Facebook has just announced that starting tonight, the exchange rate for Facebook Credits (Facebook’s virtual currency) will be changing by a factor of 10X from $0.01/credit to $0.10/credit. At the same time, Facebook Gifts prices will fall by a factor of 10, keeping gift prices effectively constant. Users’ credit balances will be adjusted as well.
Why is Facebook making the change? Facebook says it wants to “simplify the use of those credit by taking away a zero from gift prices” in order to “make sure that even the smallest amount of credits is meaningful.”
“Now by accumulating as little as 10 credits, you can buy a gift to add more significance to a friend’s birthday, celebrate a special occasion or simply have fun,” Facebook says.
Since migrating to a credit-based currency system last fall, Facebook has been testing a variety of initiatives with its virtual currency, including credit gifts, branded virtual gift credit bundles, and soon, it will launch tests with third party Facebook Platform applications.
In many virtual economies, game designers and economists optimize performance by consistently tweaking exchange rates, and often providing variable price points for different quantities of virtual currency. However, it appears for now that Facebook is keeping it simple at 10 cents per credit with no bulk purchase discounts.
This adjustment will help preserve the value of the Facebook credit. In the future, I wouldn’t be surprised to see Facebook experiment with more sophisticated ways of pricing and selling currency to different users based on their demographic profile, payment layer constraints, and purchase pattern history.