Orson Welles 2.0 – “We will sell no virtual currency before its time”
Ok, so this is a deep reference to a 1980’ish commercial for Paul Masson wine where Orson Welles says, “We will sell no wine before its time”. Very catchy and it was VERY popular. Heck, I wasn’t too old, but it obviously stuck in my head as I thought of it as I was putting a title to this bit of writing. The video is below.
Regardless of the unique title – the statement is true. Virtual currency is back and in a BIG way. Just check out what’s going on with in this payment space right now - http://www.insidesocialgames.com/category/payments/ . With the explosion of social gaming, this category is growing by leaps and bounds and is being run by some very talented individuals.
However, if some of these payment platforms and proprietary solutions seem familiar, it is because they are. Remember Whoopie Goldberg and her commercials talking about the new payment method, Flooz? How about Cybercash, Digicash or Beanz? In actual calendar years, this wasn’t too long ago (2001). However, in the social/Web 2.0 world, it’s like night and day.
Back when Flooz and it competitors were operational, they had to convince online stores to reconfigure their shopping carts to accept their proprietary money. Then, they had to figure out how to get these funds into people’s hands so they could spend it at the online shops who the sold in the first place. Chicken meet the Egg. Flooz went about it by selling corporations on giving their currency away as incentives. Heck, they took in $50M in VC, but still managed to flame out in September, 2001.
Today, it’s a whole different ballgame. With social gaming growing at the astronomical pace it is, there is a need for virtual currency. Not only because of the ‘micro-nature’ of the transactions and prohibitive cost of credit card transactions. But, because for many of these companies, giving away this virtual currency is the perfect methodology to grow their customer base. No coupons to type in. No 30 day free trial. Just give them a $5 virtual currency gift card when they purchase another product and they can be up and running in no time.
And, virtual currency also doesn’t come with many of the headaches that other prepaid/debt instruments come with. The monthly and/or transactional fees with these products are less or do not exist at all. The ‘breakage’ rules, or regulations concerning expired cards/accounts, are much less stringent of a proprietary currency than they are with other payment instruments utilizing the big credit card names.
However, maybe the best argument for virtual currency is the teenager. The have expendable income and are a driving force in the growth of social gaming in so many of the platforms right now. They lack credit cards, so virtual currency is perfectly suited for them.
Will all of these payment methods be successful? No. But, virtual currency seems to have risen from the ashes at a great time to ensure some success for more than a few players.
So, take heed of Mr. Orson Welles 2.0 – he was right with the wine, I think virtual currency just took a little aging to get it right.
