually provide a full stack to game developers who want to monetize their virtual currency. So, through a very simple API they can create their own white-labeled currency. We manage the credits, the debits, the account balances. We help them merchandise their virtual goods effectively. Of course, on the front end we let them accept payments from end users.
Interviewer: And what’s the benefit of going with you guys versus just setting up your own credit card system, accepting payments directly from the player?
Michael: So, probably the biggest is, like I said, we offer full stacks. We can provide an end to end solution, including payments. There are a lot of intricacies of managing virtual currency transactions specifically one that PayPal and Amazon still haven’t solved for, is the fact that you don’t have three days between actually processing the payment and shipping the book or the CD or what have you.
So, fraud and stuff like that are very important to manage effectively. And it’s difficult to do if you just get your own merchant account and start processing credit cards. You have to have a team. You have to have algorithms. It can get pretty complex pretty quickly.
Interviewer: And how are you guys different than some of these other companies that do offer processing, too, like OfferPal, SuperRewards, TrialPay? Is that even something similar to what you guys are doing?
Michael: It is similar, and, in fact, I actually wouldn’t consider any of those folks competitors. We’re actually partners. All of those people are great at aggregating advertising offers and optimizing your revenue as a publisher. That’s their core competence. They realize that direct payments is not their core confidence, and so they come to us.
Social Gold was founded by a couple of former Amazon.com engineers who built Amazon Payments. So, we’re a direct payments company. We process all of SuperRewards credit cards. We process most of OfferPal’s. So, it’s sort of an incestuous coop-etition environment.
Interviewer: Do you guys do anything with mobile or mostly focused on social networks and web?
Michael: We haven’t looked too much at mobile simply because on iPhone…all transactions must be processed through iTunes. But with Android starting to make some serious waves and building out their publisher network, that is a platform that we’re developing today.
We’re not just on social networks. We actually have an HTML solution that works anywhere in browsers, so a lot of browser-based MMOs. We’re the only people that do in flash payments. So, if you’re a flash game developer, you ought to be talking to us. Android and the other one, we’re toying with. Actually, we’d be interested in what your community thinks is Unity 3D as a platform.
Interviewer: Let’s talk about flash. So, you talked about in-app flash payments. I thought that’s something that’s being implemented by a lot of companies. Can you talk about exactly what that is, and how people can use your platform to accept payments directly in flash?
Michael: Sure. Most of what is out there is what I would call fake flash. So, you’ve got the swf game itself, and then that will spawn a HTML overlayered iFrame that’s been skinned and the look and feel of the game. So, it appears that you’re actually in flash, but it’s an HTML experience.
Once the transaction is completed, it actually requires a server to server a message saying, yes, give this person their virtual currency or their virtual sword. And then, in order for that to be reflected in the flash game, you actually have to reload the flash game.
Our solution is completely in swf. We actually give the developer a flash library that they compile in their swf run time. It’s a very light library. I think it’s like 40K or something, but I’m not a technical guy. And we actually conduct the transaction in the flash game itself, completely secure.
The only people who have access to the data are the user entering it and us receiving it for payment. So, neither the publisher themselves nor a third party library can sniff the key strokes. Flash games are inherently insecure, and our super smart engineers figured out a way to make it secure.
Interviewer: Great. What about this concept of Facebook credits and stuff like that? Is that a competitor or is that something where you think developers should focus on something like that…where does Social Gold come in there?
Michael: So far, it’s been the rising tide lifting all boats. I think part of the value proposition of Facebook Credits is a trusted brand. I think we have seen more users transacting in the games. Of course, the downside is you’re paying 30 percent to Facebook.
So, many of the publishers that we work with… They haven’t seen the ROI that they should see with the payments solution. So, they’ve actually augmented Facebook Credits with us. The other limitations of Facebook Credits is they process credit cards, PayPal and mobile, and they integrate some of the offer providers.
But, if your game monetizes super well in southeast Asia, how are you going to get those users to pay using Facebook Credits? You need the prepaid cards that are popular there. You need the direct bank transfers that you can get through a company called IPS in China. You really want to rely on people like Social Gold who are doing all the blocking and tackling at a local level.
Interviewer: Yeah. Can you talk about gift cards? Is that something where Social Gold has some kind of gift card out there, you know, people can accept?
Michael: So, we don’t have our own branded card at retail. We’ve decided to partner on that front, at least for now. We’ve got a relationship with 7-11 whereby you can purchase a generic 7-11 card and redeem it in Social Gold.
And then regionally, we’ve done deals with UCash and PaySafe card and Cherry Credits and Gash, all the sort of local convenience store prepaid vouchers and cards.
Interviewer: Where do you see everything going? Do you feel that the social game thing is just a fad? Do you think it’s going to be something long-term to stay or what?
Michael: It’s definitely not a fad. I see it as the proof of concept for micro transactions and loyalty online. I can tell you from first hand experience, traditional media, you know, the newspapers, the magazines, the movie studios, video sites, they are all looking at the gaming industry and watching how the business models are evolving. So, I only see the games segment growing and the market growing by orders of magnitude.
Interviewer: And where can people get started if they want to use your service?
Michael: So, they can go to SocialGold.net, N-E-T. Don’t go to dot com. That’s owned by a Norwegian artist who wants far too much money for the domain, so SocialGold.net.
Interviewer: Thank you very much.