Facebook Considering Virtual Currency System?

Facebook’s Gareth Davis said at the GamesBeat conference in San Francisco yesterday that the company is “looking at” a virtual currency system of its own, according to the LA Times. However, despite what the LA Times suggests, it may be a little premature to assume what that means exactly, given that the company has been “looking at” doing a Platform payment system since late 2007 that has yet to launch.

Universal virtual currency, however, could make a lot of sense for Facebook, especially given the recent “virtual credits” system that was introduced in Facebook’s own virtual gifting system. In this scenario, users would buy blocks of Facebook virtual currency directly, and then be able to use them in various ways in both Facebook’s own virtual gifts store or in third party applications. Hi5 announced a similar universal virtual currency program two weeks ago for developers on the hi5 Platform.

A large virtual currency and payment ecosystem has been growing on the Facebook Platform over the last two years. Many games and other applications are already monetizing well through their own virtual currencies, either through offer providers such as OfferPal, Super Rewards, Peanut Labs, and Gambit, direct credit card or Paypal/Amazon/Google payments through providers like Jambool and Spare Change, or mobile payments through providers like Zong and Paymo.

The opportunity to plug into a virtual currency system that would be available to every Facebook user would certainly be interesting to many developers. However, neither building a global payments platform nor managing a universal virtual currency are small tasks.

Should Facebook launch a virtual currency system, the dynamics of how it would affect existing monetization systems would heavily depend on the implementation – both from a user experience and a technical integration perspective.  However, ultimately, things will simply come down to whichever option can make the best returns for a given application’s user base.