hi5 Games Make More for Network’s Virtual Cash

Posted by Kristen Nicole on February 5th, 2009 9:03 AM

hi5 has just added Games to its social network. It’s yet another way to waste time on hi5, and even interact with friends as many of the games are socially-integrated. With this global launch, I actually think it’s important that hi5 focused on creating the games in a socially-integrated environment, because it extends the social capabilities of hi5 as a network and communications platform.

It’s also interesting that hi5 has decided to launch Games as a native application within its network, avoiding the open platform approach where the majority of games would be made to available to hi5 users through third party developers. If you look at a platform like Facebook’s, there are several games available to users but they’re the result of third party developers that have taken advantage of Facebook’s open platform for both access and distribution. Some of these games are more social than others, and application games overall aren’t unified, even for some separate games that come from the same developer.

There’s a reason hi5 is taking such a controlled approach to its new Games section, and that’s because hi5 sees the monetary benefit of being the central determining factor in extending games to end users. These games will be heavily tied in with hi5’s recently launched virtual currency, which is being applied to a number of different sections of hi5’s network including virtual gifting. When it comes to Games, hi5 users will eventually be able to use hi5 Coins for “premium content, advanced gaming features and status upgrades.”

But even though hi5 isn’t taking an open platform approach, there’s still a dedication to third parties–namely brands. Games can be used as engaging types of advertisements, and in a similar way to third party apps on other platforms these games can be targeted to certain demographic groups within the hi5 network.

So is this approach better than an open platform? It could stand to make more upfront revenue for hi5, as it positions itself as the monetary gatekeeper for direct transitions occurring around its new virtual currency. It also means that hi5 has more control over the type of content being extended to end users, and this includes the advertisements that appear in various applications and games as well as that advertising revenue.

Time will tell which approach is better in the long run, especially when you think about the incentives behind stimulating participants for an open or closed platform approach. And there is always the option of incorporating aspects of both methods, considering hi5 is among the many Open Social supporters. The question still remains whether or not Facebook will eventually take a dual-ended approach as well.