Facebook Sets July, 1, 2011 Deadline to Make Credits Sole Canvas Game Payment Option

Starting at its developer conference last April, Facebook has been saying publicly for the past year that Credits would eventually be the only payment option in social games on the site (although it started saying so to developers months before).

It had originally slated all developers to have completely made the switch by the end of 2010. While that has mostly happened, there are still many games not using Credits.

So the company is announcing today that all developers who have games on canvas pages will need to move to only use Credits by July 1st of this year. New games will be required to use Credits as the virtual currency when they first set up their canvas pages; older games will also be required to switch to exclusively use Credits, too.

For users, that means no more paying for currencies directly with credit cards or other methods that don’t somehow use Credits.

For developers, it means more costs and benefits to plan for.

Credits, along with whatever benefits it brings, also comes with a 30% revenue cut that developers have up to this point not had to pay. Although many have already adopted Credits in whole or in part, the potential cost of exclusive implementation continues to be an issue for the ecosystem. Facebook’s mandatory push could, beyond the risks to developers’ businesses, also help increase the prevalence and ease-of use of Credits to the point that the currency makes relatively more money for developers even with the fee — or that, at least is, Facebook’s plan.

New Credits Promotions, More Stats

As part of the news, Facebook is also releasing some big updates to its promotional plans for Credits, and stats on adoption.

Perhaps the biggest piece of news is that Facebook is going to be strongly encouraging developers to use Credits is the premium in-game currency, beyond requiring Credits to be the only virtual currency payment option. According to Deb Liu, a lead platform marketing manager  at Facebook, the company could offer additional benefits for developers who do this, including free advertising on the Games dashboard, in other Facebook ad inventory, and in other special features. She tells us to expect more news on that front soon. Note that we’ll be asking her for more details tomorrow, as she’s on a monetization panel at our Inside Social Apps conference in San Francisco.

Liu tells us that Facebook doesn’t plan to make premium-currency implementation mandatory, however. The company is, as before, only requiring that developers use Credits as the payment method for one or more currencies that developers have within games. In case you’re not familiar with social game virtual currency models, many popular titles are currently designed around dual currency systems. These currencies are branded around the particular game, and allow developers to tweak the virtual economy by doing things like give away more of one kind of currency for in-game actions, and increase the monetary cost of the premium currency at the some time to encourage people to buy (and pay more).

However, Facebook did tell us that it may make “some exceptions” to this new policy of requiring Credits to be the only available payment option, with those exceptions possibly including prepaid game cards that have already been launched by a few large developers, as well as specialized regional payment options which Facebook has not yet integrated into Credits.

Facebook’s rationale for promoting in-game usage of Credits is that doing so will increase the overall visibility of the currency to users, thereby enticing more and more of them to spend their money on it directly. Otherwise, the additional step of buying Credits then buying another currency can create confusion and decrease conversion.

While Facebook has been criticized by developers for forcing Credits on them, the company should also be recognized for the drawn-out implementation process it is going through to make sure that the product works for the ecosystem. Liu explains that the next five months are intended for lots of fine-tuning of payment options (it plans to add a lot more), payment flows, the new features, and other parts of the expansion.

Beyond whatever Facebook plans for promoting in-game implementations, it also has a bit more to share about adoption — Credits is now used by 350 applications from 150 developers representing around 70% of Facebook virtual goods transaction volume, according to the company.

We’ve separately heard some developers privately praise Credits as a better way to monetize than other payment options, and we’ve also continued to hear other developers claim that Credits could destroy their livelihoods. We’ll be discussing all this at Inside Social Apps tomorrow.

Although the announcement appears to be directed at all social games, we’re also double-checking with Facebook to confirm that the rules do not apply to non-gaming apps that have virtual currency, such as gifting titles.

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Leave a Reply

11 Responses to “Facebook Sets July, 1, 2011 Deadline to Make Credits Sole Canvas Game Payment Option”

  1. XP35 says:

    What’s your source for this?

  2. Eric Eldon says:

    The information about Facebook’s plans comes from Facebook. The information about developers’ perspectives comes from developers we’ve spoken with.

  3. Andrew Steve says:

    Sorry, this isn’t quite accurate – the official Facebook post linked to says “Although we are not requiring developers to use Facebook Credits as their sole in-game currency, we are offering special incentives to those who do (see below for details).” (2nd paragraph)

    So they’re requiring all apps to support FB Credits transactions, but they’re not requiring that they *only* support FB credits.

    I can see that ugly day coming pretty soon, though.

  4. Eric Eldon says:

    Hi Andrew, I’ve been answering this question over on the Inside Social Games post.

    Here, “payments” means all methods of putting real money into virtual currency on Facebook, including credit card, offers, game cards, etc.

    Meanwhile, “in-game currency” means currency in games that you can earn through things like watering crops, not through payments. Facebook is saying that if devs want to use in-game currencies, that’s fine, but the only way that users will be able to *pay* real money for them is through Credits.

  5. Adknowledge Ventures Onto Android With an Eye to Help Mobile Developers Monetize says:

    [...] when Facebook may look to clamp down on third-party offers companies. Facebook said yesterday that all canvas developers will be required to process payments through Facebook Credits by July, giving the company a 30 percent cut of [...]

  6. Sony App Rejection Signals Stronger Enforcement Around In App Purchases says:

    [...] infrastructure and whether that raises antitrust issues. In a similar move last week, Facebook finally set the deadline for making Credits the sole payments option for canvas applications in July… Presumably, because Credits has been on the roadmap in some variant for four to five years, the [...]

  7. Facebook comenzará a dar dinero virtual a los usuarios por ver anuncios : Soft Zone : Blog sobre Software con tutoriales de ayuda y noticias says:

    [...] El 1 de julio será la fecha límite que tienen los desarrolladores de los juegos para para procesar los pagos a través de créditos Facebook, más información aqui [...]

  8. EMI signs Facebook licensing deal with MXP4 for social games - TNW says:

    [...] the ‘mandatory universal currency’. From July 1st, all game developers on Facebook are required to only process payments using Facebook [...]

  9. Is Zynga Too Big To Fail for Facebook? | Digiday says:

    [...] increasingly throwing its weight around in its 600-million user ecosystem. For example, as of July the only currency allowed in Facebook will be Facebook Credits; game companies will no longer be able to employ tokens, points or anything of that nature unless [...]

  10. fictive facebook, part 1 | mediark says:

    [...] revenues last year, the company earned $557 million from Facebook Payments - the virtual currency it began requiring game developers on the platform to use as of July 1, 2011 – and other [...]

  11. Facebook shares new documentation for local currency pricing, sets migration for Q3 says:

    [...] pricing their virtual goods in $0.10 USD increments as was required when Credits became mandatory in July 2011. This also eliminates any confusion that resulted from users trying to think about conversion rates [...]

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