As Facebook Prepares Credits Rollout, Here’s a Look at the Virtual Currency in Social Games

pay-with-facebookWill Facebook users feel more comfortable trusting their credit card information with the company instead of social game developers and other payment providers when they go to buy virtual goods? If the answer is yes, we may see a new surge in revenue for developers, and for Facebook.

The question is closer than ever to being answered, too. Facebook is planning to more fully release its virtual currency, Credits, on third-party apps in the coming weeks. In the meantime, here’s a look at which games are already running Credits, and how they’re going about doing it.

Here are the games integrating Credits that have been announced so far, sorted by developer and noting the Daily Active Users (DAU) for each game:

There are two basic implementations seen to date:

  1. Buying in-game currency with “Pay with Facebook” as an alternative payment method along with credit card, pay pal, mobile and offers
  2. Buying in-game items directly with Facebook credits

Most of the developers opted for a simple implementation, just adding Facebook credits as another in a laundry list of purchase options for users:

zynga-pirates-pay-with-facebook2

Once users select Facebook Credits, they are presented with the option of using their existing credits if they have enough. Otherwise they are presented with options to buy with the credit card on file (if there is one), their mobile phone, or to select a new card.

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In general, Credits are 10 for USD $1, but if you buy with your mobile phone, there is a pretty standard (and somewhat sizable) 43% haircut taken to help cover the carrier fees. There are also some subtleties in implementation, such as Playfish only implementing Facebook Credits for the purchase of coins, but not Playfish cash.

Crowdstar has been the only one of the developers listed above to do the in-game items directly, with slightly different implementations. Happy Aquarium actually reserves specific items in its store to be purchased only with Facebook Credits – ostensibly now offering item exclusives under three different currencies:

crowdstar-happy-aquarium-credits

And more interesting is Crowdstar’s implementation of credits to buy upgrade items directly in recently launched Happy Island, as we covered yesterday. For a user who already has Facebook Credits, this is an extremely simple purchase process as detailed in these three steps. happy-island-process2The only issue so far is that the upgrades don’t appear in the game immediately – in this early stage you seem to need to refresh the game for it to display.

From a developer perspective, there is definitely some trepidation in relying on Facebook solely for purchases. Besides several operational and redundancy considerations, direct relationship with paying users is really valuable. The larger developers have created user accounts, letting you take currency across games (like Playfish) or at least save your credit card info to make it easy for you to pay across different games. The other major benefit from a direct relationship with end users is cash flow: with credit purchases going through the Facebook credit system, developers now have to wait for Facebook to remit the funds to them.

As Zynga has one of the broadest bases of players, and thus presumably some of the most control to lose, they have been aggressively pushing discounts on buying in-game currencies. Since Thanksgivng, both Mafia Wars and FarmVille have been offering discounts on the respective game currencies, often seen as pop-ups touting a special limited time offer to buy one of the usually $10 or more valued bundles. This kind of promotion is fairly typical in retail and in e-commerce, providing incentive to users to increase the size of their average order (from experience, a majority of users only buy the smallest currency bundles, typically around $5). Judging by the frequency of Mafia Wars and FarmVille promotions (indiscriminately hitting both previous buyers and non-buyers), it must be working.