Why Sulake Loses Money

Since Sulake, publishers of HABBO and developers of IRC Galleria announced its modest profit of approx 1 million euro http://www.arcticstartup.com/2009/10/05/sulake-enjoys-a-slight-profit-for-2008/ followed by its dramatic layoffs of 20% of its workforce http://www.arcticstartup.com/2009/10/06/sulake-to-lay-off-20-of-helsinki-employees/, many pundits have speculated where all the cash and VC funds are going http://ramine.net/2009/03/31/sulake-has-a-problem/
So what the hell is up with this seemingly booming virtual world success story?

Well, to cut to the chase, Sulake, with HABBO alone or its brand extensions (mobile, merchandise, TV, animation etc...) and new products (IRC Galleria) has never made money in its history. This is old news to PG http://paymentguy.blogspot.com/2008/07/100-million-habbos-still-losing-money.html So it should come as no surprise to my Dear Readers Sulake has always, ALWAYS lost money.


Here is why:

1. Fat Operations - HABBO launches most of its hotels in foreign countries the old fashioned way meaning it actually rents offices and hires expensive teams of people to run the local "Hotel". This results in large and excessive operational costs which could be avoided through regional or HQ operational consolidation;

2. Expensive Marketing - Sulake normally partners with a local media concern in international markets (e.g.; Sulake and TTG Group JV in The Netherlands http://www.sulake.com/contact/local_offices and failed partnerships in Russia, Japan and South Korea for example). This means the "local partner" takes about 50% of the revenue generated from the local Habbo Hotel. Some of these deals were so lopsided they actually share revenue (not profits / EBITA based) without deducting expenses so the local partner turns a profit while Sulake Group eats a loss;

3. Failed Advertising - Sulake has for many many years believed in the money making power of online advertising but through inept Advertising deals http://www.allbusiness.com/marketing-advertising/4151158-1.html and "partnerships", despite innovative campaigns (there are many http://www.ebrc.fi/kuvat/hynynen.pdf) has not realized the advertising power of such a large community of Teens, Tweens and young kiddies world wide;

4. Freemium HABBO is a Loser - Despite what its long-term CEO says, HABBO's freemium model bites and loses money year after year http://www.arcticstartup.com/2009/03/30/sulake-corporation-reports-e-48m-profit/ Sulake has never been able to boost its member buying % through a compelling subscription based membership / premium membership plan ala Club Penguin etc... They even know this http://www.pafis.shh.fi/~henjan06/v17.pdf The % of HABBOs that actually spend money in HABBO Hotel is less than 3% globally according to inside sources. It needs a subscription model asap http://paymentguy.blogspot.com/2008/09/sulake-must-offer-monthly-subscriptions.html;

5. Payment Commissions - Sulake with HABBO and IRC suffers crushing payment commissions. Sulake has to eat huge losses from its over reliance on micro-billing / telco (i.e. premium SMS) billing fees. Despite generating 75 million+ micro payment transactions, its average profit margin is less than 60% Sulake's inability to move to card, prepaid and other is FATAL (think interactive toys ala Webkinz) http://paymentguy.blogspot.com/2008/09/virtual-world-payment-trends-2008.html


6. Mediocre Management - Sulake has an insular "veteran team" of homogeneous managers (read "all Finns") running the business which has grown and expanded http://www.sulake.com/company/management?navi=1.3. But after a decade of losing money and delayed IPO's http://paymentguy.blogspot.com/2007/04/sulake-eyes-ipo-in-2008.html they need new blood. HABBO was and still is a Golden Goose. But it needs new leadership and better faster execution of an adaptive strategy if it will ever realize its potential. Why fire all these employees without a management change?

Virtual Worlds News Sucks - Since Joey Seiler Left

Once great, VWN now does suck terribly since off-to-law school Chief Seiler anointed Replacement Feldman http://www.virtualworldsnews.com/

Free vs Fee - The Debate Continues

The saying "there ain't no such thing as a free lunch" was popularised by science fiction writer Robert A Heinlein. But the science fact is that most of the online services and content we use today are a free ride. It is a growing trend. Despite pulling in 5% less traffic than transaction-based websites three years ago, free content sites are now 73% more popular, according to data from Hitwise. http://www.guardian.co.uk/tech-media-invest-100/free-or-fee

Introducing the HABBO Euro Ad Sales Guy

How many Ad sales guys has Sulake hired and fired for Habbo? Countless it seems ... here is another one. Good luck Mate! "Hussain Chowdhury is currently European Sales Director for Habbo UK, France, Holland and Germany. Habbo is a virtual world / social networking site aimed at teenagers. Hussain's media career spans across online, magazines, outdoor as well as cross media. Hussain began his media career at CBS Outdoor's (then known as TDI) Special Projects Division; CBS Impact where he worked on various outdoor innovations and ambient media projects. Hussain then moved to the award winning Bauer Creative Solutions Team (formerly Emap) where he held several posts across FHM, Arena, The Face magazines and different disciplines across a variety of integrated cross media campaigns spanning across magazines and online as well as utilising other areas of the portfolio that included events, radio and TV. Hussain worked with clients as diverse as Audi, Adidas, Electronic Arts, Scottish & Newcastle, Blackberry, Nintendo, Apple and many more.

