Hi everyone! The past few months have been very exciting with the push to launch Mochi Coins and I’ve been thrilled with the positive energy and passion people have shown for this new product. Now that things have settled down a bit I wanted to take some time to reflect and share our thoughts and vision for the future of Flash games. Since Bob and I started Mochi Media in 2005, it’s been amazing to see how the innovation and quality of games grows by leaps and bounds each year; and it doesn’t seem to be stopping! Flash is now firmly established as a solid contender to many other gaming platforms.

Mochi Media’s vision has always been to fuel the creativity of Flash games by rewarding developers for creating world-class games. In seeing the growth of ads, sponsorships, licensing, contests — and now the introduction of micro-transactions — we believe we’re well on the path to helping developers achieve their goals of prospering from this market, and channeling more time and effort into their next set of games. For those of you that aren’t familiar with our backgrounds, we both came from the Flash game development world ourselves and we wanted to build tools and services that would help carry our industry forward. The most recent step in this journey has been with the introduction of Mochi Coins, our micro-transactions and distribution platform. There is a lively debate on the forums so we wanted to add our thoughts to the conversation.

So, Why Micro-Transactions?

The reasoning for Mochi Coins came out of Flash Gaming Summit in March 2009. For those of you who didn’t attend, Flash Gaming Summit was a sold-out conference with 300+ attendees obsessed with Flash games. We couldn’t believe the turnout and energy in the room! One of the recurring topics of conversation throughout the conference was that developers needed to make more money in order to grow and improve their games. Many game developers believed that the reason why their Flash games were being held back in complexity and quality was because they weren’t making enough on a per-game basis to sustain the resources needed to extend their development cycle. Many developers limit the amount of time and effort they put into a game because they know at some point their return on investment does not scale linearly. Any additional effort that is put into a game is purely for the love of the craft. And the love of games is what should ultimately motivate us, but it was clear that many developers were yearning for a way to make more money from their games. This planted a seed in our minds and over the following weeks that seed grew into a full-fledged commitment to enable micro-transactions within games.

Behind the Scenes on Building Mochi Coins

Once we made the commitment to build Mochi Coins, we went through an extensive research phase to figure out what was needed for a successful micro-transactions platform. The biggest source of waste in any company is to build something that no one wants and we’re careful with our resources since we’re a small company and a small team. We completed over thirty exhaustive interviews with developers and publishers asking them about their views on micro-transactions and what the ideal system would look like.

Throughout those conversations, we heard a LOT of excitement about the prospects of micro-transactions. However, we also heard a lot of recurring themes on why people weren’t building micro-transactions into their games.

• It’s a hassle to run my own database and servers.
• Concerns around security and authentication.
• Too painful to implement multiple payment providers.
• My Flash games aren’t big enough on their own to sustain large purchases.
• I want to focus on creating great games, not building a transaction system.
• How can I market and distribute these games?
• We’re making money from building advergames already, can’t justify the up-front investment to build something like this.

We took everyone’s feedback and tried to come up with the “best in class” Flash games micro-transaction and distribution system. Here’s what we pointed to that only Mochi could truly pull off:

• Integrated Services – Integration into an existing set of tools that provide ads, distribution, live updates, encryption, distribution, high scores, social network integration and testing.
• Ease of Use – Ridiculously easy for developers to implement, without needing a server of their own.
• Reach and Exposure – Marketing and distribution deals with companies like AOL, GamePro, Warner Brothers, Hi5 and more to get micro-transaction games distributed to as many gamers as possible. Our Ads platform also reaches over 100 million unique players a month and that would be a great asset in helping Mochi Coins enabled games get much more exposure.
• A Giant User Base – Several of the top game developers in the industry are already using Mochi Coins and more are signing on every day. This has lead to an incredible consumer adoption rate and more than 200,000 users just three weeks after launch. With more Mochi Coins consumers a larger pool of revenue is available for developers to tap into and thus a network effect is created.
• Universal Access – The Mochi Coins wallet and login works across all games and sites. That means now people can play their games anywhere and pick up from where they left off anywhere. This may not seem like a big deal but this has been one of the most requested features we’ve heard since we started in 2005.
• Customer Ownership and Communication – People that play your game and buy your items are YOUR customers. The game developer and sponsor can contact their customers through Mochi at any time. This has rarely been available in prior Flash games and having a database of consumers will lead to great brand building and marketing opportunities. Never underestimate the power of your brand as a developer.
• Deep and Powerful Data – Analytics and stats that give you a great dashboard view of pricing and game performance.
• Security and Consumer Trust – It’s important that consumers feel that their money is being spent in a safe place. And because of that we have gone through the certification process with the Better Business Bureau and McAfee Secure. The more comfortable consumers are with where their money is being spent, the more money they are likely to spend. Our commitment to the highest quality customer service will continue in all that we do.
• Reliability – Mochi Media was formed in 2005 and has been operating a successful business ever since. We have an established and trusted brand within the games community and are now extending that to game players. The company has raised over $14 million in capital and it is very clear that the business will be around for a very long time.

