RockYou Strikes Virtual Currency Deal With Facebook

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RockYou has entered into a five-year agreement to make Facebook Credits the exclusive payment option in its social games and applications on the social network. The deal, unveiled Thursday, is a boon for Facebook, as RockYou is one of the largest developers on the site, with about 34.6 million monthly active users and 2.7 million daily active users, according to Inside Network's AppData.

The move helps ensure that Facebook's virtual currency will gain wider distribution across the site. Until recently, Facebook Credits, which cost 10 cents each and allow users to buy virtual goods in games and apps, had only been available in a limited number of apps for testing.

But Facebook has lately been trying to build the user base for Credits through deals with significant developers, who get a 70% cut of revenue from sales suing the virtual currency. Some developers, principally game maker Zynga, have resisted offering Credits because of the 30% cut Facebook takes.

In a five-year deal announced in May, however, Zynga broadly pledged to expand the use of Credits in its games, which include wildly popular titles like "FarmVille" and "Mafia Wars." Separately, smaller developers including CrowdStar and Lolapps have also signed exclusive five-year deals to use Facebook Credits exclusively.

"Facebook is showing a long-term commitment to social gaming -- and that's very exciting," said Lisa Marino, chief revenue officer at RockYou, in a statement. "As users adopt Credits, there may be a great opportunity for us to increase revenue from both a virtual goods and advertising perspective."

Marino told Inside Social Games last week that Facebook is taking steps to make Credits work better, such as testing new purchase interfaces in apps and offering some free Credits to lure more users.

In some tests, conversion rates have been higher than the 3% to 5% developers typically get. By partnering with Facebook early on Credits, RockYou hopes to benefit as the virtual currency evolves into an established payment system on Facebook.

In April, the companies teamed up for RockYou's advertiser-sponsored "Deal of the Day" promotion to reward people with Facebook Credits when they interact with in-game advertising. More than 1 million people completed the offer in the first four days. Furthermore, RockYou has issued over 5 million Credits to date through testing in its "Zoo World" game, using both direct pay and sponsored methods.

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