Google added games to its Google+ social network yesterday, and then Facebook updated its gaming platform with a new Game Ticker, full screen support, and the ability to favorite games later the same day. Google+ has only 16 games right now, made by 10 game developers, while Facebook has developers from more than 190 countries building apps and games on its platform. That’s not where the ultimate comparison should be though. You see, Google has just started a social games price war with Facebook.
Wait, what do you mean? Social games on Facebook and Google+ are free! Well, that’s true, at least for most games. There is one huge aspect of online games that many often forget about: in-game transactions. Virtual items are not going to necessarily cost less for you on Google+, but they will for the developer. Google knows it needs to win over developers to get games on its new social network, and it’s starting by significantly undercutting Facebook on the commission price.
Facebook charges a 30 percent commission on any transactions that use its Facebook Credits virtual currency, which is now required in all games on the company’s platform. Google has decided to start off with a 5 percent commission for Google+ Games.
Sure, Google+’s 5 percent commission is just promotional, or at least, that’s what Google+ games product manager Punit Soni told VentureBeat. Soni claims Google doesn’t yet know when the promotion will end or what the company will charge developers on a regular basis, but I’m willing to bet that Google will keep its price significantly under the 30 percent mark.
The 30 percent number may seem high, but it’s actually a standard in the industry. Both Apple and Google take 30 percent of the revenue app developers make on the companies’ respective mobile app stores.
This social games price war is nothing new for Google: when the company launches a new platform, it often makes a point to undercut its competitor. After all, Mountain View gives Android away for free. The search giant makes enough money from Google AdSense (97 percent of its revenue comes from ads) that it doesn’t necessarily need to make sure that many of its products, be it Android or Google+, are profitable by themselves.
Palo Alto will definitely try to hold on to the 30 percent commission number for as long as possible. If Facebook ever feels threatened by Google+ in the social games market – meaning if social game developers ever start leaving Facebook for Google+ en masse – that number will probably be slashed. In the meantime, the social networking giant will simply boast about how much game developers actually make, despite the higher commission to Facebook, mainly because the platform has 750 million users and counting.
Summary: Google has started a price war with Facebook: the search giant is charging developers a 5 percent commission for in-game transactions, compared to social networking giant’s 30 percent.
