Monday, January 24, 2011

Digital Money by Facebook

Facebook is announcing the next phase in the rollout of its virtual currency, Facebook Credits, which is leaving beta testing today. That means all Facebook game developers will be able to use Credits as their payment system for virtual goods — in fact, Facebook is requiring them to make the switch by July 1.
Facebook Credits are a system of points, managed by the social network, that can be purchased or awarded in exchange for marketing offers, then traded in within games for virtual add-ons that enhance gameplay. It’s a surprisingly large business already: In 2010, the market for such purchases reached an estimated $835 million, according to a report by Inside Network.
Venture Beat
No inflation measure yet, but that will come.
Facebook may have a financial reason to make these changes, since it takes a 30 percent cut of all Credits purchases. In the past, the company’s executives have said that they don’t expect the program to be a big moneymaker initially, and that any profits would be reinvested in the Credits product. When I asked about that today, Liu said Credits revenue will “enable us to invest more into the platform.”
Well a 30% take for hitting the digital money generator starts them with a bad history. If they skip the 30% take, they likely could get Amazon to take the digital bits.

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