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Wednesday, November 4, 2009

The Scamville Debate - Arrington Vs. Social Games

Social gamers are being scammed. So says Michael Arrington of TechCrunch last weekend, who wrote that the big three developers—Zynga, Playfish and Playdom—use "completely unethical" methods of making money off players who think they’re getting free in-game currency for filling out an I.Q. survey or signing up for a free CD from Video Professor.

Read the fine print, and you’ll see that you’re actually paying far more (in the case of Video Professor, $189.95) for in-game currency than if you just paid cash. Arrington urged Facebook and MySpace to police this arena, but also accused them of “turning a blind eye to user protection,” because they’re getting a huge cut of revenue back from the games.

In response, Zynga CEO Mark Pincus acknowledged the problem while defending his company's position:

"Most of these offers are good for the advertiser and user. There are many users who don’t have access to online payment methods who are still interested in making in game purchases. There is also great potential for large web players like Amazon, eBay and Netflix to leverage social media channels like facebook and zynga to acquire new user relationships."

Pincus also claims that Zynga has “worked hard” to remove scammy offers:

"In fact, the worst offender, tatto media, referenced in the techcrunch article, had already been taken down and permanently banned prior to the post. Nevertheless, we need to be more aggressive and have revised our service level agreements with these providers requiring them to filter and police offers prior to posting on their networks. We have also removed all mobile ads until we see any that offer clear user value."

Independent blogger Andrew Chen also weighed in on the controversy. According to Chen, things aren’t so black and white:

"The more I dug into the issue, the more nuanced I decided it really was – things weren’t all bad, actually. In fact, I’ve come to believe that there are plenty of advertisers where this is working for them, plenty of consumers who are happy as well, though these offer guys are leaving a trail of unhappy users."

Chen agrees that the user experience sucks and offers some solid suggestions on how Facebook can better regulate the lead gens:

"In general, I believe the key to thinking long-term on the offers industry would be to expose all sorts of feedback information, out in the open, at a granular level... I think a lot of companies would hate it in the short run, and a lot of dollars might be banned, but long-term, this would be better for the overall ecosystem."

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Posted by Soyon Im on November 4, 2009 3:07 AM |

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