VIDEO: Facebook Credits Discussion

Bloomberg provides an interesting video interview with IFEELGOODS, Inc CEO, Scott Silverman discussing Facebook Credits virtual currency.

Are you Ready for RewardVille?

Zynga rolls out its own reward system RewardVille and virtual currency called “Z-Coins”. Articles and analysis from:

Red Orbit ” Media conglomerates such as Walt Disney Corp. and Time Warner Inc. should be worried, says, BTIG Research analyst, Rich Greenfield. Zynga threatens to take viewers away from their televisions and movies. Disney responded to the threat by purchasing its rival, Playdom for $563 million last year. “

NPR ” The lure this time is “RewardVille,” a show of appreciation aimed at getting players even more absorbed in their online farms, cities, crime rings and poker games. The program unveiled a week ago doles out game points and credits that can be used to buy more virtual goodies on Zynga’s existing games. “

MarketingVox ” These games’ popularity is drawing people’s away from TV sets, movies and other sources of entertainment. “Media has been fragmenting, and Zynga seems to be doing the exact opposite. It is growing at a staggering rate and reaching eyeballs that none of these companies are doing. “

Video: Zynga’s Rewardville trailer

Bringing the Hammer Down

As widely anticipated, Facebook makes their virtual currency, Facebook Credits a  mandatory option for all social game developers that use a payment system.  Articles and analysis from:

The Wall Street Journal ” Facebook began testing Credits as a form of currency with some developers in 2009. It says they are now used in more than 350 applications from 150 developers, representing more than 70% of virtual goods transactions volume on Facebook.”

WebProNews “ Users and developers shouldn’t react with too much dismay.  Other in-game currencies will be still be permitted, and Facebook intends to let developers keep 70 percent of the revenue from transactions that involve Facebook Credits.”

The Street ” While some game developers have their own currency payment methods, most large app companies already use Facebook Credits.” 

GigaOM ” Facebook developers will have the option of using their own payment system in addition to Facebook Credits but Facebook will be offering incentives like early access to product features and on-site promotion to help get them on board fully.”

Forbes “ Forex traders and global conspiracy theorists take note: with close to 600 million people using the system, we could be watching a Dollar rival spring to life. To the bunkers! ”

TechCrunch “ This is about more than purple cows and gold coins, too — in the long run, Facebook has a strong incentive to maximize the number of users who are signed up for Credits. 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.”

Video: interviews with social game developers concerning the initial Facebook Credits announcement at the  f8 Conference (about 10 months ago)

 

Virtual Showdown

Social gaming giant Zynga goes for the jugular and files for a patent for  non-redeemable virtual currency. Is this move intended as a bargaining chip with Facebook or something much larger? Articles and analysis from:

TechCrunch ” While at first glance it seems like the patent’s strictures only pertain to poker chips, it explicitly references Zynga games Zynga Poker and Farmville in its “Examples of Embodiments” section, which delinates both “Non-Redeemable Virtual Currency” and “Non-Redeemable Virtual Poker Chips” as inventions that Zynga is claiming the rights to.”

AllFacebook ” For Facebook the stakes are higher. The social networking site earns a 30% cut every time Credits are used to buy virtual goods in a game. With the burgeoning popularity of social games on Facebook, it would be a serious blow if it lost this growing source of revenue.”

VentureBeat ” The patent filing, on which Zynga CEO Mark Pincus’s name is listed as one of the inventors, is arguably defensive, potentially orestalling intellectual-property claims against Zynga. But it could also give Zynga leverage in its negotiations with Facebook, the social network which connects most of Zynga’s players with each other.”

Online-Casinos.com ” Zynga’s patent application points out however that its virtual-currency uniqueness is that the currency exchange is only one-way. Players can put money in but they can’t take it out thus circumventing the online gambling dilemma.”

Tom’s Guide ” Essentially the company may be trying to patent the process of purchasing virtual money that cannot be re-sold. The patent also seems to indicate that Zynga may implement a fraud prevention system to inhibit players from using cash to purchase virtual funds from other players within Zynga products.”

Virtual Goods sales will pass $2 Billion in 2011

Inside Network releases findings from their Virtual Goods forecast report that shows Virtual Goods sales will be over $2 Billion in 2011. Articles and analysis from:

Bloomberg ” The market will jump to $2.1 billion next year from $1.6 billion in 2010 and $1.1 billion in 2009, the San Francisco- based research firm said today in a report.”

Forbes ” As in this year, 2011 will also see the dominance of social games in the sales of virtual goods. In 2010, social games accounted for $835 million, or around half, of the total market size.”

CNN International ” The term virtual goods refers to digital items that are purchased for use online, in games and on mobile phones.”

The New York Times ” The figures are especially significant because Facebook is pushing all its game developers to use Credits, its virtual currency.”

Advertising in Social Games

Mashable has an excellent article about how to advertise within social games on social networks. From the article:

” Social games provide some unique opportunities for advertisers, as gameplay generally involves virtual goods — things players want, but often don’t want to pay for. Game publishers have begun to tie virtual goods or currency to “real world” purchases from advertising partners (spend $50 at the Gap, get 20 Facebook Credits, for example).”

Friendster moves towards Social Gaming

PhilStar.com reports that Friendster, an early social network acquired by MOL Global is moving towards becoming a social gaming portal complete with their own virtual currency platform provided by MOL Global. From the article:

“We are in the midst of a highly confidential project; we call it Project Neutron. Basically, we transform Friendster into a social gaming portal over the next three to six months,” Bangah told Filipino reporters and media representatives at Friendster’s Philippine office in Makati City.

More from the Manila Bulletin at MB.com.ph

Life has its Rewards

Social Media guru Laurel Papworth breaks down the potential impact of widescale adoption of Facebook Credits virtual currency as a method of purchasing “real world” products and services. Kudos to Gamezebo for spotlighting this provocative article.

” Expect to see everyone from Nike (rewarding you for uploading your nutrition/exercise program) to TV Stations (rewarding you for becoming a Fan/Like of Lost or Big Brother page) jumping in. The current emphasis on rewards of credits going to Facebook Advertising implies that Facebook are going hungrily after Google’s Adsense/Adwords revenue.”

– Laurel Papworth

Facebook ramping up Credits

Inside Facebook provides a recap of Facebook’s recent activity regarding rolling out its Credits virtual currency. From the article:

” Key to Facebook’s plans for Credits is getting more payment providers in place, a process that has been accelerating for months.”

In related news, VentureBeat reports that Rixty partnered with Coinstar to provide an easy method of converting loose change into Facebook Credits at grocery stores. From the article:

” In addition to the free Facebook Credits, users can buy Credits by taking their coins to a Coinstar machine and getting a Rixty voucher.”

The Wall Street Journal provides this Opinion piece. 8/13/2010

” The biggest shift in the social-gaming world — which includes titles like Mafia Wars and Restaurant City — is likely to be a battle over payment.”

Half of Facebook users play Social Games

TechCrunch discusses an astounding figure mentioned by Playdom CEO John Pleasants who said that half the people on Facebook play Social Games and their time spent “in-game” is a mind-boggling 40% of their time on the network. This presents a massive opportunity to monetize via Facebook Credits virtual currency.

” But the most interesting thing Pleasants noted was that he recently heard (from his own source, apparently) that half of all users on Facebook now play social games. More impressively, 40% of total usage time on the service is spent on these games.”

Additional coverage from Inventorspot

” The beauty of bundling micropayments via Facebook Credits is that a single virtual currency could increase the size of the market exponentially by making it easier for users to purchase items where they don’t have to continually use  credit cards.”