
Facebook To Make ‘Facebook Credits’ Mandatory For Game Developers - noctrine
http://techcrunch.com/2011/01/24/facebook-to-make-facebook-credits-mandatory-for-game-developers/
======
cletus
Does anyone else see "(techcrunch.com)" at the end of the submission title and
think of the boy who cried wolf?

This may be true but, for me, TechCrunch has gotten to the point where anytime
I see one of their headlines I think it's sensationalist linkbait and I'm
better off assuming what they're writing is exaggerated or simply not true.

As for the claim, it may be true but I really don't think it matters and this
is something that's important for anyone assessing FB as an investment.

Facebook used to own social gaming. Arguably it still does. But it faces a
huge threat, one which it hasn't remotely tackled: social gaming--and non-
social gaming for that matter--is going mobile in a _huge_ way.

Facebook gaming is built on Flash. As we all well know, Flash is incompatible
with iOS and doesn't really suit touch-based interfaces for those platforms
that do support Flash (eg use of rollovers and so on). That's not to say that
you can't write a mobile-friendly game with Flash but, to date, most people
haven't (in my albeit limited experience).

Facebook is, for most people, three things (IMHO): games, photo sharing and
chat/messaging. FB's revenue seems built on ads and games. They're acting like
they've got the market cornered on games but the don't. As Facebook usage goes
mobile (as I believe it increasingly is), the draw of those games goes down
and consequently so does the potential revenue.

Sony, Microsoft and Nintendo should already be scared to death of Apple as far
as portable gaming goes. I think Facebook should add itself to that list.

~~~
scrame
MS doesn't have portable gaming. Sony's PSP is pretty much dead from a lot of
their stupid choices. The NDS has a huge foothold and is an overall _better_
gaming option, and the 3DS looks promising.

Apple will get the market of $3 casual games, but that market does not have a
huge overlap with the DS demographic, and where it does, there is less barrier
for an iPhone owner to get a DS than there is for a DS owner to get an iPhone
-- you can get a used DS for less than a monthly AT&T iphone bill.

Not to mention that the DS is much cheaper than an iPhone, and has
multiplayer/networking built in.

Apple is doing fine, and will continue to do so, but they are absolutely not
going to unseat the DS any time soon.

[ As a comparison, there have been ~60 million iphones sold, and about 135
million NDS, while iPhone adoption is strong, it has a way to go to just bowl
over nintendos foothold. ]

~~~
cletus
Why are you comparing the DS to the iPhone when the elephant in the room is
the iPod Touch?

An 8GB iPod Touch is cheaper than the pricing of the 3DS. For completeness
we're looking at $249 for a 3DS and $170 for a DSi [1].

What's more a typical new release 3DS game will sell for $30+. Compare that to
the typically <$5 for an iOS game. Now you describe those iOS games as
"casual" but I see games like Angry Birds that can hold the attention for a
long period of time. What's more, you can afford 10-20 of those games per DS
game!

Honestly I've never played a DS so I really don't know but are the games
_really_ that much better to not feel the heat from Apple? We're talking an
_order of magnitude_ difference in game costs and not too dissimilar hardware
costs.

