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Facebook, Zynga Sign Long-Term Virtual Currency Deal

Soulskill posted more than 4 years ago | from the money-builds-great-friendships dept.

Businesses 124

Despite recent rumors that Facebook and FarmVille developer Zynga were gearing up for a legal battle, the two announced yesterday that they have signed a five-year agreement over how virtual currency will be used. Quoting: "The source of the conflict ... comes down to Facebook's decision to introduce Facebook Credits, an over-arching currency system to be used in all games on its platform. This allows users to purchase just one type of currency for use in Facebook games, rather than buying directly from individual developers — a lack of direct control over its monetization that became a major point of contention for Zynga. Also likely an issue is Facebook's decision to take 30 percent of revenues gathered from credits, with 70 percent allocated to the developers."

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Monetize (4, Insightful)

Thanshin (1188877) | more than 4 years ago | (#32262764)

I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.

I wonder if he has found a strong enough soap to remove that constant slimy sensation.

Re:Monetize (4, Insightful)

WrongSizeGlass (838941) | more than 4 years ago | (#32262788)

I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.

I hear it was virtually impossible ;-)

I wonder if he has found a strong enough soap to remove that constant slimy sensation.

There isn't a shower hot enough to make someone feel clean after that.

Re:Monetize (4, Insightful)

KDR_11k (778916) | more than 4 years ago | (#32262798)

The whole business model of the game is to make money via selling stuff for real money. The game itself is free to play but it's designed to encourage players to draw friends into it and to spend real money on it. Or do you think they're running Farmville out of the goodness of their hearts?

Re:Monetize (4, Interesting)

shadowknot (853491) | more than 4 years ago | (#32262850)

The game itself is free to play but it's designed to encourage players to draw friends into it and to spend real money on it.

So it's actually a very sophisticated and subversive MLM (Multi Level Marketing) program that rewards participants with a video game. Having never played it I didn't realize this but whomever the genius is who came up with that deserves every cent they make!

Re:Monetize (5, Insightful)

Thanshin (1188877) | more than 4 years ago | (#32262966)

I agree in the analysis and disagree in the resulting conclusion.

At some point I stop seeing an insightful, astute, marketer and I start seeing someone who bases his income on the stupidity of the most stupid.

The guy you call genious, from my point of view is just as repugnant a person as a tv fortune teller.

Re:Monetize (4, Insightful)

sopssa (1498795) | more than 4 years ago | (#32262998)

You may think such games and spending on them is stupid, but if it gives some value to the user (fun, feel of accomplished, whatever), what's wrong with it? People like different things.

Re:Monetize (0)

Anonymous Coward | more than 4 years ago | (#32266068)

Mod parent up, I accidentally modded down.

Re:Monetize (0)

Anonymous Coward | more than 4 years ago | (#32263028)

But with his millions of dollars, he can at least afford a spellchecker to let him know he's spelling genius wrong. Maybe he uses Firefox, which automatically spellchecks form contents. Stupidity of the most stupid?

Re:Monetize (0)

shadowknot (853491) | more than 4 years ago | (#32263126)

I understand your perspective but, respectfully, consider it a little naive. I think that as sopssa [slashdot.org] said, if people are enjoying the product what's so harmful about it? I would agree if they were destroying their lives or harming others but this really is no different than people playing MMORPG's. The vast majority of MMORPG players do so responsibly and in moderation. You can't condemn the product because of the few who take it to an extreme. It's that sort of logic that leads to a society of rounded corners and no risk, a world that simply can't exist.

Re:Monetize (0)

Thanshin (1188877) | more than 4 years ago | (#32263618)

if people are enjoying the product what's so harmful about it?

I don't judge the product. I despise those who work on finding ways of monetizing the product, even at the expesnse of offering an inferior product.

It's that sort of logic that leads to a society of rounded corners and no risk, a world that simply can't exist.

What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.

Re:Monetize (1)

shadowknot (853491) | more than 4 years ago | (#32263798)

I don't judge the product. I despise those who work on finding ways of monetizing the product, even at the expesnse of offering an inferior product.

Fair enough, I don't like Microsoft's products but I will not begrudge them their profit, that's the free market. Consumers will not always make the smartest choices but it is up to them to make that choice be it wise in your eyes or not. Anyway, what's wrong with making money?

What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.

Wow, way to show your despotic cards. Let's examine that statement, you think that "forbidding dangers" is a solution that leads to a "fool proof society"? Who, pray tell, is the arbiter of these "dangers" and who enforces the actual "forbidding". I'm not a smoker but I don't believe I, or anyone else, has the right to tell smokers that they can't smoke. Smoking, as we all know, is extremely hazardous to their health and by applying your logic to my example we arrive at the conclusion that it should be "forbidden". Do we empower the police to do this or some form of other force to curb this "forbidden" behavior? I'm just curious how long it takes you to reach the inevitable conclusion that your type of anti-liberty thinking leads to.

