Facebook launches local currency payments API, will officially end Facebook credits September 12

After announcing its intention to end Facebook Credits last March, Facebook has launched the local currency payments API today. Replacing Facebook Credits, the local currency payments API has been put in place to simplify purchase experience, improve payments flow and make it easier to price virtual goods globally.

Facebook has asked game developers to integrate into their current and future apps, giving a 90 day window to migrate to the API. After the 90 days, which falls on September 12, Facebook will only accept payments through the API and no longer accept Facebook Credits.

Facebook has also stated that it will also be depreciating Payer Promotions for Facebook Credits and will reintroduce to local currency in the next few months. It will also depreciate Facebook-sponsored support for TrialPay offers, but TrialPay will continue to support the promotions through a direct integration solution. Instead of using Facebook’s currency payments API, integration support will be supported by direct integration. Only technical integration will be different, fees will not change and advertising rules will not change.

[EDITORS NOTE: Due to misunderstanding of the original blog post, we first reported that Facebook would be depreciating TrialPay. To correct this mistake, Facebook will not be eliminating offers, but will move from a Facebook API to a direct integration with TrialPay. Facebook has since updated their blog post to better communicate the migration.]

The new currency payments API will improve app performance by caching static prices with Facebook, but developers will also be able to price items dynamically. In early tests with select game developers, Facebook found new payments API provided for a faster and smoother overall users experience.

Excerpt from earlier post in March:

Through the local currency payments API, Developers will be able to set more granular and consistent prices for non-U.S. users and price the same item differently on a market-by-market basis, as opposed to 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 for dollars, Credits and in-game currency.

The social network first introduced what it called “Pay with Facebook” in May 2009. That eventually got combined with the Credits program associated with virtual gifts that users could buy and post to each other’s profiles. In July 2011, Facebook made Credits mandatory for social games.

Only 27 million users — a little over 2 percent of total monthly active users — paid for virtual goods on the platform in 2012. Facebook generated about $251 million in games-related payments revenue in the fourth quarter of 2012. That’s nearly 16 percent of total revenue for the quarter, a percentage that has been declining as game developers invest less in Facebook canvas experiences and as the social network focuses more on its ads business.

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Get personalized advice from industry insiders at Facebook, Deloitte, Chartboost, Tango, and more at Inside Social Apps, this Thursday and Friday in San Francisco. Newly added speakers include Val Bauduin of Deloitte & Touche, LLP and Doug Purdy, Director of Developer Products at Facebook, so don’t miss the chance to add these valuable contacts to your network. Tickets are available onsite.

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Facebook Credits could violate U.S. antitrust laws, be in big trouble

When Facebook Credits were officially introduced in July 2011, the social game industry collectively groaned. The 30 percent cut that the social network now takes from the universally-instated currency hit game makers hard. As it turns out, Facebook's grand money-making scheme could be for naught, if attorneys Derek Newman and Brian Strange have their way.

The two firmly believe that Facebook, because of its dominant position in the social networking world, could be in violation of U.S. antitrust laws. These laws, according to Newman, prevent scenarios like "when one company dominates an area of commerce with a product and then forces customers to accept another product in order to use the first."

With that, the attorney duo created StopFacebookCredits.com to raise awareness about Facebook's potential violations and investigate whether Facebook is, in fact, violating these laws. Of course, Newman and Strange offer their services to those who may have a complaint against Facebook's Credits initiative. In fact, the two are ready to file a class action suit against Facebook.

"Virtual-currency companies, game developers, and the entire social gaming community are paying higher prices and receiving fewer services," Strange said in a release. If this actually happens, it could set a standard for other platform providers that force their own currency upon their users. So, you can either grab the popcorn or go up in arms with Newman and Strange. Choose wisely.

Could Facebook Credits be in violation of antitrust laws? If this went through, what would happen to other currency providers in social games? Sound off in the comments. Add Comment.

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FarmVille: Get 20 Farm Cash and 10 Facebook Credits for just $1

by Brandy Shaul, Posted Feb 18th 2012 1:40PM

Well, you can if you're lucky. While not all farmers have been given access to this new offer in FarmVille, FVNation is reporting that some players can now purchase 10 Facebook Credits for $1 US, only to receive 20 Farm Cash for free just by doing so. To see if you're eligible for this offer, click on "Get Farm Cash" on top of the FarmVille gameplay area. Then click on the large green "View Special Offers" button as you scroll down the page.

If you have this offer available to you, you'll need to scroll through the list of offers (that would normally require you to sign up for some kind of service in exchange for free Farm Cash) until you see the 20 free Farm Cash offer. Again, not all players have this offer available to them, as of this writing, but it's worth the few seconds to check out if you're one of the lucky few, right? 20 Farm Cash plus 10 Facebook Credits (which could be used for more Farm Cash or in any other Facebook game) all for $1? Talk about a bargain!

[Second Image Credit: FVNation]

Will you check to see if you can purchase this $1 Facebook Credits / Farm Cash deal, or have you already checked and didn't see it available? Sound off in the comments.

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Tags: 10 facebook credits, 20 farm cash, facebook credits, farmville farm cash, farmville free farm cash, free farm cash, zynga

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Developers say Facebook Credits is converting fewer paying users than they had hoped

Facebook’s top developers say the company’s payments infrastructure and virtual currency Credits are converting fewer paying users than they had hoped a year ago.

Facebook made it mandatory for developers to use its payments platform in canvas games in July. That meant developers on the platform had to start handing over a 30 percent revenue share to the company, mirroring a similar split on Apple’s iOS. The hope was that a single, universal currency would make it more frictionless for users to start paying for virtual goods.

“We thought that conversions would go up and be around 15 or 20 percent,” said Kevin Chou, the chief executive of Kabam, a social gaming company that targets a more hardcore demographic, at the Inside Social Apps conference in San Francisco. “But it turned out to be around 5 to 10 percent, meaning that we’re taking a 20 percent net tax.”

For comparison, Facebook’s biggest developer, Zynga, revealed in its prospectus that it had 3.4 million unique payers during the third quarter of last year. That’s out of 152 monthly unique users in the same time period, suggesting a 2.2 percent conversion rate. Zynga attracts a much larger, more casual audience, so we’d expect to see a lower conversion rate compared to Kabam.

Anil Dharni, who co-founded Funzio, which has had hits on iOS and Facebook like Crime City, said the move to Credits ended up being roughly even for the company.

“Facebook credits is a wash for us,” he said. “It increased the conversion rate but we actually saw a gradual decrease in average revenue per paying user. It’s hard to know why.” Funzio has since moved its focus to iOS, where it has launched Crime City and Modern War, both titles that reached the top of the grossing charts.

