New Partnerships and Promotions Show Facebook’s Focus on Expanding Credits

After detailing its plans for Credits at its f8 developer conference in April, Facebook has made the virtual currency a priority in the last few months. It has signed exclusive deals with top developers, introduced a variety of giveaways and other promotions, and partnered with a diverse group of payment service providers. Here’s a closer look at the recent expansion, following up from our post-f8 analysis on Inside Facebook Gold.

First, though, we should note Facebook’s efforts have had a mixed reception. Some developers have been concerned that the currency will hurt them more than it helps them, at least in the short term. Facebook takes a 30% cut of Credits revenue, and other factors, like breakage and loss of control over in-game economics, are also seen as drawbacks. Many virtual currency service providers, meanwhile, appear to be cut out of the platform entirely if they do not have a partnership with Facebook to be  a payment method for Credits. At the same time, Credits promises to greatly increase the number of people spending money in applications, and the amount they spend, through more payment options, better security features, a simpler user interface, and other incentives and promotions.

Facebook itself acknowledges that the expansion is causing short-term pain, but has committed itself to pushing through and making Credits work for the ecosystem over time. “There will be a transition period that will be kind of awkward, but in the end everyone will benefit from the system,” Facebook CTO Bret Taylor told us earlier this year.

For more, check out our recent guest columns on the issue, one from social game developer CrowdStar in favor of Credits, and the other from monetization service company Social Gold against the currency.

Developer Partnerships

CrowdStar was the first developer to go all-in, starting last December when it introduced Credits as the exclusive payments method for virtual goods in tourist simulation game Happy Island. In June, it announced a five-year deal with Facebook to make Credits the exclusive paid currency in all of its games.

But CrowdStar was not the first developer to sign a Credits-related deal — Zynga was. After increasing tension between it and Facebook, the platform’s largest developer signed a five-year deal in May, that cemented the two companies’ “shared commitment to social gaming on Facebook and expands use of Facebook Credits in Zynga’s games.” The announced terms notably did not make Credits the exclusive payment method in Zynga’s games on Facebook.

After Zynga and CrowdStar, the pace of big developer sign-ons has picked up. RockYou agreed to the five-year exclusive plan in mid-July; Wooga did a week later, after reporting positive results from its Credits tests; Playdom is the latest, announcing its participation days after getting bought by The Walt Disney Company. While other developers, like Playfish, have also been testing Credits out for months, up-and-comers are now doing so prominently, including Booyah and Digital Chocolate.

Credits Promotions

Facebook has also begun pumping more free Credits through the system. CrowdStar’s Hello City has featured a large portion of these promotions, although users who earn Credits this way can of course use them in any Facebook app: the Games Dashboard offered a 5-Credit giveaway for the game for a little while, as did an email campaign, and an oil spill virtual goods fundraiser.

It has since been giving away between 5 and 15 Credits to users, through an in-house ad appearing at the top of home pages. Giveaways have also appeared in Booyah’s location game, MyTown, where users have a chance to gain Credits by checking in to certain locations. And gaming site has been running a sweepstakes offering a 1,000-Credit prize to the winner.

Finally a special Credits splash page and fan Page both highlight games using Credits, and partners.

New Payments Partners

Key to Facebook’s plans for Credits is getting more payment providers in place, a process that has been accelerating for months. Deb Liu, one of Credits’ product leaders, said at f8 that the company hopes to bring in “100 to 200″ payment options — at the time, she announced a few of them, including the App2User loyalty points exchange program and Plastic Jungle’s gift card exchange service. It began running offers from TrialPay and RockYou earlier in April; it previously included PayPal in February, mobile payment provider Zong last summer.

Three more payment options have become available in recent months. Rixty, a virtual currency for coins kiosk service, began offering Credits as a purchase option at the start of July. Malaysia-based MOL Global, which runs a southeast Asia-focused online payment service, began offering Credits purchases a week later (reportedly as part of a larger deal involving social networking patents). And finally, PayNearMe, formerly Kwedit, has begun letting users print out an order for Credits online, then buy them at 7-11s across the US.

Expect Credits to continue expanding quickly — and we’ll be covering it as it does.