Re:Monetize (1)

Thanshin (1188877) | more than 4 years ago | (#32263922)

What leads to a fool proof society is the idea of solving dangers by forbidding them, instead of using them as indicators of where the education, or public information, systems are failing.

Wow, way to show your despotic cards. Let's examine that statement, you think that "forbidding dangers" is a solution that leads to a "fool proof society"? Who, pray tell, is the arbiter of these "dangers" and who enforces the actual "forbidding".

I wasn't clear. I meant "fool proof society" as your "society of rounded corners"; something that doesn't work.

I'm not a smoker but I don't believe I, or anyone else, has the right to tell smokers that they can't smoke.

Using the smoking example, my point was that forbidding smoke is useless and that people smoking is an indicator that the information given to the population about tobacco was insufficient or wrong.

An even clearer example is that of drugs. Prohibiting them, instead of making sure that everybody understands their dangers, has the effect of concentrating the negative effect on the less educated population and still doing very little to stop their spread.

So, finally, what I implied was that, while I despised tv fortune tellers (or other businesses based on taking money fro the uninformed), I'd not stop them from continuing with their job. I'd rather use them as pointers to where is the education/information system failing.

Re:Monetize (1)

shadowknot (853491) | more than 4 years ago | (#32264102)

So, finally, what I implied was that, while I despised tv fortune tellers (or other businesses based on taking money fro the uninformed), I'd not stop them from continuing with their job. I'd rather use them as pointers to where is the education/information system failing.

That seems completely reasonable to me, the ambiguity of discussion forums clearly caused some misunderstanding here!

Re:Monetize (1)

Thanshin (1188877) | more than 4 years ago | (#32264316)

Indeed, and my last response was so careful because I'd have answered just as you did, had I interpreted what you did.

Cheers.

Re:Monetize (3, Insightful)

Devout_IPUite (1284636) | more than 4 years ago | (#32263652)

I'd say about 5% of the people who I know who play MMOs do it in a healthy way.

Re:Monetize (1)

stg (43177) | more than 4 years ago | (#32266222)

There is the slightly worse factor that for many MMORPG, they have to pay monthly. At least for Farmville (never played the other Zynga games), you only have to pay if you want to, or if you feel you need the cute extras.

I don't really see such a distinction from regular downloadable games and online games like Farmville... The only real difference is that Farmville is much better geared toward making you invite more people. Many of the "regular" games have now started to monetize on extras, although most try to avoid giving obvious advantages for players who spend more money.

Re:Monetize (3, Insightful)

WrongSizeGlass (838941) | more than 4 years ago | (#32263640)

At some point I stop seeing an insightful, astute, marketer and I start seeing someone who bases his income on the stupidity of the most stupid.

Insightful, astute marketers make their living finding the stupidity in people. You know who said "a fool and his money are soon parted"? A marketer, that's who.

Re:Monetize (1)

MiniMike (234881) | more than 4 years ago | (#32263626)

Is there no advertising revenue? I know they try to make money off of selling game credits, but I would be surprised if that were their only source of income.

Re:Monetize (0)

Anonymous Coward | more than 4 years ago | (#32262836)

It's called the free-to-play MMO model (or 'freemium' but I can't say that with a straight face) and was pioneered years ago. The new way to hook customers is to graft it onto an existing gullible userbase via a social network-virtual grindwork status convergence paradigm.

Re:Monetize (0)

sopssa (1498795) | more than 4 years ago | (#32262936)

It's called the free-to-play MMO model (or 'freemium' but I can't say that with a straight face) and was pioneered years ago. The new way to hook customers is to graft it onto an existing gullible userbase via a social network-virtual grindwork status convergence paradigm.

And almost every asian MMO uses this model and they like it and it's working good for them. We western geeks just have got used to buying the whole game at once, but this model works a lot better with casual gamers and especially girl players.

The GP thinks its a bad model. So what? You and me and rest of the slashdotters can continue our normal games. There's enough space for both and both genres mostly cater to different kind of players.

Re:Monetize (0)

Anonymous Coward | more than 4 years ago | (#32263736)

I thought the preferred name was "Allegedly Free Game."

Re:Monetize (2, Interesting)

somersault (912633) | more than 4 years ago | (#32262894)

I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.

Somehow I doubt he'll care when he's a millionaire..

Re:Monetize (2, Interesting)

rhsanborn (773855) | more than 4 years ago | (#32263030)

Since Zynga is raking in ~500 million - 1 billion USD a year, I'm pretty sure he can get over the slimy sensation. I hear hundred dollar bills act as a good balm...

Re:Monetize (1)

complacence (214847) | more than 4 years ago | (#32263188)

I pity the guy who sells help with documentation sold with a virtual product running on sold hardware that is built from sold compartments that are made out of sold microchips that comprise sold integrated circuits that are made out of sold natural resources and were designed using documentation to a virtual product running on hardware that is built from...

Wait, is that slimy at all?

