Facebook to developers: Get ready for Credits

Facebook's virtual currency, "Facebook Credits," is getting very close to its full launch: a post on the Facebook developer blog explains some of the full terms of the system and what developers can expect as the currency continues to roll out slowly.

"Today more than 500,000 applications exist on Facebook, and the virtual goods within those applications (particularly games) have become an increasingly valuable part of the user experience," the post explained. "By providing a single, cross-application currency, our goal is to [make] transactions simpler for users, leading to a higher conversion rate for developers. Specifically, our early testing has shown that users paying with Facebook Credits are significantly more likely to complete a purchase than the average Facebook user."

Developers will need to believe in that incentive: Facebook plans to take a full 30 percent cut of Credits transactions. Some developers have already denounced that as too expensive. Facebook will have to give them the hard sell in order to win them over, as many third-party currency start-ups have already flooded the developer platform, and there are consequently lots of other options out there.

A Facebook Credits preview.

(Credit: Facebook)

Facebook assures developers in the blog post that it "will explore a number of ways to improve the program, and increase conversion and net revenue for developers, including user education and marketing, testing innovative ideas such as bulk discounting, and seeding Facebook Credits to drive discovery and repeat engagement."

Multiple industry sources have indicated to CNET and elsewhere that Facebook will be formally launching Facebook Credits at the third installment of its F8 developer conference, which is taking place on April 21 and 22 in San Francisco.

But in contrast to previous F8 developer launch events, during which developments were kept behind closed doors up until the event itself, Credits have been actively tested by select Facebook developers for well more than six months. They're also used internally as the currency for Facebook's own "gift shop," which last fall was expanded to include some sponsored gifts from partner companies and nonprofits.

Last week, Facebook announced that it would partner with the eBay-owned PayPal for transaction technology, adding to an array of credit cards, 15 international currencies, and mobile-payment start-up Zong. It shows that Facebook's road map has changed quite a bit from the days when the company was plotting a competitor to PayPal itself; with the most successful applications built atop Facebook dominated by social games, a virtual currency makes far more sense.

[jfrdricks2009]

Wow. It was all about the almighty dollar with facebook from the beginning. I will probably stick with google buzz and twitter now. To hell with Facebook!

[ObsceneZen]

Sorry to say, but that's a pretty ignorant comment. Of course it was about money. Capitalism is all about doing something useful so that you can make money. But that's not even relevant to this particular feature, because all this does is allow games -- which already charge people -- to use a common currency so that they don't have to set up their own payment methods from game to game.

[kingsnoofer]

Agree with ObsceneZen...Anyone who thought Facebook was created and molded out of pure niceness is really naive. It only, at the moment, applies to the apps and games. If you are like me and find most or all of the apps useless you won't have to even concern yourself with it.

[ferricoxide]

Buzz kinda sucks right now. Also discovered that Buzz will sometimes destroy your Google contacts (replaces Buzz-linked contacts' info with links to those contacts' profiles). This wouldn't be TOO horrible, if you were guaranteed to get the same info from those profiles as you had in your former contact entry, but you're not guaranteed of that. Worse, if you're using the various sync services (e.g., for your BlackBerry), your contact information gets deleted in those alternate locations as well. Right now, I have a big hate-on for Buzz.

[USDecliningDollar]

Do you think that FB was doing this for free? Do you think that Google Buzz is "free"?

Nothing in life is free my friend.

I hope that FB does make some money, otherwise it will come to a swift demise.

[JBSimmons]

It makes sense. Facebook and it's apps are worldwide. This is the only way to manage payments to a single vendor across a wide array of currencies. Save for the one world government and a one world currency which none of us want at this time.

[bvdon]

30 percent? Say that again THIRTY EFFIN PERCENT!!!!!

What a rip-off! I seriously hope developers boycott this scheme/scam.

[ferricoxide]

No, it's not just 30%. It's the 30% that Facebook takes plus the extortionate amounts that PayPal takes, as well. And, given that the virtual currency needs to translate to real monies, somewhere (for it to be worthwhile to participate in the virtual money system), you can be sure that various jurisdictions' taxation authorities will be looking for their pound of flesh, too (especially given all of the budgetary shortfalls that these tax authorities are being saddled with mitigating).

In the end, the FB app developers will be seeing about as much from their efforts as musicians see after the studios, RIAA, release channels, etc. take out their cuts.

[Mergatroid Mania]

I agree, they should call them Facebook Greedits. 30% is ridiculous, and add any other middlemen on top of that your dollar may end up only actually being worth 50 cents or less.

Oh well, I don't play their crappy games or use their useless apps. Anyone who enjoys being ripped off, help yourself to some greedits.

[sparrowhyperion]

Anyone who spends real money on the games on FB has way too much money and way too little brains..... For what it would cost for a few virtual game perks, you could play Champions Online for a month.

[sullivanjc]

Nice site and all, Facebook, but not worth shelling out money for.