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Facebook to Game Developers: No More Choice With Credits. Should Paypal Be Worried?

As long expected, Facebook is getting ready to formalize its preference for its own online currency, Facebook Credits. TechCrunch is reporting that the social network is reaching out to game developers to tell them that Facebook Credits is now mandatory and, according will be exclusive as well.

The move was not unexpected: with a 30% cut of the virtual goods purchases, Facebook stands to enhance its bottom line considerably, Tech Crunch notes. But, it also, speculates, it could also be the beginning move of Facebook establishing a more encompassing online payment system - one that the dominates. A "Pay with Facebook" option could include everything from digital content to physical goods, it said.

Some Signs

It is an intriguing concept and one backed by Facebook itself. Last year the company put its in-store gift cards on sale in $10, $25, and $50 increments at Best Buy and $5, $10, and $25 at Wal-Mart. At first glance it would seem that Facebook, as AllFacebook pointed out at the time, was gunning for is the "oh, what the hell?" demographic, - people who ordinarily wouldn’t make such a purchase online but who succumb to the temptation of the check-out aisle.

But the potential for greater reach has been clear for some time. Facebook Credits can also boost retailers' sales if used cleverly, says Scott Silverman,'s VP of marketing. (via eConsultancy). He gives a hypothetical promotion on a retail webpage - buy two pairs of jeans and save $20. Now contrast that with a virtual goods incentive of buy two pairs of jeans and get 20 free Facebook credits. Which is more appealing to the consumer - obviously the additional bargain of 20 Facebook credits. In truth, this offer costs the retailer next to nothing, Silverman said. "Each Facebook credit is worth 10 cents, so the cost to the retailer is $2, or 20% off of an order that might be $50-$60. But 20 feels like a pretty significant number to consumers…We believe that'll have a high perceive value to consumers, and it will help drive them to make that purchase."


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