Heyzap Hops Onto the Virtual Goods Bandwagon


heyzap When Heyzap, the San Francisco-based startup that offers up casual, Flash-based games for publishers to embed to their sites, launched back in January, revenue was being generated by the short ads shown before its games. But as the economic downturn tightened its grip and the online advertising market continued to flounder, Heyzap founders Immad Akhund and Jude Gomila saw the need for a different revenue model. So last week they rolled out Heyzap Payments.

Before, developers that uploaded games to Heyzap’s web site would take a cut of the revenue generated from the ads shown before the games. But with Heyzap Payments, game developers can further monetize the games by offering users the opportunity to purchase virtual goods. Heyzap and developers will get 50 percent of the cut from the virtual goods service, while publishers will get 10 percent. Users can pay for the virtual goods via their mobile phones, PayPal, credit card or filling out online surveys, and sign into the service either through their Facebook or Twitter accounts. The startup is also working to make its games more viral by letting people post their game activity on Facebook and Twitter. “We’re taking the monetization techniques of social games and…allowing casual game developers to plug that into games so we can move into a more social space,” Gomila said. “We’re upgrading the entire market.”

Heyzap’s games are embedded on nearly 25,000 web sites, a number Gomila believes will rise to 100,000 in six months — not bad for a startup that’s barely six months old. Heyzap received between $500,000 and $1 million in funding from Union Square Ventures last month.

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