Social game CEO talking at Inside Social Apps were very open with their opinions about Facebook credits. Kixeye CEO Will Harbin felt that the system was just the cost of doing business adding, “It’s nice to not have to worry about a payment platform.”

RockYou CEO Lisa Marino noted that “things became much more interesting and monetization definitely grew because you control your economy in a much more compelling way. It’s absolutely fair for Facebook to take their fair share because we’re leveraging their platform on a bunch of different levels.”

Haining Wang, CEO of Happy Elements, was not on the same page as the other CEOs, saying, “We see around three to five times higher conversion rate versus using the in-game currency, but a much lower ARPPU (Average Revenue Per Paying User). Probably because a user can pay easier, but they pay less in a single transaction. Generally speaking we have 10-20 percent higher revenue per game.”

Marino also emphasized that advertising had done well by them. “In the case of Zoo World, that franchise generates 40 percent of its net revenue after Facebook Credits from ad units,” she said. “It’s very, very highly tuned to ads because we found that our ARPPU overall was much higher than trying to continue to tune for digital goods monetization in games that are very 40-year-old mom-centric. We’ve always been huge pioneers on the advertising side, and we’re beginning to expand that to third-party games that we don’t own and operate.”

“I’ve been quoted saying this a lot lately, and I’ve been extremely frustrated by the social gaming genre for several years, because for some reason people have thought that that segment of entertainment was above being a media company,” she continued. “Let’s call a spade a spade. When you’re dealing with the number of eyeballs that we have in social gaming in general, you’re a frickin’ media company. Especially people like Zynga, people like RockYou that really serve these demographics that are very, very interesting to large advertisers.”

“When you think about media companies in general, you’ve got three things that are very common in all of those models. One is they do have their owned and operated content; Second, they source content from third parties; and they all have dual monetization,” she added.

Harbin, however, feels the emphasis should be on games and not advertising. “Some of these things we’ve been talking about can move the needle in a big way for a game that does a few cents per daily active user, but to really talk about monetization around 50 cents, a dollar, two dollars, or even higher in some cases, it’s got to really come down to the core game dynamics,” he said. “No amount of blasting media or offers towards users is going to ever get you to that point if you aren’t attracting the right audience, and if you aren’t making the right kind of game. For us, we don’t do a lot of optimization when it comes to monetization, it’s just kind of inherent in the gameplay. Our core value is just to build a game that we love first, that we think other users are gonna love, that follows a certain set of rules and a timeline. Users in our game really just spend money to speed up time. The game allows balance for people who pay and people who don’t pay.”

“There’s lots of elements around engagement that help with monetization, such as synchronous real-time gameplay. There’s something that lends to monetization and engagement when you’re watching your base be destroyed in Battle Pirates in real time. When the battle’s over, you’ve seen what they’ve done to you, you have that option in front of you to exact revenge immediately if you don’t want to wait and repair what’s been damaged. For us monetization’s inherent in the actual gameplay itself, it’s not an ancillary thing that we add on in a layer later,” said Harbin, adding, “We monetize revenge.”

For Harbin the focus is on appealing to the hardcore gaming demographic. “I think it’s really come down to user acceptance and what users are comfortable with in terms of how they spend their money. This kind of model is new to a lot of gamers in the Western hemisphere,” he detailed. “Most of our audience is used to paying $50, $60 for a title and putting it in their console. I think some are actually finding that this model works better for them. You can play it for free, try it for free, if you like it and you want to move faster in the game, you pay some.”

Harbin was quick to emphasize game balance with virtual items people can buy. “None of our items are exclusive to paying users. Every one of our items are completely free if you play long or hard enough. I’ve spent over $200,000 of free currency in Battle Pirates on my account and I get my ass handed to me daily by users. I think all of those kinds of things balance out, but who knows what the limit is ”

Source: IndustryGamers {link no longer active}