Facebook’s payments revenue increased 20 percent quarter-over-quarter going into the end of last year to $188 million, suggesting that the platform may be improving at getting users to pay. However, the company also ran promotions during that time, giving some users an 80 percent discount on Credits. So it’s hard to tell whether those are genuine increases.

If Facebook can’t improve at converting more paying users, it risks losing developer talent to competing platforms like Apple’s iOS and Google’s Android. That in turn could mean growth in its payments business will slow or stagnate over the next year. Facebook diversified its business last year to make payments 17 percent of its revenues in the fourth quarter, up from 10 percent the year before. The rest is advertising.

Developers earned $1.4 billion in revenue from transactions on the platform last year, according to Facebook’s filing for an IPO. Apple’s iOS was able to pay developers about half of that or $700 million in a single quarter during the holiday season, according to their most recent earnings call.

“Mobile users are more engaged and they produce higher revenue than our tethered titles on PCs,” said John Spinale, the senior vice president of social games at Disney. He added, “We’re also seeing incredible revenue growth on Android. Android is a little bit unwieldy, but the revenue is meaningful enough that it’s worth the pain of doing.”

One developer, Wooga, which is the biggest social game developer in Europe and trails only Zynga in daily active users, defended Credits. The company’s chief executive Jens Begemann suggested that Facebook takes more flack because it instituted a 30 percent revenue share after several years of not charging developers for earning revenue off its platform. Apple had a split from the beginning.

“We have been on Facebook Credits since Day One. So for us, we don’t see really negative trends,” he said. “I’ve also not heard anyone complain about Apple for their 30 percent revenue share.”

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Liveblogging Inside Social Apps: Monetizing Social Games on Facebook: Credits, Today and Tomorrow

We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference.

The second afternoon panel is “Monetizing Social Games on Facebook: Credits, Today and Tomorrow.” Joining moderator AJ Glasser on stage is Trial Pay co-founder and CPO Terry Angelos, Kixeye CEO Will Harbin, RockYou CEO Lisa Marino and Happy Elements Chief Product Officer Rony Wang.

The following is a paraphrased transcript of the discussion.

AJ: Facebook Credits, how’s it working out?

Will: From my stand Facebook Credits are a simple reality. Our original hypothesis was that we would see an increase in conversions when the transition to Facebook Credits happened, and that’s been the case.

Lisa: When the change happened, monetization grew, because now you control your economy in a much more focused way. From our perspective, it’s absolutely fair for Facebook to take their share, and you design around the execution, really understanding how you convert non paying users to paying users.

Terry: There are two elements to the credits platform. Facebook as a payments service, and Credits as a virtual currency. We’ve seen some developers being very happy, and some wanted to switch back to their own premium currencies, but we haven’t seen anyone upset about the 30 percent.

AJ: Will either Happy Elements or Kixeye change the way Facebook Credits are used, making them a gateway payment to your own currencies?

Rony: We see three to five times higher conversion rate after Facebook Credits. There is a lower average revenue per user, but 10 to 20 percent higher revenue. Before Facebook Credits, we had to work with the prepaid card provider. If you use Facebook Credits as the in-game currency, but most of the conversions happen from Trial Pay. If we use Facebook Payments just as the gateway, we can get the user to pay more in a single transaction.

Will: It’s to-be-determined. It’s always best to see what drives conversion. Right now, we’ve seen that sticking with Facebook Credits as the exclusive provider makes sense, but it may change with upcoming games.

AJ: What about alternate forms of monetization?

Lisa: When we started out our apps grew very fast and we did a lot of experimentation. As we’ve been working with our games, we’ve always been a pioneer in monetization and that spawned the RockYou Ad Network. For example, Zoo World generates 40 percent of its revenue through ad units. When you have paying users to converting at a rate of about 1-2 percent you need to find alternate ways of monetization.

Terry: If you look at Zynga games, it is about 6 percent monetization through ads. We think that’s an interesting trend. There’s a lot of advertisers looking to try to reach an audience through advertising – CityVille, CastleVille and FarmVille all have bigger audiences than [NBC talent show] The Voice. When you’re reaching an audience the size of the voice every week, advertising makes sense. It’s much like a TV program. In order to continue to watching Seinfeld you have to watch an ad, in order to continue playing Words With Friends you have to watch an ad.

Lisa: I’ve been frustrated with the social gaming genre for many years, because people thought that it was beyond the scope of being a media company. With that many eyeballs, let’s call a spade a spade, you’re a media company.  If you think about media companies and social game companies you have three things that are very common: they have their own content, they source their content from other companies and they all have dual monetization — they have subscription and advertising. We need to start looking at ourselves, as developers, as media companies. User acquisition is starting to skyrocket. Alternative ways of monetization are the only ways we will be able to get through this.

AJ: Response?

Rony: Less than 2 percent of our revenue comes from advertising. In Asia, there are much fewer advertisers interested in participating.

Will: We are not a media company, we’re a game company. 98 percent of our revenue comes from direct transactions. There may be companies that do well with advertising but 99 times out of 100 our monetization is through game purchases. We’re giving something specific to consumers that they want to purchase. We are not a media company, we are a game company.

AJ: Let’s talk about engagement with advertising.

Terry: How do you convince a Proctor and Gamble to spend brand dollars on a completely new medium? They may think of games as a particular segment that’s only played by teenagers. One way to overcome that hurdle is to put in a really deep, engaging experience. Users can compare two ads and choose which one they like, or play a mini-game – more opportunity with the consumer’s time. If you’re not adding value and you’re not entertaining, you’re not going to engage, but if you can create an engaging experience, you’re going to connect. If you look at what RockYou is doing, what we’re doing, there’s an element of engagement that gets users to remember the brand. It might not be right for Will’s games, but if you look at a platform like Zynga, the users are casual gamers who don’t think of themselves as a hardcore gamers, they just want entertainment.

Rony: We haven’t seen a close relationship between engagement and retention. Lots of games on Tencent have a very low retention rate, but high ARPU. Hardcore games can have very low retention but very high ARPU. This kind of game can probably get more revenue over two months than other games can make in two years.

Will: To see monetization around 50 cents, a dollar or two dollars it really comes down to core game mechanics and no amount of blasting the consumer with media will get you there. Our core value to build a game that we love and we think our users will love. We don’t do optimization for monetization within games. Users in our game spend money to speed up time. There’s a lot of other elements that can help with monetization like real time synchronous gameplay. You see in real time what another player is doing to your base in Battle Pirates, and you can either wait to rebuild or you can go after them right away.  For us monetization isn’t another layer, it’s built into the game.

AJ: So you monetize revenge?

Will: We monetize revenge.

Lisa: I monetize cute animals. We break out the engagement by different user actions, because different users require different engagement. We’re incredibly deliberate about how we treat different users. We have whales that we’ve monetized through advertising. It’s about giving users the tools to collect either through buying items or grinding through ads.

