I dropped by Hi5’s office last week before the madness that is called the Game Developer’s Conference to meet with Alex St. John and get a sneak peak of their new monetization platform, SocioPay, and new features to their distribution channel, SocioPath.
Though I still think the names and logos are gimmicky (sorry, call me a brand purist), the new features are legitimate.
Hi5 claims that SocioPay can increase the revenues of social game developers by 200 – 300%, numbers that will be put to the test when SocioPay launches in beta with five games, including Bush Whacker and Chronicles of Herenvale. If it works as designed, SocioPay could be a huge revenue generator for social game companies.
SocioPay introduces the concept that Alex St. John calls Ad/Commerce Hybridization.
Right now, the way most social game payment offers work is that it’s one price or offer fits all. You play the social game and at some point you get an offer to buy a widget (as my economics professor would say). However, no matter what the game company does, the majority of gamers will not buy the widget, now or ever.
SocioPay analyses gamer data on the Hi5 network, tries to determine if a social gamer will buy an item, and if not, serves a video ad so that even if the user is not buying the item, you may as well monetize them with ads.
SocioPay also analyzes pricing data across different countries, so that someone in Romania may get a different priced offer than someone in the US, which should encourage more sales.
Game companies can add SocioPay to their games to be played on Hi5 and other networks, such as Facebook, where all the gamers are now. Hi5 will not take a cut of the transaction sale, making all its money on the shared advertising.
Surprisingly, we haven’t seen this level of intelligence with social game monetization yet (Trialpay is going in this direction with Dealspot). It’s an obvious idea and that I for one am interested in watching to see how it works.
The other big announcement Hi5 is making is allowing users to play social games on Hi5 without logging in. Users have to log in to save progress, add friends, etc, but anyone can immediately start to play social games anonymously on Hi5. This presents Hi5 with an opportunity to make it as easy to play social games on Hi5 as it is now on Facebook, since everyone and their mother is already a Facebook member.
It also presents challenges. It’ll surely be a pain to ensure games are COPRA compliant and safe for children under the age of 13 and ban troublemakers.
With these moves, Hi5 is continuing to aggressively move the company to solely be a social gaming network. Facebook may have the numbers (700 million versus just 40 million users on Hi5), but Hi5 definitely is committed to social games.
Over the past year, Hi5 has released new features to try to be the social game developer’s best friend. Nothing has been a hit yet, but SocioPay and anonymous game sessions could raise the needle for Hi5.
Hi5’s success hinges on whether they can execute quicker than Facebook can copy them. The ideas behind SocioPay and SocioPath are obvious and Facebook has all the data and technology in the world to make it happen. The question is, will they? Hi5 is betting that by the time they do, it will not matter.
In other news, check out Alex St. John’s excellent editorial in TechCrunch on why the days of glory may be over for social games. I don’t agree with his thesis entirely, but I can not deny the logic behind his ideas.
Also if you are at GDC, Hi5 will be parking food trucks with free food in front of SFMOMA (across from where GDC is held) on Monday, 11 AM – 11 PM and Tuesday, 9 AM – 11 AM. I hear there will be free Belgium waffles.