Re:Monetize (5, Insightful)

Rogerborg (306625) | more than 4 years ago | (#32263226)

It's worth considering that for many people, Facebook is their internets. Facebook has achieved what AOL could never do - build a garden so compelling that people never wonder what's outside the wall.

Re:Monetize (1)

Stratoukos (1446161) | more than 4 years ago | (#32263958)

Yeah but their App Store policies are atrocious.

Oh! Wait a second... I thought you said Apple. Nevermind.

Re:Monetize (1)

Monchanger (637670) | more than 4 years ago | (#32264514)

Really? I can get my pr0n on Facebook?

Re:Monetize (5, Funny)

Fnkmaster (89084) | more than 4 years ago | (#32265516)

If FarmVille is the most compelling thing you can find online, then I don't think I want to be your friend. Facebook or real-life friend.

Re:Monetize (0, Flamebait)

dlt074 (548126) | more than 4 years ago | (#32263678)

he could just borrow the soap the people at the FED use.

at least the people on facebook have a choice in using that fiat currency.

Re:Monetize (1, Insightful)

PopeRatzo (965947) | more than 4 years ago | (#32264842)

I pity the guy who has to find a way to monetize the virtual currency

Because that's what the world economy needs today: virtual currency. Like we don't have enough types of currency that aren't real.

When can I start trading in derivatives of securities that are based on virtual currency? Or futures of derivatives of securities that are based on virtual currency?

Fuck's sake, can we please go back to trading in beads? Or tulips?

Whoa morons. (4, Insightful)

unity100 (970058) | more than 4 years ago | (#32262766)

30% ? what kind of whacked out rate is that ? loansharks' ?

are they aware that, if zygna wants, they can now just set up their servers with farmwille and draw their 85 million players to it ?

i bet that last bit was the thing that forced fuckerberg to sign a deal.

btw mark, youre fuckerberg for me from now on. your numerous failures in regard to privacy policies and flops with pr earned you an f in place of the z in your last name. enjoy.

Re:Whoa morons. (3, Informative)

KDR_11k (778916) | more than 4 years ago | (#32262818)

That's the rate online game stores (Steam, XBLA, etc) tend to charge. It's their cut as the retailer of the game, for providing the infrastructure, advertising, etc that their service offers and many people accept that trade-off. For comparison, I believe the indie license for the Unreal Engine is something like 50% of your revenue.

Farmville cannot separate from Facebook, it requires the social propagation system it has on Facebook where Farmville players effectively spam their friends with advertising for the game.

Re:Whoa morons. (0, Redundant)

sopssa (1498795) | more than 4 years ago | (#32262948)

The article also notes that Zynga and other companies who make Facebook games are allowed to use other direct payment options too. Facebook is providing this as an extra, and it since it's Facebook itself you can probably trust it more (all the privacy things aside now)

Re:Whoa morons. (1)

will_die (586523) | more than 4 years ago | (#32263268)

Except facebook does not do any hosting, they direct the players to servers running the application. Facebook does get all the spam, 3Gb/sec at peak, according to reports.
Steam, microsoft games, market stores for various products,etc all provide hosting and other features which based on brick/motar distribution would give the them 25-50% of the money paid by the customer. Facebook is just offering a microtransaction service.

Re:Whoa morons. (0)

Anonymous Coward | more than 4 years ago | (#32263664)

Well, they are offering the access to millions of customers, spam-marketing and the reminder-virality to keep them in game - from value-added sort of perspective that's far more important than the actual game development or hosting.

Re:Whoa morons. (1)

Culture20 (968837) | more than 4 years ago | (#32263800)

btw mark, youre fuckerberg for me from now on. your numerous failures in regard to privacy policies and flops with pr earned you an f in place of the z in your last name. enjoy.

I used to call him that as a joke. Maybe now Dumbfuckerberg would be more apropos?

Zuck: They "Trust me"
Zuck: Dumb Fucks

Re:Whoa morons. (1)

ampathee (682788) | more than 4 years ago | (#32264658)

Stan Marsh? More like Stan Darsh..

Re:Whoa morons. (0)

Anonymous Coward | more than 4 years ago | (#32264748)

No clue how this got rated insightful. Replacing Zuckerberg's name with an 'F' is akin to Micro$oft. It's childish and immature. But, of course, I guess the flavor of the day is to hate Facebook, so +1 Insightful to you.

Re:Whoa morons. (0)

Anonymous Coward | more than 4 years ago | (#32264974)

30% ? what kind of whacked out rate is that ? loansharks' ?

What on earth does loansharking have to do with this? It's not as though Facebook is lending Zynga money! What they are doing is marketing (through incessant notification of what people do on their farms, with their mafias and so forth ad nauseam) to attract new players, distribution (signing up to the Zynga apps), and providing a user identity and authentication service which Zynga benefits from.

Whether 30% is a reasonable commission fee is not for me to say, but if Facebook makes money off people's virtual farms and whatnot, I might hope they won't be quite so cavalier about selling data about my social network to various shady businesses....

