Facebook Abandons Credits, Adds Subscription Billing
June 21, 2012
Facebook has discontinued the use of Facebook Credits in its payment system and has added the ability for developers to charge for their apps on a subscription basis. The company, which introduced the virtual currency in 2009 and required its use for in-app payments across the social network, said on its developer blog Tuesday that it has backed off Credits to simplify the payments process. Facebook says that consumers being forced to buy Credits, then exchange them for each individual game’s virtual currency, then buy the virtual good is not efficient.
While Facebook Credits are going away, however, its processing system survives. And, while that system still requires developers to pay Facebook 30 percent of every transaction, clearing Credits from system may indicate a closer, more harmonious relationship with the developers, which can only help Facebook in the long run, according to Scott Strumello, consultant at Auriemma Consulting Group in New York City.
“In effect, the opening of Facebook's financial statements to the public (as part of the IPO and now as a publicly-held company) and the need to have a sustainable model which can generate revenue is driving this change,” says Strumello. “Facebook needs its game developers, and they seem to prefer having their own brand-specific credits, so Facebook is working to make this group happy. Also, the change will enable developers to offer subscriptions, which Facebook also sees as a potentially profitable revenue stream.”