Mertado Takes Facebook Games Beyond Virtual Goods to Real-Life Retail Sales

Social games already have a half-dozen ways to make money from users: direct payments, offers, surveys, and so forth. A new, and potentially important addition is appearing this morning from Mertado, a recent Y Combinator graduate.

Mertado first launched this spring with a Facebook Application that offered a direct retail experience in which users shopped and bought goods without leaving the social network. Now it’s bringing shopping into third-party apps — in other words, a game could also be a virtual store.

Some games are already set up for the inclusion of retail. Titles like Retail Therapy and Car Town include real-life brands, while Mall World and others use shopping as their major play mechanic. Almost as good are games like Baking Life, which it’s easy to imagine selling a user a muffin pan or cookie jar.

Mertado’s sales widget can fit in anywhere in a game. A developer could hide it away with other offers, or provide a direct link from a virtual item in the game. Each item can come with sales info like a video, images and text explanation.

Out of the item’s sales price, Mertado will give the developer back around 15 percent of the sales price. CEO Vijay Chittoor says the average sales price would be around $45, which would net the developer about $7.

The transaction is made using real currency, of course, so developers using Facebook Credits wouldn’t have to worry about the social network’s 30 percent cut. Chittoor says that test partners have shown overall revenue increases of 20 to 50 percent.

The other key detail is that Mertado isn’t a middleman; it’s a retailer that obtains and ships its own stock. The company will produce daily deals for the games that it works with, rather than relying on a game like Retail Therapy to find a Louis Vuitton retailer, for example, to sell the branded goods it already has in-game.

Unfortunately, this means that developers will have to hope that Mertado is agile enough to fulfill any special requests. Chittoor says there’s also an upside, though, in that Mertado can control the retail experience to make sure that it’s satisfying for customers, and developers shouldn’t be worrying about retail items anyway. “Most game developers, for good or bad, won’t come up with the right ideas. They can do it at the high level, but it’s hard to pick specific merchandise,” he says.

Although Mertado is still just starting out, its basic idea may have major implications for social games, especially those that simulate real life and business.

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