Virtually Understandable? (1)

WrongSizeGlass (838941) | more than 4 years ago | (#32262776)

Facebook wants to control all the virtual currency on their platform? Not a surprise at all. They want 30% for letting other companies make money of Facebook's platform? Just as greedy as Apple. I just wonder, if people were handing out virtual personal information instead of currency, would Facebook want in of the action? Is a "Second Life" type of virtual world in Facebook's future?

Re:Virtually Understandable? (1)

Aladrin (926209) | more than 4 years ago | (#32262876)

30% does indeed sound like a lot, but if you RTFA it says they plan to use that 30% to improve the game interface and features, as Zynga has been requesting for a while. So it's not all profit for them.

Re:Virtually Understandable? (1)

somersault (912633) | more than 4 years ago | (#32262926)

It is all profit after they recuperate the costs of the upgrade, which I doubt will take long. And then it is all pure profit, forever, with no work necessary.

Re:Virtually Understandable? (1)

kestasjk (933987) | more than 4 years ago | (#32263362)

Because systems serving tens of millions of people run, maintain, and develop themselves..

Re:Virtually Understandable? (1)

somersault (912633) | more than 4 years ago | (#32263404)

They're already doing that, so if they're already making a profit then this is just extra profit.

Re:Virtually Understandable? (1)

kestasjk (933987) | more than 4 years ago | (#32263754)

Extra profits, which means extra R&D, which means better services, which means a larger user-base, which generates opportunities for a more diverse set of Facebook-app development companies, which means extra profits, which means extra R&D ...

It's a good thing for everyone except FarmVille, and who cares about them? (And you could even argue that their loss is short-term with a long-term benefit)

Re:Virtually Understandable? (1)

somersault (912633) | more than 4 years ago | (#32264182)

My point was that this system is simply pure profit for no effort. It's a tax made possible by Facebook's monopoly-like status.

Yes, profits can be put back into R&D but that's not got anything to do with what I was talking about. I was simply stating that after a short while of recouping development costs, this 30% tax on game tokens is all profit for Facebook.

Re:Virtually Understandable? (1)

WrongSizeGlass (838941) | more than 4 years ago | (#32263668)

Because systems serving tens of millions of people run, maintain, and develop themselves..

somersault is on target here. It's similar to Google adding YouTube to its infrastructure. They're already in the business of shoving dump trucks worth of data out the door so YouTube didn't add that much to the overhead when compared to their current operation.

Re:Virtually Understandable? (0)

Anonymous Coward | more than 4 years ago | (#32264122)

Why would Zynga ask Facebook to improve their game interface and features? Isn't that Zynga's job?

I enjoyed Farmville at first, but it's gotten to the point that they hound you so much to try out their new features and buy all their new items (both the stuff available with completely play-money and the stuff you can only get with purchased play-money), that after I get in, accept all the gifts my "friends" have sent me, I just don't feel like playing any more and leave.

Re:Virtually Understandable? (1)

RobertLTux (260313) | more than 4 years ago | (#32263314)

i hate to bring this up but

SecondLife is partly a 3d Facebook

in fact if you wanted to you could buy a plot of land and have a FaceBook type wall that is an actual wall.
And just to really freak you out with SL 2.0 you can have that wall show your public facebook wall.

name a face book thing and i can name something in SecondLife that does the same thing.

Re:Virtually Understandable? (2, Funny)

Permutation Citizen (1306083) | more than 4 years ago | (#32263458)

Say, a large and growing user base ?

Re:Virtually Understandable? (1)

RobertLTux (260313) | more than 4 years ago | (#32263770)

okay im going to have to concede that one but if Linden Labs would cut back on the drinking during the meetings where things are being decided then we could actually see this.

psst btw if you want most of the features of SL 2.0 but not that interface then check out Emerald.

As if credit cards are bad (3, Interesting)

will_die (586523) | more than 4 years ago | (#32262780)

The highest credit card only charge in the 5-6% range and facebook wants 30%. At the max paypal charges 2.9% with a small fixed fee.

Re:As if credit cards are bad (0)

Anonymous Coward | more than 4 years ago | (#32262820)

Think of it more like an income tax. 30% is quite low for an income tax.

Re:As if credit cards are bad (0)

Anonymous Coward | more than 4 years ago | (#32263234)

30% ... low?

You mean, I'm not rich?

Re:As if credit cards are bad (0)

Anonymous Coward | more than 4 years ago | (#32262832)

Most credit cards i've seen are 16-18%. Still, considerably lower than 30%. Although it could be worse... loans, at least in Canada, can have up to 50% interest charged legally.

Re:As if credit cards are bad (1)

KDR_11k (778916) | more than 4 years ago | (#32262844)

I think he's talking about the cut per transaction, not the interest on loans.

Re:As if credit cards are bad (1)

Inda (580031) | more than 4 years ago | (#32262868)

There are adverts running in the UK that state 2450% APR. 50% is nothing!

