Facebook To Make Facebook Credits Mandatory For Games 116
An anonymous reader sends this excerpt from TechCrunch:
"Facebook has confirmed that it is indeed making Facebook Credits mandatory for Games, with the rule going into effect on July 1 2011. Facebook says that Credits will be the exclusive way for users to get their 'real money' into a game, but developers are still allowed to keep their own in-game currencies (FarmBucks, FishPoints, whatever). For example, Zynga can charge you 90 Facebook Credits for 75 CityCash in CityVille. ... The company acknowledges that some developers may not be pleased with the news, explaining this is why it is announcing the news five months in advance, so it can 'have an open conversation with developers.' The rule only applies to Canvas games (games that use Facebook Connect aren't affected), and while it's games only at this part, Facebook says that it eventually would like to see all apps using Facebook Credits. It's a move that's been a long time coming — there has been speculation that Facebook would do this for a year now, spurring plenty of angst in the developer community."
Thirty Percent Cut? (Score:5, Insightful)
The company acknowledges that some developers may not be pleased with the news
Hmmm, why would that be? Perhaps because:
Of course, Facebook gets something out of it: they take an industry-standard 30% cut whenever users purchase anything with Facebook Credits. That can add up to a lot of money -- we’ve heard elsewhere that Zynga is paying Facebook around $30 million a month for its Credits tax.
If anyone came up to me and said that five months from now they'd be harvesting thirty percent of my revenue, I don't think that conversation would last very long. My understanding is that a lot (if not all) of these game models is to get the user into the game for free and then urge them to pay small sums to improve their abilities in the game. I understand this move by Facebook avoids user lock-in to one developer but you'd think some credit card model could be implemented by a third party that would take far less than a thirty percent cut.
Also you're overlooking the interest. When an entity makes currency or "prints money" that is yet to be a realized transfer to the individual as goods or services, that money has the ability to accrue in value through interest or investing or whatever. The old model might have seen someone buying $50 of city cash and parceling it out over the course of the year. That cash flow will change subtly but importantly now as Facebook will be holding that $50 as it is parceled out to the possible game services. Facebook's cash reserves grow even if it eventually will be transferring that cash to game developers.
I understand these games would not have had the success they are enjoying without Facebook but surely there is some symbiotic relationship now that Zynga and other casual games have increased Facebook's crack-like effects.
In Soviet America... (Score:1, Insightful)
Re:Desperate to make money (Score:5, Insightful)
Why would facebook (or any other viral entity) stop trying to make more money, even if they don't need it?
Re:I wonder what the reaction will be... (Score:2, Insightful)
NB: I do not have a Facebook account at all, it's been deleted.
Facebook doesn't delete your account, it 'deactivates' it. The only way not to have a facebook account "at all" is not to have had a facebook account in the first place.
For those not familiar with web content (Score:5, Insightful)
30% is NOTHING. Really, it is a trivial amount. It is not uncommon for affiliate systems to have an even split on any revenue generated through an affiliate and Facebook is one HELL of an affiliate. Yes boys and girls, that is all it is. Nothing different from porn or game sites that link to payed content except Facebook already gets people to surrender a lot of privacy before ever clicking through to the real content. Facebook is not in the business of making a social website anymore then google is about search results. It gets its cash from people clicking on ads displayed on its site. It has done this advertising thing so well, that now people are even willing to pay for the advertisement.
Smart.
If you read the article, the big boys have no problem with this, it is advertisement cost to them and in the online world the costs of aquiring paying customers is very high. A "normal" business cannot afford to spend up to 50% of its revenue on advertising... or can it? Think of the massive sponsorship deals done by Coca Cola or Nike? You don't think that the price for sugar water in a can is really what you pay for a Coke do you? Same with Farmville. You, the paying customer, pay for getting more players to play the game.
Zynga isn't going to leave facebook, not only do they consider the cost more then fair and part of how their business operate, but where would they go next? Farmville IS facebook, it wouldn't survive a second in the cold hard banner world. Facebook has created the eco system in which Farmville can survive.
Read up on affiliate systems, they are the back bone of much of the internet.
Re:I wonder what the reaction will be... (Score:3, Insightful)
You can request to be "permanently deleted with no option for recovery". [facebook.com] I had a FB acct but requested a perma-delete in 2009 (inspired by a Slashdot story, but before "dumb fucks"-gate). Two weeks later I got a mail saying that it was re-activated, but I think that was just the staff (or their scripts) logging in to make it final: the emails (school and non-school) I used are "not associated" with an acct as of today, and I couldn't find me in a search by name (a partial list 'cause I wasn't logged in).
Still, Facebook being a big website, and Facebook being Facebook, their staff probably have an old backup anyway. :)