5 ms·

Facebook To Make ‘Facebook Credits’ Mandatory For Game Developers

44 points by noctrine 16y ago

wildmXranat 16y ago
I remember the days when you only had IRS dip into your pockets. Now everybody wants to take a turn.
- davidsiems 16y ago
  It's actually industry standard for the publishing platform to take ~30% as the article says. XBLA, Steam, and PSN all do this as well. It may seem like a lot, but those users wouldn't be available to you without the platform supporting you.
  - roc 16y ago
    I think the 30% concern is largely from people who see this growing into a paypal sort of service. 30% to sell virtual cow-feed is standard. 30% to sell a book or some jeans is not. Whether Facebook intends to go that way or not, people seem to be assuming it will.
mildweed 16y ago
If they start allowing the sale of non-digital goods on Facebook, they had better drop the 30% cut. That'll never fly with retailers, no matter how much exposure their Page gets them. Current payment processors take about $0.10 per transaction.
- 51Cards 16y ago
  Was about to post the same thing. You'll never get 30% on a retail product. In effect it would make everything you "buy with Facebook" 30% more expensive since there isn't that margin there, and that would kill the concept quick. I also question how wide spread this would be. I mean yes it has the potential to be huge but I purposely don't connect my Facebook account to anyone else (no Login with Facebook for me) because of their shoddy history with privacy. Last thing I'm going to do is attach payment info, esp since I don't play any games in the system. I'm not saying this won't be huge, but I am saying it's not going to be ubiquitous.
- mootothemax 16y ago
  If they start allowing the sale of non-digital goods on Facebook, they had better drop the 30% cut Agreed, 30% is a ludicrous amount for anything outside of Facebook. Now, if they could offer comparable rates to PayPal, I for one would sign up overnight. Is it that crazy to think that they could topple PayPal's current monopoly on low-end[0] payments? [0] I couldn't think of a better way to describe it, but if you aren't based in the USA, UK, Australia etc, there aren't a lot of options for getting your first buck for your web app etc.
  - egor83 16y ago
    if you aren't based in the USA, UK, Australia etc, there aren't a lot of options for getting your first buck for your web app etc. http://flattr.com http://flattr.com? They hail from Sweden, and are quite eurocentric.
    - mootothemax 16y ago
      flattr.com? They hail from Sweden, and are quite eurocentric. I've only had a brief look, but it seems like a fairly unsatisfactory way of implementing billing for a web app. I accept that I could be missing something obvious - can you let me know if I've got it wrong? :)
      - egor83 16y ago
        You're right, I'm sorry. It lets you transfer small amounts on the web, but it's not for billing.
- thinkcomp 16y ago
  FaceCash (http://www.facecash.com http://www.facecash.com), which my company runs, takes only 1.5%. We're not in any way affiliated with Facebook, but our system does use an image of your face to verify identity at the point of sale.
rwhitman 16y ago
Its not hard to imagine FB could become the primary virtual currency for everything within a very short timeframe.
- bryanh 16y ago
  At a 30% cut, I find that hard to believe.
  - rwhitman 16y ago
    Good point, but keep in mind they have 500M+ users. Almost everyone willing to buy into virtual currency is already on Facebook
    - jonknee 16y ago
      What does having a Facebook account have to do with being willing to use a virtual currency? I'm willing to use virtual currency and have a Facebook account, but I'll never use Facebook's credit system. I don't want Facebook to know what I'm buying.
      - rwhitman 16y ago
        Why not? People already trust FB with all their intimate details and relationships. I don't trust them either, but I'm pretty sure plenty of other people would. Of 500M+ users even if a tiny fraction adopted it, it would become a huge deal. I don't know what the stats are for virtual currency adoption rates, but even the most widely adopted currency probably wouldn't match what the entire Facebook ecosystem would bring in
    - rmc 16y ago
      How many users do Mastercard or Visa have?
      - slantyyz 16y ago
        Heck, how are people even going to be paying for Facebook credits in the first place? Why bother with the middleman, right?
gyardley 16y ago
It's funny how Apple charges 30% for in-app purchases, and that instantly becomes 'industry standard' in the minds of lazy TechCrunch writers. The cut taken by most virtual currency providers on Facebook is about a third of that. The 30% figure can only stand up in an environment without competition. Luckily for Facebook (and Apple), they can create an environment without competition by fiat.
- quanticle 16y ago
  And its that 30% figure which is going to prevent Facebook credits from becoming a wide-spread e-currency. There are many payment systems out there (Paypal, Google Checkout, etc.) that have lower fees and looser terms of service than Facebook. Its one thing for Facebook to mandate this for their own network. It'll be quite another for Facebook to push this service out onto the Internet as a whole.
larrik 16y ago
Isn't the Secret Service going to have a problem with this? I thought making your own currency was a huge no-no, and if it gets too popular they are going to have a hell of a time passing it off as something else to the government.
- quanticle 16y ago
  Its not going to be an issue, I think. I mean, Microsoft is already doing something very similar with Microsoft Points on XBox Live. EDIT: Actually, all the major game consoles use "credits" rather than actual dollars for their online transactions. If they can do it for their platforms, Facebook can do something similar for its own platform.
- mildweed 16y ago