Re:As if credit cards are bad (1)

TaoPhoenix (980487) | more than 4 years ago | (#32262834)

I completely don't understand your statement. Credit cards charge all the way up to 21% and more!

Re:As if credit cards are bad (1)

robthebob (742982) | more than 4 years ago | (#32262938)

He's talking about the cut that credit card companies take from retailers, not the interest they charge to consumers.

Re:As if credit cards are bad (1)

will_die (586523) | more than 4 years ago | (#32262964)

The percent is the fee credit card companies charge each time a customer uses a credit card, aka transaction fee. Interest for the borrowers is extra.
You can get in the double digit transaction fee range if you are a very small company so you don't qualify with the credit card companies. Then you have to go through 3rd party companies and they charge double digit percent fees.

Re:As if credit cards are bad (1)

kestasjk (933987) | more than 4 years ago | (#32262944)

Yeah and only 0.1% of a credit cards total mass is the magnetic stripe! That's an even smaller percent!

It's totally unrelated to a platform fee, but then again so is an interest rate..

Re:As if credit cards are bad (1)

ducomputergeek (595742) | more than 4 years ago | (#32263794)

Actually, the default rate for online card not present rates is $.25 + 2.4%. Usually you can get that down to $.15 + 1.85% if you are willing to pay the sales game. And with some of these games, they'd qualify for Interchange pricing and could probably get that knocked down to $.10 + 1.5% per transaction if they are processing more than $50k per month.

Re:As if credit cards are bad (0)

Anonymous Coward | more than 4 years ago | (#32264770)

I don't know what kind of credit cards you have, but mine are at 29.95%.

Understatement of the week (1)

MK_CSGuy (953563) | more than 4 years ago | (#32262808)

Also likely an issue is Facebook's decision to take 30 percent of revenues

No sh*t sherlock... that was the main contention point.

Virtual Currency? this is just wrong! (1)

lagi (303346) | more than 4 years ago | (#32262866)

it is only me or there's something very wrong with the term "Virtual Currency" ? people pay real money for virtual money? there's no other word to call this except a big scam.
if one pays 10$ for 100 virtual bucks. and in theory Zynga (zynga is not a bank as far as i know) take your 100 VM and multiply it by 10,000, this makes you rich? no, it probably makes you very stupid.
now i totally understand the deal when it's related to gaming, it's OK, you pay for content, and it does worth something.
but think what would happen when an evil Facebook will use this in entire site. after taking the normal life of 400,000,000 people and turning them in virtual, now they are ready to take your money and make them virtual.
guys (who still has FB account), please, quit facebook, delete you account, don't give a hand to this evil to spread. facebook just makes stupid people more stupid then they already are.

not THAT wrong... (1)

Errol backfiring (1280012) | more than 4 years ago | (#32262922)

It is a game. In a game, you can have virtual money and virtual economies. You can see how blatantly "wrong" economies develop. And if people want to pay for that, they are free to do so. I mean, they don't have to. Only if the virtual money gets mixed in the real economy, this can get bad.

Re:Virtual Currency? this is just wrong! (4, Insightful)

Rockoon (1252108) | more than 4 years ago | (#32262970)

people pay real money for virtual money?

"real" money? You mean like Gold?

Its better than current alternative (1)

nomaddamon (1783058) | more than 4 years ago | (#32262974)

At the moment Zynga makes most of it's money from scamming users to download fake anti-viruses and subscribing users to services that are costly and nearly impossible to un-subscribe from.
Facebook virtual currency will put a stop to this and ensure that users who want to buy virtual currency will get just that, with no addition of malware.
Taking 30% cut from it is greedy but hey... i'd rather pay the 30% fee (which is invisible to end-user anyway) than get my credit card emptied out by some Russian group who distributes malware via Zynga

Re:Its better than current alternative (1)

Rhaban (987410) | more than 4 years ago | (#32263076)

i'd rather pay the 30% fee (which is invisible to end-user anyway)

Not so invisible, Zynga may just raise all their prices by 30% as they migrate to facebook credits.

Re:Virtual Currency? this is just wrong! (4, Insightful)

somersault (912633) | more than 4 years ago | (#32262976)

people pay real money for virtual money?

People transfer one essentially worthless measure of value into another, yes. Real life money is almost no use by itself, it's only because of a strange kind of social contract that we regard it as having any value. People obviously must perceive value in virtual currency or they wouldn't buy any. So it's a kind of meta-currency - slightly less useful than real money, but still valuable to the individual.

Re:Virtual Currency? this is just wrong! (1)

Luke has no name (1423139) | more than 4 years ago | (#32266116)

I actually think that in the near future virtual currencies will be more and more popular, to facilitate easier online transaction that don't involve traditional banks/paypal fees. Virtual currency exchanges will come around, and BOOM! You have a new online way to pay for goods. After all, money is just a number.