[1]: [http://www.bestbuy.com/site/Nintendo-DS/Nintendo-DS-
Hardware...](http://www.bestbuy.com/site/Nintendo-DS/Nintendo-DS-Hardware-
Console/abcat0707001.c?id=abcat0707001)

~~~
scrame
Good point on the iPod touch being cheaper (and not needing a contract).
However the 3DS isn't out and will not stay at that price long (thats the
japanese launch price which is usually different from US releases).

> Honestly I've never played a DS so I really don't know but are the games
> really that much better to not feel the heat from Apple? We're talking an
> order of magnitude difference in game costs and not too dissimilar hardware
> costs.

Yes, they are.

I think what gets me about these conversations is that it is typically people
with smart phones who might play games casually, I have never heard the "Apple
will beat Nintendo" argument from someone who uses both.

Here, look at a list of the top iOS games from last year:
<http://wireless.ign.com/articles/106/1063222p27.html>

With the exception of GTA: Chinatown wars (which is a DS port), those games
are all nostalgic remakes (space invaders, oregon trail), puzzle ports
(peggle) or generally pretty simple/shallow games.

These are great diversions for 5 minutes waiting for a train, but most of them
are not "great" or even "good" games. I admit that the iOS is versatile, but
it has a lot of its own limitations, many of which coming from the fact that
its _not_ a games machine.

The DS has its own share of shovelware, certainly, as do all platforms, but it
is a dedicated gaming platform, and the games on there are leagues better.

Also, individual games cost $30 new at release time, but that cost goes down
significantly quickly.

Nintendo said a few years ago they consider the iphone to be a competitor, but
they are not stupid and have the same focus on high product quality (hardware
and first party software) as apple, with a better attitude towards their
customers, and have innovated and outmaneuvered and outsold sony and microsoft
(and helped run sega out of the console market) at practically every
generation.

The two markets actually _are_ different, even though superficially similar,
and Nintendo isn't going to just disappear because iPhones/iPods support games
any more than twitter disappeared after facebook implemented status updates.

~~~
cletus
> Here, look at a list of the top iOS games from last year:

Do you play iOS games? I ask this because I do and that's not a great list.
It's the kind of list I'd expect from a content farm that picked 25 games
seemingly at random.

For one thing it doesn't include Angry Birds (either version), Plants vs
Zombies, Bejeweled 2 and many, many others.

Perhaps you likewise have misperception when it comes to mobile gaming?

> These are great diversions for 5 minutes waiting for a train, but most of
> them are not "great" or even "good" games.

I think you're coloured by your own predilections. I now I've sat there and
played Angry Birds for _an hour_. As for games being "good" or "great", well
that's largely subjective.

As an anecdote, my 10 year old nephew has an iPod Touch and plays games on it
all the time (when he's allowed to have it that is). Thing is, _all his
friends have one too_.

> Also, individual games cost $30 new at release time, but that cost goes down
> significantly quickly.

Yes but iPhone games _start_ at (rarely more than) $5 and go down. Angry Birds
is _one dollar_.

A lot of games are free too, some totally so, others ad-supported (eg Angry
Birds on Android). Not that Android has an iPod Touch equivalent (yet anyway).

> ... with a better attitude towards their customers

I think your bias is showing here.

> Nintendo isn't going to just disappear

True but, in the phone market as one example, I'd rather be Apple than, say,
Nokia or RIM.

~~~
jokermatt999
> Angry Birds (either version), Plants vs Zombies, Bejeweled 2

All of these are examples of "shallow" or puzzle games. That's not to say that
they're bad games, but it's simply not in the same market as DS games.

> I now I've sat there and played Angry Birds for an hour.

And that's an outlier. I was a kid of the Pokemon generation. I'd sit and play
those games (and similar) all night, only stopping to do homework.

For a good example of what the DS market is, I'll look at the top games under
"DS" on Gamefaqs. This isn't a perfect representation (represents activity on
the site vs sales), but it'll do. 1 to 3 are all Pokemon. 4 is a Kingdom
Hearts game, a series known for it's story more than anything. 5th is Golden
Sun: Dark Dawn, a traditional RPG. 6th is more Pokemon. 7th is Dragon Quest
IX, another installment in the classic RPG series. I can't speak for the rest
of the list because I don't know the games mentioned, but by now you should
have noticed a trend: RPGs and story. These are games that (as a kid) I'd play
for an hour at a minimum. You can easily get 20 or 30 hours out of these and
that's _before_ replay value (which absolutely ridiculous when you're talking
about Pokemon).

That $30 isn't just something to keep you distracted on the bus; it's
something you'll put some time into playing. I don't mean to sound rude, but
it seems like something you just aren't getting as a "non-gamer". I don't mean
that in a bad way, but to me there's a massive difference between Angry Birds:
February Edition! and the next installment in an RPG series I know and love.
One will give me quick diversion while I wait in line, but the other one will
offer me hours upon hours of entertainment and story.

Edit: Apologies for the tone of this post. I love Angry Birds and similar for
what they are, but I have a pet peeve about people conflating casual/social
games with video games as a whole.

