Facebook distributed free Credits last summer to increase awareness of its new “universal” virtual currency, but is now informing users that these promotional Credits will expire on February 15th, 2011. Users who received free promotional Credits but never spent them are seeing a notification informing them to use their Credits before they disappear.
The expiration will please developers because they can’t redeem free Credits spent in their games for cash from Facebook as they can with traditionally purchased Credits. However, it will also anger some gamers who will feel ripped off.
Last June, Facebook began offering users 5 free Credits for installing Crowdstar’s Hello City game. The promotion was designed to familiarize users with the Credits system and maintaining a balance. It also helped make them more comfortable spending Credits. This would benefit developers in the long run, but also led to an immediate loss of revenue. It expanded the promotional Credits more broadly in the weeks afterward.
Since then, Credits has matured and is now the exclusive direct payment method for 22 of the top 25 Facebook games, including those from Zynga, Disney/Playdom, EA/Playfish, and many others. All developers will be required to switch to Credits on July 1st, 2011.
Some developers reported that up to 70% of the Credits being spent in their games were promotional Credits that didn’t earn them money. This led some developers to increase prices to exclude those users with only small number of promotional Credits.
Other developers were impacted less, with only .05% to 15% of incoming Credits being promotional ones. Still, Facebook has been trying to improve its standing with developers, and removing free Credits from the virtual economy will accomplish this.
Facebook’s Help Center has details about the free Credits expiration. Purchased Credits won’t be affected, and users can keep any virtual goods they”ve bought with free Credits before February 15th. Facebook protected itself from legal challenges to the expiration by changing its Payment Terms in September to include the statement “If you receive free or promotional Credits, we may expire them at any time.”
Facebook tells us that users will see a combination of notifications, home page ads and canvas navigation reminders that their credits are expiring until February 15th. It’s possible that Facebook will seed users with free promotional Credits again in the future, though for now its focusing on offering discounts on in-game purchases made with Credits through the new Buy With Friends deal sharing system.