Hussain¹s most recent role is at Sulake, Finnish virtual world/social networking experts and creators of Habbo. Sulake are specialists in building successful online communities in the youth space. Habbo features clients as diverse as Coty, 20th Century Fox, Sega, COI, Warner Bros and the NSPCC. Hussain heads up Habbo's advertising teams across Europe. http://www.guardian.co.uk/megas/judge-hussain-chowdhury

WonderRotunda Is Pretty Cool

PG likes WonderRotunda https://www.wonderrotunda.com/. Very cool and educational. Aaccording to Founder Garfinkel interviewed in The Washington Post; "he didn't do a lot of market research as he was developing Wonder Rotunda; he mostly came to this space as a concerned father. "My daughter was spending time on Webkinz and Club Penguin," he said. "They weren't as constructive as I thought they could be." http://www.washingtonpost.com/wp-dyn/content/story/2009/09/26/ST2009092600907.html
PG loves the Park Pass payment concept - https://www.wonderrotunda.com/checkout.php billing by Cybersource's Authorize.Net http://www.authorize.net/

WebKinz Trading Cards ...

... should also come with secret codes so they serve as payment methods ;)

Club Penguin Membership Cards Are Great But ...

CP has been a huge success. But it's payment network could also use some work. It is conspicuously absent of proven offline payment methods e.g. prepaid cards like Wallie, UGC, etc.... Check the CP Payment Method Mix https://secure.clubpenguin.com/membership/faq.htm#method-accept With its owner's huge retail distribution network (for those of you ignoramouses out there CP is owned by Disney and is part of the very successful and pioneering Disney Interactive Group) they do cover the US nicely with its own branded prepaid cards or "Membership Cards" https://secure.clubpenguin.com/membership/membership_cards.htm And they do offer them in the UK at Sainsbury's. But why not extend their payment network reach by adding other prepaid methods? Bet they would sell a lot of memberships through Wallie Card in The Netherlands or Ukash in UK for example. And why are they not selling their gift certificates in Euros and other currencies and only making them available in USD? Strange ... So comment here if you want CP to add more prepaid cards http://support.clubpenguin.com/help/contact/billing.php

Second Life Hires New VP to Help SL Residents Get A Real Life

Second Life, today announced the appointment of a Vice President of Web Development. New in the role is Robin Ducot, previously at Adobe Systems where she held a post with the same title. The hire falls syncs squarely with Linden's expressed goal of "extending the value of Second Life beyond the virtual world and helping Residents more closely integrate Second Life with their daily lives." To that end, the company points to the recent acquisition of Xstreet SL which added an ecommerce component to the virtual world and the launch of AvaLine, a service that lets SL residents receive cell, landline or VoIP calls inworld from people outside Second Life. http://www.virtualworldsnews.com/2009/08/second-life-accelerates-mainstreaming-with-hire.html#more

BOKU Gets "Bigger" By Expanding to Teeny Finland and Tiny Taiwan

Via VWN "Mobile Pay Provider Boku Expands Reach" http://www.virtualworldsnews.com/2009/09/mobile-pay-provider-boku-announces-partners-expansion.html
Boku-logo Monetizing the virtual world experience is one of the significant legs a virtual world and avatar-centric business model stands on. Among the fastest developing trends is the leveraging of mobile numbers and the billing relationship users have with their service provider as a means to facilitate inworld purchases, among other transactions. Mobile payment start-up Boku today announced a number of partnerships in the sector, including deals with Hi5, Meez, Offerpal and WeeWorld, and expansion into a number of far-reaching markets, including Finland and Taiwan. VirtualGoodsNews.com has the full story.

In a Sale, Skype Wins a Chance to Prosper - But Only If It Beefs Up It's Payment Network

Skype must immediately focus on beefing up its international payments infrastructure to start cashing in on its user base. What if every major prepaid card could offer skype credits for example? Anyway, here is a good look at Skype's future options since its sale by BRAD STONE; "SAN FRANCISCO — With its sale to private investors, the online calling service Skype has thrown off the last of the shackles that limited its growth and potential as a unit of eBay. Now its challenge is to turn its global popularity into bigger profits. EBay announced on Tuesday that it was selling Skype to a group led by Silver Lake Partners, a private equity firm in Silicon Valley. As part of the deal, which values Skype at $2.75 billion, the buyers agreed to pay $1.9 billion in cash, which includes a loan from eBay of $125 million, for 65 percent of the company. EBay, which is based in San Jose, Calif., will retain a 35 percent stake. http://www.nytimes.com/2009/09/02/technology/companies/02ebay.html?_r=1&hpw

SmartyCard Sets New Price Points

SmartyCard is adding subscription-based rates to its pricing options, the company said today. The idea behind the move is to help parents take the guess work out of topping off a child's SmartyCard account (and for parents who might forget to fund a child's account). SmartyCard responded to its summertime surveys and has made a basic subscription available at $6.95 per month for 5,000 points. A three-month subscription plan provides 5,000 points per month and the six-month subscription plan provides 6,000 points per month. Virtual worlds that use SmartyCard include Zwinky Cuties, Bella Sara, Club Penguin, and Stardoll.