~~~
slantyyz
Ok, I'll bite.

I bought Street Fighter 4, and I expected the game play to suck on iOS without
a D-pad. The graphics exceed any fighting game I've seen on the DS, and the
game play is true to the original.

As for the market for DS games, a lot of the big winners for the DS were
casual games (the DS legitimized "Brain Games"). Much of the Brain Game genre
is easily/faithfully reproduced on iOS.

The driving games I've played on iOS seem better than the DS, and even the
hockey game that I got on iOS (I believe it's 2K sports) plays surprisingly
well.

Beast Boxing is a pretty good rendition of Punch Out too.

Yeah, all the casual games on iOS get the glory, but there are deep console
level games for iOS that can rival games on the DS.

------
gyardley
It's funny how Apple charges 30% for in-app purchases, and that instantly
becomes 'industry standard' in the minds of lazy TechCrunch writers. The cut
taken by most virtual currency providers on Facebook is about a third of that.

The 30% figure can only stand up in an environment without competition.
Luckily for Facebook (and Apple), they can create an environment without
competition by fiat.

~~~
quanticle
And its that 30% figure which is going to prevent Facebook credits from
becoming a wide-spread e-currency. There are many payment systems out there
(Paypal, Google Checkout, etc.) that have lower fees and looser terms of
service than Facebook. Its one thing for Facebook to mandate this for their
own network. It'll be quite another for Facebook to push this service out onto
the Internet as a whole.

------
trotsky
_Right now the vast majority of Credits are spent on gaming, but it’s very
likely that Facebook will eventually begin allowing third-party websites to
offer a ‘Pay With Facebook’ option, and that may include everything from
digital content to physical goods._

Why would physical goods sellers use an upstart payment platform that takes a
30% transactional cut when there are tons of established financial firms who
will do the transactions for 3%-5%?

I mean the fact that they are making this mandatory means that they can't even
organically convince vendors who are selling virtual goods on facebook's own
platform. Surely this is facebook worship hand waving.

~~~
msy
I guess the idea is that if FB has your card details it'll be a bit like
Facebook Connect and will lower transaction friction. Which is exactly what
Paypal does. Except - and it's quite incredible really - as a purchaser I'd
trust Paypal much more than I trust Facebook, I don't want my purchase history
being sold along with all my other personal data thankyou.

The idea of trusting something less than Paypal is amazing, go Facebook!

------
itsonlyfair
If someone doesn't like facebook, now is a very good time to have DOJ slap
them around for anti-trust, just like
<http://en.wikipedia.org/wiki/United_States_v._Microsoft>

If those major developers were told "close a deal because we're willing to
mandate using credits" then Facebook deserves to be punished for anti market
practices. There is little difference between "hey my OS is popular, let me
use it to bootstrap my browser share" and "hey my Social Network is popular,
let me use it to bootstrap my payments product".

------
colinsidoti
Heh, Facebook will need to continue making special deals with major game-
makers. Facebook Connect can be used to implement all of the social features
these games have incorporated. Asking a game-maker to stay with Facebook and
ignore the 30% cut they're taking is unreasonable after the product is
popular. I can see the cut become an automatically tiered percentage based on
the amount of transactions being done. The more transactions, the lower the
cut.

Facebook simply does not provide enough value after these games are popular to
justify a 30% cut. In all honesty, it hardly provides enough value at the
beginning. Nothing says social games cannot exist without Facebook at all.

