Only a Handful of Tickets Left – Inside Social Apps InFocus 2011 on January 25th

January 25th | San Francisco

Inside Social Apps InFocus 2011, our second conference on the future of monetization on social platforms, is less than two weeks away! Space is very close to sold out, so we strongly encourage you to register today:

Join us in San Francisco on January 25th for our one-day summit featuring industry leaders from every corner of the social app and game ecosystem. Executives and leaders from Facebook, Google, leading social networks, mobile platforms, social game and app developers, media companies, virtual goods and payment services, and investors will all be there to tackle the most pressing issues facing the industry in 2011.

We’re expecting a full house for the event — make sure your spot is reserved and register now.

Who’s Speaking?

We’re honored to present the following confirmed speakers at Inside Social Apps InFocus 2011:

Bret Taylor
CTO, Facebook
Eric Chu
Group Manager, Android Platform, Google
Kristian Segerstrale
Co-founder and CEO, Playfish (now part of EA)
Vish Makhijani
SVP Business Operations, Zynga
Kevin Chou
Co-founder and CEO, Kabam
Peter Relan
Executive Chairman, CrowdStar
Rick Thompson
Co-Founder, Playdom (now part of Disney), and Investor
Jason Oberfest
VP Social Apps, ngmoco:) (now part of DeNA)
Rex Ng
Co-Founder and CEO, 6waves
Deborah Liu
Commerce Product Marketing, Facebook
Sean Ryan
EVP and GM Games, News Corp
Bill Gossman
CEO, hi5
Anil Dharni
Co-founder, Funzio; Founder, Storm8
Paul Bettner
GM, Zynga with Friends
Jens Begemann
Co-founder and CEO, Wooga
Dennis Ryan
EVP Worldwide Publishing, PopCap Games
Eric Goldberg
Managing Director, Crossover Technologies
Carey Kolaja
Senior Director, Digital Goods Operations, PayPal
Raph Koster
VP Creative Design, Playdom (now part of Disney)
Atul Bagga
VP Equity Research, Games, ThinkEquity
Manu Rekhi
GM Games and Platform, MySpace
Martin Essl
Strategic Software Partner Management, Sony Ericsson
Matthaeus Krzykowski
Founder, Xyologic
Asokan Thiyagarajan
Dir. Platforms & Tech. Strategy, Samsung
Justin Smith
Founder, Inside Network
Kim-Mai Cutler
Lead Writer, Mobile & Social Applications, Inside Network
Eric Eldon
Editor, Inside Network

Inside Social Apps InFocus 2011 – January 25th in San Francisco

Social applications first emerged in 2007, and are today maturing into a global media ecosystem. With the launch of the Facebook Platform, followed by platforms from MySpace and other social networks, developers worldwide could leverage the social graph to create new kinds of social experiences never before possible.

Now, three and a half years later, what started out as sheep throwing and vampire biting has quickly become a profitable billion-dollar industry, punctuated by numerous major acquisitions by the world’s leading media companies and developers. But now, new challenges are emerging, affecting big players and new entrants alike.

Inside Social Apps will investigate the latest trends and challenges for social applications, and look at what’s to come for developers throughout the space – including the growth of virtual goods and social applications on mobile devices.

What are the biggest uncertainties and opportunities facing the future of social games and applications in 2011, and who is leading the way?

Inside Social Apps InFocus 2011 takes place January 25th, 2011 at the Mission Bay Conference Center in San Francisco, and brings together the world’s leading entrepreneurs to weigh in on the future of social app and game monetization.

Inside Social Apps will be a one-day summit led by Inside Network’s Eric Eldon and Justin Smith, and will take in-depth investigative approach to the day’s discussions. At Inside Social Apps, Inside Network will work alongside founders and executives of the top social networking, social gaming, mobile social gaming, payments, and virtual goods infrastructure companies to analyze the most important issues affecting the industry. Inside Social Apps is geared towards developers on Facebook, iPhone, Android, and emerging online social platforms.

Inside Social Apps will be a content-rich day of critical discussion, followed by an evening and nighttime of casual networking.

Register Now


The countdown has begun and Inside Social Apps InFocus 2011 is just weeks away! We’re expecting a full house for January’s event; to make sure your spot is reserved, please register now.

From all of us at Inside Network, we hope to see you on January 25th in San Francisco at Inside Social Apps!