AJ: How can TrialPay integrate with these types of developers — do you look to make those types of engagements with the game itself and what the brand offers?

Terry: We’re running lots of pet videos on Pet Society today, but you can’t always do that. You’re going to have a great response if you can monetize a game with advertising that matches the content. Finding ways to target to the right demographic is what we focus on, and that’s very similar to how TV ads work — just because I’m watching Modern Family, it’s hard to discern what I like. You have to get that right. What we’ve seen some developers do is large scale advertising — for example Lady Gaga’s FarmVille campaign.  That must have been very expense. I don’t know how often you’ll see campaigns like that. What we focus on is repeatable engagement.

Lisa: Totally agree. Our incentive add unit gets very different performance in our owned and operated properties than in our partner’s games because there is a different depth of integration into the overall gameplay. The commitment and integration of that particular unit, regardless of content, is what generates results — the performance is night and day.

Terry: We have to work very hard as a third party to get the same level of engagement as a third party. We have in-game icons that enable the user to watch a video — we customize them to fit within each game. If you A/B test the giant banner that takes over the whole screen will always win. How do you develop an ad platform that is opt-in, sustainable, and effective? We do this by surfacing ads only when it’s relevant, so that when a user sees an icon, it’s more likely to result in engagement, and once the ad is clicked, the icon disappears.

AJ: What types of monetization are your users going to tolerate? Are they more receptive to some types of monetization than others?

Will: Our users respond to functional items. They decorate with blood, not bananas or palm trees. The market dictates what kind of spending they’ll do and I don’t think we’ve found that limit yet. It really comes down to user acceptance and what they’ll tolerate.  We’ve seen games in China that have hit $4 average revenue per daily active user. It’s a new concept in the US — most of our audience is used to spending $50 to $60 and putting a game in the tray, but some of our users have found that this method works better for them. None of our items are exclusive to paying users. I’ve spent over $200,000 of free currency within a game, and I get my ass handed to me daily by other users (who haven’t paid as much).

Rony: For us, the bottom line is that the paying user should not ruin the non-paying user in games. In our games, we pay a lot of attention to the balance, so that the paying users don’t gain a huge advantage.

AJ: What’s the most you’ve spent on a game?

Lisa: In CityVille $200, our game $250 — if I decide to play, I’m a paying user. You’ll get me for at least $50.

Will: I’ve played League of Legends, but I don’t want to tell you how much I’ve paid.

Terry: 3-figures.

AJ: In one game?

Terry: I’m obviously one of the cheapskates.

Rony: I spent $500 in one day, in a browser based game in China. I pay for revenge.

Audience question: What are your thoughts on advertising competitors in your own games?

Lisa: I do it all day long. You don’t want to give up your paying users, but for the users who aren’t paying, you want to monetize them in some way. We want to be a good player in the ecosystem, but also to grow the number of eyeballs. Thinking through how to treat paying vs. non-paying is an issue for every developer to address prior to entering the ecosystem.

AJ: Can I expect to see you monetize differently across different platforms?

Lisa: We monetize on mobile as well as Facebook, but the behavior is very similar.

Will: I don’t think your behavior intelligence changes across platforms. The game informs the monetization, not the platform, the platform is a canvas.

Audience Question: I’ve been told the amount of money people pay for virtual goods is inversely proportional to their IQ. Is that true?

Lisa: Not at all true. Some of the best monetizing games on Facebook are gambling, skill-based games slots and bingo and they monetize at a very high rate. If you’re looking at a Sims game, the ARPU is likely to be much lower than for a skill-based game about a 4 to 8 cents. I think you can can easily get to 8 to 10 cents in ARPU but only if you’ve built the economy right.

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Plink rewards consumers’ offline purchases with Facebook Credits

Consumers can now earn Facebook Credits for purchases they make at brick and mortar locations by signing up for Plink, a loyalty program that officially launched on Thursday.

Plink connects offline transactions with people’s online profiles without placing additional onus on consumers or businesses. And because people are rewarded with Credits, businesses do not have to devalue their products through discounts. To reach mass audiences though, the demand for Credits will need to expand beyond social game players. As more goods become available for Credits, Plink can build partnerships with more restaurants, retailers and other businesses.

Facebook users connect their accounts with Plink and register a credit card with the site. Plink then matches users’ purchases with offers they qualify for. Users will receive emails to connect Credits they earn to their Facebook profile.

Plink users can earn Credits when they use their credit card at Taco Bell, Quiznos, 7-Eleven and a few other national chains. For instance, spending $10 at Taco Bell results in a reward of 12 Facebook Credits, the equivalent of US$1.20. Most in-game items typically cost anywhere between one and 50 Credits, but select premium items can be valued higher.

Plink’s biggest selling point is that consumers don’t need to carry coupons or rewards cards. They use their credit card as they normally would and the Credits add up, similar to how people earn Frequent Flier Miles. Members have to provide their online banking credentials when they sign up for Plink, which might turn off some users, but the company provides a disclaimer about how it uses the information and why users’ information is safe.

For businesses that partner with Plink, there is no change to the transaction process so staff does not need to be trained and sales aren’t slowed down, as they are with prepaid coupons or check-in deals. Restaurants and retailers pay Plink a percentage of the sales generated by Plink members.

Film studios and musicians have started to experiment with offering content in exchange for credits, but currently the market is dominated by in-game purchases. If Credits take off like Plink CEO Peter Vogel predicts they will, the company provides a unique way for Facebook users to earn them by taking actions offline.

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Soda pop promotion offers free Facebook Credits in every bottle

Dr Pepper/Seven Up is delivering the sweetest giveaway for Facebook gamers with their following sodas: Sunkist, 7UP, Sun Drop, A&W Root Beer, and Canada Dry Ginger Ale. From this month until June 30th, if you spot a green bottle cap on a 20-ounce soda bottle of the aforementioned beverages, snatch it up because that might your chance to win $500 USD's worth of free Facebook Credits, which can be converted for use in any game on Facebook.

The promotion, called Flavor Credits, has seven prize levels from A to G that range from 5 to 5,000 Facebook Credits. According to the official rules, if your code doesn't happen to be a winner, you'll still get 1 free Facebook Credit out of it as a consolation prize. Sadly, only US-based Facebook users are eligible for this offer. But the good news for those who can benefit from this promotion is that there's a way you can get a free code without hunting for soda caps -- just send a hand-written 3"x5" card with your name, address, phone number (with area code), birthday, and email address to:

2012 SUNKIST, 7UP, SUN DROP, A&W AND CANADA DRY
Facebook Credits Program
c/o YOU Technology
701 Gateway Blvd, Ste. 101
South San Francisco, CA 94080

While the company doesn't say how often you can request a free code, you should know you're limited to redeeming only 3 codes per day. So start writing up cards and buying soda. And if you don't play Facebook games, be so kind as to pass on your bottle caps to someone who does. I guarantee that they'll jump at the chance to convert those FB Credits into some free Simoleons or Farm Cash.

