At the end of the day, Facebook is a platform. They have every right to control what happens within their walls, and should be expected to profit off it. Facebook Credits, which will soon be mandatory, are essentially a 30% tax on all transactions that happen on the platform. Although on the surface level this is a reasonable proposition, there are some drawbacks which I hope to expose in this post.
Problem: Alternate-Payment Accessibility
Not everyone can pay through the methods provided by Facebook. In some countries paying by phone is the way to go, and to have the user jump through multiple steps before even arriving at an alternate payment option is guaranteed to lose users, and lose payments. Facebook needs to do a better job at providing payment options and offers for all markets. Unless they can effectively cover all the options previously offered by the competing payment providers they are shutting down, it is bad for the ecosystem
Solution: Allow At Least Two Competing Alternate-Payment Providers
Allow multiple payment providers to compete on the platform. Currently, TrialPay is the only alternate payment system available on the platform. They enjoy staggering volume regardless of whether or not they give good payouts to the developer, an optimized user flow, or optimized offer wall. Allowing at least one other alternate-payment provider, and allowing the developers to choose it would create healthy competition that would be good for everyone.
Problem: Free Credits
A major problem with Facebook credits, is that the market is flooded with "0-value" credits. This means that the user can trade in credits which they did not pay for, for virtual goods that the developer is expecting to receive real money for. At the end of the day the developer might find out that 50% of the money they thought they were receiving is in fact worth nothing. Upon first glance, you might think this isn't a big deal since the virtual goods don't cost the developer anything. In reality though, there are some very significant costs that go into selling virtual goods.
- The cost of building a game world which is what gives the virtual goods real value in the first place. (This can cost from hundreds of thousands to millions of dollars - yes, even for a seemingly simple game like FarmVille)
- The cost of maintaining a game. (Engineers, Artists, Managers, Servers, Bandwidth, etc.) For a small studio running a single game, this can easily run in the hundred-thousand dollar range each month.
- The cost of marketing the game. (Advertising, Press, etc.)
Solution: Trade in Fake Credits For Marketing Credits
Allow developers to trade in the free credits for an equal value in marketing credits. This will at least avoid the issue of devaluing the investment in buying Facebook ads. It is up to the developer to offset the other costs, but by purchasing advertising at-cost, and being forced to accept a fake currency as payment is an unreasonable business relationship.
Problem: Credits as The ONLY Premium Currency
The concept of premium currency has been around since the beginning of games on Facebook. Mob Wars Favor Points, FarmVille Cash, etc. Generally, the only way to earn premium currency is by spending real money in a game, or by completing a rare task such as leveling up. Facebook essentially wants to take away this type of currency from the developers. They are carefully offering incentives to developers that conform to this request. Their goal is to make sure users keep a balance on Facebook, NOT inside of games. This could potentially increase the value users place on credits, while making it harder for developers to collect bulk payments.
Problem: Loss of Developer Control
Every game is different: pacing, incentives, etc. all play into how the game is played. By taking away the ability for developers to seed their users with premium currency, the experience for the user will inevitably end up less-than-optimized.
Solution: Stop Being Greedy
Focus on building the ad platform and payments platform, and not on overreaching policies. Get rid of the incentives for games that integrate credits as a premium currency. Incentives are already aligned with the developers, no need to push it. The idea of keeping a balance on Facebook vs inside of games is a poorly thought-out and greedy policy that will end up making everyone less money overall. Let the games run free and reap the benefits.