Viximo Signs New Partners, Predicts Strong Growth Off Facebook

Cross-platform game distributor Viximo got off to a late start in its business of publishing social games to platforms other than Facebook, only starting in fall last year. But the company seems to be doing fairly well anyway, with an announcement that it has signed on three more Facebook games with a total of almost 11 million monthly active users: Ravenwood Fair, Backyard Monsters and Resort World.

The idea is to re-use assets that have already been published on Facebook to capture new users and revenue on other networks. Viximo, and competitors like Heyzap, do this by creating tools to make it easier for developers to easily plug into the APIs of competing social networks like MySpace and Quepasa.

But there’s more to it than plugging in, according to Viximo CEO Dale Strang. “As tempting as it is to do a quick and easy shortcut onto these networks, the reality is unless you’re really lucky with your game, integration and network, you probably won’t get a big lift. There are too many factors that work against it,” he says.

The best candidates for cross-platform publishing are similar to the company’s three new partner games: titles that have proven themselves able to attract crowds on Facebook already. Developers also need to have the bandwidth to maintain their games across all the platforms they might want to publish on, keeping in mind that the features and viral channels of those networks can vary widely.

For the trouble, though, there’s a significant reward. “We’ve got partners who are certainly generating hundreds of thousands of DAU by launching games on our network, and many are finding that it’s a really nice incremental revenue stream, he says.”

For now, Viximo has about a dozen platforms that it taps into. In 2011, that number could grow, and Strang thinks the overall network will be a good source of growth for social gaming. “Our prediction for 2011 is that the beyond Facebook market will grow much more quickly than the Facebook market in 2011,” he says. Much of that growth will come from overseas, where networks like VZ and Tuenti are still strong.

Strang, of course, is biased to think that his own market is growing. But the total number of players on Facebook is only growing as fast as Facebook itself, so his prediction could well turn out to be correct.

One more trend Strang pointed out, that we’ve also heard others predict, is a growth of social games into sites that don’t look like typical social networks. “We’re talking with entertainment sites, network sites owned by TV and movie networks,” says Strang, adding that sites with high traffic and visit frequency and some sort of social graph could fit the bill, even if they’re not considered real networks.

RockYou Buys Playdemic, Aims for More Social Gaming Expansion

RockYou has acquired Playdemic, the United Kingdom-based developer of farming-plus-cooking Facebook simulation game Gourmet Ranch. The plan, as RockYou’s new games product leader Jonathan Knight told us in an interview yesterday, is to turn Playdemic into the company’s second studio.

Gourmet Ranch, built by Playdemic’s team of game industry veterans, has been part of bumper crop of smaller but successful games that have emerged on Facebook over the past year (check out our review of it in August for game-play details). Today, the developer’s lone Facebook title has 540,000 monthly active users and around 100,000 daily active users on AppData — numbers that suggest it has been monetizing well.

RockYou’s first studio is at its Redwood City headquarters — while the company has developed a wide range of apps over the years, as well as its own ad network, the focus is now on social gaming.

It launched its first true social simulation game, Zoo World, back in 2009, and has [updated: not launched any major games since other ones, like Farm Land and Toy Land, have not fared nearly as well.] It’s been busy nurturing its main game, though, and after a number of rises and falls in the past year the app is bringing in nearly 9 million monthly active users and 1.25 million daily active users as of today, according to our AppData measurement service.

It also quietly bought TirNua, a small company that was building a virtual world, at the beginning of December, and it has moved the company’s technical team over to technical leadership position for Zoo World and other social games, according to Knight, also a recently-hired veteran game industry producer.

Playdemic’s 16 employees will join RockYou’s existing workforce to total 170 people (it’s down significantly  following a massive round of layoffs this past fall). That number, however, doesn’t include the RockYou Asia branch of the company that publishes games on Asia-based social networks.

While RockYou was at the fore of social app development over the past decade, and still has large non-gaming apps like Birthday Cards (which lets you play Zoo World inside of it) and Pieces of Flair, it has been passed in size and revenue by Zynga, Playdom, Playfish and other developers over the last couple of years. Today, including Playdemic, it’s the 12th largest developer on Facebook, with nearly 20 million monthly active users and 1.25 million daily active users, according to AppData. The company has also raised multiple rounds of funding adding up to around $130 million.

So between its strong foothold in social games, its new acquisitions, and

Care for Facebook Fuzzballs with Fuzzits!

FuzzitsTaking care of a virtual pet is nothing new to the Facebook platform, but developer TnT Games is attempting to grow that niche with a new game called Fuzzits!