To redeem your codes, go to http://apps.facebook.com/FlavorCredits. According to the app's automatically generated Facebook fan page, 50K people are currently signed up for it.

[Hat-tip: The Sims Social Fansite]

Is a free Facebook Credits giveaway enough to make you buy more soda? Sound off in the comments. Add Comment

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Platform Update: Mobile Hack Day, International Payment Methods for Credits, Privacy Retrieval

Facebook has made several developer-focused announcements over the paste few days, including that it has released more free tickets to its Mobile Hack event at Facebook headquarters this Friday. This will give more developers the opportunity to learn about building Facebook-integrated native native and HTML5 mobile apps.

Nine new international Facebook Credits payment methods have been added to make it easier for those abroad to buy Credits. Additionally, developers now have the capability to programmatically check if an app is installed on a Page and what privacy setting a user has selected for an app.

Facebook recently launched a blog specifically for HTML5 developers, and there announced it would hold an all-day Mobile Hack event at the Facebook headquarters in Palo Alto on October 28th. The event will cover iOS, Android, and HTML5 mobile web development for the new Facebook mobile app Platform. It will feature: “technical deep-dives, a Q&A, partner presentations, and an opportunity for you and your team to hack on site with Facebook developer team assistance. At the end of the day, awards will be given to the best mobile social apps.”

Developers can register to attend Mobile Hack for free on Eventbrite, though tickets are limited and will likely sell out the same way the mini-f8 Open Graph Technology Days Facebook held around the country did. They may then begin working on their hack project, as apps don’t need to be built from scratch at the event. The schedule for Mobile Hack is as follows:

10:00am – Registration Open
11:00am – Facebook Platform on Mobile
11:45am - New Features: Social Discovery on Mobile
12:30pm - Lunch
1:30pm –   Partner Presentations and Best Practices
2:30pm -  Native Distribution for Web Apps
3:00pm -  Break
3:15pm -  Open Graph and Mobile
4:00pm -  Q&A
5:00pm -  Dinner
5:00pm -  Hack
11:00pm – App Presentation & Awards
11:30pm – Event Close

There hasn’t quite been a blitz of mobile app development since the new Platform opened earlier this month. The launch partner apps show some promise, but traffic has been slow. Creating a healthy mobile app platform is key to Facebook growing mobile engagement and making money through mobile Credits. Facebook is hoping the new HTML5 resource center and Mobile Hack will give developers the understanding necessary to explore the mobile platform’s viral channels.

Alongside the announcement of initial test of Facebook Credits for Websites, Facebook listed that Credits can now be bought with several new international payment methods. The news benefits developers, as users are more likely to become paying customers if it’s easy for them to acquire Credits.

Many of the new payment methods are online payment solutions for Southeast Asia and South America, which have become important secondary markets for developers. Facebook now supports over 80 payment methods in 50 countries. They new methods include:

Axeso5 (Brazil)Join Card (Taiwan, Hong Kong, Thailand)Malaysia OBT (Malaysia)MEPS FPX (Malaysia)MEPSCASH (Malaysia)PayEasy (Philippines)PaysBuy (Thailand)SafetyPay (Mexico, Costa Rica, Peru, Spain, Austria, Brazil)WebCash (Malaysia)

The Graph API can now be used to determine if an app has been installed on a Page. An HTTP GET request to /PAGE_ID/tabs/APP_ID will return the IDs of any app installed on a Page when used with a Page admin access token, and whether a particular app is installed when used with that app’s access token. This will allow Page management apps to determine what tab apps have or haven’t been installed  on a Page they oversee.

The new app authentication flow allows users to set the widest possible audience for content shared through that app. Now developers can retrieve a user’s privacy selection via the privacy setting table. This way, when apps present users with subsequent privacy selectors, they can default to a user’s previously chosen privacy setting. This keeps users from thinking their existing privacy settings have been changed.

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Facebook Testing “Facebook Credits for Websites” That Helps Third-Party Sites Sell Virtual Goods

Facebook has just announced a closed, limited test in which for the first time it will allow websites to process payments for virtual goods using Facebook Credits. Facebook’s virtual currency is currently the mandatory payment method for all Facebook games on the web, a payment option for Facebook apps, and became available as a payment option to mobile app developers last week. The only initial launch partner for “Facebook Credits for Websites” will be online and downloadable games site GameHouse that until now only accepted payments through credit card and PayPal.

During the test, Facebook will closely monitor the demand for Credits as a payment method and the user experience of those that pay though its virtual currency. If a high enough percentage of users make purchases through Credits and feedback is positive, Facebook may expend additional resources to let more websites add Credits as a payment option.

Eventually, Facebook might open the option to all web developers selling virtual goods or digital media, allowing the social network to earn a 30% cut on transactions across the web. In exchange, sites will be able to provide an easier way to buy their goods and media than punching in credit card or PayPal details. Facebook has provided a signup page for developers that want to try Facebook Credits for Websites if the test is expanded.

GameHouse users that sign in to the site with their Facebook login and play Collapse Blast or UNO Boost will only see Credits as a payment option, not credit cards or PayPal. If they choose to buy virtual goods or proprietary in-game currencies, Facebook Credits will be deducted from the same account that Facebook canvas and mobile games pull from. Similar to how it works within Facebook, users without an existing balance of Credits will be able to purchase a bundle within the payment flow.

Unlike on Facebook where Credits are the exclusive payment method for games, GameHouse may still offer other payment options. However, Ian Fliflet who handles corporate strategy for GameHouse tells me that those signed in through Facebook won’t see the option to pay with a credit card or PayPal account. This could anger some long-time GameHouse users that try signing in through Facebook for the first time only to find their preferred payment options missing in the two test games. That in turn could negatively skew feedback on Credits for Websites.

If the test does indicate a demand for Credits as a payment option outside of Facebook.com, its unclear whether Facebook would require developers to use its virtual currency exclusively. It could simply make them an additional payment option, the way Credits currently work for Facebook.com apps as well as mobile apps and games. However, it might extend this test model so that sites that want to use Facebook as an identity and login provider will also need to use its taxed virtual currency.

The impact of Facebook Credits for Websites could be significant. It could assist independent game developers and digital media merchants with monetization, as customers might be able to quick make purchases rather than having time to reconsider while enduring the friction of entering their credit card information or logging in to PayPal.

Currently, many independent game developers have to distribute through portals like GameHouse that have built a base of users that have already provided their credit card details. Facebook Credits for Websites could give them the opportunity to distribute directly to fans in way that gives them more control over branding. The tax that third-party game portals take on credit card or PayPal transactions may vary widely, so Facebook’s 30% cut could be less or more than developers are used to paying.

