Facebook and CrowdStar Sign Five Year Deal to Make Credits the Exclusive Virtual Currency

Social game developer CrowdStar is cementing its existing status as the lead test partner for Credits, Facebook’s virtual currency. The two companies have signed a deal where the developer will exclusively use Credits as the paid virtual currency in all of its games for the next five years. It has already been using Credits exclusively since this past December, and claims that its average revenue per user (ARPU) has gone up by almost 50% as a result.

CrowdStar has been in a good position to try out Credits, because it gained most of its users last fall; developers that got established earlier have tended to invest more money in their own monetization services. Many are concerned about the cost of Credits, including the 30% fee that Facebook takes out of all purchases of the currency as well as the loss of control and breakage. By starting fresh, CrowdStar has less to lose even as it sees what it can gain.

Facebook is testing many different ways of making Credits valuable to developers, like a broad variety of payment methods, Facebook’s brand, high-quality offers, purchase volume discounts and free advertising. The announcement today is intended to highlight how it is making “liquidity” happen — the more users who have Credits to spend, the more sense it will make for developers to plug in to it, just like businesses gravitate towards broadly available fiat currencies, such as the dollar or Euro.

While CrowdStar could be seeing the benefits of Credits from other factors, like improved interface design, its relationship with Facebook does look beneficial to the company. It’s not just seeing higher revenue, it is seeing new growth — Facebook heavily promoted its Hello City simulation game this past month, for example, and that probably helped it grow quickly to nearly 5 million monthly active users, according to AppData. Other developers are being enticed to make Credits the exclusive paid currency in their games, and we expect more announcements on that front in the future.

A big question remains: How might Facebook require Credits? Whether or not is allows non-Credits payment options, like PayPal or third-party offers, is not clear. Not making Credits the mandatory way to put money into the virtual economy of a game means less liquidity; by having other payment options, developers also don’t have to pay Facebook a 30% cut, and instead pay out far smaller revenue shares directly to payment offer providers. Facebook tells us now, as it has in recent months, that it has not made plans one way or another. Here’s the company’s statement, when we asked for more details on how developers can implement the currency:

Facebook Credits give people an easy to use and trusted way to buy and spend virtual currency inside applications, such as games. We believe Facebook Credits are a great way for application developers to handle transactions within their games and we are testing many different ways for developers to integrate Credits. We have no plans to require developers to use Credits as their exclusive in-game currency. Some developers today are choosing Facebook Credits for transactions within their games, while others are supporting Credits as a way to purchase their own in-game currencies.

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11 Responses to “Facebook and CrowdStar Sign Five Year Deal to Make Credits the Exclusive Virtual Currency”

  1. Osi says:

    Uh, to correct this story, Facebook takes out 33% not 30% that is popularly advertised. They take out another 3% before the money makes it into your coffers/bank account.

  2. Bart says:

    Why would anyone in their right mind want to use Facebook’s credit and lose 1/3rd of their revenue? What’s the real benefit to use facebook vs a stand-alone with FB-connect features?

  3. Eric Eldon says:

    Osi, you also left this comment the other week. I asked you to provide any evidence to confirm what you’re saying, and you still haven’t.

  4. Osi says:

    Because, I have forgotten to bookmark that article, I will provide links directly from facebook mentioning this fact:

    Ref: http://developers.facebook.com/policy/credits


  5. Osi says:

    As for the benefit. There is none. Except for the fact that facebook is banning all other forms of transactions so you are forced to use facebook credits.

    Therefore, if you use facebook for transaction, you lose 1/3rd of your monies. But .. you have no choice but to use facebook’s currency.

  6. Eric Eldon says:

    Here’s what I see: “When you redeem Credits with us we will redeem them at the rate of $0.10 per Credit, less a service fee of $0.03 per credit redeemed.” In other words, 30%.

  7. Osi says:

    My reading == fail for now :(

  8. facebookmarketing.de | Facebook und das liebe Geld says:

    [...] für sich behält scheinen Credits für Anwnedungsbetreiber und Entwickler attraktiv zu sein. So wurde vorgestern eine auf fünf Jahre ausgelegte Kooperation mit dem Social Games Hersteller Crowdst…. Dieser wird die Facebook Credits als einziges Zahlungsmittel in seinen Online-Spielen einführen. [...]

  9. Facebook Credits will be everywhere… how to get your business ready! « The Social Bazaar says:

    [...] return to the shop” payment experience we’ve come to expect. Some early adopters like Crowdstar have seen an ARPU jump of 50% despite the 30% transaction fee Facebook [...]

  10. Facebook Credits will be everywhere… how to get your business ready! at Nudge Social Media says:

    [...] return to the shop” payment experience we’ve come to expect. Some early adopters like Crowdstar have seen an ARPU jump of 50% despite the 30% transaction fee Facebook [...]

  11. Playdom Signs Five-Year Contract With Facebook, Will Exclusively Use Credits says:

    [...] about the same size as Playdom, was the first to use Credits exclusively for a game, and recently signed its own five-year contract with Facebook. We’ve also been told by LOLapps, RockYou and Wooga that they’re on board [...]

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