Zynga Readies Switch to Facebook Credits

Facebook has taken a step closer to establishing Credits as the exclusive payment system for virtual goods on the social networking site, wrapping up a deal with the biggest social game company, Zynga.

Zynga, which offers games such as Farmville, Frontierville, Mafia Wars and Texas Hold Em Poker, is preparing to switch to use Facebook Credits exclusively for all games hosted on the site. The official joint statement says: “Facebook and Zynga have transitioned Facebook Credits to be the exclusive method of payment for most Zynga network games on the Facebook platform. The companies are committed to working together to provide the best possible customer experience during this transition.” Credits was part of the five-year deal the two companies signed in May, though it was not stated that it would be exclusive at the time.

Facebook Credits was already an option for most Zynga games, with the exception of poker. (Inside Social Games reports that poker will be making the transition eventually as well). Now third-party payment options have started being disabled across the Zynga portfolio of games. Even if you buy your virtual game currency using a credit card, it appears that you are really unknowingly buying Credits.

Facebook gets a 30% cut from the game developer for all transactions via Credits but the fact is that Zynga had few alternatives. The game developer can still take charge of its own payment system on its own domains, such as Farmville.com, or on other hosts such as Yahoo! However, Facebook accounts for the vast majority of all social game playing and Zynga needs the site to maintain its current numbers, let alone grow.

Facebook has been making extensive efforts to market Credits to its users, giving them away to selected users and partnering with payment providers to allow people to buy credits in retail stores or online without a credit card. Some of Facebook’s Credits partners have in turn been running their own promotions, such as PayNearMe and Rixty.

Since the closure of the Facebook store – which sold virtual goods for people’s profiles and walls – in August, social games have been the only place to spend the virtual currency on Facebook. Generally it’s free to play the games on Facebook but users can get ahead if they pump in actual money to buy virtual goods. With 200 million people playing games on Facebook every month, according to the site’s own figures, it only takes a small proportion of paying customers to generate a healthy revenue.