Social game company RockYou and Facebook have signed a five-year agreement in which RockYou will exclusively support the social network’s virtual currency.
That means that when you purchase a virtual good in a RockYou game, such as food in Zoo World, you will do the transaction with Facebook Credits, which you can purchase with real money from inside the games or apps.
Facebook hopes to generate major revenues through Facebook Credits by taking a 30 percent cut of every transaction. More than 150 companies are testing it so far, but only Zynga and Crowdstar had signed five-year agreements to adopt Facebook Credits until now. RockYou’s deal is standard in that Facebook will take its 30 percent cut while RockYou will get 70 percent.
But while some in the industry think that is a hefty take, Facebook argues that it is building complex infrastructure to make that happen, akin to building an electronic banking system. The investment is so big that Facebook wants to sign up its biggest developers for the long term, said Deb Liu, product marketing manager at Facebook, in an interview. She added that the RockYou agreement is solely about Facebook Credits support.
Facebook believes that the introduction of its standard virtual currency will encourage trust and a common infrastructure for spending across social apps, much like the introduction of the euro broadened commerce in the European Union. Crowdstar said earlier that it saw its commerce jump 50 percent after the introduction of Facebook Credits in its games. That’s because users feel more comfortable with the purchases.
Lisa Marino, chief revenue officer at RockYou, said in an interview that RockYou has seen better results with Facebook Credits than with its own virtual currency, meaning people tend to buy more stuff when they use Facebook Credits. She said that RockYou will fully support Facebook Credits and will not use other external providers of virtual currency, but retains the right to use its own virtual currency in games if needed. Marino said RockYou decided to cut the deal with Facebook because it wanted to be involved early in the crafting of the new currency.
“This facilitates dialogue with Facebook,” she said.
RockYou will continue to work with its offer provider, Peanut Labs, in some of its transactions as necessary. RockYou has been inserting promotions into its games dubbed Deal of the Day, where users can choose to reap virtual goods in a game by accepting a special offer. Besides Peanut Labs, Facebook has also authorized offer company TrialPay to work with Facebook Credits.
RockYou’s investors include Sequoia Capital, Partech International, Lightspeed Venture Partners, DCM, SK Telecom Ventures and Softbank. In November, RockYou raised $50 million in a fourth round of funding.
Liu said that Facebook has worked with RockYou for the past six months testing the system.
Redwood City, Calif.-based RockYou said it has more than 280 million users with 15 billion monthly global impressions.