Virtual currency monetization and payments are hot on the Facebook Platform right now, and Inside Facebook has the exclusive on a new startup that is helping social network application and online game developers do just that.
Gambit, which has been operating in stealth mode for six months, is launching publicly for the first time today.
The company’s team – Noah Kagan, formerly of Facebook, Chris Smoak, formerly at Amazon, and Andrew Hunter, formerly at Ning – didn’t originally start out to build a payments company. Rather, the three have been building Facebook applications themselves since the Platform launched nearly two years ago. When they weren’t satisfied with existing solutions, they decided to build their own payments product in house, and opened it up to a few others to try. Because it was performing so well, they decided to shut down their other applications and focus on building out a payments service.
Now, Gambit is focusing on apps and games where there is user demand for virtual currency. Gambit lets users obtain virtual currency through a variety of methods, including direct payments through credit cards, PayPal, Amazon, mobile payments through Zong, and its own managed network of offers. Gambit manages the relationships with payment vendors, and handles all payment-related customer support. The company says integration with the Gambit API is very similar to that of other payment providers and should only take a few minutes.
Gambit’s co-founders say the company have spent the last three months focusing on three areas:
- Optimization. First, Gambit tests which payment method is working best – if the app is mostly used by adults, credit cards or Paypal may work best; if it’s used mostly by high schoolers, mobile payments might perform better. Second, the company tests different price points – for example, should it give users the option to buy virtual currency for $19.99 or $20, etc.
- Customization. All of the CSS is completely customizble for app developers who want to change the way the payment options look and feel. In addition, the service is localized into 15 languages. If users are in France, the payment options will be presented in French, and so on for Spanish, Norwegian, German, Turkish, and 10 others.
- Transparency. Gambit’s admin tools show developers the details on how much they make on every transaction on a per-user level. This helps developers understand which users are the most valuable, and what users are doing.
The company says it is now working with School Vandals, myFarm, and several other top application developers, as well as destination websites like SmallWorlds. Overall, Gambit’s business is split roughly 40% Facebook, 25% MySpace, 25% destination sites, and 10% mobile. The mobile service is WAP based – Gambit has developed an iPhone version, but Apple does not allow third party payment integration on iPhone apps currently.
Chad Boyda, developer of School Vandals, said he’s seen improved monetization rates since implementing Gambit.
“We were able to change all of the colors, fonts, etc. to match the look and feel of our game which provided a more seamless integration into our game. Upon doing so we saw immediate jumps in conversion rates,” Boyda says.
In addition, Gambit is working on a subscriptions product that will be coming out soon.
At the end of the day, the virtual currency monetization/payments space is all about providing better results, customization, deep analytics, and high quality customer service. Gambit and current players in the space, including Offerpal Media, Super Rewards, Social Gold, Peanut Labs Media, SocialCash, Twofish, and Playspan, are all fighting to prove to developers that they can deliver on all those fronts. App developers are likely to continue to testing out different providers to see which work best for them.
Gambit has received angel funding and is based in Berkeley, California and Austin, Texas.