Laurel Papworth has written an excellent article on Facebook’s grandiose plans for Facebook Credits where she explains this is not just about virtual currency in games.
Not that virtual currency and social games are not big business by itself, estimated to generate $850 million in the US alone in 2009 (Inside Social Games report). Assuming every games company on Facebook “voluntarily” adopts Credits, Facebook will generate huge revenues at a 30% cut (that does not include the ad dollars they make by game companies promoting their games).
The big picture, according to Laurel Papworth, is Facebook’s real world component, “App2User.” This program aims to encourage bricks and mortar merchants with loyalty programs to tie them to Facebook Credits and a points system.
Imagine buying a sofa with your credit card that earns you frequent flyer points that you then can convert on Facebook to purchase items in games. Now, imagine, the flipside. Earn points playing Bejeweled Blitz that you then can convert into frequent flyer points to take a trip to Rio.
You get the picture…and the picture is big.
Laurel Papworth then imagines what would happen if Facebook bought Foursquare and you added the component of points and badges earned from checking into the mix. Of course, Facebook has acquired a Foursquare-like company, Hot Potato, and plans to create their own location based check-in system. The ability to earn and swap back and forth between the virtual and real-world is endless.
Rixty has started to erase the barrier between real world and virtual points with its recent deal with Coinstar. Zynga has as well with its promotions with 7 – 11 and Green Giant (buy this slurpee and green peas and redeem as credits online).
By itself, virtual items are a huge business. When you tie it to real world incentives and point systems, it’s mind boggling how big an opportunity this is. It’s no wonder Laurel Papworth claims that Facebook CEO may end up as “treasurer” of the Internet and that Google is investing so heavily to become a big player in social games.