Making money from games is nothing new, and it can be done in a lot of different ways. To be straight up, selling your game is the most direct route. You know what you're getting because you price the game. But it's not always possible to make money, especially when there are a number of other games being offered for free.
That leaves game developers with the option of advertising.
No shocker, therefore, that companies are lining up to provide those ads to video-game developers. One of those companies is Kiip, which raised $300,000 in funding. This mobile gaming ad startup was founded by teen entrepreneur Brian Wong, who at the age of 19, is one of the youngest founders to receive venture capital.
As the startup is in stealth mode, there's little information about which game developers it's partnered with. But reports say it has an audience of more than two million active users monthly.
The company does not seem to be focusing on the virtual goods model, despite an 80% increase in the overall sales of virtual goods in games, reported earlier this year by Flurry Analytics. This may distinguish them from other in-game monetization companies, such as Play Span, which recently raised $18 million in a Series C round, in August of this year. Another potential competitor is Adknowledge, which released a monetizaiton platform for game in September of this year.
Of course, the big issue for any advertising-based model is how many people will be looking at the ads. After all, ads are all about exposure. As it turns out, there are some 100 million people in America and the U.K., who regularly play social games, according to a study conducted this year. A single company, like Zynga, can reach an estimated average of 65 million daily active users. So it seems like Kiip could easily reach a broad audience with their ads.
They are also walking into an area where cash is being spent, hand over fist. Spending on ads inside social games is at a record high, this year. It is likely that publishers will spend upwards of $220 million worldwide, to advertise in social games and applications in 2010, according to research conducted by eMarketer. In 2011 this is expected to increase to $293 million.
Kiip has yet to respond to a request for comment at the time of publication.
(Image courtesy of Kiip)