Facebook is phasing out its Credits virtual payment system and will be transitioning all games integrated into the social network to a new local payments API by Sept. 12, the company announced Wednesday.
The migration is part of a larger effort to give gaming developers more control over how they charge users for items in their games. Apps built by game developers are responsible for a majority of the revenue that Facebook derives from its Payments infrastructure, the company said in its last annual report.
The new API, or application programming interface, is designed to address multiple challenges tied to Facebook's Credits system. The API officially rolled out on Wednesday for all game developers, Facebook announced in a blog post.
Game developers have 90 days to migrate over to local currency payments; after Sept. 12, Facebook's virtual Credits payments system will no longer be supported, the company said. After that date, Facebook will convert end users' Credits balances to the equivalent amount of value in local currency when their first purchase is made with a new local currency-compatible application, a spokeswoman said.
Users can continue to spend the currency in other apps that have switched to the new local payments, Facebook said. Users' balances will not be able to be used on games that have not migrated.
The API's launch follows Facebook's announcement last year that it would be phasing out Credits, which did not provide the pricing flexibility desired by developers and was also overly complicated, Facebook said. For one thing, Credits acted as a secondary currency on top of a separate in-game currency for some developers, Facebook said.
With the new API, however, developers can set prices for in-game items for each geographic market, using that market's preferred currency, such as Euros or Japanese Yen.
In its blog entry, Facebook gave as an example Plarium, an Israeli game developer and one of a group of early adopters of the local currency conversion. With the new payment system, the company "could quickly and easily customize pricing for blocks of game currency to suit specific markets and regions, and tweak prices to match ongoing promotions," Facebook said.
Overall, the API "will make pricing easier for developers, and also give end users a better sense of what they're paying for," said Brian Blau, an analyst with Gartner.
Games, and outside apps in general, are becoming increasingly important to Facebook. At the same time, Facebook is becoming more important to apps. More than 80 percent of the top-grossing iOS apps, and more than 70 percent of the top-grossing Android apps, are integrated with Facebook's Platform programming interface, the company said during a recent meeting with the media.
Facebook also wants to make it easier for outside developers to build apps. In April, the company announced its acquisition of Parse, a cloud service company that Facebook said simplifies the app development process by providing developers with a hosted back-end infrastructure.
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