After making its Angry Birds the dominant game on two mobile platforms, the developer Rovio Mobile Ltd. is taking flight in a new line: payments.
Rovio, of Finland, has developed an in-game payments system that players of Angry Birds may use to buy more mobile applications from the company, which bills the purchases to the user's monthly phone bill. This model has been gaining traction in recent months with U.S. wireless operators.
The system, named Bad Piggy Bank (after its game's porcine villains), is available through the Google Inc. Android version of the game and is limited to customers of Elisa Oyj, a mobile operator based in Finland. Rovio plans to expand the system's availability to other carriers next year, though it has not made public any plans to extend the system to other game developers.
On Dec. 27, Angry Birds was the top paid app for Apple Inc.'s iPhone and the top free game on Android, where it is ad-supported. A spinoff, Angry Birds Seasons, ranked as the No. 8 paid app on iPhone and No. 4 on Android.
On the iPhone, where Apple limits developers' options for in-app sales, Rovio added the ability to purchase a new Angry Birds character, the Mighty Eagle, for 99 cents through Apple's iTunes store as of Dec. 23. This character is meant to help users get through the game's more challenging levels.
Rovio did not respond to requests for comment.
The wireless carrier billing system is gaining favor in the United States. In October, AT&T Inc. signed partnerships with three mobile payment companies that enable its wireless customers to charge online purchases for digital content such as games and music directly to their mobile phone bills.
Historically, most digital content purchased through a mobile phone has relied on a method called premium short-message service, or SMS. Vendors use such messages to deliver digital content, such as ring tones, to a mobile phone. The carriers, however, required the merchant to pay as much as 50% of each purchase as a transaction fee similar to interchange.
Mobile payment companies have moved away from this model to direct-to-mobile billing, a system that is less costly to the vendors of digital content. With direct-to-mobile billing, vendors typically pay carriers 10%-20% of the sale.
However, such rates will prevent the direct-to-mobile billing model from becoming mainstream, said Todd Ablowitz, president of the consulting firm Double Diamond Group in Centennial, Colo. "I'm very skeptical that [billing model] is going to have a huge amount of success," Ablowitz said.
One flaw to the system is how long it would take Rovio to receive funds from the transaction, he said. The mobile developer "doesn't see any money until after the carrier gets paid" at the end of the monthly billing cycle.
Despite the system's imperfections, companies and investors involved with direct-to-mobile billing say the model is a continuing trend, Ablowitz said.
Consumers also appear to favor the option over eBay Inc.'s PayPal, according to research from Strategy Analytics, which in November surveyed 1,000 U.S. consumers online and 1,500 others from the United Kingdom. In the U.S., 38% of respondents favored direct-to-mobile billing, while 40% preferred it in the United Kingdom. Respondents in both the U.S. (31%) and U.K. (26%) preferred PayPal to using a credit or debit card.
What may have driven Rovio to get directly involved in payments, rather than adapt to the systems already in place and use them, is a desire to attract more revenue from its game's massive audience.
"Companies are exploring payments as a way to monetize" how many consumers use or view particular websites, or in this case, games, Ablowitz said. In this regard, Rovio's Bad Piggy Bank resembles Facebook Inc.'s Facebook Credits, which the social networking site launched as a way to encourage its own audience to spend money on a site many use every day for free.
