CoinWhale Kicks Off Combo Deals for Virtual Currency in Social Games

Cross-promoting games on Facebook has become a big deal for many developers, since Facebook clamped down on its viral channels. We’ve just spoken to CoinWhale, the latest startup aimed at helping to cross-promote, although its idea is a bit different from the advertising bars being pushed by companies like Applifier and AppStrip.

CoinWhale takes inspiration from sales sites like AppSumo to offer a package deal on virtual currency to Facebook game players. But since any developer can offer a deal on currency in its own game, CoinWhale is bundling together games in threes.

The idea is to get three developers, who all have similarly-sized apps, to work together to lure in paying users. When a user of one of the games comes in to buy discounted virtual currency for that game, they’ll get a matching amount for free in the two other games.

If the sale works, the three games will share their pool of motivated, paying customers, which is typically only a tiny fraction of the overall playerbase. The developers will split the proceeds from the sale based on traffic to the sale from banners, in-game incitements and emails, with CoinWhale taking 10 percent off the top.

Existing cross-promo schemes mostly rely on a 1-to-1 exchange of traffic, and there’s no guarantee that CoinWhale can offer that here — one game could end up sending more of its precious, paying users out than it receives in return.

There are two arguments in favor of doing the deal anyway. Brad Mills, one of CoinWhale’s co-founders, says that there’s a pool of spending users who regularly try out new games, the way cinephiles go to a new movie every week. Those users will try out new games anyway; they might as well be directed.

The second, and more important argument, is that small developers need a way to replicate the cross-promotion schemes that much larger developers can use within their own networks of games, a feat that they can’t replicate without taking some risks and working with other companies.

And CoinWhale’s initial test of its concept showed fairly positive results. Testing with three small games that had a total of about 20,000 monthly active users, CoinWhale received 2,500 unique visits, of which the games drove about 1,500. User referrals and other traffic brought in the remaining 1,000.

Of that pool of 2,500 people, 550 registered as members of the site, and 163 purchased the $20 sale, bringing in $3,260. Overall, the conversion rate from visitors to buyers was 6.5 percent, with revenue of $1.30 per user.

CoinWhale is looking for more companies to try out its service; you can contact them here.