While still making use of the familiar mechanics of other pet caring games such as Pet Society, Fuzzits also introduces some new elements, from training pets to growing a Fuzzit town. That said, a lot of the game still feels vague and unfinished with a good bit of feedback issues that add to a general sense of lifelessness within the cute little puffballs one cares for.

Fuzzits, the characters, are amorphous balls of fluff that players are tasked with taking care of. Some are little puffballs, others more egg-shaped, some have antennae, and others are like cats. Regardless of type, they all follow the same basic rules found in other virtual pet caring games. Players must feed them, pet them, and groom them on a daily basis in order to keep them healthy and happy. So long as this is taken care of, they will slowly grow into an adult.

More FuzzitsOf course, fuzzits are for more than just looks. They actually have their own town. It’s not much of one at first, but as players come back on a daily basis, they will be able to discover barrels around the map that contain random materials. These are used in two ways. The first is just a sort of collection mechanic that doesn’t seem to do much other than show that you found something rare. The second, on the other hand, involves food items used in recipes. Should the player collect all the items in a recipe, they will attract a non-player fuzzit to the town and their shop will begin construction.

Unfortunately, other than the aesthetic value of building out a town, these fuzzits don’t seem to do anything. The developer says that it does plan to add in a sort of reputation/interaction system with these characters, but nothing is really implemented yet. Additionally, players can buy decorations for the town as a whole, but the current selection is somewhat limited, and the placement of items often has some obnoxious clipping (where the top of one object will appear beneath the bottom of another).

One of the elements that is interesting with this collection mechanic is that it is affected by the type of fuzzits one owns. Each critter has its own personality type of either nurturing, studious, athletic, or artistic. Depending on the level and type of personality, different items will be found in town.

TrainingLevel does not necessarily refer to the age of the fuzzit in question. Rather, it refers to the creature’s “training level.” As an added element, players can train each of their creatures, over a few hours, in the personality trait that they hold. Presumably, this will further unlock different collectible items to find in town, and once all four have been upgraded to a certain level, a fifth type — adventurous — will unlock.

It’s also worth noting that players can also breed their fuzzits once they reach adulthood. As one might expect, the results will reflect the color schemes of the parents as well as the noted personality traits.

While many of the mechanics of Fuzzits may sound interesting, a lot of the game still feels a bit vague and unfinished. For one, the collection aspect is very limited, with only a handful of items to find, and the purpose of training wasn’t made truly clear until visiting the game’s help section. Furthermore, the point to collection is sort of lost with the minimal amount players can do at any given time (we found three). It’s actually gratifying to watch a town evolve as one hunts for “treasures,” so why limit it so drastically?

The biggest complaint, however, comes in the form of user feedback and general liveliness within the game. A good example is actually the interaction with the fuzzits themselves. When feeding or petting them, they don’t really react. Perhaps there’s a sweet spot, but when using these tools, we pretty much held the mouse button down and dragged around until a sparkle was seen and a coin fell out of the creature, so we must have been doing something right.

Collections

There is also a general lack of life worth noting. Most of time the fuzzits just sit there staring at the user, rarely moving. At most, they might yawn, but they’re actually very boring to look at. Even the NPCs in town are just sort of there. Nothing really has a personality of its own, and their being piles of fur doesn’t help.

The social aspects are a bit basic at the moment too. As it stands, the social elements are similar to early Pet Society in that players can visit each other’s fuzzit virtual spaces and care for one another’s pets for extra coin. Additionally, the fuzzits will gather gold for players to collect on a daily basis, in which friends can partake too. Aside from this, the only other social interaction of notice is gifting, but TnT Games does say that it plans to involve friends in the town area of the game in the future.

Overall, Fuzzits is a decent game, but still feels a bit clunky and not quite as polished as it could be. It has some interesting ideas with the personality training and collection aspects, but with limited items to find at any given time, it falls short of what it could be. Even so, this all pales in comparison to the general lack of life and personality the fuzzits themselves have. Sure they look kind of cute, but just watching them sit there the entire time is not exactly entertaining. Regardless, the game is very new, and TnT Games is already planning to roll out improvements and new iterations.

CityVille Edges Past 100 Million MAU — Over Half Are International Users

Zynga’s CityVille has broken another record, moving past 100 million monthly active users in Facebook’s latest stats update. The game now stands at 100,064,578 MAU, with 18,591,715 daily active users.

The day before Christmas, CityVille passed FarmVille as Facebook’s biggest game ever, so today’s number just adds a little bonus shine to Zynga’s new game. It has been 41 days since the game launched.