PCI Compliance ...

Reports that companies involved in some of the latest data breaches were PCI-compliant continues to spark discussion of whether PCI is a solid measuring stick for overall security. Industry observers say yes, but businesses need to change their check-list approach. http://www.eweek.com/prestitial.php?type=rest&url=http%3A%2F%2Fwww.eweek.com%2Fc%2Fa%2FSecurity%2FPCI-Compliance-Only-the-Start-of-Security-365170%2F&ref=.

Linden Lab Family Tree

Stumbled upon this ... quite illustrative of Linden Lab's recent Management restructuring.
http://farm4.static.flickr.com/3618/3421940266_3c75901860.jpg?v=0

PayPal Opens Door to Developers

PayPal on Thursday opened its online payments system to third-party developers so they can embed a variety of PayPal payment mechanisms into Internet-based services.
The widely used payment provider, a division of eBay, formally announced the Adaptive Payments System at its Platform Preview Event in San Jose, California, after confirming some details about it earlier this month. PayPal began making APIs (application programming interfaces) available to developers and will add "dozens more" later this year, said Osama Bedier, vice president of platform and emerging technology. "PayPal will be the first and only global payment service open to third-party developers," PayPal President Scott Thompson said at the launch event, which was webcast. The company intends to help developers implement payment tools that go beyond traditional e-commerce purchases to support a wider variety of services.

"Innovators like you need (to) and should get paid for your great concepts," Thompson said. Without an easy way to sell online services around the world, only a few innovators will bother, he said. Adaptive Payments includes a variety of tools for creating new payment tools. For example, it allows one payee to take its cut of a customer's payment and then split the rest among partner companies. Developers can also separate transaction approval from payment so the payment can take place offline or in some other setting with another approval, Bedier said. Adaptive Payments could also support payments over set-top boxes or mobile gaming platforms.

The company waited this long to introduce the developer program because it needed to make sure PayPal's security was strong enough, Bedier said. Some observers say PayPal is catching up to Amazon.com, which already offers APIs that give developers many options for using its payments platform. PayPal claims it has about 75 million active accounts in 190 countries, making payments in 19 currencies. The expansion of Internet-based services beyond traditional online shopping represents a big opportunity, according to PayPal. Several companies joined PayPal with plans to use or support Adaptive Payments. Most notably, Microsoft said it will enable developers to embed PayPal payment systems in applications developed and delivered on Azure, its cloud computing infrastructure due later this year. TwitPay, a startup offering payments on Twitter via PayPal accounts, is a beta tester of Adaptive Payments. It used PayPal's APIs to create capabilities such as making a single payment that is split up among several recipients, said TwitPay CEO and cofounder Michael Ivey. Among other things, TwitPay allows users to settle debts, run up tabs and get paid for Twitter-based applications, he said.

LiveOps, another beta customer, uses cloud computing to bring together teams of call-center operators who work at home. LiveOps is expanding its offerings to include services such as transcription, translation and document review. The new service, called LiveWork, has been collecting payments with a system based on Adaptive Payments for several months, said Michael Neril, senior director of LiveWork business development. It was easy to integrate the payment system into the LiveWork service and took just a few days, Neril said. Developers can apply to get involved in the beta program for Adaptive Payments through x.com, PayPal's developer site. Through "code and build" sessions in the next few months, about 300 will be admitted by November, the company said. Beta users can use the platform for payment systems on live, commercial services. On Nov. 3-4, PayPal will hold its first developer conference, PayPal Innovate X, in San Francisco. The beta program will expand further after that, but PayPal won't give a date when Adaptive Payments will emerge from beta. http://www.pcworld.com/businesscenter/article/168978/paypal_opens_door_to_developers.html

The Economist Covers Kiddie Virtual Worlds

Virtual worlds for children
Online playgrounds

Jul 23rd 2009
From The Economist print edition
There is life in virtual reality after all

REMEMBER Second Life, the virtual world that was supposed to become almost as important as the first one? Now populated by no more than 84,000 avatars at a time, it has turned out to be a prime example of how short-lived internet fads can be. Yet if many adults seem to have given up on virtual worlds, those that cater to children and teenagers are thriving. Several have even found a way to make money.

In America, nearly 10m children and teenagers visit virtual worlds regularly, estimates eMarketer, a market researcher—a number the firm expects to increase to 15m by 2013. As of January, there were 112 virtual worlds designed for under-18s with another 81 in development, according to Engage Digital Media, a market research firm.