Facebook has much to gain from Credits for Websites, though. The more places they’re accepted, the more users that are likely to buy and maintain a balance of Credits, and the more transactions Facebook will get a cut of. A user might buy a bundle of Credits to spend them on a gaming portal or to buy a band’s album, but then spend then become a paying customer of a freemium game on Facebook.com.

More users maintaining a balance of Credits also makes Facebook a more lucrative platform for developers. Typically only a few percent of gamers ever pay to play, but if they already have a balance they may be more likely to spend. Facebook may need to initially reduce its tax or not demand any exclusivity as a payment method to get websites hooked on Credits. With time, though, Facebook Credits for Websites could become a significant revenue source and powerful way to attract developers.

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How Facebook Could Make Credits for Websites Work: Optional, Then Mandatory

Last week Facebook announced the first test of “Facebook Credits for Websites”, its new program that could allow any site to sell virtual goods or digital media in exchange Facebook’s virtual currency. For businesses selling things online, a big hurdle to conversions is getting potential customers to enter their payment details, so this could be a big new way for them to make payments easier and monetize more users.

Facebook will need to make a choice regarding exclusivity and Credits for Websites. Requiring Credits to be the exclusive payment method for Facebook-logged in users would allow it to essentially charge websites for access to its identity platform. A rollout without exclusivity requirements could get more websites to adopt Credits.

Therefore, we believe that similar to how Credits were at first an option but then later required to be the sole payment method for Facebook.com games, Facebook may be best off initially allowing websites to use Credits alongside other options and later making them mandatory.

For background, Facebook launched Credits in the summer of 2010 to simultaneously make it easier for game developers to accept payment for virtual good and to give itself a 30% cut on virtual good transactions. Users buy Credits from Facebook with their credit card, PayPal account, mobile phone, gift cards, or offers. Rather than having to enter payment details in each different game or with each developer whose games they play, Facebook Credits allow them to enter payment details once with a single, theoretically more trusted vendor (Facebook) and then spend across different games and developers.

Initially game developers could provide the option to pay with Credits alongside their other payment methods. They would then redeem with the Credits spent by their users with Facebook for 70% of their value. In July 2011, Facebook began requiring all game developers to exclusively process payments through Credits, while utility app developers could (and still can) choose whether or not to use them. Then, Facebook began allowing mobile app developers to process payments with Credits earlier this month.

Offering Facebook Credits as a payment option is a trade-off for developers. Benefits include the ability to:

Instantly process payments from those with a balance of CreditsMonetize international users without having to accept their local currencyMonetize those without credit cards such as teens that can acquire Facebook Credits by completing offers, buying Facebook Credits gift cards with cash at local convenience and grocery stores, or by depositing loose change at Coinstar/Rixty kiosksAvoid transaction and fraud costsLet users pay through a big-name company they may trust moreIncrease user spend because they’re paying indirectly through a virtual currency rather than directly with dollars they may be more careful with

Developers must also endure several drawbacks if they offering Credits as a payment option. Most importantly, they must pay Facebook a 30% tax. Additionally, developers lose flexibility in how they optimize virtual currency costs to maximize sales. Some people don’t trust Facebook and may be more likely to submit credit card information to a game developer than to the social network. Developers are also less likely to earn money off of breakage, where users buy their proprietary virtual currency but never end up spending it. Though there haven’t been many prolonged outages in the past, if the Facebook Credits system went down, those relying on it to process payments could miss out on sales until service was restored.

Finally, Facebook can impose its own exclusivity policies on how Credits can be used alongside other payment options. Facebook allowed the game developers to flourish using any payment method they wanted on the Facebook.com Platform before eventually requiring Credits to be their exclusive way of processing payments. In this way, the gaming industry invested in developing for the Facebook Platform rather than competitors such that it had little choice but to accept Facebook’s 30% tax when it became mandatory.

In many cases, developers would prefer Facebook not implement exclusivity policies, though they begrudgingly accepts them and the 30% as the cost of being able to do business on the Facebook Platform.

In the first round of testing for the new Facebook Credits for Websites program, the social network is working with online gaming portal GameHouse. In two specific games, if users are logged in to GameHouse via their Facebook Credentials they’ll be prompted to pay for virtual goods with Credits and won’t see the credit card and PayPal options. In this way, Credits are the “exclusive payment method for users logging in through Facebook”.

If the tests go well, Facebook could roll out Credits for Websites to more beta partners and eventually to all websites. Here are some of the exclusivity structures it could use, how they would impact developers, and the likelihood that Facebook would choose each potential structure:

Exclusive for all users - Websites can only use Facebook Credits as a payment method if it’s the only option they give to users, even those without Facebook accounts. This would prevent developers from monetizing significant portions of their users who don’t have a Facebook account or don’t log in with it. Therefore it wouldn’t be worth it for developers to switch to Credits exclusively. It’s very unlikely that Facebook would choose this structure. It only works on Facebook.com because every user there must be logged in through Facebook.

No Exclusivity - Websites can offer Credits as a payment option as well as other options such as credit cards and PayPal. Though it would clutter their payment flows, developers could offer Credits as an additional option to lower the payment barrier for those who maintain a balance of the virtual currency. It would help with monetization of international and teen users without forcing developers to pay a 30% cut on all of their transactions.

At first, Facebook may choose to roll out Credits for Websites without exclusivity. This would lower the risk and cost for developers such that Facebook could to get the maximum number of developers to add Credits as a payment option. Getting a wide base at first would also help Facebook push more users to start carrying a balance of Credits because they’ll see them as more widely applicable.

Though it would complicate enforcement, Facebook could require Credits to be listed equally or at least alongside credit card and PayPal options so developers wouldn’t bury Credits behind additional clicks to dissuade users from paying through a taxed method.

Exclusive for Logged in Facebook Users – Websites that want to utilize Facebook as an identity provider to power their registration and login systems would have to exclusively use Credits as their payment method for Facebook-logged in users. This creates a value exchange where developers can’t piggyback on Facebook identity without paying for it. If developers want to monetize their users but not use Facebook Credits, Faceboo could deny them access to its identity platform.

Functionally, it works because only logged in Facebook users would see the option to pay with Credits, and those with an existing balance of Credits would be able to pay instantly. People using a third-party website without signing in through Facebook would only see more traditional payment options, or could also be given the option to log in through Facebook to pay through Credits.

If the test is any indication, Facebook may eventually want this to be the way Credits for Websites works. Third-party sites would be taxed for access its its identity platform the same way Facebook taxes developers on Facebook.com. At first it might allow Credits for Websites to be used without exclusivity, but eventually it might give sites warning that it would become the mandatory payment method for Facebook-logged in users.