Despite the big numbers, CityVille is arguably a less successful title than FarmVille. Its stickiness, of the DAU as a percentage of MAU is much lower; at FarmVille’s high point it had well over 30 percent stickiness, while CityVille just dropped to 19 percent. Most developers consider DAU far more important, especially as a determiner of revenue.

CityVille also has access to a much larger and more engaged international audience than FarmVille did, due to built-in localization for the major European languages that FarmVille still lacks. The result is that more than 50 percent of CityVille’s playerbase is located outside Zynga’s home country, according to demographic data from AppData.

There are more differences from FarmVille. The average player age in CityVille skews much lower, perhaps a result of the preponderance of international users. And CityVille’s users are far more evenly divided between men and women than almost any other Zynga hit (excluding Poker and Mafia Wars).

Where will CityVille go from here? Its current growth rate suggests that it could be nearing its peak. Zynga has steadily ratched up advertising across every channel on Facebook, from performance ads to Tapjoy’s cross-promo bar, and still the game’s MAU growth has slowed dramatically from its previous average of three million MAU per day to a weekly average of a million MAU per day. Its growth over the past day was about half a million MAU.

We previously suggested that 125 million MAU would be an upper limit for CityVille, but given the slowdown, it might not top 110 million. Not that Zynga should mind; whatever the wrinkles in traffic, revenue or player lifetime may be, it undoubtedly has a smash hit on its hands, and one that will likely find new success on smartphones soon.

Demographic data cited above from AppData Pro.

Highlights This Week from the Inside Network Job Board: Ubisoft, NaturalMotion, & More

The Inside Network Job Board is dedicated to providing you with the best job opportunities in the Facebook Platform and social gaming ecosystem.

Here are this week’s highlights from the Inside Network Job Board, including positions at Ubisoft, NaturalMotion, TheBroth, Cie Games, and Digital Chocolate.

Anonymous:

Listings on the Inside Network Job Board are distributed to readers of Inside Facebook and Inside Social Games through regular posts and widgets on the sites. Your open positions are being seen by the leading developers, product managers, marketers, designers, and executives in the Facebook Platform and social gaming industry today.

Super Rewards Parent Company Adknowledge Raises $200M Round for Broad Advertising Expansion

Adknowledge, an established online performance marketing company that bought its way onto the Facebook platform over the last few years through a series of acquisitions, announced today that it has raised a massive $200 million-some round from private equity firm JMI, including debt financing from Bank of America.

While the company has been quite active on Facebook up to this point, the money is going towards a wide range of other areas. From the press release it put out this morning: “In the U.S. and international markets, Adknowledge plans to use the funding to further expand its network so advertisers can access inventory from valuable segments of the long tail marketplace online, such as mobile, video, content sites, and display.”

The company has bought Facebook ad providers large and small, starting with Cubics in December of 2007, continuing with Lookery in November of 2008, Super Rewards in July of 2009, and SocialMedia’s ad network in November of 2009. Today, Cubics and Super Rewards are the two active brands on the platform; both are on Facebook’s new whitelist of ad providers.

Adknowledge’s roots are in the murky world of email marketing and online performance advertising, but it has steadily built out a performance bidding system that can help developers and web site owners optimize ads to match quality ads with users’ particular interests. It has been integrating Cubics and Super Rewards in with this service.

Under the Adknowledge umbrella, those companies have also been expanding across other social networks and gaming sites. They’ve needed to as Facebook has been moving to make all virtual goods payment methods go through Credits. While the ad network business won’t be affected, Facebook’s moves will eventually cut out Super Rewards from the Facebook platform.

Large Developers, International Apps Own This Week’s List of Fastest-Growing Facebook Games by DAU

A group of five top Facebook developers hold over half of the spots on this week’s AppData list of fastest-growing Facebook games by daily active users, including most of the top 10. Most of the apps that broke through the large developer wall are from international origins:

Top Gainers This Week – Games
Name DAU Gain Gain,%
1. CityVille 18,591,715 +1,620,113 +10%
2. Millionaire City 2,678,013 +198,868 +8%
3. 寵物戰爭 235,763 +161,834 +219%
4. Texas HoldEm Poker 6,981,466 +132,997 +2%
5. Café World 3,428,097 +132,895 +4%
6. แฮปปี้คนเลี้ยงหม 689,945 +123,055 +22%
7. Country Life 808,712 +95,114 +13%
8. It Girl 1,000,207 +86,215 +9%
9. City of Wonder 566,238 +79,054 +16%
10. Happy Pets 671,149 +76,271 +13%
11. Farmandia 196,970 +66,583 +51%
12. Ravenwood Fair 559,268 +58,333 +12%
13. Monster World 1,155,354 +55,429 +5%
14. Texas HoldEm Poker – Deluxe ★★★★★★ 83,083 +51,538 +163%
15. 小小戰爭 712,840 +45,861 +7%
16. Backyard Monsters 801,215 +45,681 +6%
17. Barn Buddy Game 473,222 +44,340 +10%
18. Mahjong Trails 308,992 +42,774 +16%
19. Happy Island 614,662 +42,363 +7%
20. YoVille 837,358 +41,430 +5%