All cater to different age. http://www.economist.com/businessfinance/displaystory.cfm?story_id=14098380

Gaia Hires Zong for Mobile Payments

Teen virtual world Gaia Online and mobile payment service provider Zong today announced a deal that introduces the option for Gaia users to purchase the site's virtual currency, Gaia Gold, with their mobile phone number. The agreement will make it significantly easier for the eight million people who visit Gaia monthly to buy virtual currency, and then digital goods, on the site. "We’re confident that Gaia Online's teen-based membership community will find Zong to be even easier than a traditional credit or debit card-based payment, and this partnership underscores the tremendous economic potential of the high-growth virtual goods industry," David Marcus, founder and CEO of Zong said in statement. http://www.virtualworldsnews.com/2009/07/gaia-teams-with-zong-for-mobile-payment-option.html#more

Playspan Launches Virtual Goods Store on MySpace & FaceBook

Well done! "Micro-payments across the gaming world is gaining serious traction, especially on social networks. PlaySpan, which powers micro-payments across over 1,000 video games and virtual worlds, is launching marketplace storefronts for Facebook and MySpace (which will be rolled out soon). The marketplace will which let users purchase online game items, virtual goods, and game currencies for online games and applications directly from their social networks.

What makes the marketplace interesting is that you can buy, trade, and sell goods within the marketplaces on Facebook and MySpace and then use the items in online game environments. And making a transaction on the marketplace becomes a whole lot more social, as your friends may be able to see it on your NewsFeed. PlaySpan, which recently acquired micro-transaction app developer Spare Change, has processed more than $50 million worth of micro-transactions through its PayByCash and Ultimate Game Card products. PlaySpan also raised $16.8 million in a series B funding last Fall from Easton Capital Group, Menlo Ventures, Novel TMT Ventures, and STIC. The startup was founded by a 12-year-old, Arjun Mehta, but it is actually run by his father, CEO and co-founder Karl Mehta.

The recent acquisition of Spare Change now makes sense. While PlaySpan’s focus so far has been within games and virtual worlds, it made a recent deal to power micropayments on hi5. Spare Change, on the other hand, powered micropayments across 700 social networking apps on Facebook, MySpace, and Bebo, and at the time of its acquisition was on its way to processing $30 million worth of transactions this year.

It seems like these days everyone is getting into micropayments, and the number of players are scaling quickly. With continued expansion on social networks, startup PlaySpan can become a serious player in a space where bigger players like PayPal, Facebook and MySpace are all considering making a move. The competition may be stiff but as micropayments start to integrate with consumers’ social graphs, but there seems to be the potential for more than enough opportunity for both startups like PlaySpan and Zuora, and the more established players.
http://www.techcrunch.com/2009/07/16/playspan-launches-virtual-goods-marketplace-on-facebook-and-myspace/

Facebook's Payment Guy

is ... Gareth Davies, who says stuff like ""We get a lot of requests to provide a platform-based monetization model. We want to help developers succeed as best as we can and also help users have a great experience. We have a gift shop on Facebook.com that enables our users to buy gifts using a virtual currency called Facebook Credits. And that's done very, very well for us. We're thrilled with that business, and it's growing... People love to buy [virtual] gifts and give them to their friends. It's a very fun, engaging activity. And so, having seen the success there and hearing the requests from developers that this would be of interest to them, we have begun testing the user Facebook Credits by offering them to developers, so that users can use Facebook Credits in an application to buy things. We're very early on in the test there, and so far, the results look good. We have a handful of apps live today."
http://www.gamasutra.com/php-bin/news_index.php?story=24378 He has without a doubt the payment industry's biggest window of opportunity with the Facebook user base and developer network to do truly game changing and innovative thing sin the world of payment. But so far you ca only buy Facebook credits with Credit Card. Will be interest to see whether he and his Facebook Payments Team come up with beyond the same old same old. Stay tuned...

Q: Why is the Linden $ the most successful virtual currency the world has ever known?

A: Because Linden and its exchange network (partnered and 3rd party) provide a mechanism for people to convert their electronic funds back into real dollars. So after selling virtual goods in Second Life you are able to turn that into actual value in your real life.

Q: What is the most succssful vrtual currency?

A: The Linden $.

VC's & Mobile Payments - Round 11

All about the current VC lust for mobile payment miracle providers .... http://www.nytimes.com/2009/06/22/technology/22pay.html NOKIA put 35 mill usd into OBOPAY last March

RIXTY Now In 10,000 Retails Spots

Well done Rixty!; "Paying for online entertainment without a credit card just got easier, thanks to Rixty. The innovative e-commerce company launched today its new cash-based payment system at more than 10,000 retail locations. Now anyone with cash and coins can convert that money into online purchasing power across an exciting array of entertainment merchants."

