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Casual Games

Game Developers Launch Initial Integration of Facebook Credits for Payments

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As originally posted on InsideSocialGames.com.

Will Facebook users feel more comfortable trusting their credit card information with the company instead of social game developers and other payment providers when they go to buy virtual goods? pay-with-facebookIf the answer is yes, we may see a new surge in revenue for developers, and for Facebook.

The question is closer than ever to being answered, too. Facebook is planning to more fully release its virtual currency, Credits, on third-party apps in the coming weeks. In the meantime, here’s a look at which games are already running Credits, and how they’re going about doing it.

Here are the games integrating the credits that have been announced so far, sorted by developer and noting the Daily Active Users (DAU) for each game:

There are two basic implementations seen to date:

  1. Buying in-game currency with “Pay with Facebook” as an alternative payment method along with credit card, pay pal, mobile and offers
  2. Buying in-game items directly with Facebook credits

Most of the developers opted for a simple implementation, just adding Facebook credits as another in a laundry list of purchase options for users:
zynga-pirates-pay-with-facebook2

Once users select Facebook credits, they are presented with the option of using their existing credits if they have enough. Otherwise they are presented with options to buy with the credit card on file (if there is one), their mobile phone, or to select a new card.

robinhood-credits-paymobile

In general, credits are 10 for $1, but if you buy with your mobile phone, there is a pretty standard (and somewhat sizable) 43% haircut taken to help cover the carrier fees. There are also some subtleties in implementation, such as Playfish only implementing Facebook credits for the purchase of coins, but not Playfish cash.

Crowdstar has been the only one of the developers listed above to do the in-game items directly, with slightly different implementations. Happy Aquarium actually reserves specific items in its store to be purchased only with Facebook Credits – ostensibly now offering item exclusives under three different currencies:

crowdstar-happy-aquarium-credits

And more interestingly is Crowdstar’s implementation of credits to crowdstar-happy-island-integrated-creditsbuy upgrade items directly in recently launched Happy Island, as reported in Inside Social Games. For a user who already has Facebook credits, this is an extremely simple purchase process as detailed in these three steps. The only issue so far is that the upgrades don’t appear in the game immediately – in this early stage you seem to need to refresh the game for it to display.

From a developer perspective, there is definitely some trepidation in relying on Facebook solely for purchases. Besides several operational and redundancy considerations, one of the more valuable things for a developer is the direct relationship with the paying user. The larger developers had created user accounts, letting you take currency across games (like Playfish) or at least in saving your credit card info to make it easy for you to pay across different games. The other major benefit from a direct relationship with end users is cashflow: with credit purchases going through the Facebook credit system, developers now have to wait for Facebook to remit the funds to them.

As Zynga has one of the broadest bases of players, and thus assumingly some of the most control to lose, they have been aggressively pushing discounts on buying in-game currencies. Since Thanksgivng, both Mafia Wars and FarmVille have been offering discounts on the respective game currencies, often seen as pop ups touting a special limited time offer to buy one of the usually $10 or more valued bundles. This kind of promotion is fairly typical in retail and in e-commerce, providing incentive to users to increase the size of their average order (from experience, a majority of users only buy the smallest currency bundles, typically around $5). Judging by the frequency of Mafia Wars and FarmVille promotions (indiscriminately hitting both previous buyers and non-buyers), it must be working.

mafia-wars-discounted

In addition, this may have been a good pre-emptive strike, to get the Zynga users setting up more direct accounts with Zynga to buy in-game currency and help solidify itself against potential pressure from users to add Facebook credits options to all of its games.

For now, Crowdstar is taking the lead as far as exposure to users and integrating in more detailed ways – as a newer entry among the top developers they have the most to gain from innovating and integrating the Facebook credits into their games. Yet with every potential streamlining of the end-user experience, there are still several things that need to be proven over the next few months.

