Facebook’s 30 Percent Revenue Share May Soon Not Apply To All Apps
It’s pretty much common knowledge now that Facebook gets a 30 percent cut whenever somebody buys Facebook credits to spend on in-game purchases. It’s the leading reason behind Facebook’s continued dependence on Zynga and other game developers who make up more than 10 percent of their revenue with Zynga making up 12 percent all by themselves.
Facebook does have more than just game apps though and those apps are sooner or later going to begin the monetization process through Facebook credits. They could range anywhere from movie rentals to playing full retail games through streaming services like Gaikai. The point is that there’s more to the Facebook app ecosystem than just Zynga and Facebook knows it.
To that end, Techcrunch stumbled upon something mighty interesting in the recent IPO filing from the company. It was an admission from the company that it may change up its 30 percent revenue sharing rule with non-game app payments. Here’s the full statement:
We receive a fee of up to 30% when users make such purchases from our Platform developers using our Payments infrastructure. In the future, if we extend Payments outside of games, the percentage fee we receive from developers may vary.
As Techcruch points out, this opens Facebook to some interesting offers they could give to developers to entice them to their platform. Other platform holders like Google, Amazon and Apple all have their own rigid revenue sharing structures that benefit both parties. What if Facebook amended its policy to, say, only receive 10 percent revenue share from a movie app? They could attract businesses away from competing services.
It’s no surprise that Facebook wants to enter into areas that were long held by other giants in media. There’s even hints that Facebook might be developing their own search engine to take on Google at their own game. Not to mention Facebook ads are reportedly destroying Google ads. It all paints a picture of a Facebook ready to compete.
A recent study pegged 40 percent of freemium players buying content on games like Farmville and the like. That’s 40 percent of players paying real money that Facebook sees 30 percent of the revenue from. Now imagine something that requires payments 100 percent of the time. That kind of ecosystem creates 100 percent monetization, but with a lower revenue share. That’s still instant success for Facebook.
Of course, the statement from Facebook said “may vary.” We don’t know one way or the other right now. It looks more like the option is just being laid on the table. Whether or not Facebook is gearing up to take on the giants of media is up to the analysts who get paid to predict these sort of things. But if you want my two cents, for whatever it’s worth, I’d say this is not a matter of if Facebook is going to start offering other media services, but rather when.
Do you think Facebook is going to lower its revenue share with developers to attract non-game apps? Or are they going to stick with a strict 30 percent share across the board? Let us know in the comments.