Good Vid on Gold Farming

http://multimedia.asiaone.com/Multimedia/News/Story/A1Multimedia20090711-7195.html

KidsCom.com, Partnering For Virtual Kids Universe

This is quite cool and smart. Kinda like Disney Interactive Group and its portfolio of virtual worlds, Kids.com is partnering with virtual world publishers to launch a network of kiddie virual worlds under its brand. So far the virtual worlds, Faithful Friends (see FF TV hosts - quite hot MILF's...), Primary Games, Elf Island and robotics maker WowWee Groups Virtual Animal Care Center. Four additional virtual worlds will be added to the KidsCom.com Idea Seeker Universe in the next month according to Jori Clark. http://pr-usa.net/index.php?option=com_content&task=view&id=236676&Itemid=28

KidsCom.com, which launched in 1995 and is the internet’s longest-running online family oriented community, is partnering with other virtual worlds, gaming sites, content providers and consumer products companies and real world destinations to create one safe and fun Virtual Universe.

“Since we have earned the trust of parents due to our history of supporting COPPA and CARU guidelines and because we have consistently delivered on our promise of being the place where their kids could Play Smart, Stay Safe, Have Fun™, we realized the time had come to create a network of partners that follow those same standards," describes Jori Clarke, founder of www.kidscom.com, now the Virtual Universe for kids and tweens. "With the ever expanding list of virtual worlds available for kids to play online, we know that many parents don’t have the time to review all of the options. They can be comfortable in the knowledge that every addition to our world will adhere to our mission statement.”

KidsCom.com has been seeking out partners with content that offers families wholesome fun for their kids, as well as an opportunity to do good in the real world or to bring families together in play. Each partner contributes a unique and fun play experience: Television and virtual world integration; toy and virtual world play support; online and offline “do good experiences”; novel approaches to game play. The following worlds and play options are now available in the Virtual Universe at KidsCom.com:

The Faithful Friends TV show, presented by Drs. Foster and Smith Pet Supplies on Animal Planet, provides to pet owners veterinarian advice and tips on subjects including health, nutrition, behavior, travel, new and aged pets, horses, fish & coral and birds. In the virtual world, kids have had the opportunity to watch TV clips and meet up with show co-host Electra Mustaine or leave messages for her on her avatar Idea Seeker home page. Faithful Friends is a copyrighted trademark property of Heads & Tails, Inc. and is created by Tony Loiacono.

Primary Games, created by teacher Susan Beasley, is a gaming site that offers kids, educators and parents access to learning games and activity pages that can be used in home and school settings.

Elf Island is a site that promotes good deeds with “Good Quests” that promote learning and giving back to others. While offering the fun virtual experience kids want, Elf Island is uniquely dedicated to instilling redeeming values and social responsibility, with a “mirrored gaming” concept that transforms online games into real world actions, including building houses in Honduras, protecting polar bears in the Arctic, sharks in the Galapagos Islands and more.

WowWee Group Limited has established a virtual Animal Care Center for their award-winning brand of WowWee Alive™ plush animal babies. The huggable and life-like plush animals, which come “alive” in response to loving attention, can be fed and heard as kids play with them online. Two Online games – animal matching and trivia - provide kids with additional opportunities to interact with the WowWee Alive baby animals.

Four additional virtual worlds will be added to the KidsCom.com Idea Seeker Universe in the next month.

For more information, please visit the Company's web site at www.kidscom.com.

Media Contact
Jori Clarke
Circle 1 Network
414.271.5437 (office)
414.305.7742 (cell)
Jori.Clarke@circle1network.com

ClickandBuy says ecommerce retailers should offer more payment options

Well, they would say that of course ... "According to a recent study conducted by YouGov and commissioned by German online payment service ClickandBuy potential sales are being neglected by some of the UKs largest e-commerce sites and online retailers due to the lack of different payment methods available to customers. The survey says that more than 50% of regular online shoppers will cancel a potential purchase if their preferred payment method is not available. The study makes a review of what options can large retailers offer to their consumers apart from traditional Visa or other credit cards. Thus, it was noticed that while many smaller retailers offer PayPal (and it’s something consumers have grown to expect), practically none of the larger retailers offer this to their customers. Those utilizing Google Checkout have an extra button on their Adword ads asserting this, which, according to Google, increases the amount of clicks these ads receive by 10%. This is a great option to address those dubious about submitting their credit card details to an ‘unknown’ entity. In a sporadic move Kiddicare have made it possible for their customers to pay for goods with cash by buying a voucher and entering the voucher code during the check out process. The vouchers are available from over 21,000 pay points throughout the UK, including many petrol stations and local newsagents. The reason for this new mode of payment is customer demand, as explained by Scott Weavers-Wright, partner at Kiddicare, via silicon.com. “We get about 400 or 500 calls a day and 300 or 400 emails a day, (and) we do get questions on ‘is there an alternative payment?’ and it’s definitely increasing” Often the reason consumers are looking for alternative payment methods to the standard Visa card is the lack of trust they sense towards a website. Consumers should be reassured whilst visiting a site in regards to security and privacy, particularly through the checkout process and product pages; so the inclusion of a genuine VeriSign logo confirming this is essential. Displaying company contact details (ideally physical address, email address and telephone number) also significantly helps, assuring people there’s somewhere to turn if anything should go wrong. Whilst the fear of online crime and fraud maybe more prevalent than the actual realities, online retailers need to offer customers the ability to pay for their purchase through their preferred payment method, if they want to maximize their sales and profit." http://www.ecommerce-journal.com/news/15966_clickandbuy_says_ecommerce_retailers_should_offer_more_payment_options

Wee World R.I.P.