  "You may not accept Credits as payment for a currency or other stored value item that can be used outside of the application." "You will not (and you will not enable or allow any third party to) sell Credits to, or trade or otherwise exchange Credits with, any third party." In short, Facebook Credits cannot be a commodity / currency. They're closer to gift cards, storing value only. [0] http://developers.facebook.com/policy/credits http://developers.facebook.com/policy/credits
- jonknee 16y ago
  It's not much different than eBay requiring PayPal.
- clistctrl 16y ago
  I was to be under the impression that it is not illegal to create your own currency. I believe the secret service protect "dollars" and issues related to that such as counterfeiting. If you have a link that says otherwise, i'm very much interested!
trotsky 16y ago
Right now the vast majority of Credits are spent on gaming, but it’s very likely that Facebook will eventually begin allowing third-party websites to offer a ‘Pay With Facebook’ option, and that may include everything from digital content to physical goods. Why would physical goods sellers use an upstart payment platform that takes a 30% transactional cut when there are tons of established financial firms who will do the transactions for 3%-5%? I mean the fact that they are making this mandatory means that they can't even organically convince vendors who are selling virtual goods on facebook's own platform. Surely this is facebook worship hand waving.
- msy 16y ago
  I guess the idea is that if FB has your card details it'll be a bit like Facebook Connect and will lower transaction friction. Which is exactly what Paypal does. Except - and it's quite incredible really - as a purchaser I'd trust Paypal much more than I trust Facebook, I don't want my purchase history being sold along with all my other personal data thankyou. The idea of trusting something less than Paypal is amazing, go Facebook!
itsonlyfair 16y ago
If someone doesn't like facebook, now is a very good time to have DOJ slap them around for anti-trust, just like http://en.wikipedia.org/wiki/United_States_v._Microsoft http://en.wikipedia.org/wiki/United_States_v._Microsoft If those major developers were told "close a deal because we're willing to mandate using credits" then Facebook deserves to be punished for anti market practices. There is little difference between "hey my OS is popular, let me use it to bootstrap my browser share" and "hey my Social Network is popular, let me use it to bootstrap my payments product".
Charuru 16y ago
Oh god no. As a Facebook app developer if something like this becomes official it would be like the end of the world. Where are you GOOGLE ME?! SAVE US!
cletus 16y ago
Does anyone else see "(techcrunch.com)" at the end of the submission title and think of the boy who cried wolf? This may be true but, for me, TechCrunch has gotten to the point where anytime I see one of their headlines I think it's sensationalist linkbait and I'm better off assuming what they're writing is exaggerated or simply not true. As for the claim, it may be true but I really don't think it matters and this is something that's important for anyone assessing FB as an investment. Facebook used to own social gaming. Arguably it still does. But it faces a huge threat, one which it hasn't remotely tackled: social gaming--and non-social gaming for that matter--is going mobile in a huge way. Facebook gaming is built on Flash. As we all well know, Flash is incompatible with iOS and doesn't really suit touch-based interfaces for those platforms that do support Flash (eg use of rollovers and so on). That's not to say that you can't write a mobile-friendly game with Flash but, to date, most people haven't (in my albeit limited experience). Facebook is, for most people, three things (IMHO): games, photo sharing and chat/messaging. FB's revenue seems built on ads and games. They're acting like they've got the market cornered on games but the don't. As Facebook usage goes mobile (as I believe it increasingly is), the draw of those games goes down and consequently so does the potential revenue. Sony, Microsoft and Nintendo should already be scared to death of Apple as far as portable gaming goes. I think Facebook should add itself to that list.
- scrame 16y ago
  MS doesn't have portable gaming. Sony's PSP is pretty much dead from a lot of their stupid choices. The NDS has a huge foothold and is an overall _better_ gaming option, and the 3DS looks promising. Apple will get the market of $3 casual games, but that market does not have a huge overlap with the DS demographic, and where it does, there is less barrier for an iPhone owner to get a DS than there is for a DS owner to get an iPhone -- you can get a used DS for less than a monthly AT&T iphone bill. Not to mention that the DS is much cheaper than an iPhone, and has multiplayer/networking built in. Apple is doing fine, and will continue to do so, but they are absolutely not going to unseat the DS any time soon. [ As a comparison, there have been ~60 million iphones sold, and about 135 million NDS, while iPhone adoption is strong, it has a way to go to just bowl over nintendos foothold. ]
  - 16y ago
lux 16y ago
If/when they do launch a "Pay with Facebook" feature, I'm sure they're aware that they'll have to come up with a fee schedule that's competitive with existing vendors like Paypal. I wonder if that would force them to lower their take on Facebook apps as well, or if they could finagle a way around that...
colinsidoti 16y ago
Heh, Facebook will need to continue making special deals with major game-makers. Facebook Connect can be used to implement all of the social features these games have incorporated. Asking a game-maker to stay with Facebook and ignore the 30% cut they're taking is unreasonable after the product is popular. I can see the cut become an automatically tiered percentage based on the amount of transactions being done. The more transactions, the lower the cut. Facebook simply does not provide enough value after these games are popular to justify a 30% cut. In all honesty, it hardly provides enough value at the beginning. Nothing says social games cannot exist without Facebook at all.
mildweed 16y ago
Its official http://developers.facebook.com/blog/post/451 http://developers.facebook.com/blog/post/451