Re:Virtual Currency? this is just wrong! (1)

kestasjk (933987) | more than 4 years ago | (#32262986)

guys (who still has FB account), please, quit facebook, delete you account, don't give a hand to this evil to spread. facebook just makes stupid people more stupid then they already are.

Says the guy who considers DLC credits "evil" because a journalist called it "virtual currency"..

Re:Virtual Currency? this is just wrong! (0)

Anonymous Coward | more than 4 years ago | (#32262996)

Looks like someone should read FTW [craphound.com] to understand how virtual economies work.

Re:Virtual Currency? this is just wrong! (2, Informative)

Mouldy (1322581) | more than 4 years ago | (#32263020)

Buying virtual currency is no different to buying credit tokens in an old-fashioned arcade. It's no different to buying chips at a casino. It's not quite the 'scam' you claim it to be.

Social games need their user's money to survive. Companies won't (and can't) make games for free. The traditional "you buy a game, then you play the game" business model doesn't work on social networks. People are used to games on the web being free. So the only way to make money from the free games is to offer special content that you have to part with real money for. Social games companies now have a "you play the game, then you buy stuff to play the game more/better" business model because it works. Facebook already make a lot of money off the back of 3rd party app developers. Do you think so many people would stick around on facebook if there weren't games to idly pass the time? Of course not. The apps keep people on facebook for longer, giving facebook more ad-time. Asking 30% of developers only source of income is very cheeky in my opinion.

How/why I know what I do;
I work for a games company, and I develop most of the company's social games (with other people, of course). Trust me when I say it's very expensive to not only develop and host the games - but to keep them working. Facebook & other social networks move their goal posts a LOT. We have to be on top of all their changes so our games keep working. Unlike console games, for example, we can't just release a social game and leave it.

Re:Virtual Currency? this is just wrong! (0)

Anonymous Coward | more than 4 years ago | (#32263110)

Buying virtual currency is no different to buying credit tokens in an old-fashioned arcade. It's no different to buying chips at a casino. It's not quite the 'scam' you claim it to be.

In general I agree with your statement. But the comparison with the chips at a casino only holds if, like at a casino, you can easily and at no extra cost sell the chips back to the casino.

Re:Virtual Currency? this is just wrong! (0)

Anonymous Coward | more than 4 years ago | (#32263672)

Asking 30% of developers only source of income is very cheeky in my opinion.

How/why I know what I do;
I work for a games company, and I develop most of the company's social games (with other people, of course). Trust me when I say it's very expensive to not only develop and host the games - but to keep them working. Facebook & other social networks move their goal posts a LOT. We have to be on top of all their changes so our games keep working. Unlike console games, for example, we can't just release a social game and leave it.

Briefly re "how/why I know what I do": My web game was ported to Facebook, where it gets a few thousand monthly active players (a few dozen players online at a given time), nothing to FarmVille but I'm certainly not an outsider to this stuff.

First off Facebook's development costs, keeping users involved etc, are also significant. Those constantly changing goalposts you refer to are about keeping users on Facebook as much as possible, something Facebook and app developers should get behind.

So they do get ad revenue for that, but if what Facebook makes is relative to the user page-views and what app-devs make is relative to the DLC content sold that's a recipe for instability and unfairness.

  • It penalizes app developers which don't use any virtual currency, and rewards ones which do.
  • It penalizes developers which have apps that involve frequently refreshing/rechecking the page and rewards apps which keep the user focused on one thing for a longer period.
  • It penalizes apps which contain textual content suitable for marketing analysis, and rewards those which don't contain any such info.

Why shouldn't Facebook make money off apps relative to the amount of money each app makes? Doesn't that make more sense than something as arbitrary as the number of ads/relevance of ads it displays? Web app developers which are making lots of money should be paying more to Facebook than the web app developers which aren't.

It also provides the sort of union between the interests of Facebook and app developers that helps ensure a platform remains viable for both parties. Those moving goal posts you talked about? Well now Facebook is making a proportion of the money you make; if they move the goal posts too far/too fast they will now lose out. That didn't factor into their decision process before, now it will.
It will be in their best interests to keep revenue generating games front and center; whereas before if they thought a game was distracting people from areas/apps of Facebook which could make them more money they had an incentive to penalize the game now they don't. Whereas before they had no reason to provide APIs useful to DLC app developers now they will.

Finally acting like developers for console/PC games don't have rapidly moving goal-posts but Flash games do is ludicrous..

Re:Virtual Currency? this is just wrong! (1)

rumith (983060) | more than 4 years ago | (#32263118)

What is "real" money, my friend? Money is an abstraction, a convenience. Money works only because we have agreed to use it.
If you only consider money real if Walmart accepts it (I'm exaggerating, but I think you understand my point), please reconsider: there are literally hundreds of different currencies in the world, all printed by recognized governments and some even fully backed by national gold reserves, that you will not be able to purchase anything somewhere other than the country of that money's origin. If governments can do it, why can't companies (provided they have enough customers for it to make any sense)?
Disclaimer: I do not play FarmVille or similar games. Actually, I do not use Facebook at all, although I do have an account there.

