Facebook Takes Credits to the Web, & Real’s GameHouse is the Petri Dish
Facebook is testing its virtual currency system, Facebook Credits, on sites across the broader Web—and the first public guinea pig is GameHouse, the casual-games division of RealNetworks (NASDAQ: RNWK) that is going full-bore after a bigger slice of the social-gaming sector.
Facebook Credits allow players to buy “virtual goods” within games they play. So, if you’re building barns in social-game leader Zynga’s FarmVille, you can buy some nails and boards to complete the task. And that’s turned into a sizeable business: One analyst has predicted that Facebook’s 30 percent cut of Credits sales will bring it $400 million this year from Zynga alone.
But bringing credits outside Facebook’s garden has implications well beyond a few candy-colored time-wasters. Matt Hulett, Real’s senior VP of games, says it’s a major step in building a revenue platform that developers and studios can use to tie games together, regardless of where they’re played.
With Facebook Credits enabled outside of the social network, two GameHouse games that were previously only available on social platforms—Collapse! Blast and Uno Boost—can be played on GameHouse’s website. And any purchases made or progress achieved by a player will show up when they switch platforms, between website and Facebook, or vice versa.
That’s a big deal because it helps usher in the future of casual-type games, where you might start playing one on your connected TV, switch over to your smartphone or tablet while riding the bus to work, and then continue on your work computer during the day.
Hulett says that frictionless gaming experience will help make social games even more mainstream, and potentially break down the idea that “social game” only means something that’s played on a social network (Google+ also offers games, and GameHouse is on that nascent platform too).
“I think we’re a little cro-magnon in the game space when we talk about social games as this alien thing,” Hulett says. “It’s huge, and we know its growing. But when we talk about anything other than Facebook, people shut their brains off and stop thinking.”
The arrangement also will help GameHouse in its drive to become a leading social publisher, Hulett says, because players who work within the Facebook Credits system on GameHouse’s sites will be counted as daily users of Facebook games overall. That allows GameHouse—and Facebook—to draw more players into the social network’s territory.
“For us, with 15-20 million unique users on these dot-coms, we know those same consumers are playing games on Facebook or downloading in app stores,” Hulett says.
The Facebook Credits experiment reflects just how driven GameHouse is in social games, Hulett says, and also showcases the division’s technological expertise in working on different platforms, from online to social to mobile. About half of the GameHouse division’s roughly 300 employees are now devoted to social games, and the unit turned profitable a year ago as it got out of underperforming lines of business and refocused on social games.
“I’m highly confident that we’re going to be growing in to a top-10 developer of social games very, very soon,” Hulett says.
While the company doesn’t break out virtual currency revenues as a separate item in public financial reports, Hulett says it’s the clear target for growth: “I’ve seen growth rates that say it’s going to be as big as console gaming,” which is still a roughly $20 billion annual business, Hulett says. “I think it’s going to be the main thing that we do.”
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