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Facebook Sees Big Bucks in Virtual Goods

Social networking site wants a cut of gaming transactions

By Harry Kimball,  Newser Staff

Posted Oct 23, 2009 12:56 PM CDT
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(Newser) – Gaming is blowing up on Facebook, and the social networking site hopes to take a cut of the very real revenue generated by virtual interactions. Analysts think credits and other services bought to enhance the likes of “Farmville” and “Mafia Wars” will be trading at a clip of $1 billion a year on the site by 2012. If Facebook Credits become the currency of choice and the company follows PayPal’s rates, it would mean a cut of $55 million, notes Bloomberg.

The viability of online games with “virtual goods and microtransactions” is not lost on Facebook, an exec says. “Two years ago, we never considered it.” And investors see developers working in the field—as opposed to traditional “packaged” console or PC games—as a good bet. “There’s only one deal I regret not doing, and that’s Zynga,” one says of the company behind “Mafia Wars.” “I was afraid the valuation was too high. Man, was that stupid.”

A Facebook user.
A Facebook user.   (AP Photo)
A screenshot from Farmville on Facebook.
A screenshot from "Farmville" on Facebook.   (©sabrina.dent)
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These are spur-of-the-moment purchases so if the whole payment system becomes seamless and painless it’s going to be a big driver of growth. - Atul Bagga, ThinkEquity

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COMMENTS
Showing 3 of 9 comments
diltsduo
Oct 24, 2009 12:33 PM CDT
what's wrong with you people? Farm Town is the way to go!
Toon
Oct 24, 2009 6:46 AM CDT
It doesn't seem that bad to me. IF it keeps teens out of trouble and out of the mall, that's all to the good. On YoVille right now the hot new things cost either time and the managing of resources or $1-$5 of real money. That seems less stupid than paying $100+ to buy jeans with holes in just the right places.
BlueAyez
Oct 24, 2009 6:05 AM CDT
There's hundreds of games on Facebook now and most of them pressure you to pressure your friends to join. It increases the hit count and drives up the price of ads so everyone makes a killing. The fastest growing game on there right now is Cafe World. I think Yoville has the most members. Another big one is Sorority Life. All of them have items available for cash. It's no different than Second Life and people have been known to sell off their characters there for thousands of dollars.

 
social networking • Internet • Web 2.0 • Facebook • PayPal • online gaming • virtual goods • microtransaction • Mafia Wars • Farmville

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