Rixty’s Cash-for-Virtual Goods Service Bringing In More Gaming Revenue

Social game developers have been busy experimenting with ways that users can pay for virtual goods with cold, hard cash. But how is this effort working? Earlier this week, alternative online payment company Rixty announced a deal with offer company Offerpal, in which people can buy Rixty’s pre-paid cards and at convenience stores or at Coinstar change kiosks, then use codes on those cards to buy virtual currencies in games. So we asked Rixty how this service is going.

Here’s what Jason Hovey, the company’s head of business development, tells us:

Rixty users are averaging $40 plus a month in spending with our partners, and we’re seeing fantastic data on repeat spending. Our users do not seem to be one time purchasers. We are also hearing from our partners that this is not cannibalistic spending, but rather that we are bringing new, previously unpaid users into the revenue mix. According to our user surveys, almost a quarter of all Rixty users have never spent online before, and 50% have not spent online in the past 3 months. We think that we are having such success because users view their spare coins almost as free money and are empowered by their ability to use it through Rixty to fund their online purchases. Roughly $3 billion in coins goes through the Coinstar machines each year, with another $10 billion in change sitting in US household. Rixty is trying to help our partners get as much of this as possible by giving youth and the unbanked a simple, easy to use way to spend this money online.

The company’s partners already include massive multiplayer online gaming sites like Z8Games, and casual gaming portal/ad network Mochi Media. Now, with Offerpal, users who play games that integrate that companies offers and payments services can also pay through Rixty accounts. As Offerpal works with a wide range of social gaming companies, these cards could be a meaningful new revenue stream for all parties.

Coinstar has kiosks in more than 10,000 locations around the country, and itself has been moving into social gaming — although Rixty’s deal with the company only went live in July, so that effort is also still young. Rixty cards can also be bought at around 4,000 convenience stores.

In related news, another pre-paid card service, InComm, officially announced a deal with game developer Playdom earlier this week, and apparently also with Zynga.