Following Zynga's Footsteps, EA Signs Five Year Deal With Facebook To Use Credits
Following in the footsteps of Zynga, Electronic Arts has just announced that it has entered into a five-year strategic relationship with Facebook. Similar to the Zynga deal, Facebook Credits will become …
Context & Ripple Effects
Zynga already set the template: a five-year commitment to make Facebook Credits its virtual currency on the platform. With this announcement, Electronic Arts — the largest traditional game publisher pushing into social games — adopts the same structure, so the two dominant social-game publishers are now both locked into Facebook's payment rail through 2015-era horizons.
The significance is less the individual contract than what it standardizes: Facebook converts its distribution power over social gaming into control of the payments layer itself, and EA accepts a revenue share on every Credits purchase rather than running its own billing.
First-order effects
- EA's Facebook game portfolio moves onto Credits for five years, giving up direct control of pricing and checkout in exchange for guaranteed placement within Facebook's platform terms.
- Facebook secures multi-year commitments from both Zynga and EA, anchoring demand for Credits among the publishers who drive most social-game spending.
Second-order effects
- Smaller and mid-tier Facebook game developers face growing pressure to adopt Credits as well, since the category leaders' deals normalize the 30%-style platform cut and weaken any argument for alternative billing.
- Zynga and EA's competition for social-game players now plays out inside Facebook's economics — user acquisition, virtual-goods pricing, and margin all route through the same tollbooth, sharpening the head-to-head between them.
Third-order effects
- If the pattern holds, platform owners will treat payments as the monetizable layer of third-party ecosystems: whoever controls distribution taxes the virtual-goods economy built on top, a structure that other platforms building app economies can be expected to copy.
- For traditional publishers, the deal marks a structural trade-off — access to hundreds of millions of social users in exchange for ceding the customer relationship and billing data to the platform for years at a time.
The trend: Social gaming is consolidating around platform-controlled virtual currencies, with Facebook turning its position as the dominant distribution channel into the default payment rail for the genre.