Facebook, Zynga Sign Long-Term Virtual Currency Deal 124
Despite recent rumors that Facebook and FarmVille developer Zynga were gearing up for a legal battle, the two announced yesterday that they have signed a five-year agreement over how virtual currency will be used. Quoting:
"The source of the conflict ... comes down to Facebook's decision to introduce Facebook Credits, an over-arching currency system to be used in all games on its platform. This allows users to purchase just one type of currency for use in Facebook games, rather than buying directly from individual developers — a lack of direct control over its monetization that became a major point of contention for Zynga. Also likely an issue is Facebook's decision to take 30 percent of revenues gathered from credits, with 70 percent allocated to the developers."
Monetize (Score:5, Insightful)
I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.
I wonder if he has found a strong enough soap to remove that constant slimy sensation.
Re:Monetize (Score:5, Insightful)
I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.
I hear it was virtually impossible ;-)
I wonder if he has found a strong enough soap to remove that constant slimy sensation.
There isn't a shower hot enough to make someone feel clean after that.
Re:Monetize (Score:4, Insightful)
The whole business model of the game is to make money via selling stuff for real money. The game itself is free to play but it's designed to encourage players to draw friends into it and to spend real money on it. Or do you think they're running Farmville out of the goodness of their hearts?
Re:Monetize (Score:5, Interesting)
The game itself is free to play but it's designed to encourage players to draw friends into it and to spend real money on it.
So it's actually a very sophisticated and subversive MLM (Multi Level Marketing) program that rewards participants with a video game. Having never played it I didn't realize this but whomever the genius is who came up with that deserves every cent they make!
Re:Monetize (Score:5, Insightful)
I agree in the analysis and disagree in the resulting conclusion.
At some point I stop seeing an insightful, astute, marketer and I start seeing someone who bases his income on the stupidity of the most stupid.
The guy you call genious, from my point of view is just as repugnant a person as a tv fortune teller.
Re:Monetize (Score:4, Insightful)
You may think such games and spending on them is stupid, but if it gives some value to the user (fun, feel of accomplished, whatever), what's wrong with it? People like different things.
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This is not different to any other game, except for most games you pay up front, not knowing if you are even going to enjoy it.
Zynga builds on the same fundementals that keep all game players coming back.
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if people are enjoying the product what's so harmful about it?
I don't judge the product. I despise those who work on finding ways of monetizing the product, even at the expesnse of offering an inferior product.
It's that sort of logic that leads to a society of rounded corners and no risk, a world that simply can't exist.
What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.
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I don't judge the product. I despise those who work on finding ways of monetizing the product, even at the expesnse of offering an inferior product.
Fair enough, I don't like Microsoft's products but I will not begrudge them their profit, that's the free market. Consumers will not always make the smartest choices but it is up to them to make that choice be it wise in your eyes or not. Anyway, what's wrong with making money?
What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.
Wow, way to show your despotic cards. Let's examine that statement, you think that "forbidding dangers" is a solution that leads to a "fool proof society"? Who, pray tell, is the arbiter of these "dangers" and who enforces the act
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What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.
Wow, way to show your despotic cards. Let's examine that statement, you think that "forbidding dangers" is a solution that leads to a "fool proof society"? Who, pray tell, is the arbiter of these "dangers" and who enforces the actual "forbidding".
I wasn't clear. I meant "fool proof society" as your "society of rounded corners"; something that doesn't work.
I'm not a smoker but I don't believe I, or anyone else, has the right to tell smokers that they can't smoke.
Using the smoking example, my point was that forbidding smoke is useless and that people smoking is an indicator that the information given to the population about tobacco was insufficient or wrong.
An even clearer example is that of drugs. Prohibiting them, instead of making sure that everybody understands their dangers, has the effect of concentrating the negative effect on the less educated popul
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So, finally, what I implied was that, while I despised tv fortune tellers (or other businesses based on taking money fro the uninformed), I'd not stop them from continuing with their job. I'd rather use them as pointers to where is the education/information system failing.
That seems completely reasonable to me, the ambiguity of discussion forums clearly caused some misunderstanding here!
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Indeed, and my last response was so careful because I'd have answered just as you did, had I interpreted what you did.
Cheers.