Zynga is the big presence again, with CityVille and three other games adding about two million DAU. The company is now within a few million DAU short of the high point it reached last April. Its DAU as a percentage of monthly active users, however, is at an all-time low of 20 percent, reflecting CityVille’s rapid bloat.

CrowdStar also made a significant showing, with It Girl, Happy Pets and Happy Island. This week was a big one for It Girl, as the game pushed above the significant million DAU point for the second time. However, the developer still lost over half a million DAU overall as many older games declined.

The only two new games on the list, 寵物戰爭 and Texas HoldEm Poker – Deluxe ★★★★★★, are both from Chinese developers, while แฮปปี้คนเลี้ยงหม is proving that Thai users are another southeast Asian group with heavy social gaming habits.

Numulus Brings Cross-Platform Puzzling to Facebook & iOS

Numulus iPhoneWhile puzzle-based games are fairly common in both the mobile and social spaces, those centered around math and numbers are decidedly less so. However, a title by the name of Numulus, from developer Pedro, is looking to take this less traveled path, not only on Facebook but on the various iDevices as well.

Centered around basic arithmetic and visual recognition, Numulus could prove enjoyable for the right audience, especially with the addition of a less common math-puzzle element. However, this same puzzle can cause frustration during play due to poor usability design.

The idea behind Numulus is to answer as many math “questions” correctly as possible in a finite amount of time. These questions are not along the lines of “2+2.” Each number in the puzzle is instead part of a cloud, which contains four sets of numbers, each with a different color, and of three varying sizes (small, medium, and large). As such, the questions will be something like “medium green + medium blue.”

In order to get the answer right, players must recognize the correct color and size quickly and click the screen (tap it for iDevice versions) to bring up a simple number pad and input the sum. Obviously, the main goal is to score the highest score possible, which is simply the number of questions one gets right. In order to boost this score, players can also earn time bonuses by answering a question within a sort of sub-timer. What this means is that when a question pops up, it must be answered before the overall level timer reaches a white marker. This marker will change its position with every question.

Numulus Cloud FacebookIt’s all really quite simple and is easily playable in just a few minutes, and thus could be potentially fun for fans of math based games. Of course, the key word is “potentially”, as Numulus comes with some very frustrating usability issues around size recognition. Even if the player knows the right answer mathematically, more often than not Numulus will reject it, because many of the “medium” and “large” numbers, depending on the shape of those numbers, look extremely similar size-wise.

Answers FacebookThe sizing problem leads into yet another usability issue. The game relies on color recognition with red, green, yellow, and blue. Unfortunately, there appears to be no color-blind mode, and with the very common red-green colorblindness… well, let’s just say those players won’t be doing too well.

As for social features, the game does have a global leaderboard for each of the four levels (although the difference between levels feels negligible and only two are available for the Facebook and free iOS versions). Additionally, players can challenge friends with the classic “beat my high score” type of mechanic on Facebook and accomplish achievements via Plus+ on their iDevices. Moreover, Pedro advertises that the various versions of the game are all cross-platform, and regardless of the rendition, accomplishments can all be shared via both Twitter and Facebook.

As an idea, Numulus is decent. Especially for the iOS, the game looks very clean and visually polished (less so with the Facebook version — there’s just too much empty space) with some nice calming sounds, conducive to puzzle solving. However, the frustration created by either bugs or poor usability – though definitely usability in terms of the lack of a colorblind mode – sucks all the potential enjoyment out of the game. The good news is that the rest of the game, and the idea behind it, is not half bad, so here’s hoping some fixes and improvements are on the way.

Facebook’s Big Credits Push Shows Itself in CityVille, Other Top Social Games

Over the past year, Facebook has steadily worked to make Credits the only payments option on its platform, but has given few specifics details on what it’s doing during the transition. Below, we take a fresh look at Facebook, its top developers and the platform providers to help clear up where Credits will go in 2011.

