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Facebook, Zynga Sign Long-Term Virtual Currency Deal
Despite recent rumors that Facebook and FarmVille developer Zynga were gearing up for a legal battle, the two announced yesterday that they have signed a five-year agreement over how virtual currency will be used. Quoting:
"The source of the conflict ... comes down to Facebook's decision to introduce Facebook Credits, an over-arching currency system to be used in all games on its platform. This allows users to purchase just one type of currency for use in Facebook games, rather than buying directly from individual developers — a lack of direct control over its monetization that became a major point of contention for Zynga. Also likely an issue is Facebook's decision to take 30 percent of revenues gathered from credits, with 70 percent allocated to the developers."
The highest credit card only charge in the 5-6% range and facebook wants 30%. At the max paypal charges 2.9% with a small fixed fee.
The game itself is free to play but it's designed to encourage players to draw friends into it and to spend real money on it.
So it's actually a very sophisticated and subversive MLM (Multi Level Marketing) program that rewards participants with a video game. Having never played it I didn't realize this but whomever the genius is who came up with that deserves every cent they make!
I pity the guy who has to find a way to monetize the virtual currency of a game that's inside a social network, inside internet.
Somehow I doubt he'll care when he's a millionaire..
which is totally what she said
Since Zynga is raking in ~500 million - 1 billion USD a year, I'm pretty sure he can get over the slimy sensation. I hear hundred dollar bills act as a good balm...
what does the IRS think of this?