Do you know that the big social gaming companies are making hundreds of millions of dollars in revenue on Facebook and MySpace through games like Farmville and Mobsters? The startups and their success have been applauded by the major media. However, more important to see than their business success, are the unethical way that they are using to achieve that success.

In these games, you have to pay cash for in game currency if you want to level up faster and have a better overall experience. If you do not want to pay cash, there are a wide variety of “offers” available for you where you can get in-game currency in exchange for lead gen-type offers.

Most of these games trick users into a lead gen scam. The money these games earn is ploughed back into advertising in Facebook and MySpace to get more users. The new users are monetized using the same process.

Game developers who monetize the best (Zynga) can get the most money and so are able to spend the most on advertising. Gaming companies who do not use this fall behind. Few companies such as Playdom and Playfish seems to constantly shift their policies on lead gen.

Game developers use a complex set of partner chains to earn money from their leads. But due to the bad advertises, good advertises Netflix goes out, the game developers who are desperate to monetize, find questionable offers to earn the money. This process ensures that the good advertisers are out, and the worst of the worst remain.

The platforms which such social gaming are using (Facebook and MySpace) can regulate this, and have rules prohibiting some scams. But the platforms often do not enforce them and the developers ignore such regulations. As because Facebook and MySpace are getting a very good revenue from these social gaming scam advertisers, so they do not want to cut back on the money.

Zynga is probably paying $50 million a year for Facebook advertising. Such a huge advertising revenue has helped Facebook to get to profitability way ahead of schedule. Even though the gaming companies are paying the money but actually the money comes from users who’ve been tricked into one scam or another.

How to find out a scam?

You can easily find out if it is a scam. Check out the offers well. Most of such offers will try to bribe you with in-game currency. The terms of such deals will not be clear. Ask yourself  – “Will I buy this if the in-game currency is not offered?” If your answer is no, then this is probably a scam. A few examples -

Examples Of Scams: (Thank you Techcrunch)

Scam 1: In this scam, you will be offered in game currency if you fill out an IQ survey. In the survey, you will be asked four simple questions. The answers are irrelevant. Once you reach the last question you will be told that your results will be text messaged to you and so you should enter your mobile phone number. They will send you a pin code to enter on the quiz in your mobile number.

If you do that, you will come to know that you just subscribed to a $9.99/month subscription. Tatto Media  is the company at the very end of the line on most mobile scams, and they push it through Offerpal, SuperRewards and others to the game developers.

Look at the image. Can you find anything in the offer that says that you will be billed $10/month forever for a useless service.

 

Scam 2: Video Professor. If you sign up for a free learning CD from Video Professor, you get in-game currency. We’ll be told that you just need to pay nothing except a $10 shipping charge. But look at the page from checkout, which will tell you that you will be getting a whole set of CDs and will be billed $189.95 unless you return them.

You won’t probably return them because you will not know about the extra charge. See here for more on the Video Professor  scam.

Can you find any mention of the payments in the offer itself:

 

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