------
mildweed
If they start allowing the sale of non-digital goods on Facebook, they had
better drop the 30% cut. That'll never fly with retailers, no matter how much
exposure their Page gets them. Current payment processors take about $0.10 per
transaction.

~~~
mootothemax
_If they start allowing the sale of non-digital goods on Facebook, they had
better drop the 30% cut_

Agreed, 30% is a ludicrous amount for anything outside of Facebook. Now, if
they could offer comparable rates to PayPal, I for one would sign up
overnight. Is it that crazy to think that they could topple PayPal's current
monopoly on low-end[0] payments?

[0] I couldn't think of a better way to describe it, but if you aren't based
in the USA, UK, Australia etc, there aren't a lot of options for getting your
first buck for your web app etc.

~~~
egor83
_if you aren't based in the USA, UK, Australia etc, there aren't a lot of
options for getting your first buck for your web app etc._

<http://flattr.com>? They hail from Sweden, and are quite eurocentric.

~~~
mootothemax
_flattr.com? They hail from Sweden, and are quite eurocentric._

I've only had a brief look, but it seems like a fairly unsatisfactory way of
implementing billing for a web app. I accept that I could be missing something
obvious - can you let me know if I've got it wrong? :)

~~~
egor83
You're right, I'm sorry.

It lets you transfer small amounts on the web, but it's not for billing.

------
larrik
Isn't the Secret Service going to have a problem with this? I thought making
your own currency was a huge no-no, and if it gets too popular they are going
to have a hell of a time passing it off as something else to the government.

~~~
mildweed
"You may not accept Credits as payment for a currency or other stored value
item that can be used outside of the application."

"You will not (and you will not enable or allow any third party to) sell
Credits to, or trade or otherwise exchange Credits with, any third party."

In short, Facebook Credits cannot be a commodity / currency. They're closer to
gift cards, storing value only.

[0] <http://developers.facebook.com/policy/credits>

------
wildmXranat
I remember the days when you only had IRS dip into your pockets. Now everybody
wants to take a turn.

~~~
davidsiems
It's actually industry standard for the publishing platform to take ~30% as
the article says. XBLA, Steam, and PSN all do this as well.

It may seem like a lot, but those users wouldn't be available to you without
the platform supporting you.

~~~
roc
I think the 30% concern is largely from people who see this growing into a
paypal sort of service. 30% to sell virtual cow-feed is standard. 30% to sell
a book or some jeans is not.

Whether Facebook intends to go that way or not, people seem to be assuming it
will.

------
lux
If/when they do launch a "Pay with Facebook" feature, I'm sure they're aware
that they'll have to come up with a fee schedule that's competitive with
existing vendors like Paypal. I wonder if that would force them to lower their
take on Facebook apps as well, or if they could finagle a way around that...

------
mildweed
Its official

<http://developers.facebook.com/blog/post/451>

------
rwhitman
Its not hard to imagine FB could become the primary virtual currency for
_everything_ within a very short timeframe.

~~~
bryanh
At a 30% cut, I find that hard to believe.

~~~
rwhitman
Good point, but keep in mind they have 500M+ users. Almost everyone willing to
buy into virtual currency is already on Facebook

~~~
jonknee
What does having a Facebook account have to do with being willing to use a
virtual currency? I'm willing to use virtual currency and have a Facebook
account, but I'll never use Facebook's credit system. I don't want Facebook to
know what I'm buying.

~~~
rwhitman
Why not? People already trust FB with all their intimate details and
relationships. I don't trust them either, but I'm pretty sure plenty of other
people would.

Of 500M+ users even if a tiny fraction adopted it, it would become a huge
deal. I don't know what the stats are for virtual currency adoption rates, but
even the most widely adopted currency probably wouldn't match what the entire
Facebook ecosystem would bring in

------
Charuru
Oh god no. As a Facebook app developer if something like this becomes official
it would be like the end of the world.

Where are you GOOGLE ME?! SAVE US!