Summarizing the Pros and Cons of Implementing Facebook Credits

Pros:

  • Easier customer experience, especially when never have to associate dollar amount with the purchase decision (as in the Happy Island example where item purchased with current balance of Facebook credits) – any time you can make a purchase decision less of a consideration it’s a good thing
  • Removes barrier of user having to go get their credit card when already have on file with Facebook (a pretty heavy base of users based on the gift applications)
  • Customers may trust their credit card to Facebook more than to a game developer and that developer’s choice of payment provider(s)
  • Implementation of Facebook credits API eliminates need to get a credit card processor and/or a mobile payments provider

Cons:

  • Still an untested platform, especially in regards to scale; Facebook’s issues with its core platform have been a source of concern for developers already so it’s hard to trust your payment system to them until there is more of a track record
  • Developers may still want an alternative credit card processor so they have redundancy in case the Facebook credits system goes down, or to have protection in case Facebook processing fees get exorbitant
  • Developers may still want to offer alternative payment methods like Pay Pal, prepaid cards and Offers (none of which can currently be used to buy credits) or to cover mobile territories Facebook does not cover
  • If users don’t have credits or a credit card on file, not really much more of a value-add than putting a user through credit card.
  • Ceding a direct paying relationship with end-user to Facebook and having to wait for Facebook to remit funds to you versus receiving directly from end-user
  • Integrating Facebook credits into direct-purchase items ala Happy Island may limit some of the ability to do promotions and manage your virtual economy
Casual Games

After the Acquisition by EA, Playfish Titles See Traffic Drop

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When you get purchased by someone as huge as Electronic Arts (EA), there is definitely a bit of turmoil as everyone tries to understand how the two companies will co-exist and work together. One of the more interesting things we’re seeing is a decline in daily active users (DAU) across the top Playfish titles since the acquisition last week:

Although Pet Society is down only 2.4%, Restaurant City is down 6.8% and Country Story is down 10%. See more detailed analysis in the full-post at InsideSocialGames.com

Casual Games

Quick Hits: Playfish Offers, Notification Spam, Fast Growth and Country-Themed Items

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I’ve been busy looking at some new analytics (new post coming next week) and doing some project work, but came across these tidbits of interest:

Playfish Dips its Toe in the World of Offers: In the last two weeks, Playfish tentatively began offering users the ability to earn coins by completing Offers run by Super Rewards. From a brand perspective, you definitely worry about any negative implications from unsavory offers, and Playfish definitely is trying to protect itself based on this screen coming up before you get to the offers section:

I met with Noah Kagan of Super Rewards competitor Gambit earlier this week and he’s very up front about the challenges around offers. I highly recommend you follow their Gambit blog, as you can’t beat the straight talk regarding the pros and cons about offers – a great example is “F-ck your offers! Game-ending user complaints & 3 developer solutions” that highlights the common customer complaints.

Cross-Application Spamming in Notifications? I noticed when earlier this week that the old Happy Hour application (remember when we used to send rounds of drinks to or Super Poke our friends?) actually cross-promoted game application Enchanted Island. While I’ve noted before the proliferation of Notifications from games crowding out notices from friends, this is the first time I’ve seen one application cross-sell another application via notification. While not specifically prohibited by Facebook’s Notification Guidelines, I think this practice goes a bit beyond the user expectations (rule #2) and would hope most developers will continue to keep cross-selling in their own applications ala the Zynga toolbar.

Zynga Apps Keep Hitting Incredible Numbers: Café World is the big story, passing top restaurant sim competitor Restaurant City (Playfish’s top application in terms of Daily Active Users) in just five days, then passing Mafia Wars to capture the #2 spot in Facebook Applications (with 6.6 million DAU) in just two weeks. As I mentioned last week, the ability to market across the installed base of FarmVille and Mafia Wars via the toolbar (plus some advertising) really helped the application grow quickly.

Could Listening to Users Build Your Audience by 5%: In addition to Café Worlds big gains, FarmVille grew by 1 million DAU in a day on October 14th – growing from 22.01 million DAU to 22.08 million. Beyond meteoric rises during launch, a 5.1% increase on that base is unprecedented and pretty impressive. Hard to pinpoint the actual driver as there has been a slew of new items released: Halloween Items on the 7th, Pink Cow (joining the lost cow, black sheep and ugly duckling) on the 9th, and new country flags on the 13th. Could the three million Facebook users on India have been the driver? Zynga responded pretty quickly to the online protest of Indian players looking to get the India country flag added to the game, creating and adding country flags (which can only be purchased with hard currency) within a week and seem to have been rewarded with more engaged users and likely more sales.

As Facebook becomes more of a global platform, cashing in on country pride should be a standard expansion for Facebook game applications – when I was at PowerSoccer.com, country-themed shoes, headbands and tattoos were some of our biggest virtual item sellers.