Facebook has already carried out this strategy of luring developers with an untaxed Platform, then giving them the option and incentives to use its taxed universal currency, and then finally making Credits the exclusive payment method with games on Facebook.com, and canvas utility apps might be next. A similar long-term strategy for Facebook Credits for Websites could be the best path to monetizing transactions for games, media, subscriptions services, and more across the web.

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Platform Update: New Bug System and Platform Live Status Page, Credits Features, Event APIs

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Facebook Streamlines Credits Payflow

Facebook announced a “Labor Day” edition of its platform updates that reveals a streamlined payflow option for Facebook Credits.

Developer now have the option to omit the Credits “bulk-discounted” packages from the pay flow. Facebook provides the following screenshot:

Developers are able to A/B split test the streamlined pay flow to determine what impact it may have on user spending. Facebook often tests new Credits features like these, such as the Frictionless Credits function, however it hasn’t done anything big with Credits features in recent months.

At this point, developers are looking for ways to keep players in-game at all times — even when paying for things. A big step in this direction would be a tweak to the games platform that stops users from automatically exiting full-screen mode whenever a Facebook dialogue box appears. Sean Ryan, Director of Games Partnerships, mentioned such an improvement last month during a press event detailing significant platform updates.

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Facebook Becomes a Competitor and Complement to iTunes as MP3s are Sold for Credits via Pages

iTunes and Amazon take note: musicians are now selling MP3s directly from their Facebook Pages. Electronic music producer and DJ David Guetta this week added a tab application to his Facebook Page that allows him to sell MP3s for Facebook Credits. The Nothing But The Beat app, developed by French marketing agency KRDS, allows users who’ve Liked Guetta’s Page to listen to previews of tracks, publish audio clips of songs to the news feed and the walls of friends, make payments, and initiate downloads.

The enhanced and retention viral features, ability for artists set their own download prices, and the fact that Facebook and iTunes take an equal 30% cut of sales could make Facebook Page tab apps an increasingly popular digital distribution channel for musicians.

Facebook has emerged as a digital media store this year, allowing third-party developers to use its Credits payment system to offer an alternative purchase point to iTunes and Amazon for film rentals, pay-per-view video streams, and now music. Facebook isn’t officially pushing this use of Credits, but may offer a first-party MP3 store or payment portal to streaming services such as Spotify, Mog, and Rdio as part of its anticipated Music Dashboard that’s expected to launch later this month at the f8 developer conference.

David Guetta now has the 39th most popular Facebook Page according to PageData, collecting 23.6 million Facebook fans despite not being a household name. He’s accomplished this by being a savvy early adopter of music technologies, using creative tab apps and partnerships with developers such as MXP4 to frequently reach our fastest growing Pages charts.

Guetta’s app prices MP3s at 19 Credits, or $1.90 apiece, making them 1.47 times more expensive than on iTunes. The app may therefore be designed to attract impulse buys and those looking for convenience rather than savvy music shoppers. However, any artist could develop a similar app and sell tracks for equal or cheaper than other popular music services in order to draw customers to where they have a higher lifetime value.

With artists increasingly driving their fans to their Facebook Pages that offer strong retention and marketing capabilities, offering MP3 sales from the same presence could be lucrative. Otherwise, musicians must force users to open the iTunes desktop software or direct them offsite to Amazon or other webstores before they can execute purchases. The friction of these extra clicks and load times cause some users to drop off, diminishing sales that might have been completed if users didn’t have to leave Facebook.

Virality and retention is also much better on Facebook than on other music stores. By hosting MP3 sales apps on their Pages, musicians can gain the opportunity to market to users in the future, especially if they require users to Like their Page to access the app. iTunes only allows users to subscribe to updates about an artist through its failed Ping social network, and Amazon doesn’t offer any long-term retention mechanic.

By using Facebook’s social plugins and stream publishing capabilities, developers can let listeners share albums, tracks, and artists to the news feed with a single click, while iTunes and Amazon require multiple clicks, sometimes through hidden drop-down menus. When users click the Like or Send button on a song through a Facebook app such as Guetta’s, friends can play an audio preview of the track straight from the news feed. iTunes and Amazon’s song shares don’t offer in-line play so users must click through to the desktop app or site to hear a song recommended by a friend.

Since iTunes and Amazon downloads are served from the servers of those services, artists can’t offer free or deeply discounted downloads without approval. On Facebook, though, artists serve downloads from their own servers and don’t need Facebook’s approval for anything. The social network simply gets its 30% cut of any Facebook Credits purchases, so artists can offer free or cheap downloads as loss leaders to win over new fans.

The enormous number of credit cards numbers iTunes and Amazon have collected and their roles as go-to digital media buying destinations means artists aren’t likely to sell exclusively on Facebook. Instead, they’ll add the site as another distribution channel alongside other digital stores, their own websites, and physical retail stores.

Sales on Facebook could cut into those on iTunes and Amazon, though, while creating a new revenue stream for the social network. Established online music stores will need to consider improving their retention and virality mechanics to give artists better access to their customers and improved lead generation through rich media sharing. Otherwise, they could see digital music sale market share slowly slip to Facebook.

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Facebook Roundup: Photo Apps, Video, Movies, AT&T, Pageviews, Places, Credits, Growth and More

UK Won’t Ban Facebook – Facebook, Twitter and Research In Motion met with United Kingdom officials Thursday regarding the social networks’ role in summer riots there. The government ended up not moving to restrict access to the social networks in emergencies such as riots.

Facebook Takes Third Spot for Video – Facebook becomes the third largest video site on the Internet, comScore reported. That is 51.5 million people who watched videos on the platform in July.

AT&T to Discontinue Facebook Phone – AT&T is reportedly set to drop its “Facebook phone” called the Status, according to TechCrunch.

Places More Popular Than Foursquare – London developer Golden Gekko reports its clients report much more Facebook check-ins than Foursquare in Europe. Magnus Jern reported that the ratio ranged from 5-10 to 1. However, the future of the service is unclear.

Facebook Hit 1 Trillion Pageviews - Facebook surpassed 1 trillion pageviews according to Google’s Ad Planner tool, although comScore says otherwise.

Facebook Mobile App to Offer Photo Filters - Facebook looks to be competing with Instagram’s classy mobile app by offering almost a dozen photo filters to its mobile own application — following Facebook’s attempt to buy the startup, according to The New York Times. News of the feature first leaked out in June.

Recapping Facebook’s Bug Bounty – Neal Poole did a basic rundown of Facebook’s Security Bug Bounty program, which included information about multi-line JavaScript URI, redirects preserving fragment portions of URLs, XSS filters and more.

Facebook Wraps Up Farm Bureau Dispute – Facebook and the Farm Bureau had a dispute over Facebook trademarking “FB,” but it seems like the lawsuit is set to be wrapped up.

Milyoni Chart for Credits – Milyoni created a nice chart and whitepaper that includes ways that Facebook Credits can, and cannot, be used.