How lame; WeeWorld Honors Farrah Fawcett, MJ from VWN; "Never mind how Farrah Fawcett died (hmm, explain that to a 12-year-old), she died. On Thursday of last week to be exact. Now, it's time to react -- with pangs of nostalgia, with tears, and with virtual goods."http://www.virtualworldsnews.com/2009/07/weeworld-honors-fallen-stars.html#more
She was the best thing to come out of Texas since Shiner Bock however ...

ONVERSE Runs On Ramen

In development for over a year and a half, virtual world Onverse opened its doors to users just last week. The five-person team launched on a shoestring --"on savings, family and ramen noodles," http://www.virtualworldsnews.com/2009/06/qa-onverse-ceo-steve-pierce.html Sorry Dear Readers (and Onversians...), but there is nothing new with this virtual world. Same old same old ... With such a competitive space over-saturated with kiddie and teen virtual worlds, you better get used to the Ramen, because it does not seem likely your world will make any dough. PG has an old hot pot stored from college days he can mail you guys to keep your noodle fix goin' ... Hate to be a prick. But you are doomed to wither and die i.e. FAIL unless you differentiate. Try doing something different - like tying in augmented reality via mobile content like vids and photos and sms's/twitters for a mobile centric virtual mixed reality world using your Onverse platform ... or just add frozen vegetables to your Ramen every now and then for variety.

HABBO Study Shows Competitors More Popular ... Than HABBO!

Sulake makers of Habbo released its annual Global Habbo Youth Survey Brand Update which in typical Sulake ass-backwards fashion shows its competitors are more popular than HABBO itself; "The study, says Habbo, explores teens' connection and interests toward individual brands and highlights their preferences in categories including consumer electronics, music, sportswear, and games. On the game/virtual worlds front, Runescape maintained its number one status among US respondents, followed by Gaia Online, IMVU, World of Warcraft, and Club Penguin.http://www.virtualworldsnews.com/2009/06/study-runescape-gaia-online-imvu-most-popular-with-us-teens.html

Linden Lab Hires Too Many Too Soon

Linden is hiring way too many people way too soon. Virtual worlds for the enterprise is still 2 years away... What is really funny is how many of these Linden Folk slog off to work in a real life office cubicle rarely employing their own virtual world for work ... Second Life rarely works like its supposed to and even no-life shut-in 400lb Virtual Vampire Role players complain about its reliability so what Fortune 500 Company would actually serious consider using the same buggy virtual collage of technology to run inside their own company? And still keep their job that is. We all saw what happenned to Renaud and EPredator http://paymentguy.blogspot.com/2009/02/epredaotor-becomes-econsultant.html: "Is the eminent roll-out of Nebraska, the virtual world-in-a-box being developed at Linden Lab, responsible for the company's rabid pace of hiring? According to the San Francisco Business Times, Linden Lab has hired nearly 30 people since the beginning of the year, with 25 of the hires devoted to the marketing and development of Second Life products for enterprise customers. And still there is a need for 18 additional staffers, according to the company. But just how many of those new and upcoming hires are related to LL's standalone version of Second Life designed to run behind a company's (or school's) firewall, the company wouldn't say. One thing it would disclose is that pricing for the product is due to be revealed this summer."http://www.virtualworldsnews.com/

Payment Contract Review

PG has reviewed and closed over 500+ payment contracts over 150 payment vendors over the last 10 years. Probably more than anyone on the planet. So why do it yourself when all this expertise is just a GMAIL away? Much smarter to get your payment deal T&C professionally reviewed by Payment Guy at a flat fee. Guaranteed to save and make you money or your money back! Don't sweat the details - contact paymentguy@gmail.com - and get the best deals. PS: PG will also review your existing deals and help you renegotiate them. You may be paying more and making less than you should.

