Game Marketing Tips, Analysis, and News

Tuesday, January 25, 2011

Facebook Drops The Bomb

Yeah, winning loot is easy... if you're Facebook.
The move was inevitable; the only question was when it would happen. We now have the date for the nuclear event: July 1, 2011. That's when Facebook will require all Facebook Games to implement Facebook Credits, which means a cool 30% rakeoff for Facebook.

Oh, it's not exclusive; developers will be free to use their own credit system as well as Facebook Credits. But all games will have to use Facebook Credits. Facebook will also offer incentives for developers that use Facebook Credits exclusively, such as premium placement on their Games Dashboard and special promotional opportunities.

Rumor has it that Zynga ships Facebook $30 million or so every month for its share of Facebook Credits; I'd have thought it would be somewhat higher. Clearly this will help Facebook reap more revenue. But it also has benefits for developers. A unified currency will benefit smaller developers, because a user will already likely have Facebook Credits handy... so they won't have to pull out their wallet to buy something inside your game. Yeah, it's a bummer for games already on Facebook, as they stand to lose 30% of their revenue stream. But this has been clear for almost a year, so companies have had plenty of time to adapt to it.

Facebook's giving some warning so there's still time to modify the plan based on feedback from game companies. (Feedback: The high-pitched whining noise coming from game developers.) I can't really blame Facebook for wanting to get their cut of the action, and Facebook Credits do offer a useful service. Companies thinking about putting a game on Facebook will just have to decide if giving up 30% of the income is worth the additional exposure; I'd bet it is in most cases. But companies will do well to create their own brand, identity, and gaming possibilities outside of Facebook as well, so they aren't too dependent on what moves Facebook may make in the future.

The largest social game companies have been busy doing just that in the past year or so. Mobile gaming is a major growth area for them. But the Facebook juggernaut is heading in that direction, too... it's a rapidly evolving market, fraught with danger for the unwary or the slow to change.

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