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>people smoking is an indicator that the information given to the population about tobacco was insufficient or wrong
This is pretty naive. I used to think the way you do about smoking and drugs. "Why would anybody ever do that? Don't they know how bad it is for them?" I said that once around an occasional-smoker friend who simply corrected me with "It's not about whether they're bad for you; it's about how they make you feel." It's not fundamentally an "education about drugs" problem. It's something
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Okay, I have to put a bite in on the Anti-Microsoft plug. I'm sorry, but as much as microsoft products suck, most everything else sucks more for consumer software. Microsoft provides integration between their products, they are supported and fixed. Very few products in other realms come close to that.
Apple's products are better to some degree because they provide reliability through simplicty, but nobody has ANYTHING as good as the office suite that works with the rest of their stack.
OOo? It feels like I'm
Re:Monetize (Score:4, Insightful)
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There is the slightly worse factor that for many MMORPG, they have to pay monthly. At least for Farmville (never played the other Zynga games), you only have to pay if you want to, or if you feel you need the cute extras.
I don't really see such a distinction from regular downloadable games and online games like Farmville... The only real difference is that Farmville is much better geared toward making you invite more people. Many of the "regular" games have now started to monetize on extras, although most t
Re:Monetize (Score:4, Insightful)
At some point I stop seeing an insightful, astute, marketer and I start seeing someone who bases his income on the stupidity of the most stupid.
Insightful, astute marketers make their living finding the stupidity in people. You know who said "a fool and his money are soon parted"? A marketer, that's who.
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Mod parent -1, Elitist Jerk
You really think people who spend money on entertainment are stupid? Because that's all it comes down to.
The game maker has a world where you can have fun/power and, if you spend real money, you can have MORE fun/power. It doesn't float my boat, but I certainly wouldn't put somebody in the "most stupid" category because a game was worth a few bucks a month to them. I see no real distinction between these games and most MMOs.
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I agree. It's actually one of the oldest tricks in a salesman's book.
Over the years people have been hailed as business or marketing geniuses for the seediest of tricks such as:
1) Lying to people about your product being healthy
2) Making people feel insecure
3) Using market power to target and undermine competitors
And over and over again people fall for it.
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You can replace marketer, with just about every other profession too. Just about everything in this world is about taking advantage of people that don't have access to the information that you do, or the skill sets to understand and apply that information.
The asshole that sees a $1 million dollar antique and buys it for 50c at a garage sale is just as repugnant as
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I 'play', if you could call it that. Farmville isn't really a game but it makes for nice downtime conversation and has reconnected me with some of my friends.
It also gives you a chance to have secret little side conversations about nails and puppy chow.
The premium items work like this:
You can have a Barn for 5,000c in game coins you earn in game.
But you can have a COW PRINT Barn for 17 FV (about $1.70 cash.. or maybe 0.17c cash.-- I think it is 10 cents per FV tho).
You can get a pond for 5,000c. Or you ca
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Is there no advertising revenue? I know they try to make money off of selling game credits, but I would be surprised if that were their only source of income.
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I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.
Somehow I doubt he'll care when he's a millionaire..
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I pity the guy who sells help with documentation sold with a virtual product running on sold hardware that is built from sold compartments that are made out of sold microchips that comprise sold integrated circuits that are made out of sold natural resources and were designed using documentation to a virtual product running on hardware that is built from...
Wait, is that slimy at all?
Re:Monetize (Score:5, Insightful)
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Yeah but their App Store policies are atrocious.
Oh! Wait a second... I thought you said Apple. Nevermind.
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If you've made the right friends...
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Realllyyy?
So... um... can I be your friend on Facebook?
Wait a minute... this is Slashdot so your probably a dude. Never mind.
Re:Monetize (Score:5, Funny)
If FarmVille is the most compelling thing you can find online, then I don't think I want to be your friend. Facebook or real-life friend.
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Because that's what the world economy needs today: virtual currency. Like we don't have enough types of currency that aren't real.
When can I start trading in derivatives of securities that are based on virtual currency? Or futures of derivatives of securities that are based on virtual currency?
Fuck's sake, can we please go back to trading in beads? Or tulips?
Whoa morons. (Score:5, Insightful)
are they aware that, if zygna wants, they can now just set up their servers with farmwille and draw their 85 million players to it ?
i bet that last bit was the thing that forced fuckerberg to sign a deal.
btw mark, youre fuckerberg for me from now on. your numerous failures in regard to privacy policies and flops with pr earned you an f in place of the z in your last name. enjoy.