Facebook to Open Second Campus - Facebook is set to open up an additional campus from its current Menlo Park, Calif. headquarters. The second campus pwill be southwest of the current location, to be constructed in 2013 to accommodate about 2,800 employees.

Ticketmaster Allows Users to Find Friends – Line Nation’s Ticketmaster service launched an app that allows users to see where their friends are sitting on seat maps and tag themselves.

BBC Does Facebook On-Demand Video – BBC has developed an on-demand Facebook application allowing users to rent episodes from the show “Top Gear” for 48 hours.

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Filed in Applications, Apps For Sale, Credits, E-commerce, Events, Facebook, Games, Google, Government, iPhone, Legal, location, Marketing, Photos, Places, Policy, Politics, Privacy, Video

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Milyoni’s Facebook Credits for Video Rentals App Ups Virality With Live Commenting and Scene Sharing

Facebook ecommerce developer Milyoni has added new sharing features to its Social Theater app that lets Pages rent videos to users for Facebook Credits. Social Theater, which powers rentals for Warner Bros’ The Dark Knight and the ACL music festival, now allows users to leave timed comments, share specific scenes, chat live with other viewers, Like brands mentioned in the film, and send discounts on rentals to friends. These improvements can now be seen on the Page for film The Big Lebowski, will enhance the Social Theater user experience, and could help instances of the app spread virally across Facebook, increasing sales for content owners.

Milyoni got the attention of the ecommerce and media worlds when Warner Bros first announced it would rent films from its Facebook Page using Social Theater, and would allow users to pay with Facebook Credits. While it opened a new revenue stream to video content owners, we criticized the app for lacking many of the social feature it added this week. Without these, Social Theater wasn’t taking full advantage of Facebook’s communication channels and built-in audience, hampering sales.

The ecommerce developer has since raised $3 million in Series A funding and partnered with Page management company Vitrue to help brands drive direct return on investment on their social media efforts. It’s also been tapped to power on-Facebook rentals of concerts as well as more Warner Bros films including Inception and Harry Potter. Now it is debuting Social Theater 2.0 with rentals of cult hit The Big Lebowski from the film’s Facebook Page.

Once users opt to rent the film they’re shown a landing page with Like and Send buttons for sharing the app with friends, and a Like Box so they can become a fan of the film’s Page. Users then confirm that they’ll pay 30 Facebook Credits, or $3, for 48 hours of unlimited viewing of the film. They’re giving the option to post a link to the walls of friends that lets them get a $1 discount on renting the film.

While watching the film without going into full-screen mode, they see timed comments — text tied to a certain moment in the film —  written by other viewers scroll across the screen. They can add their own comments that are also published to Facebook, though this syndication could be made more explicit to the user.

At certain moments in the film users are are shown prompts to share scenes or popular quotes from to the film to the news feed. This content can be consumed for free by friends right from the news feed, and entices them to click through and rent the film themselves. Users also prompts to Like the Pages related to the film or of brands mentioned in the film, so users get a chance to Like the Page of the film’s main character “The Dude”, and when he asks for a drink of Kahlua, users have the option to Like the alcohol brand.

On the backend, Milyoni has implemented an efficient self-serve admin system that for deployment of the app in less than 24 hours. Admins can also customize pricing, promotion, and app layout.

Social Theater 2.0 is much more engaging and viral than the first version Milyoni launched with The Dark Knight. It gives users a unique, social viewing experience in which they can easily share compelling content and discounts on rentals with friends, and subscribe to updates about the film and related Pages. These elements should allow content owners who license Social Theater to secure more rentals, and help Milyoni turn one-time renters into repeat sales across deployments of its app.

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A List of Current Options for Buying Facebook Credits Around the World

We’ve been covering Facebook’s expansion of options that users have available for buying its Credits virtual currency, which as of July 1st will be the only currency that users can obtain for games on Facebook using real money. Here’s quick update about that — a country-by-country list of methods of inputting direct payments, previously published by Facebook in its Help Section.

Mobile*, DineroMail, Moneybookers, Western Union QuickPayMobile*, Bank Transfer, Mister Cash, Moneybookers, PaySafeCard, WallieCard, Western Union QuickPayMobile*, Boleto Bancario, Debito Brandesco, DinheiroMail, MoneybookersMobile*, InteracOnline, Moneybookers, Western Union QuickPayMobile*, DineroMail, Moneybookers, Western Union QuickPayMobile*, Moneybookers, Western Union QuickPayMobile*, Bank Transfer, Carte Bleue, Moneybookers, PaySafeCard, Ukash, Visa Electron, Wallie Card,Mobile*, Bank Transfer, ELV Direct Debit, GiroPay, Moneybookers, PaySafeCard, Sofortüberweisung, Ukash, Visa Electron, Wallie CardMobile*, Moneybookers, PaySafeCard, Visa Electron, Western Union QuickPayMobile*, MyCard – Card Redemption, MyCard – Pay Via MyCard Member Account, Western Union QuickPayMobile*, Moneybookers, MyCard – Card Redemption, MyCard – Pay Via MyCard Member Account, Western Union QuickPayMobile*, MOLPoints, Moneybookers, Western Union QuickPayMobile*, Bank Transfer, Moneybookers, PaySafeCard, Ukash, Visa Electron, Western Union QuickPayMobile*, MOLPoints, Moneybookers, MyCard – Card Redemption, MyCard – Pay Via MyCard Member Account, UkashMobile*, DineroMail, Moneybookers, Todito Cash, Wallie Card, Western UnionMobile*, Moneybookers, Western Union QuickPayMobile*, PaySafeCard, Visa Electron, Western Union QuickPayMobile*, Bank Transfer, CashU, Maestro, Moneybookers, PaySafeCard, Ukash, Visa Electron, Wallie Card, Western Union QuickPayMobile*, Gamania GASH – Card Redemption, Gamania GASH – Pay Via GASH/BeanFun Member Account, yCard – Card Redemption, Moneybookers, MyCard – Pay Via MyCard Member AccountMobile*, Moneybookers, Western Union QuickPayMobile*, CashU, Moneybookers, OneCard, Ukash, Wallie Card, Western Union QuickPayMobile*, Maestro, Moneybookers, PaySafeCard, Ukash, Visa Delta/Debit, Visa Electron, Wallie CardMobile*, Western Union QuickPay

Facebook’s explanation of the asterisk: “*Mobile payments are powered by Boku or Zong depending on your mobile carrier. For more information about mobile payment options, click here.”

As a bonus, we’ve included a video found via Lolapps that shows Nestea running an advertisement in Taiwan that promotes a giveaway for MyCard credits, which one can in turn use to buy Facebook Credits. MyCard is a pre-paid card service already popular as a way of buying into all sorts of online games, and in the embedded commercial you can see that Facebook — despite the two degrees of separation from the topic of the commercial — is being prominently featured.

