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Electronic Arts Selects Live Gamer For Online Microtransactions

Wagner James Au — Mon, 26 Jul 2010 13:05:42 +0000

Today game publishing giant Electronic Arts is announcing that they’ve selected microtransaction/virtual economy service provider Live Gamer to help monetize its online gaming products. This is major news for the game industry, as America’s largest game publisher continues moving away from the old school retail model and towards social network-driven, free-to-play gaming, with revenue driven more by virtual item sales than sales of cardboard boxes on shelves. Last year, EA made a huge move into social gaming with the purchase of Playfish; this partnership with Live Gamer strongly hints that the company will put more of its existing “core gamer” franchises online, with Live Gamer handling sales.

After all, EA has already been experimenting with a free-to-play, microtransaction model for its core games, most notably Battlefield: Heroes, a multiplayer shooter in the comic vein of Team Fortress 2 (and in my opinion, a damn fun game), which launched last year to impressive results. While today’s announcement doesn’t name any of the EA franchises that’ll use Live Gamer, it’s likely we’ll see versions of their most popular titles get the free-to-play treatment soon. (If EA doesn’t launch a free, Facebook-embedded version of The Sims soon, they’re crazy.) And where Electronic Arts goes, expect the rest of the industry to follow.

For Live Gamer, this news is the third major partnership announcement just this month, following right after RealNetworks’ casual game network GameHouse and major publisher THQ, making the New York-based company a plausible contender for the title King of Virtual Currency Monetization. For company President and Co-Founder Andrew Schneider, who I spoke with recently, the industry’s move to free-to-play games is an inevitable one for Western game developers, who are only imitating a model that’s worked extremely well in Asia for years. In the US, the ARPPU for consumers spending on Live Gamer, he told me, is an impressive $24, but an amazing $60 in Japan; at the same time, 50% of core gamers are already spending on microtransactions. With this EA deal, expect that percentage and that ARPPU rate to go up soon.

Twofish Looks To Revolutionize the Virtual Economy

Nick O'Neill — Tue, 10 Mar 2009 13:01:59 +0000

Today Twofish announced its first partnerships with a number of large social gaming companies including Pocketville, Pangaea, and Ignite Skill Gaming. More important than the partnerships is the immense value that Twofish provides to applications that are integrated into the virtual economy. Through leveraging double-entry accounting standards, Twofish tracks every single transaction that takes place within an economy.

That’s not all though. Twofish also gives developers insight to buyers’ post purchase behavior. For example, say a user in a virtual game like Pet Society (the largest application on the Facebook platform in terms of daily active users) purchases an item for their house but keeps it in their inventory rather than using it. The Twofish data platform will be able to notify the developers of the user’s behavior with each product they purchase.

I spoke with Lisa Rutherford, President of Twofish, last week to discuss their newly launched platform and I was truly impressed. While social networks continue to seek a break through monetization model, Twofish is actively developing a platform which provides deep insight, eventually empowering developers to create virtual goods and services that are most relevant to each user.

I’m currently long on the digital goods space, and believe that we are still extremely early in developing a more robust digital economy. Companies like Twofish are necessary to help developers build more efficient systems and truly understand what’s driving their application’s economy. The platform reports on metrics such as scarcity, velocity, and stagnancy.

Is your application’s digital economy about to enter a recession? Twofish can warn you ahead of time so that you can take precautionary measures to avoid things like virtual currency inflation. I am extremely impressed with Twofish and think they have an extremely bright future ahead of them. If you want to learn more about monetizing and tracking digital economies check out the Twofish website.

I’ve also included a video from Sean Ryan, a co-founder and Chairman of Twofish, and the CEO of MEEZ, describing more about the Twofish platform.