Facebook enforces credits system
The home page of Facebook displayed on a laptop screen.
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JEREMY HOBSON: From the real economy to the growing virtual one. Facebook will soon require all app developers to use Facebook's own "credits" system, when selling virtual goods. So if you want to buy a new pig on Farmville, for instance, you pay with credits that you buy from Facebook. And Facebook takes a 30 percent cut.
Marketplace's Steve Henn reports from Silicon Valley.
STEVE HENN: OK, I'll admit it. I can't for the life of me understand why someone would spend real money to buy an imaginary pig on FarmVille. And if living in CityVille means you have to listen to this soundtrack:
I'd rather move anywhere. But social games are exploding without me. Two hundred million Facebook citizens play these games and lots are spending real money for digital pigs, houses, even imaginary fishing poles -- a.k.a. virtual goods. And when millions start spending 50 cents every few days on imaginary products, it quickly adds up to some serious coin.
Justin Smith just published a report on this industry called "Inside Virtual Goods."
JUSTIN SMITH: Our estimate for the size of the U.S. virtual goods market is that it will hit $2.1 billion in 2011.
Smith thinks more than half of all these purchases will take place on Facebook. So by forcing all game developers to use its own virtual currency, Facebook will collect $300 million in fees next year from U.S. consumers alone.
And Deb Lui, who runs this business for Facebook, says social games are just the beginning.
DEB LUI: We see a lot of different options for Facebook credits in the future. Right now social games is where a lot of this virtual economy is happening but we see new verticals emerging, and we hope new verticals will emerge to use credits in the future.
Think of how much that you already buy that's digital. Your music, your media -- all this could be delivered through Facebook and bought with its own corporate currency.
So will the Facebook credit rival the U.S. dollar one day for economic dominance? Randy Kroszner, a former fed governor, doesn't think so.
RANDY KROSZNER: When it is just within FarmVille and people are just using it purchasing and selling cows and nothing more, that's no different than Monopoly money. But if people are actually transferring credits to buy real good and services...
That's a different story. The Facebook credit could get there one day.
For now, it has its limits. While you can use cash from 15 different countries to buy Facebook credits, there is no way to turn those credits back into real money.
In Silicon Valley, I'm Steve Henn for Marketplace.