Although it has never said so explicitly and publicly, Facebook has required, one by one, all major developers to sign five-year agreements agreeing to use Credits exclusively. That’s instead of the direct credit card payments, third-party offer walls, game cards, and other payment options that have until now been the main ways to buy virtual currency for social games and apps on the platform.

Facebook’s initial plan was to fully transition to Credits by the end of 2010, but the results might not be obvious today. For example, the two largest games on the platform — CityVille and FarmVille — show an offer wall, game cards, and a variety of other non-Credits payment methods.

Yet these two games, along with most others from leading developers, have already integrated Credits as the only method of paying using credit cards. As you can see in the screenshot below, you’re directed to spend your Credits, not buy the City Cash game currency directly. And that means Facebook is already beginning to make a significant amount of money from virtual goods revenue in social games.

Direct payments currently account for over 80 percent of revenue in most social games, as we cover in our Inside Virtual Goods: The Future of Social Gaming report, and that proportion has been increasing steadily over the last few years. So, because Facebook takes a 30 percent cut of all Credits revenue, it  is now beginning to pull in a large portion of the hundreds of millions of dollars being spent on virtual goods on the platform.

Where Credits Are Still Missing

Credits are visibly missing from some locations in games. Yet from what we’re hearing, that won’t be the case for much longer.

In the past year, companies have been pushing alternative monetization ahead on their own, keeping existing revenue streams intact during their transition to Credits. Many invested a significant amount of their own money in payment systems before Facebook began pushing the Credits requirement, which they have still been capitalizing on.

The most striking example of missing Credits is in CityVille — the largest Facebook app ever. Since launching at the beginning of December, half a year after Zynga agreed to sign on to Credits, CityVille has featured a wide range of the other options, including a non-Credits offer wall from Tapjoy. Zynga’s previous hit, FarmVille, also still has the Tapjoy offer wall that it has had for years (since back when Tapjoy was Offerpal).

As we wrote last week over on Inside Mobile Apps, Tapjoy is still seeing significant revenue from Facebook, while other offers companies have told us that their revenues on Facebook have been growing by around 20 percent every quarter in the past year.

Zynga was also busy adding other non-Credits payment options over the course of the past year: It announced programs with American Express and Citi nearly at the end of the year, allowing users to exchange their card loyalty reward points for virtual currency, even though Facebook has been building out its own loyalty exchange program over the same period.

Beyond Zynga, the usual variety of non-Credits payment options are also still live on established hits like Playfish’s Restaurant City and Playdom’s Social City, even though those companies have also already agreed to the five-year Credits deal.

How Long Until It’s All Credits?

Facebook, then, seems to have prioritized moving all direct payments over to Credits before messing with the variety of alternative payment options. That progression allows it to get Credits in front of the bulk of paying users while giving developers more flexibility around the switch. Since the larger companies were upset about their investments in their own payment structures going away, this slower rollout gives them some more time to monetize some of what they’ve built.

Meanwhile, although some developers have previously said that Credits make less total revenue than other methods, many have been saying that it works at least as well if not much better. The promise of Credits isn’t just a bigger piece of the revenue pie for Facebook but a bigger pie for all — with Facebook’s branding, promotion in the interface, site-wide usage, its own alternative payment options, everyone could make more money.

That seems to be happening more or less as the company has hoped, although there are still some potential problems in the system. For example, some developers report that over half of the Credits spent in their game are promotional Credits that Facebook does not pay them for. This problem is most severe for games with low-priced virtual goods, which may have led other developers to raise their prices. We’ve heard that these promotional Credits may slowly be washing out of the system, but as long as Facebook still offers promotional Credits, developers who don’t design with this problem in mind may find their revenues to be more diluted than expected.

We’ve also been hearing that Zynga is planning to move to Credits-based offers in all of its games within the next couple of months, and we expect other developers to do the same. That should bring most of the rest of the outstanding revenue in to Facebook, too.

We asked Zynga for comment its transition to Credits, and here’s a spokesperson’s response:

We are fully committed to Credits as the payment method we employ in our games on Facebook. We’re working closely with Facebook on transitioning offers and alternative payment options to Credits in our game interfaces over the course of the next few months. We can’t comment on specifics but are committed to extending all of the options for players to ensure the best user experience possible, including Zynga game cards.

We expect other developers are on a similar schedule. Look for the transition to be over soon.

For more, we’ll be discussing the ins and outs of Credits with Facebook and leading social game developers at our Inside Social Apps conference in San Francisco on January 25th.

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