Tuesday, March 30, 2010

Scamville: The Social Gaming Ecosystem of Hell

October 31, 2009: summarized from TechCrunch -- Last weekend I wrote about how the big social gaming companies are making hundreds of millions of dollars in revenue on Facebook and MySpace through games like Farmville and Mobsters. Major media can’t stop applauding the companies long enough to understand what’s really going on with these games. The real story isn’t the business success of these startups. It’s the completely unethical way that they are going about achieving that success.

In short, these games try to get people to pay cash for in game currency so they can level up faster and have a better overall experience. Which is fine. But for users who won’t pay cash, a wide variety of “offers” are available where they can get in-game currency in exchange for lead gen-type offers. Most of these offers are bad for consumers because it confusingly gets them to pay far more for in-game currency than if they just paid cash (there are notable exceptions, but the scammy stuff tends to crowd out the legitimate offers). And it’s also bad for legitimate advertisers.

The reason why I call this an ecosystem is that it’s a self-reinforcing downward cycle. Users are tricked into these lead gen scams. The games get paid, and they plow that money back into Facebook and MySpace in advertising, getting more users. Who are then monetized via lead gen scams. That money is then plowed back into Facebook and MySpace in advertising to get more users…

Here’s the really insidious part: game developers who monetize the best (and that’s Zynga) make the most money and can spend the most on advertising. Those that won’t touch this stuff (Slide and others) fall further and further behind. Other game developers have to either get in on the monetization or fall behind as well. Companies like Playdom and Playfish seem to be struggling with their conscience and are constantly shifting their policies on lead gen.

The games that scam the most, win.

And some users aren’t dumb, either. For every user who gets tricked into some fake mobile subscription, there’s another who can beat the system. That’s where the legitimate advertisers, like Netflix and Blockbuster, get hit. Users sign up for a free trial with a credit card, get their game currency, then cancel the membership and start over. Netflix has a policy of only paying for a user once. But game developers use a complex set of partner chains to launder these leads and try to get them through for payment. Netflix sees an overall lowering of quality and pays less for leads. Game developers, desperate to monetize, then search for ever more questionable offers to make up the difference. In the end, the decent advertisers are out, and only the worst of the worst remain.

Read more at: http://tcrn.ch/cGgwIi

5 comments:

  1. Your articles are extremely fit and approved and incomparable.
    https://casinoonlinevenezuela.co.ve/

    ReplyDelete
  2. Excellent Blog! I have been impressed by your thoughts and the way you
    casino-online-chile.cl

    ReplyDelete
  3. Whether somebody pursuit of his vital thing, hence he or she desires to be accessible that at length, hence that thing is maintained over here.
    can dogs have avocado

    ReplyDelete
  4. En nuestros más de 10 años de experiencia en este sector hemos ido ajustando nuestros servicios a las exigencias de nuestros clientes, para así hacer de nuestra empresa una de las mejores empresas de cerrajería, mantenimiento y reformas de todo Madrid en relación a calidad, precio y rapidez de nuestros servicios ofrecidos. Damos cobertura a todo Madrid y alrededores (Getafe, Leganés, Arganda, Fuenlabrada, Alcobendas, Pinto, Moraleja, Etc…) tanto en nuestros servicios comunes, como en servicios de urgencias las 24 horas del día (incluido festivos). No dude consultarnos cualquier duda o pedirnos presupuesto sobre el servicio requerido. Le atenderemos rápidamente y sin ningún tipo de compromiso. Contacte con nosotros a través de nuestro teléfono: 608-163-499 Cerrajeros Madrid

    ReplyDelete