44 points by noctrine 16y ago

wildmXranat 16y ago

I remember the days when you only had IRS dip into your pockets. Now everybody wants to take a turn.

davidsiems 16y ago
It's actually industry standard for the publishing platform to take ~30% as the article says. XBLA, Steam, and PSN all do this as well. It may seem like a lot, but those users wouldn't be available to you without the platform supporting you.
- roc 16y ago
  I think the 30% concern is largely from people who see this growing into a paypal sort of service. 30% to sell virtual cow-feed is standard. 30% to sell a book or some jeans is not. Whether Facebook intends to go that way or not, people seem to be assuming it will.

mildweed 16y ago

If they start allowing the sale of non-digital goods on Facebook, they had better drop the 30% cut. That'll never fly with retailers, no matter how much exposure their Page gets them. Current payment processors take about $0.10 per transaction.

51Cards 16y ago
Was about to post the same thing. You'll never get 30% on a retail product. In effect it would make everything you "buy with Facebook" 30% more expensive since there isn't that margin there, and that would kill the concept quick. I also question how wide spread this would be. I mean yes it has the potential to be huge but I purposely don't connect my Facebook account to anyone else (no Login with Facebook for me) because of their shoddy history with privacy. Last thing I'm going to do is attach payment info, esp since I don't play any games in the system. I'm not saying this won't be huge, but I am saying it's not going to be ubiquitous.
mootothemax 16y ago
If they start allowing the sale of non-digital goods on Facebook, they had better drop the 30% cut Agreed, 30% is a ludicrous amount for anything outside of Facebook. Now, if they could offer comparable rates to PayPal, I for one would sign up overnight. Is it that crazy to think that they could topple PayPal's current monopoly on low-end[0] payments? [0] I couldn't think of a better way to describe it, but if you aren't based in the USA, UK, Australia etc, there aren't a lot of options for getting your first buck for your web app etc.
- egor83 16y ago
  if you aren't based in the USA, UK, Australia etc, there aren't a lot of options for getting your first buck for your web app etc. http://flattr.com http://flattr.com? They hail from Sweden, and are quite eurocentric.
  - mootothemax 16y ago
    flattr.com? They hail from Sweden, and are quite eurocentric. I've only had a brief look, but it seems like a fairly unsatisfactory way of implementing billing for a web app. I accept that I could be missing something obvious - can you let me know if I've got it wrong? :)
    - egor83 16y ago
      You're right, I'm sorry. It lets you transfer small amounts on the web, but it's not for billing.
thinkcomp 16y ago
FaceCash (http://www.facecash.com http://www.facecash.com), which my company runs, takes only 1.5%. We're not in any way affiliated with Facebook, but our system does use an image of your face to verify identity at the point of sale.