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That's the rate online game stores (Steam, XBLA, etc) tend to charge. It's their cut as the retailer of the game, for providing the infrastructure, advertising, etc that their service offers and many people accept that trade-off. For comparison, I believe the indie license for the Unreal Engine is something like 50% of your revenue.
Farmville cannot separate from Facebook, it requires the social propagation system it has on Facebook where Farmville players effectively spam their friends with advertising for
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Steam, microsoft games, market stores for various products,etc all provide hosting and other features which based on brick/motar distribution would give the them 25-50% of the money paid by the customer. Facebook is just offering a microtransaction service.
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btw mark, youre fuckerberg for me from now on. your numerous failures in regard to privacy policies and flops with pr earned you an f in place of the z in your last name. enjoy.
I used to call him that as a joke. Maybe now Dumbfuckerberg would be more apropos?
Zuck: They "Trust me"
Zuck: Dumb Fucks
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Stan Marsh? More like Stan Darsh..
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It's about the rate of a very high APR credit card. Payday lenders and the like can have effective rates that are in excess of 100%-- they'll never admit as much, because they use several accounting tricks to wring more money out of the people they loan money to.
And the next thing you know, Facebook will spin this as, "See? We're not as bad as payday lenders." *facepalm*
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Virtually Understandable? (Score:2)
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30% does indeed sound like a lot, but if you RTFA it says they plan to use that 30% to improve the game interface and features, as Zynga has been requesting for a while. So it's not all profit for them.
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It is all profit after they recuperate the costs of the upgrade, which I doubt will take long. And then it is all pure profit, forever, with no work necessary.
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They're already doing that, so if they're already making a profit then this is just extra profit.
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It's a good thing for everyone except FarmVille, and who cares about them? (And you could even argue that their loss is short-term with a long-term benefit)
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My point was that this system is simply pure profit for no effort. It's a tax made possible by Facebook's monopoly-like status.
Yes, profits can be put back into R&D but that's not got anything to do with what I was talking about. I was simply stating that after a short while of recouping development costs, this 30% tax on game tokens is all profit for Facebook.
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I don't see how it is unfair, and even assuming that FarmVille loses out (i.e. they don't recoup costs from the tighter cooperation with Facebook that'll follow from their sharing a common revenue stream), is that a bad thing for end-users if Facebook now has the incentive to promote a more diverse set of games and applications?
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My point wasn't whether it was good or bad, my point was that it's pretty much pure profit. 30% to me just seems like it's going to be a *lot* of money, I bet it only would take 1% or less to run the servers (of course that depends how popular the service becomes). 10% seems to me like a fair-ish cut, 30% is just greedy.
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If Facebook are the ones dealing with the sales and disputes, preventing money laundering and credit-card fraud, putting a bigger brand behind the virtual currency making it less suspect with better protection, keeping things legal across multiple countries and sets of laws, that juicy 30% might sound like a lot less all of a sudden, compared to 70% straight up, dealing with one company.
Also it's profit that someone is making. I really doubt FarmVil
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Because systems serving tens of millions of people run, maintain, and develop themselves..
somersault is on target here. It's similar to Google adding YouTube to its infrastructure. They're already in the business of shoving dump trucks worth of data out the door so YouTube didn't add that much to the overhead when compared to their current operation.
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i hate to bring this up but
SecondLife is partly a 3d Facebook
in fact if you wanted to you could buy a plot of land and have a FaceBook type wall that is an actual wall.
And just to really freak you out with SL 2.0 you can have that wall show your public facebook wall.
name a face book thing and i can name something in SecondLife that does the same thing.
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Say, a large and growing user base ?
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okay im going to have to concede that one but if Linden Labs would cut back on the drinking during the meetings where things are being decided then we could actually see this.
psst btw if you want most of the features of SL 2.0 but not that interface then check out Emerald.
As if credit cards are bad (Score:4, Interesting)
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I think he's talking about the cut per transaction, not the interest on loans.
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I completely don't understand your statement. Credit cards charge all the way up to 21% and more!
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You can get in the double digit transaction fee range if you are a very small company so you don't qualify with the credit card companies. Then you have to go through 3rd party companies and they charge double digit percent fees.
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It's totally unrelated to a platform fee, but then again so is an interest rate..
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Actually, the default rate for online card not present rates is $.25 + 2.4%. Usually you can get that down to $.15 + 1.85% if you are willing to pay the sales game. And with some of these games, they'd qualify for Interchange pricing and could probably get that knocked down to $.10 + 1.5% per transaction if they are processing more than $50k per month.
