Business Week February 24, 2011 – Market Street, a game played on social networks like Facebook, wannabe entrepreneurs open digital storefronts and compete with friends to attract shoppers. Many players pay real money to stock their virtual shelves with in-demand or seasonal items, such as rose bouquets on Valentine’s Day. That doesn’t work for the hundreds of thousands of Market Street players outside the U.S., in countries that don’t celebrate Valentine’s Day and other American holidays.
So Playdom, the company behind Market Street, hired Mentez, a startup based in Miami, to come up with a Valentine’s Day alternative for the Brazilian adaptation of the game, known as Paraíso das Compras. As a solution, Mentez programmed digital versions of iconic objects from the annual Carnaval festival, including feathered costumes, musical instruments, confetti, and noisemakers. They will be put up for sale in the Portuguese-language edition of the game, which is played on Orkut, Brazil’s most popular social network.
Playdom and other digital game companies are looking for growth in foreign markets, and they are relying on Mentez and its competitors to be their local tour guides. The market for virtual goods will total $6.1 billion worldwide in 2011, estimates investment bank ThinkEquity. Over the next two years, overseas sales of virtual goods in social games will grow 64 percent, nearly as fast as the 75 percent growth expected in the U.S. Game makers will have to take advantage of foreign opportunities if they’re to live up to lofty expectations: Walt Disney (DIS) paid $563 million to acquire Playdom in 2010, and Electronic Arts (ERTS) spent as much as $400 million on rival Playfish. Zynga, the social games leader with 271 million users, has become one of Silicon Valley’s hottest startups and is valued at $10 billion after T. Rowe Price (TROW) and Fidelity Investments recently held talks to invest in the company.
Internationalizing a game requires knowledge of country-specific traditions, architecture, holidays, and currencies—all crucial elements in games that are supposed to feel like simulations of the real world. “To really localize a game, it goes beyond translation,” says Juan Franco, chief executive officer of Mentez. The four-year-old company specializes in adaptations for South and Central America, and has offices in São Paolo, Mexico City, Bogotá, and Medellin, Colombia. Russian company 101XP helps U.S. game designers crack the Eastern European market and target users on the region’s biggest social networks, including Mail.ru. Hong Kong-based 6waves customizes social media games for Asian audiences.
Among the most promising opportunities for global growth is in Central and South America, says Ryan Linton, senior director of business development for Zynga. Today only about 10 percent of Zynga players are in Latin America, and the region “is an untapped giant for us,” he says.
Mentez employs more than 60 experts in virtual goods, including graphic designers, translators, and business-school graduates versed in the economies of Latin American countries. In addition to designing custom digital objects, as it did for Playdom’s Market Street, Mentez helps game makers keep tabs on what sells well overseas, provides customer service, and markets games. Overseas players buy up to five times the number of localized products as they do non-customized ones, says Franco. Mentez takes between 40 percent and 60 percent of the revenues generated from the virtual goods it develops, which usually sell for $1 to $10 apiece.
In some cases, Mentez also facilitates the payments. In Central and South American countries, only about 40 percent of people have credit cards, according to a 2008 report from the Commerce Dept. Mentez sells cards pre-loaded with $2 to $20 in Internet cafes, convenience stores, and other retail locations across Latin America, so gamers without credit cards can buy digital goods, too. While Zynga does not rely on Mentez to design virtual goods for its games, it began using the retail network, dubbed Paymentez, in late February. “Right now it’s really easy to make a transaction online in the U.S.,” says Zynga’s Linton. “They don’t have that luxury in many of the Latin American countries.” Chinese game developer Five Minutes, whose Happy Farm game is one of China’s most popular and a competitor to Zynga’s FarmVille title, already uses Mentez to sell cards and reach players in Latin America.
Mentez CEO Franco says that since social games are a new business in Latin America, “there is an opportunity for companies like Zynga to be aggressive in that market.” Brazil, in particular, “is a huge opportunity,” he says. “It’s the hottest market in the world today” for social games.
The bottom line: With help from startups like Mentez, social game companies are trying to exploit growth opportunities abroad with localized experiences.
Business Week: Getting Social Media Games to Play Overseas
Business Week February 24, 2011 – Market Street, a game played on social networks like Facebook, wannabe entrepreneurs open digital storefronts and compete with friends to attract shoppers. Many players pay real money to stock their virtual shelves with in-demand or seasonal items, such as rose bouquets on Valentine’s Day. That doesn’t work for the hundreds…