rwhitman 16y ago

Its not hard to imagine FB could become the primary virtual currency for everything within a very short timeframe.

bryanh 16y ago
At a 30% cut, I find that hard to believe.
- rwhitman 16y ago
  Good point, but keep in mind they have 500M+ users. Almost everyone willing to buy into virtual currency is already on Facebook
  - jonknee 16y ago
    What does having a Facebook account have to do with being willing to use a virtual currency? I'm willing to use virtual currency and have a Facebook account, but I'll never use Facebook's credit system. I don't want Facebook to know what I'm buying.
    - rwhitman 16y ago
      Why not? People already trust FB with all their intimate details and relationships. I don't trust them either, but I'm pretty sure plenty of other people would. Of 500M+ users even if a tiny fraction adopted it, it would become a huge deal. I don't know what the stats are for virtual currency adoption rates, but even the most widely adopted currency probably wouldn't match what the entire Facebook ecosystem would bring in
  - rmc 16y ago
    How many users do Mastercard or Visa have?
    - slantyyz 16y ago
      Heck, how are people even going to be paying for Facebook credits in the first place? Why bother with the middleman, right?

gyardley 16y ago

It's funny how Apple charges 30% for in-app purchases, and that instantly becomes 'industry standard' in the minds of lazy TechCrunch writers. The cut taken by most virtual currency providers on Facebook is about a third of that. The 30% figure can only stand up in an environment without competition. Luckily for Facebook (and Apple), they can create an environment without competition by fiat.

quanticle 16y ago
And its that 30% figure which is going to prevent Facebook credits from becoming a wide-spread e-currency. There are many payment systems out there (Paypal, Google Checkout, etc.) that have lower fees and looser terms of service than Facebook. Its one thing for Facebook to mandate this for their own network. It'll be quite another for Facebook to push this service out onto the Internet as a whole.

larrik 16y ago

Isn't the Secret Service going to have a problem with this? I thought making your own currency was a huge no-no, and if it gets too popular they are going to have a hell of a time passing it off as something else to the government.

quanticle 16y ago
Its not going to be an issue, I think. I mean, Microsoft is already doing something very similar with Microsoft Points on XBox Live. EDIT: Actually, all the major game consoles use "credits" rather than actual dollars for their online transactions. If they can do it for their platforms, Facebook can do something similar for its own platform.
mildweed 16y ago
"You may not accept Credits as payment for a currency or other stored value item that can be used outside of the application." "You will not (and you will not enable or allow any third party to) sell Credits to, or trade or otherwise exchange Credits with, any third party." In short, Facebook Credits cannot be a commodity / currency. They're closer to gift cards, storing value only. [0] http://developers.facebook.com/policy/credits http://developers.facebook.com/policy/credits
jonknee 16y ago
It's not much different than eBay requiring PayPal.
clistctrl 16y ago
I was to be under the impression that it is not illegal to create your own currency. I believe the secret service protect "dollars" and issues related to that such as counterfeiting. If you have a link that says otherwise, i'm very much interested!

trotsky 16y ago

Right now the vast majority of Credits are spent on gaming, but it’s very likely that Facebook will eventually begin allowing third-party websites to offer a ‘Pay With Facebook’ option, and that may include everything from digital content to physical goods. Why would physical goods sellers use an upstart payment platform that takes a 30% transactional cut when there are tons of established financial firms who will do the transactions for 3%-5%? I mean the fact that they are making this mandatory means that they can't even organically convince vendors who are selling virtual goods on facebook's own platform. Surely this is facebook worship hand waving.

