Facebook: Google can charge less because Google+ has no users

Facebook: Google can charge less because Google+ has no users

Summary: Facebook has declared that Google is charging a significantly lower commission for in-game transactions because it has very few users.

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Last week, Google added games to its Google+ social network, and then Facebook updated its gaming platform later the same day. Since Google+ Games only started off with 16 titles, made by 10 game developers, and Facebook has developers from more than 190 countries building apps and games on its platform, Google decided to start a price war with Facebook. Now Facebook is saying Google did so because it is the underdog.

Google knows it needs to win over developers to get games on its new social network, so it is undercutting Facebook on the commission price for in-game transactions. Facebook charges a 30 percent commission on any transactions that use its Facebook Credits virtual currency, which is now required in all games on the company's platform. Google has decided to start off with a 5 percent commission for Google+ Games.

"Google has emulated aspects of our system, which is what they have the right to do," Sean Ryan, Facebook's director of game partnerships, told CNN. "We just need to be better. Google is at 5% because they don't have any users." Ryan compared Google's entry into social gaming to McDonald's recent efforts to offer premium coffee in competition with Starbucks, using low pricing to build market share. It's worth noting that McDonald's coffee business has proved quite lucrative.

At the start of this month, Google+ passed 25 million users. At the beginning of last month, Facebook passed 750 million users.

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Topics: Social Enterprise, Apps, Google, Mobility

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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3 comments
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  • RE: Facebook: Google can charge less because Google has no users

    "We just need to be better. Google is at 5% because they don?t have any users."

    So, by that logic Facebook need not be worried, right? Why does it require media attention, then?
    Lord_of_the_Singhs
  • RE: Facebook: Google can charge less because Google has no users

    "Facebook: Google can charge less because Google+ has no users"

    Actually, they can charge less because Google+ isn't their cash cow. Even though I'm sure they eventually want a profit, they can keep it below profitable as long as they want (or as long as the money grubbers, err, shareholders, allow them to).
    CobraA1
    • True enough.

      @CobraA1
      And if one day after losing money on this Facebook disappears, Google will suddenly raise the rates to a profitable level.
      William Farrell