Building Payment Networks - Part 5

So you have your biller built (or bought) http://paymentguy.blogspot.com/2009/04/building-payment-networks-part-2.html, your accounting software tied in http://paymentguy.blogspot.com/2009/04/building-payment-networks-part-3.html, your planned payment method mix planned http://paymentguy.blogspot.com/2009/05/building-payment-networks-part-4.html, so now you need to choose the best payment partners per payment method. Of course the easiest way to do this is to let let PG help you (email paymentguy@gmail.com) but you can also try and sort it all out yourself. Here is a checklist for assessing payment partners;

1. Financial Due Dilligence - Credit Check them by running a Dunn & Bradstreet check (normally less than $24 or ask for a recent audited financial statement to see how their financials are so they do not go broke after taking money from your customers;

2. Technical - do a technical due dilligence by having your biller bitches check out their Integration manual and specs. If they suck technically in reality or just the opinion of your billing bitches who will have to agree with your choice to do the work to integrate and manage the service - pass;

3. SLA - insist on a SLA (most payment companies have them but deny it!;

4. Legal - review the T&C making sure a) deal is non-exclusive so you can deploy identical or similar partners and methods; b) deal terms let you back out with short notice say 30 days, c) choice of law is your home turf and not in a place where you could never litigate successfully or cost effectively (there are lots more points but this gives you an idea what to look for). If you use a lawyer get him / her to quote you a per contract review and closing fee 8do not get ripped off by agreeing an hourly rate as you may pay 2K plus just to get a payment contract reviewed by a lawyer who has never done one before of a payment company you choose not to use - so save this for last after you do your own high-level check;

5. Commercial - get multiple offers and bid them off anonymously against each other (a,b,c payment companies pitch you and you pitch them back until you reach a best deal) and watch for such things as with-holding funds (some mobile payment companies keep 90 days payment traffic) and high chargeback processing fees and do not pay a flat fee for deal closing as this is just the sales guys way to make cash so insist on a revenue share model;

6. References - check their industry references with other virtual world operators and online content sellers.

Of course, this is just a high level check list, to do it right GMAIL paymentguy@gmail.com who has negotiated 500+ of these payment deals over 50+ payment vendors. Or you can go it alone and sweat the details yourself ... Good luck!

Say Hello to PG's Moldovian Girlfriend ...

Well, their beer is crap but Moldovan pizza is surprisingly good!

Beware Dave Walker!

A GMAIL PG recently received from notorious scammer Dave Walker - no relation to this Walker who is a Good Guy; "This is to officially inform you that (ATM Card Number;5299751493779935 with a fund worth 2.8 Million Dollars has been accredited in your favor,Please Contact Mr. Dave Walker (mrdave.atmdpt@gmail.com) With the following,
Full Name:Delivery Address: Age: Occupation: and Phone Number: Best Regards.
Mr. Dave Walker"

Wizard 101 Sells Prepaids in 7-11

KingsIsle Entertainment announced today that its Wizard101 virtual world had registered over 2 million unique users. To support those users--and monetize them--the company is also launching $10 prepaid cards in 7-Eleven stores across the nation.

How Sulake Makes Cash From Habbo Credits

It's all here Dear Readers! http://www.pafis.shh.fi/~henjan06/v17.pdf

Wanna Work at Sulake?

... if you do check out http://www.sulake.com/careers/open_positions/view?id=229
... if you are successful you will work for Li Ma or (is it Li Nieminen?)

eCommerce Manager - Helsinki/Finland

We are looking for a motivated individual to join the Sulake Payment Support unit in the Helsinki Headquarters. eCommerce Manager will work closely with Director, Payment Support to carry out the following main tasks:

· Make eCommerce related business analysis, share findings and introduce good business practice with relevant business units.
· Conduct market research, identify innovative payment methods, design pilots, formulate the business model to improve monetization, identify new business opportunities and formulate associated business plans.
· Participate in global payment partnership management and deal negotiations.
· Plan and execute eCommerce related projects.

eCommerce Manager will also work closely with other HQ units, namely Development, Finance, Habbo Product, Marketing and other business units. eCommerce Manager reports to Li Nieminen, Director, Payment Support unit.

Key Competences:

· BBA or MSc degree in business studies
· Proven track record in International online business or eCommerce business area
· Good analytical and presentation skills. Proficiency in using Excel or other research analysis tools.
· Confident self-starter, pro-actively and independently carry out tasks and willing to develop skills and capability.
· Willing to work both in planning and execution.
· Demonstrate problem solving and negotiation skills
· Fluent spoken and written English are must. Other language skills are a bonus.
· Good communicator & a team player

To apply for this position, please fill in the online application form no later than 17 May 2009.

Apply now

Building Payment Networks - Part 4

So now that you have your biller built (or bought) http://paymentguy.blogspot.com/2009/04/building-payment-networks-part-2.html and you have licensed and integrated your accounting software to your biller http://paymentguy.blogspot.com/2009/04/building-payment-networks-part-3.html, you need a plan.
This boils down to choosing the right payment method mix per payment system. In any successful hight-profit margin payment system targeted at a diverse demographic of kids, teens, moms and dads, you need a wholeistic approach to payment method selection to create the widest possible payment network reach. Basically, you need to cover the 3 main payment categories which are;

1. Online Payment Method (s) i.e. Credit Cards, Internet Bank Payment(s), PayPal;

2. Offline Payment Method(s) i.e. prepaid cards, e-voucher/e-pin code generators; and

3. Telco Payment Method (s) (mobile sms, IVR).

This should be replicated in each market / region via a consistent systematic approach. To do this you either a) integrate to a turnkey hosted payment network provider with a diverse portfolio of payment methods in your home market and / or internationally, or b) do it yourself.