Providing all of these options was no small endeavor, but we are confident that we have built the most robust and complete micro-transactions platform for Flash games on the market today. We are heavily investing in further developing the Mochi Coins platform, we have well established investors that are fully backing our vision, as a company we have over 5 years of expertise in the Flash games community and most importantly we have a team of over 20 people focused on making the Mochi platform the best in the industry.

A lot of discussion has occurred around the value of using Mochi Coins. At the end of the day, the discussions shouldn’t be about just processing transactions, but about providing all of the other value added services and intangible benefits that will make Mochi Coins so valuable.

The Security Hurdle and MochiGames.com

One of the first hurdles that we encountered while trying to architect and build the Mochi Coins platform was the need for security. Our technical research included numerous sessions with Adobe and the process uncovered an issue where secure transmission of sensitive information (e.g. login or payment details) within Flash from a distributed game is not possible. The only way that sensitive information can be transmitted securely is through a separate browser window at a trusted site, which is why we created MochiGames.com.

The MochiGames.com site has been one of the big areas for discussion because site publishers have been concerned that we’re moving in the direction of becoming a portal. I hope to defuse the debate once and for all: MochiGames.com is NOT a portal. We are best at building developer tools and a platform that can be used by everyone, and it goes against our expertise and DNA to build a portal. To make this point even clearer, we’ve removed the ability to play any games at all on MochiGames.com, and the site will only refer out to publisher partners or developer sites where the games can be played. The benefit of having MochiGames.com is that today we are the ONLY Flash micro-transactions platform that truly provides a secure and trustworthy experience for consumers. The site may ruffle some feathers in the short term, but this is a long-term strategy that is designed to benefit the industry as a whole and ensure the highest security for our consumers.

The Free Coins Debate

We never thought that a marketing strategy would be the root of so much debate. The free Coins discussion has been one of the most interesting and lengthy threads on our community forums. It’s great to see the community taking such an interest in our products and I wanted to shed some light on our decision making process in offering free Mochi Coins as a purchase incentive. We want consumers to have an easy entry into Coins so they can get comfortable buying virtual goods in games, and we wanted to be able to provide them with incentives to buy larger packs of coins. In order to do this, we need the flexibility to do discounting and promotion on a fairly regular basis, which is standard for commerce businesses online and offline. There were several different solutions tossed around for this including things like creating a separate “engagement” currency and allowing developers to either dual-price or give certain things away for free or variable values for coins. Ultimately, we decided on our existing system of having coins be either “paid” or “free” because it was the simplest to understand and most transparent to developers.

We acknowledged two things in deciding to follow this model. First, we have to be as transparent as possible with our reporting to developers on when free coins were being added to the mix.

Paid and free coins are clearly reported in the dashboard

Second, that we need to closely monitor and regulate the number of free coins in our system. This second point has been the subject of a lot of debate as to how many free coins would end up diluting the system, and a key aspect of our system is that free coins are spent last out of a consumer’s wallet, and in many cases they may not spend their entire wallet. Free coins are designed to promote the service and encourage users to try buying things for the benefit of the entire community. Rest assured that we’re doing extensive testing to ensure that it does. For every $1 that comes into our system and is spent, the developer always gets 60% of that $1 and we absorb all the credit card and PayPal transaction fees into our share. You’ll always be able to see in your dashboard how many of those coins are “free” – for our top-selling game today, SAS: Zombie Assault 2, only 2% of all coins spent are free coins and we hope to keep that ratio just as low for the rest of you.

Creating Additional Value in Flash Games

The last point that I want to address is really talking about the benefit and value of micro-transactions. I believe that adding virtual goods to Flash games is only something that will add to the market, if it’s done right. And by “right”, I mean that Flash games should inherently be free and fully playable games that offer value to the consumer without spending a dime. However for those that are addicted to your game there should be an opportunity to feed that addiction and get a richer experience through purchasable content and enhancements. The more money game developers make the better their next games will be. That in itself has tremendous value for our entire ecosystem and it is our goal to enable greater value creation.

Everyone here at Mochi Media believes and has taken the bet that Mochi Coins will be additive and create more value in the industry for all parties. We are just at the beginning of an evolution in the Flash games industry and you should expect to see much more from us in the near future. Our solution for developer is very clear and rewarding. We have worked closely with several highly respected sponsors to ensure their needs have been met. Our next goal is to release a solution for publishers that will let them benefit and participate in the success of Mochi Coins enabled games.

This is a lengthy post but we hope an insightful one that further explains our thought process and why we built what we did. If you have any thoughts, please respond! If you have other thoughts that are unrelated, please feel free to send us an email directly at jameson@mochimedia.com and bob@mochimedia.com, or talk to any of us directly. It’s our job and our passion to listen and respond to the community so please don’t be shy. We ARE listening.