Facebook vs. Zynga | Hacker News Reader

Facebook vs. Zynga

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37 pointsmattmaroon8 comments

The liquidity of Facebook Credits is a major problem. They are asking game developers to give up control of their virtual currencies. When you control your virtual currency you can use it in so many ways to influence user behavior.

You can give away your own currency to lure back wayward players. You can use your currency to smooth over customer support problems (lost some of your inventory due to a bug? Sorry, have 1000 gold). You can run contests where the grand prize is $100 of virtual currency. And, so on.

You won't be able to give away or otherwise manipulate Facebook Credits in the same way you can your own currency.

Of course, you keep your own virtual currency and accept Facebook Credits. You just need to ask your players to exchange real money for Facebook Credits, and then exchange Facebook Credits for your currency, and finally exchange your currency for that neat power-up they wanted. That won't confuse anyone.

I think you kinda explained the problem Greece is having because there are in the Euro zone as well as the hint towards the possibility of an exchange rate between virtual currencies. This should make forex much more interesting...

The killer point:

So my guess it that what we’re hearing is the end result of Zynga’s a/b testing which has shown that the payments platform is cannibalizing significantly more than it’s adding.

If this is true, I'd be curious to see if Zynga releases the numbers. If they do, then things might be on like donkey kong.

I'm also certain they can't release them legally.

Let's play this out.

Say Zynga actually has the cajones to leave Facebook and run their game from farmville.com

As soon as Zynga leaves, this creates a huge void that hundreds of other game developers will rush to fill. These smaller developers will probably have smaller payrolls and be fine with the 30% cut Facebook is taking.

If Zynga has the cojones to leave Facebook, it must believe that its games will draw users away from Facebook, compared to other games people are accustomed to playing online. I don't play games online, so I don't know how warranted that assumption is.

I don't think anyone will know until it's been tried. The thing is though, there's no reason why people cannot have accounts at 2 social networks. If they can convince 50 million people to use their network, and they perhaps can (more than that log into Farmville every 2 weeks) they might have something of extreme value.

The scary part for Facebook isn't them leaving, it's them reducing the Facebook component to a viral spread mechanism for another, more gaming-focused social network. This will allow them to shift the page views and revenue away from Facebook.

There is already a game doing this largely through FB connect and I believe it's over 1m monthlies. I cannot remember the name right now but it was Evony-ish. It spreads the same way as any app, and even has an app, but all the app does is get you to play outside of FB.

Facebook's ad CPMs are comical, but given the number of pageviews they get and the marginal cost (has to be very near 0) of serving them losing that will hurt a lot in the short run.

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