Our next blog post in this series http://paymentguy.blogspot.com/2009/04/building-payment-networks-part-1.html will describe in more detail how you can go about selecting partners per method.

Building Payment Networks - Part 3

So once you got your biller built (or bought) you need to tie in some accounting software (like Netsuite)to manage your cash flow. Here are some good options;

1. Basware


2. iScala


3. Netsuite

Netsuite is most popular and a good option to investigate. Tell 'em PG sent you ;)

Check out CyKash

Don Lee of CyKash was nice enough to drop PG a line and introduce himself and his prepaid solution CyKash. CyKash is "a universal virtual currency/multi-game prepaid card that can be redeemed at our partner game websites." According to Don they designed CyKash to make it as user-friendly and safe as possible with such features as.

- Redeem/Share value across multiple games

- Redeem directly at the game site

- No personal information required to redeem

- No extra fees

Game clients include: Atlantica, War Rock, Knight Online, Global Mu, Luminary, Shaiya, MegaTen, Three Kingdoms, Rohan, Seal Online, and many more. Check them out at www.cykash.com or better yet, contact Don and see if he and his Team can help you make some money; Don Lee / CyKash, Inc. / 2350 Mission College Blvd. Ste.315 / Santa Clara, CA 95054 / Tel: 408-727-7510 / Fax: 408-727-7510
Mobile : 408-655-0946 / Email : don@cykash.com

Smart Veoh

Last year, Veoh, a video-sharing site operated from San Diego, decided to block its service from users in Africa, Asia, Latin America and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video there. “I believe in free, open communications,” Dmitry Shapiro, the company’s chief executive, said. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.” http://www.nytimes.com/2009/04/27/technology/start-ups/27global.html?_r=1&hp

Interesting revenue model for Aion

http://www.developmag.com/news/31731/NCSofts-Aion-spinning-money-in-China
From our good friend Ryan at Sarf Studios Inc. who "Found that extended pay to play aspect interesting".

Building Payment Networks - Part 2

Building a biller can be done in house by one of your Devs who will treat it as an avoid at all costs 4 day old dog turd on a sidewalk. However, most Devs consider being labeled Billing Bitch worse than a bad burrito lunch. Thus, given your Devs will consider this the most thankless impossible to please and deliver on time headache no one will step up thus delaying your payment systems launch and costing you money, your likely better off just getting one from a reputable provider. Here are some good options if your Devs are way too lazy and underpaid to motivate themselves to step up to the challenge of coding your own internal billing system or you don't want to take the chance that the new guy with the pencil mustache on the student work term can figure it out over the summer;

1. Vindicia


2. Javien


3. Aria Systems







4. JBilling




However, if you are able to find a Dev with payment system and biller design and coding expertise and the willingness and motivation to lead and manage you payment projects and team - HIRE AT ALL COSTS!

Building Payment Networks - Part 1

Dear Readers, let PG fill you in on the A,B,C,'s of Payment Network Construction:

Step 1. Build a biller (code it in house, or license one from a billing system provider)

Step 2. License some accounting software (like Netsuite)to manage your cash flow

Step 3. Choose the right payment method mix (you need to cover the 3 main payment categories A. Online Payment Method(s) i.e. Credit Cards, Internet Bank Payment(s), PayPal; B. Offline Payment Method(s) i.e. prepaid cards, e-voucher/e-pin code generators; C. Telco (mobile sms, IVR)

Step 4. Choose the best payment partners per payment method (let PG help you ...)

Step 5. Organize a Payment Systems Team / eCommerce Unit (this is the G&A / Admin side of things)

Step 6. Design some killer easy to use web pages

Step 7. Tie it all together, test, deploy, launch it and repeat per market / country / language.

More details on each point to come. Stay tuned.. or email PG @ paymentguy@gmail.com to get the straight talk direct and start making money ASAP.

Islamic HABBO

Did you know there was a HABBO Clone just for Muslims? Apparently, the CTO of the low-key creative agency FWD Helsinki is a guy fired by Sulake a few years ago. PG thinks there is not enough of a business threat for Sulake to consider wasting any time or legal fees suing them for this shameless rip-off. http://www.startupbin.com/tag/fwd-helsinki/

ECO-Rangers

ECO-Rangers by Valve Design Studio Helsinki coming this August looks to fill a void in the huge eco-themed virtual world opportunity. Using Flash, this project has a lot of brains, talent and money backing it. Virtual currency with a philanthropic twist such as ECO's would be cool? Stay tuned ... http://www.tweehouse.com/blog/2009/02/20/eco-rangers-teaser-game-live/