Game developers give Facebook Credits mixed reviews
Facebook takes a 30 percent cut of all revenue earned through Facebook Credits, leaving developers with the remaining 70 percent. Facebook's IPO numbers revealed that Facebook paid out $1.4 billion to developers in 2011 from transactions enabled by its Facebook's Payments infrastructure. Facebook Credits is a growing as a percentage of Facebook's overall revenue, but the majority still comes from ads.
Inside Social Games interviewed three social game development firms; here's a quick rundown:
- Kabam Chief Executive Kevin Chou said his company thought conversions would go up to about 15 or 20 percent, but they ended up to be around 5 to 10 percent, meaning that the company is taking a 20 percent net tax.
- Funzio co-founder Anil Dharni, said the move to Facebook Credits ended up being roughly even for the company. Although the conversion rate increased, he saw a gradual decrease in average revenue per paying user, and so the company just moved its focus to iOS.
- Wooga chief executive Jens Begemann defended Facebook Credits and says his company has been using it from the beginning. He also and suggested that Facebook takes more flack because it implemented its 30 percent revenue share cut after several years of not charging developers. In contrast, other companies began taking their 30 percent slice from the first day they launched their respective app stores.
Facebook will need to work hard at converting more Facebook users to paying customers for its partners or it may lose app developers to competing platforms like Apple's iOS and Google's Android. Part of the company's strategy is pushing the Facebook Platform on iOS and Android.
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