msy 16y ago
I guess the idea is that if FB has your card details it'll be a bit like Facebook Connect and will lower transaction friction. Which is exactly what Paypal does. Except - and it's quite incredible really - as a purchaser I'd trust Paypal much more than I trust Facebook, I don't want my purchase history being sold along with all my other personal data thankyou. The idea of trusting something less than Paypal is amazing, go Facebook!

itsonlyfair 16y ago

If someone doesn't like facebook, now is a very good time to have DOJ slap them around for anti-trust, just like http://en.wikipedia.org/wiki/United_States_v._Microsoft http://en.wikipedia.org/wiki/United_States_v._Microsoft If those major developers were told "close a deal because we're willing to mandate using credits" then Facebook deserves to be punished for anti market practices. There is little difference between "hey my OS is popular, let me use it to bootstrap my browser share" and "hey my Social Network is popular, let me use it to bootstrap my payments product".

Charuru 16y ago

Oh god no. As a Facebook app developer if something like this becomes official it would be like the end of the world. Where are you GOOGLE ME?! SAVE US!

cletus 16y ago

Does anyone else see "(techcrunch.com)" at the end of the submission title and think of the boy who cried wolf? This may be true but, for me, TechCrunch has gotten to the point where anytime I see one of their headlines I think it's sensationalist linkbait and I'm better off assuming what they're writing is exaggerated or simply not true. As for the claim, it may be true but I really don't think it matters and this is something that's important for anyone assessing FB as an investment. Facebook used to own social gaming. Arguably it still does. But it faces a huge threat, one which it hasn't remotely tackled: social gaming--and non-social gaming for that matter--is going mobile in a huge way. Facebook gaming is built on Flash. As we all well know, Flash is incompatible with iOS and doesn't really suit touch-based interfaces for those platforms that do support Flash (eg use of rollovers and so on). That's not to say that you can't write a mobile-friendly game with Flash but, to date, most people haven't (in my albeit limited experience). Facebook is, for most people, three things (IMHO): games, photo sharing and chat/messaging. FB's revenue seems built on ads and games. They're acting like they've got the market cornered on games but the don't. As Facebook usage goes mobile (as I believe it increasingly is), the draw of those games goes down and consequently so does the potential revenue. Sony, Microsoft and Nintendo should already be scared to death of Apple as far as portable gaming goes. I think Facebook should add itself to that list.

scrame 16y ago
MS doesn't have portable gaming. Sony's PSP is pretty much dead from a lot of their stupid choices. The NDS has a huge foothold and is an overall _better_ gaming option, and the 3DS looks promising. Apple will get the market of $3 casual games, but that market does not have a huge overlap with the DS demographic, and where it does, there is less barrier for an iPhone owner to get a DS than there is for a DS owner to get an iPhone -- you can get a used DS for less than a monthly AT&T iphone bill. Not to mention that the DS is much cheaper than an iPhone, and has multiplayer/networking built in. Apple is doing fine, and will continue to do so, but they are absolutely not going to unseat the DS any time soon. [ As a comparison, there have been ~60 million iphones sold, and about 135 million NDS, while iPhone adoption is strong, it has a way to go to just bowl over nintendos foothold. ]
- 16y ago

lux 16y ago

If/when they do launch a "Pay with Facebook" feature, I'm sure they're aware that they'll have to come up with a fee schedule that's competitive with existing vendors like Paypal. I wonder if that would force them to lower their take on Facebook apps as well, or if they could finagle a way around that...

colinsidoti 16y ago

Heh, Facebook will need to continue making special deals with major game-makers. Facebook Connect can be used to implement all of the social features these games have incorporated. Asking a game-maker to stay with Facebook and ignore the 30% cut they're taking is unreasonable after the product is popular. I can see the cut become an automatically tiered percentage based on the amount of transactions being done. The more transactions, the lower the cut. Facebook simply does not provide enough value after these games are popular to justify a 30% cut. In all honesty, it hardly provides enough value at the beginning. Nothing says social games cannot exist without Facebook at all.

mildweed 16y ago

Its official http://developers.facebook.com/blog/post/451 http://developers.facebook.com/blog/post/451