Offerpal Responds to Facebook Credits With Employee Layoffs

In-game offer and monetization company Offerpal Media has laid off an unknown number of employees today. Posting on the company blog, CEO George Garrick blamed the layoffs on Facebook Credits, the in-house game currency that Facebook is asking developers to use exclusively instead of using other payment services.

Facebook has been testing its own advertising offers for Credits, in partnership with TrialPay and RockYou/Peanut Labs, through a selection process that has left out companies like Offerpal and competitor Super Rewards. That didn’t present a problem as long as game developers held onto their own in-game currencies, but there has been more movement toward adopting Credits of late — including large developers signing exclusive deals to use the virtual currency, even as many worry about costs. Writes Garrick:

But like any good business, we must balance our costs with our revenues by business area.  This means that we must downsize our Facebook operations in order to adjust to an anticipated lower scale of Facebook user traffic. At the same time, we will re-focus our resources on our growth areas including other gaming platforms, open web gaming, new Internet verticals, and most importantly mobile through our Tapjoy subsidiary.

Offerpal is not left totally defenseless — in May, the company finalized its own proprietary currency system, called Game Points, which can be used across hundreds of games on Facebook and elsewhere. Everywhere but Facebook is now more of a focus.

But Facebook is still by far the largest social gaming portal, so Offerpal is in the uncomfortable position of having to hope that other ecosystems will grow quickly enough to make up for the developer exodus toward Credits. It recently signed a deal with Yahoo, it is already working with many other gaming sites, and we expect it to continue expanding outwards.