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You need to be moving a lot more than $50,000 a month to get that kind of pricing for card-not-present, even as a well-established business. That's generally the "teaser" rate and doesn't include amex, rewards cards, international cards, etc etc. A blended rate of 2.25%-2.5% at the end of the day is actually pretty good.
Understatement of the week (Score:2)
Also likely an issue is Facebook's decision to take 30 percent of revenues
No sh*t sherlock... that was the main contention point.
Virtual Currency? this is just wrong! (Score:1)
it is only me or there's something very wrong with the term "Virtual Currency" ? people pay real money for virtual money? there's no other word to call this except a big scam.
if one pays 10$ for 100 virtual bucks. and in theory Zynga (zynga is not a bank as far as i know) take your 100 VM and multiply it by 10,000, this makes you rich? no, it probably makes you very stupid.
now i totally understand the deal when it's related to gaming, it's OK, you pay for content, and it does worth something.
but think what
not THAT wrong... (Score:2)
Re:Virtual Currency? this is just wrong! (Score:5, Insightful)
people pay real money for virtual money?
"real" money? You mean like Gold?
Its better than current alternative (Score:1)
Facebook virtual currency will put a stop to this and ensure that users who want to buy virtual currency will get just that, with no addition of malware.
Taking 30% cut from it is greedy but hey... i'd rather pay the 30% fee (which is invisible to end-user anyway) than get my credit card emptied out by some Russian grou
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i'd rather pay the 30% fee (which is invisible to end-user anyway)
Not so invisible, Zynga may just raise all their prices by 30% as they migrate to facebook credits.
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yes.
Re:Virtual Currency? this is just wrong! (Score:5, Insightful)
people pay real money for virtual money?
People transfer one essentially worthless measure of value into another, yes. Real life money is almost no use by itself, it's only because of a strange kind of social contract that we regard it as having any value. People obviously must perceive value in virtual currency or they wouldn't buy any. So it's a kind of meta-currency - slightly less useful than real money, but still valuable to the individual.
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I actually think that in the near future virtual currencies will be more and more popular, to facilitate easier online transaction that don't involve traditional banks/paypal fees. Virtual currency exchanges will come around, and BOOM! You have a new online way to pay for goods. After all, money is just a number.
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guys (who still has FB account), please, quit facebook, delete you account, don't give a hand to this evil to spread. facebook just makes stupid people more stupid then they already are.
Says the guy who considers DLC credits "evil" because a journalist called it "virtual currency"..
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Social games need their user's money to survive. Companies won't (and can't) make games for free. The traditional "you buy a game, then you play the game" business model doesn't work on social networks. People are used to games on the web being free. So the only way to make money from the free games is to offer special cont
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If you only consider money real if Walmart accepts it (I'm exaggerating, but I think you understand my point), please reconsider: there are literally hundreds of different currencies in the world, all printed by recognized governments and some even fully backed by national gold reserves, that you will not be able to purchase anything somewhere other than the country of that money's or
Re:Virtual Currency? this is just wrong! (Score:5, Informative)
A currency, by definition, exists only in the mind of the users anyway. The £10 note I have in my pocket is only worth £10 because people will happily exchange it for goods / services / other notes to a value of £10. If there's a nuclear war, it'll be worth ABSOLUTELY NOTHING if I survive that. A few tons of food, a working car, or a nugget of gold, on the other hand... and even the last one is questionable that it would have value until civilisaton was rebuilt.
When Zimbabwe's currency became almost valueless and therefore useless because nobody wanted to accept Zimbabwe dollars (or whatever they were called), the currency was abandoned and people used dollars because other people would *happily* accept dollars. It was still a legal tender, but it was useless because nobody was willing to accept it for the value it purported to hold.
My £10 note also holds a peculiar legal status as it is only a promisary note to the value of £10. It says on it "I promise to pay the bearer, on demand, the sum of £10", and it's signed by the "Governor and Company of the Bank of England". Other notes in other countries have similar legal status. If I go to Scotland (technically the same country, because they are both in the UK), I stand a good chance of being given a similar note by the Bank of Scotland in my change. Both are legal, have identical "values" as they have agreed to track the Bank of England values - but try getting a London cabbie to take one. It's still just a piece of paper, at the end of the day, that costs WAY less than £10 for the government to fabricate. The same for coins.
