Facebook is about to take over the internet with its Open Graph strategy, if you believe some of the reports from its f8 developer conference on Wednesday.
Besides leading the creation of a more people-centric web, it could also end up having the dominant virtual currency, according to an early adopter of Facebook Credits.
PopCap Games has been using the service, which is still in the beta testing phase, as the sole payment method for Bejeweled Blitz on Facebook.
The game is free to play and attracts 11m monthly players, 3m of them playing it daily. PopCap sells extra power-ups, which boost players’ capabilities, and is moving onto sales of virtual items.
It has decided to ignore offering other virtual currency options and only accepts Facebook Credits. Users can buy them with credit cards, Paypal or through their mobile phones in $5, $10 and $20 increments for 50, 100 or 200 Credits.
Facebook takes the same 30 per cent cut when credits are used as Apple takes from apps sold in its App Store.
John Vechey, PopCap’s head of strategy and development, attended f8 and thinks the Open Graph protocol will quickly become part of the plumbing of the internet and bring Credits with it.
“I think its kind of obvious that part of the plumbing is eventually going to be commerce and, when people want to do some simple monetisation, they’ll see there is Facebook Credits.
“I think that’s going to be the key to their business model. They keep underplaying it so much that I’ve gotta believe that the direction there inside is: ‘Here’s how we’re going to take over credits on the internet.’”
Dave Roberts, chief executive, says PopCap does not begrudge Facebook its 30 per cent given the development and management of its platform and the new customers it is bringing to the publisher.
“We’re very pleasantly surprised with the financial results given the minuscule number of their audience that has given Facebook a credit card number so far – it bodes well for them,” he says.
“In the download casual game [PC] space, the splits have always been the other way, so folks such as Big Fish, Real and MSN have always tried to take 60 or 70 per cent, to do less frankly.”
At 30 per cent, Facebook is likely to see significant revenues from its Credits business as social gaming and sales of virtual goods boom on the social networking service and sites linked to it through Facebook Connect and Open Graph.
However, creating a payment system secure and stable enough to cope with more than 400m members is not a trivial undertaking and costs will exceed income for some time to come.
“There’s a lot of overhead for us doing this ourselves,” said Mark Zuckerberg at a news conference on Wednesday.
“We have to build up this competence and build out transaction systems and all that. So it’s a lot of really hard work and we don’t expect it to be profitable for a period of time.”
The Facebook founder’s reasoning for Credits is that users want a common system for paying within applications that gets around them having to get their credit cards authorised separately for every paying application they use.
A single currency gets around this, reduces the friction for people making payments and helps publishers.
“You may not believe me when I say this, but we’re really doing this primarily for developers and not as a revenue line for us anytime soon,” said Mr Zuckerberg.
That’s easy to believe right now, but Facebook’s future seems clear as a major payment service for the web in both micro-transactions and larger purchases.