Re:Virtual Currency? this is just wrong! (4, Informative)

ledow (319597) | more than 4 years ago | (#32263242)

A currency, by definition, exists only in the mind of the users anyway. The £10 note I have in my pocket is only worth £10 because people will happily exchange it for goods / services / other notes to a value of £10. If there's a nuclear war, it'll be worth ABSOLUTELY NOTHING if I survive that. A few tons of food, a working car, or a nugget of gold, on the other hand... and even the last one is questionable that it would have value until civilisaton was rebuilt.

When Zimbabwe's currency became almost valueless and therefore useless because nobody wanted to accept Zimbabwe dollars (or whatever they were called), the currency was abandoned and people used dollars because other people would *happily* accept dollars. It was still a legal tender, but it was useless because nobody was willing to accept it for the value it purported to hold.

My £10 note also holds a peculiar legal status as it is only a promisary note to the value of £10. It says on it "I promise to pay the bearer, on demand, the sum of £10", and it's signed by the "Governor and Company of the Bank of England". Other notes in other countries have similar legal status. If I go to Scotland (technically the same country, because they are both in the UK), I stand a good chance of being given a similar note by the Bank of Scotland in my change. Both are legal, have identical "values" as they have agreed to track the Bank of England values - but try getting a London cabbie to take one. It's still just a piece of paper, at the end of the day, that costs WAY less than £10 for the government to fabricate. The same for coins.

A cheque has similar legal status. It's "virtual" in that the currency doesn't actually exist in a tangible form. But each time I write one, that's a binding legal contract to give someone something of that value. In the past, cheques have been deemed legal when they were written on a cow. The Bank had a legal requirement to accept it as a binding contract at the time.

Historically, when coins actually started to be worth more than their face value, they were melted down and sold to people for more money than they represented. Any currency is only a representation, or a promise, of the value written on it. Sometimes that promise means nothing.

With a "digital" currency, the situation is no different. No "money" changes hands when I buy something from Amazon, just a number goes from one box to another on some computer somewhere. So credit cards and bank accounts are no different to a virtual currency at all, because they only exist as a number... the plastic card is merely a convenient security device / container for that number. If my country dive-bombs economically, it might well be the case that international sellers refuse to acknowledge that my money transfer is worth as much as I say it is. It's all based on a perception of value.

Thus, all currencies are by definition "virtual".

Therefore, if I choose to exchange my "real" money for some "virtual" money, it's no worse than putting it into my bank account. In fact, I do this every day - I buy petrol and I'm given "loyalty points" which I can cash in to claim, say, a cut-glass goblet or a breakfast bowl at a later date. And people buy entirely "virtual" products every day - the games on my Steam list, the account for my mobile phone, the subscriptions to websites, I don't see any "tangible" product at the end of a day, just the result of a bit flipping somewhere on some distant server, but it still has value to me.

Facebook's plans are no different at all, nor are some MMORPG's "gold", or an LWN.net subscription, etc. - they're the same as every other "virtual" currency / purchase out there (which is why Beenz and Paypal were often under investigation under various banking laws - they were, in effect, banks).

If people *want* to pay "real" currency for some game tokens of some kind, then they believe they are going to get value from those tokens. It's no different to going to a funfair and having to exchange cash for "ride-tickets" or anything else. So I never understand why people are so vehemently against such things (being against personally paying for a game - no problem. Being against a virtual currency existing - What? Why?) or why people think that it's somehow "new".

Re:Virtual Currency? this is just wrong! (1)

omglolbah (731566) | more than 4 years ago | (#32264682)

Well thought out and well reasoned comment on this issue.
Hell of a more interesting to read than the average gulped up newspaper-fodder these days.

Please keep writing :)

Re:Virtual Currency? this is just wrong! (1)

misexistentialist (1537887) | more than 4 years ago | (#32265196)

There is a difference between legal tender and scrip, and people are right to be uneasy about the latter since it is always a way to increase the issuer's profit.

wheeling & dealing on wall street of deceit (0)

Anonymous Coward | more than 4 years ago | (#32263014)

now, you can buy all the phony worth less payper you can eat (help 'em with that robbIE?), but you can only sell your left over payper in the amounts, times, & places specified by the payper co. & its' uncle sam.

they, however, may continue to 'buy', sell & steal where & when the mood strikes them. gooed luck with that.

working our way to a one horse race, one tv channel etc.... no wonder we need 'virtual' 'money'.

where do I go to cash in my beenz (3, Insightful)

karmaflux (148909) | more than 4 years ago | (#32263056)

or can I just feed them directly to farmville animals

Re:where do I go to cash in my beenz (0)

Anonymous Coward | more than 4 years ago | (#32264066)

I believe you can also cash them in at flooz.com.

disappointing (1)

Trepidity (597) | more than 4 years ago | (#32263100)

I was hoping this would be a long, drawn-out standoff that somehow ended up damaging both companies.