A cheque has similar legal status. It's "virtual" in that the currency doesn't actually exist in a tangible form. But each time I write one, that's a binding legal contract to give someone something of that value. In the past, cheques have been deemed legal when they were written on a cow. The Bank had a legal requirement to accept it as a binding contract at the time.
Historically, when coins actually started to be worth more than their face value, they were melted down and sold to people for more money than they represented. Any currency is only a representation, or a promise, of the value written on it. Sometimes that promise means nothing.
With a "digital" currency, the situation is no different. No "money" changes hands when I buy something from Amazon, just a number goes from one box to another on some computer somewhere. So credit cards and bank accounts are no different to a virtual currency at all, because they only exist as a number... the plastic card is merely a convenient security device / container for that number. If my country dive-bombs economically, it might well be the case that international sellers refuse to acknowledge that my money transfer is worth as much as I say it is. It's all based on a perception of value.
Thus, all currencies are by definition "virtual".
Therefore, if I choose to exchange my "real" money for some "virtual" money, it's no worse than putting it into my bank account. In fact, I do this every day - I buy petrol and I'm given "loyalty points" which I can cash in to claim, say, a cut-glass goblet or a breakfast bowl at a later date. And people buy entirely "virtual" products every day - the games on my Steam list, the account for my mobile phone, the subscriptions to websites, I don't see any "tangible" product at the end of a day, just the result of a bit flipping somewhere on some distant server, but it still has value to me.
Facebook's plans are no different at all, nor are some MMORPG's "gold", or an LWN.net subscription, etc. - they're the same as every other "virtual" currency / purchase out there (which is why Beenz and Paypal were often under investigation under various banking laws - they were, in effect, banks).
If people *want* to pay "real" currency for some game tokens of some kind, then they believe they are going to get value from those tokens. It's no different to going to
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Well thought out and well reasoned comment on this issue.
Hell of a more interesting to read than the average gulped up newspaper-fodder these days.
Please keep writing :)
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where do I go to cash in my beenz (Score:4, Insightful)
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Maybe you can swap them for a Farmville cow owned by a guy caled Jack...
disappointing (Score:2)
I was hoping this would be a long, drawn-out standoff that somehow ended up damaging both companies.
Worse than DRM. Much worse. (Score:1)
It’s like DRM: When the server is gone, your “money” is gone. (Yes, technically it’s still fraud. But I don’t see anyone of the retards who would actually use this know about that. Much less sue. And even less win.)
Plus you can not turn it into anything with any physical value. Only into imaginary things.
Needless to say: People who use this, must be shot at first sight.
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It's like... ...paying for food, once you ate it it's gone! ...paying for a concert, once it's finished it's gone! ...paying petrol, once you burn it it's gone! ...paying for sex, once you're done it it's gone! ...paying for theater tickets, once it's viewed it's gone!
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This isn't about DRM, it's about buying 'virtual money' (tokens which you can exchange for objects in an online game) You can expect online support for the game to stop at some point, just as World of Warcraft will stop at some point.
Everything you buy wears out at some point. Cloths go bad/out of style, food gets eaten/rots, online games end, life ends.
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That was more expensive the a one off. But she will still 'end' at some point.
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I'm not generally a fan of DRM, game expansions etc specifically because they limit my ability to continue to use a product in the future. But calling it fruad is little better than FUD.
I have no issue paying for something with a limited lifespan. In fact, if I could pay a reasonable monthly rate to download and play games of my choice on my console I'd do that rather than buying (generally 2nd hand games
Listen to Sheldon (Score:4, Funny)
I guess all that subliminal messaging in The Big Bang Theory might finally pay off.
"Buy Zynga!"
Facebook Late to the Party (Score:1)
Well, it seems that Facebook's reluctance to (or slow) monetization of the site has certainly come back to bite it. When releasing details of the API for developers back in the day little did they know that the casual market would suddenly turn into a full blown business platform on top of their own infrastructure.
Unfortunately they are now in the position where Zynga are such a big part of Facebook that forcing them off the site through policy changes would be a loss for Facebook any way they looked at it.
what does the IRS think of this? (Score:4, Interesting)
what does the IRS think of this?
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http://virtuallyblind.com/2007/10/23/tax-virtual-profits-in-world/ [virtuallyblind.com]
Old article but hey, was the first thing I found when googling for "irs virtual currency".
Google ftw? :-p
Flooz 2.0? (Score:2)
What's the current exchange rate between Facebook Credits and Flooz [wikipedia.org], Whoopi?