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Facebook Adds App Subscription Pricing

Facebook has found a new way to make money. The company has announced a subscription pricing model that may create a recurring revenue stream.

The New Subscription Model

Facebook announced the new subscription program on its developer blog. The company is abandoning its Credits virtual currency platform launched in 2009, which allows users to make one-time purchases of goods, in favor of monthly subscriptions. Facebook is also adding support for pricing in local currency to simplify purchasing for international users.

Facebook will still receive 30 percent of every sale, so any bumps in monetization created by subscriptions will benefit the company’s bottom line. Facebook isn’t the first service to implement subscriptions. Google added in-app subscriptions to its app store, Google Play, last month. Apple launched its subscription billing platform for the App Store last year in February, 2011.

The new pricing model could make the social network more appealing to game makers. Massively multi-player games heavily use subscription-based pricing. Only a few of the games have launched on Facebook to date, but the ability to bill monthly may change that. The new pricing coupled with Facebook’s enormous user base will be attractive for any game makers trying to increase their exposure.

Additional Details

The new service will launch in July, but subscriptions have already been tested by Zynga in its FarmVille and Pioneer Trail. Any apps or games that sell virtual goods must switch to the local currency format by the end of the year. Existing credits and gift card balances will be converted to local currency. Facebook has created a FAQ with additional details.

 
 
 
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