We don’t know if Facebook itself had any involvement with this particular campaign, but we have seen MyCards make a big deal out of its “strategic relationship” with Facebook before. Whatever the cause, third-party promotions of Credits like this should help the currency continue to gain traction with users around the world, and eventually result in more money going to developers.

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The Road to Facebook Credits: On the Home Stretch With New Payment Options

Facebook is requiring that Credits be the only payment option for social games as of July 1st. We’ve been examining the late stages of the transition process in recent weeks, including the steps that large developers and mid-market developers have taken toward the new payment system. At this point, the great majority of gaming developers on Facebook are already using Credits. It’s a few regional developers who  have had challenges with the integration, which explains some of the latest updates Facebook has been making to payout options around the world. Here’s a closer look at what we see going on.

Regional developers — companies with one or two games popular in a single language region — seem to have had a slower transition than others. We’re aware of massively multiplayer online Facebook games in Asia that currently do not have any kind of implementation. We also recently reviewed restaurant simulation TinierCafe, which hasn’t integrated Facebook Credits, suggesting that even at least a few regional developers with a good foot in the North American or European markets are still monetizing separately. [Update: TinierCafe has recently added Credits as the only payment option, so scratch that one off the list.]

This isn’t surprising. Facebook has intentionally focused its efforts on big markets, big developers and globally popular options first. It began by adding Zynga more than a year ago, then bringing in other large developers before moving farther away from those Silicon Valley, and towards smaller companies.

With most of the platform covered, Facebook is now focusing on these more niche markets. Facebook expanded its PayPal payouts to new countries in May, and in June added 13 new alternate user payment options as well as a way for developers in any country to get direct payments to their bank accounts (except for countries embargoed by the US government, of course).

Another is niche apps. For example, the Facebook Credits team described a situation to ISG in which a developer with a subscription model needed additional technical support to set up integration for a recurring pay period. That model hasn’t been as big in the US, but it has had some success elsewhere in the world.

Lastly, Facebook — which has been busy hiring for its commerce team for many months — seems to still be working through talking to all of the developers on the platform. There are small “dorm room devs” like Munich-based Diviad GmbH, which has fewer than 150,000 monthly active users across all three of its games on Facebook. The Ghost Trappers developer has told us it’s so worried about the impact Facebook 30% cut of all Credits transactions will have on its bottom line that it is switching to running its games on its own site using Facebook Connect and not using Credits, something that Facebook has not taken issue with.

We also recently reviewed a game called CopaSocca where developer Pop Rocket Games said that all European countries experienced a Facebook Credits malfunction that took a while to get fixed. So there has been the occasional hiccup.

Facebook is actively adding alternative payment options for different countries and establishing feedback channels through its developer forums, Operation Developer Love and the newly-launched Facebook+Games Page. The Credits team has also worked with developers who came forward with significant challenges to Facebook Credits implementation to create solutions. With the subscription-based apps, for example, it’s now using a back-end solution to support them, a type of revenue that it could expand on later as more industries explore that model on the site.

Facebook is not currently frowning on games that accept other payments off-Facebook but still use the proceeds of those transactions on in-game currency within the Facebook version of the game — so long as there is price parity between the platforms and no spammy, aggressive attempt by the game to direct players off-Facebook to make payments. This means that a canvas game could, for example, continue to use its cross-platform currency without having to make any major changes to its existing payment options aside from limiting those on its Facebook client to just Facebook Credits come July 1. Larger sites, like Zynga’s FarmVille.com, also uses Facebook as the exclusive identity service, but provides other payment options.

So while developers aren’t necessarily thrilled with the idea that Facebook now gets 30% of all in-game transactions, they’re not leaving the platform in droves in protest. Even the smallest of developers appear to prefer having a game on Facebook that makes less money than it used to versus having no game at all. And the story is positive for some developers, who say they’re monetizing better than with alternatives. Facebook says its long-term vision is to make the currency more profitable for third-parties even with the 30% cut, after all. The next big test of the impact will be the month of July when Facebook will audit all apps for integration compliance. Facebook will suspend any non-complying apps it otherwise finds on its platform.

Stay tuned for more coverage of Facebook Credits as we arrive at the July 1 deadline.

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Exclusive: Playfish Ending Playfish Cash, Going (Almost) All-In On Facebook Credits

EA Playfish is switching off Playfish Cash, its long-time cross-game currency, in favor of individual game currencies purchasable with Facebook Credits, the company tells Inside Social Games. The transition goes into effect starting today.

In an exclusive interview with us, Playfish VP of publishing and product management C.J. Prober described the motivation behind the move as one part quality consideration and one part agreement. With Facebook requiring all games to implement Credits after July 1, Playfish saw an opportunity to improve user experience across all its games while meeting Facebook’s requirement that it use the virtual currency. Because Playfish partnered with Facebook last year to begin the transition, the change has been the works for some time.

“It’s actually something we’re excited to get behind because we think that having individual game currencies in connection with Facebook Credits is a better user experience,” Prober said. “So going through that hurdle over the next couple of months will get us to that endpoint.”

As of this week, the developer will stop selling Playfish Cash to customers. Between now and June 30, Playfish customers with an existing Playfish Cash balance can exchange their currency for individual game currencies in any increment within any Playfish game at a one-to-one rate. As an incentive to transition, Playfish is offering customers a bonus item for the game in which the customer completes the Playfish Cash conversion. Note that Playfish is not using Facebook Credits as a premium currency within their game, which means that Frictionless Credits and Buy With Friends discounts won’t be coming to Playfish games in the short term.

“We’ve always taken the high road and really been focused on the consumers from everything from virality to payment methods,” Prober said. “Credits provides a much more seamless purchasing experience across the whole platform.”

Moreover, Prober continued, the chance to individualize game economies will make for a better user experience in the long run. Because Playfish used a single cross-game currency for its games (except in its two most recent titles, Monopoly Millionaires and World Series Superstars), the developer couldn’t offer discounts or alter prices within one game without impacting the economies of all its games at once.

“It’s one of those things that gives our game teams more independence around how they think about building up their economies, planning out their features, how they think about pricing,” he said. “As i’ts structured today, if there’s something that happens in a particular game that is a big swing away from our general economic approach across our games, that can have an impact and it creates kind of a heavy burden around coordination and working together on those economies. So [individual economies for each game] is going to allow us to act more freely on consumer demand and give our development teams more flexibility in terms of what they can offer users in the game.”

Playfish currently enjoys approximately 27 million monthly active users and 4.4 million daily active users across all its games on Facebook. The developer recently announced plans to sunset three of its older games and hired a new general manager to oversee development on new games. Follow Playfish’s progress on AppData, our traffic tracking service for social games and developers.

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