The Facebook Credits GetBalance API Helps Developers Dynamically Price Virtual Goods

Facebook has released the getBalance API call as an incentive to game developers who use Facebook Credits as their exclusive premium in-game currency. The call lets developers determine the Credits balance of any of their users. This allows them to identify high rollers with a large balance of Credits and dynamically price virtual goods to increase purchase probability or profit margin, improving monetization.

However, if developers change prices on users without disclosing the changes, they are risking significant backlash. Users might feel cheated, and stop playing the game, or other games by the developer — and they might also spread the word to others. A variety of fan sites and communities cover details like prices, and they’d be sure to notice price discrepancies and help spread the word. Also, it’s worth noting that developers who use their own proprietary premium virtual currency can see balances of their users, so getBalance really just creates parity between developers who do and do not use Credits as their in-game currency.

What the getBalance API does

Starting July 1st, all Facebook games must process payments exclusively through Facebook Credits, Facebook’s virtual currency. Developers can either use Credits as their payment method, allowing users to purchase a game’s proprietary premium in-game currency with Credits, or use Credits as their premium currency. Facebook wants developers to use Credits as their in-game currency (PDF) because it removes an extra step from the spending flow, as Credits as a payment method requires users to buy to credits to buy premium currency to buy virtual goods.

Facebook is incentivizing developers to use of Credits as their premium currency by making several special API calls available to those that do, including Buy with Friends and Frictionless Payments. Buy with Friends lets users share a discount on a virtual good with friends, while Frictionless Payments lets developers instantly sell users up to $3 worth of virtual goods without interrupting game play with a purchase confirmation step.

Frictionless Payments requires developers to display a user’s balance to them after purchase. To do this, developers can call the getBalance API for any of their users:

$ret = $facebook->api_client->users_getStandardInfo($user_id, array('credit_balance'));

But there are significant additional benefits to this API call,  which quietly became available at the end of January. It allows developers it to determine if a user is a high roller who maintains a large balance of Credits, indicating that they actively purchase Credits and will likely have a high lifetime value. Developers can also tell if a user maintain no balance and may not be a paying customer, or that they maintain a small balance, indicating that they may only buy as many Credits as they need at a time and might not spend as freely.

Facebook Credits project manager Reshma Khilnani confirmed with us that developers could use this data to optimize their monetization strategy. They might seek to reward high rollers with special rewards in hopes of winning their loyalty and turning them into a whales, or high-return social gamers who spends from $25 up to tens of thousands of dollars.

Developers might reduce the price of virtual goods when a high roller first starts playing in an effort to get them hooked, gradually increasing prices with time. Alternatively, developers of games with a low user lifespan could jack up prices to squeeze money out of them before they leave, though a slow-and-steady monetization strategy is usually more fruitful.

For those with a small balance, developers could dynamically price their virtual goods so users could make purchases without having to stop and buy more Credits from Facebook. They could also price a virtual good that is crucial to advancement just above the user’s current balance, compelling them to buy more Credits, and then lower prices to get the now Credits-flush user to fritter away their balance.

But as we said earlier, developers should remember that they may risk their reputations over their use of this feature.

The getBalance API opens a whole new level of strategy to virtual goods pricing. Large developers with huge volumes of data will be able to deduce patterns and discover tricks to help them maximize user spend. The API could even create a market for Credits balance analytics services that bring these insights to smaller developers.

Rarely in the physical world do retailers get the chance to look inside a potential customer’s wallet and price their wares accordingly. The getBalance API is a persuasive reason for developers to switch to Credits as their premium in-game currency, and an opportunity for them and Facebook to significantly improve monetization of games.