June 20, 2012
Facebook Trades The Arcade For The Shopping Mall
Michael Harper for redOrbit.com
Until now, the only way to purchase things through Facebook´s site was by using “Credits,” the official currency of Facebook-Land. However, yesterday Facebook showed some maturity and announced they would accept actual currency as a form of payment, letting the video-game-inspired “Credits” go by the wayside.Elsewhere in the announcement, the recently public social networking site also said they would begin a subscription billing service for their app developers. Now, those developers of games and other media services will be able to offer their most frequent users features such as premium plans or other subscriptions. Such moves are one more indication of Facebook´s desire to maintain a level of profitability as well as remain the platform for the future.
Credits were first introduced in 2008 as a way to give virtual gifts to friends. Two years later, Facebook allowed developers to roll them into their applications. One popular example of this integration is seen in Zynga´s FarmVille, which allowed their “farmers” to move along in the game more quickly if they were willing to fork over some Credits first. According to the New York Times, Facebook took a little off the top in these transactions, keeping 30% of the resulting sales. Selling credits ended up being good business for the company, as 15% of their total revenue last year came from their make-believe money.
With the abandonment of Credits, Facebook is now free to join the ranks of Amazon and Apple in the digital marketplace. Those Facebook users not concerned with Facebook´s privacy measures can store their credit card information with the company. These users will then be able to purchase anything offered on the site, be it apps, games, special offers or subscriptions.
“By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency,” wrote Prashant Fuloria yesterday in Facebook´s Developer Blog.
These changes will begin to roll out next month and will even work with mobile devices; A smart move, considering Facebook´s intense push towards mobile during the last year.
Outside of a few music and movie streaming services, there aren´t very many apps which could take advantage of this service immediately, though Zuckerberg and Friends hope many more app developers begin to take implement this service soon.
In addition to offering their users convenience and a singular way to pay for their games and other subscriptions, Facebook also gets an alternate form of revenue. In the weeks leading up to their Initial Public Offering, some advertisers – most notablly General Motors – decided to take their advertising dollars elsewhere. After all, General Motors could have continued to spend upwards of $10 million to advertise with Facebook, or they could have taken advantage of many of the free advertising options, such as business pages, soliciting Likes, etc.
It will be interesting to see how many people decide to bolster Facebook´s revenue underpinnings and ensure a greater Facebook for the generation of tomorrow by handing over their most private of data, their credit card information.