Worse than DRM. Much worse. (0)

Hurricane78 (562437) | more than 4 years ago | (#32263132)

It’s like DRM: When the server is gone, your “money” is gone. (Yes, technically it’s still fraud. But I don’t see anyone of the retards who would actually use this know about that. Much less sue. And even less win.)

Plus you can not turn it into anything with any physical value. Only into imaginary things.

Needless to say: People who use this, must be shot at first sight.

Re:Worse than DRM. Much worse. (0)

daid303 (843777) | more than 4 years ago | (#32263210)

It's like... ...paying for food, once you ate it it's gone! ...paying for a concert, once it's finished it's gone! ...paying petrol, once you burn it it's gone! ...paying for sex, once you're done it it's gone! ...paying for theater tickets, once it's viewed it's gone!

Re:Worse than DRM. Much worse. (1)

kestasjk (933987) | more than 4 years ago | (#32263330)

People who pay for any of those thing should be shot at first sight.. Let's start (and end) with the GP.

Re:Worse than DRM. Much worse. (0)

Anonymous Coward | more than 4 years ago | (#32263358)

Not sex. I bought my sex slave from a nice chinese guy and I got to keep her. Built her a little cage in the basement and all that jazz.

Re:Worse than DRM. Much worse. (2, Funny)

daid303 (843777) | more than 4 years ago | (#32264388)

That was more expensive the a one off. But she will still 'end' at some point.

Re:Worse than DRM. Much worse. (0)

Anonymous Coward | more than 4 years ago | (#32263600)

Now you are getting it... This is why it is impossible for the poor to become rich through "hard work" - unless they can survive without food.

Re:Worse than DRM. Much worse. (1)

ppc_digger (961188) | more than 4 years ago | (#32264004)

The difference is that with all the things you mentioned, you know the expected lifespan when you pay for them. When you buy a game, you don't expect it to stop working 5 years later, when the company that made it goes out of business.

Re:Worse than DRM. Much worse. (1)

daid303 (843777) | more than 4 years ago | (#32264372)

This isn't about DRM, it's about buying 'virtual money' (tokens which you can exchange for objects in an online game) You can expect online support for the game to stop at some point, just as World of Warcraft will stop at some point.

Everything you buy wears out at some point. Cloths go bad/out of style, food gets eaten/rots, online games end, life ends.

Re:Worse than DRM. Much worse. (1)

N1AK (864906) | more than 4 years ago | (#32263224)

I'm not generally a fan of DRM, game expansions etc specifically because they limit my ability to continue to use a product in the future. But calling it fruad is little better than FUD.
 

It's like DRM: When the server is gone, your "money" is gone. (Yes, technically it's still fraud

I have no issue paying for something with a limited lifespan. In fact, if I could pay a reasonable monthly rate to download and play games of my choice on my console I'd do that rather than buying (generally 2nd hand games). The problem isn't that computer games are moving from physical media with effectively unlimited lifespans to digital media with limited lifespans. The problem is that prices aren't decreasing with it.

At the moment the digital distribution option is normally more expensive, and comes with downsides. Sadly, this doesn't seem to stop people from using it :(

Re:Worse than DRM. Much worse. (0)

Anonymous Coward | more than 4 years ago | (#32263318)

I take it you haven't given money to Slashdot for their subscription? Once the server is gone, your *money* is gone. I really hope you're not that retarded.

Listen to Sheldon (4, Funny)

Renaissance 2K (773059) | more than 4 years ago | (#32263312)

I guess all that subliminal messaging in The Big Bang Theory might finally pay off.

"Buy Zynga!"

Facebook Late to the Party (1)

angryphase (766302) | more than 4 years ago | (#32263402)

Well, it seems that Facebook's reluctance to (or slow) monetization of the site has certainly come back to bite it. When releasing details of the API for developers back in the day little did they know that the casual market would suddenly turn into a full blown business platform on top of their own infrastructure.

Unfortunately they are now in the position where Zynga are such a big part of Facebook that forcing them off the site through policy changes would be a loss for Facebook any way they looked at it. Luckily for Zynga they got in early to have the power or authority to cut a deal as well. Now all the new developers will seemingly be under the 70/30 rule of Facebook credits.

For F***'s Sake (0, Flamebait)

MacGyver2210 (1053110) | more than 4 years ago | (#32263552)

Facebook is a black hole of time and productivity. These shitty online games they push, and now want to CHARGE for, may just be the singularity that sucks in and traps those who wander the intertubes aimlessly.

what does the IRS think of this? (3, Interesting)

Joe The Dragon (967727) | more than 4 years ago | (#32263960)

what does the IRS think of this?

Flooz 2.0? (1)

theodp (442580) | more than 4 years ago | (#32264250)

What's the current exchange rate between Facebook Credits and Flooz [wikipedia.org] , Whoopi?

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