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Facebook Taking 30 Percent Cut On Credits Revenue
Facebook Taking 30 Percent Cut On Credits Revenue
February 26, 2010 | By Eric Caoili

February 26, 2010 | By Eric Caoili
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More: Console/PC



Facebook says it's expanding its commitment to Facebook Credits -- a universal virtual currency system run by the social network allowing users to purchase digital goods in social games and applications -- and revealed its payment terms for developers.

With Facebook Credits, which will be available alongside other virtual currency options from developers and payment providers, the social network will take a 30 percent cut of Credits spent, leaving developers to collect the remaining 70 percent of revenue. Facebook says it will use its cut to "[invest] heavily in the ecosystem."

The company recently expanded the Credits program to allow consumers to buy its virtual currency through PayPal. Other supported payment methods include various credit cards, 15 currencies, and mobile payments. Facebook believes this varied selection translates into "more people ready to spend, each with a higher likelihood of completing purchases".

Since moving into its beta phase (Credits began alpha testing in May 2009), the social network has tested the program with several big developers like Zynga, Playfish, RockYou, Crowdstar, Playdom, and 6waves, and will bring in more developers "over the next several months". Facebook says it plans to keep Credits in closed beta as it focuses on scaling the product to more users and studios.

"By providing a single, cross-application currency, our goal is to making transactions simpler for users, leading to a higher conversion rate for developers," says Deborah Liu, product marketer on the Facebook Developer Network team.

She continues, "... Our early testing has shown that users paying with Facebook Credits are significantly more likely to complete a purchase than the average Facebook user. These announcements and the continuation of our testing are part of our long-term commitment to you to build Facebook Credits into a product that is widely adopted by users and seamless to implement for developers."



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Comments


Leo Gura
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Zynga and all the other social developers seem to be printing money now, but are they factoring in the long-term consideration that they're essentially swimming in a private pond, and Facebook has them over a barrel? Once Facebook goes public and penny-pinching sets in, all those developers are gonna get screwed big time, a la what's happening with Ebay. No one's profiting off Ebay but Ebay any more.

John Petersen
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I have a feeling alot of people on facebook are going to migrate somewhere else. Again... don't bet the farm on facebook

E Zachary Knight
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Really this is nothing new. Facebook wants to help games become profitable while making some money themselves. These Facebook points are no different than Mochi Coins or the Point system Kongregate uses.



30% cut is also not that bad. Mochi does a 50/50 split. So I would prefer the 70% cut.



As long as Facebook doesn't require game developers to use their system over any other 3rd party or proprietary system, I see no problem with this.

David Shaw
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@ E Zach.
Well it looks like you have not done your research. They take 100%, keep 30% and make you wait 21 days for your 70%. In the 21 day period they can do whatever they want with the 100%, which would include doing micro investments to pull an additional revenue from interest from YOUR money.

To go from near instant revenue collection to a 30% revenue drop then to a delay of 21 days for payment does not leave me feeling good.

Do you still see no problem with this?

Mark Morrison
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i don't really see the private pond problem leo, because facebook is just one of many ponds that publishers and developers fish. sure, itís the biggest and deepest blue but this will probably change and the publishers will react accordingly.



platforms grow, shrink, and react to similar factors that have driven the game space for decades. facebook is hugely successful for top twenty content providers with multiple rev. streams now; but, it's pretty competitive out there. Who knows whatís further down the road.



all of the major platforms take around 30% (including mobile and console) for their retail transactions or platform royalties. i doubt the top 20 publishers have worried concerns with facebook success currently ;) plus, game and app code is still pretty ubiquitous online so pubs. will continue to follow fertile grounds IMO.



all of the major platforms take around 30% (including mobile and console) for their retail transactions or platform royalties. i doubt the top 20 publishers have worried concerns with facebook success currently ;) plus, game and app code is still pretty ubiquitous online to it will continue to follow fertile grounds IMO.


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