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Home / Technology / Facebook's mobile gaming ecosystem is growing rapidly – The Motley Fool

Facebook's mobile gaming ecosystem is growing rapidly – The Motley Fool



Facebook (NASDAQ: FB) published the first "Instant Games" in a closed beta at the end of 2016. The HTML5-based games could be started in the chat apps of Facebook and were not required More downloads from a mobile app store.

Recently, Facebook announced that there were now over 6,000 games on the platform (compared to 70 the year before), where over 20 billion gaming sessions were held. It also found that daily and monthly active players more than tripled in the course of 2018, but no exact player numbers were given.

  Facebook Instant Games.

Source: Facebook.

Facebook opened the platform for all developers in March last year that triggered the rapid growth of their gaming library ̵

1; this includes social games like Words with Friends Battleship Draw Something and , 8 Ball Pool . Last August, revenue was lowered by 30% to undercut Apple (NASDAQ: AAPL) App Store and Alphabet ] (NASDAQ: …) (NASDAQ: …) Google Play. Facebook also keeps users connected to Game Bots on Messenger games that reflect the App Store notifications on iOS and Android.

Facebook is aggressively expanding the gaming system in multiple directions. Recently, more than 270,000 gaming groups with over 90 million active users have been added "play" buttons directly connected to instant games. Instant Games was launched last month for its portal smart displays, and the games are introduced for Facebook Lite, the lighter version of its app for slower Internet connections and weaker devices in developing markets.

This is obviously a big project for Facebook. However, it has been largely overshadowed by the company's recent privacy and security issues. In the long-term, however, the expansion of Facebook's mobile gaming ecosystem could support development as a platform and threaten Apple's and Google's App Store revenues.

Creating an App Ecosystem Without an App Store

Google and Apple's Duopoly in Mobile Systems make it the gatekeeper for mobile apps, and the price for licensing is typically a 30 percent reduction in an app's revenue. Many smaller developers considered the fee fair, as Google Play and the App Store gave their apps better visibility, access to user reviews, and streamlined one-click downloads.

But big companies quickly realized that they could avoid this app store with "a few clever steps." Android app developers could ask users to download and install their apps from external websites to get Google out of the ordinary as did Epic Games last year with its hit game Fortnite .

  The instant games of Facebook.

Source: Facebook.

The direct installation route is not available on iOS However, IOS developers offering subscription-based services can not use Apple's fee with pop-up windows that allow users to pay on external sites – a strategy adopted by Netflix and Spotify is used.

Another strategy is to launch app stores "in-app." These platforms process Get downloads, installs, and payments right in the app to remove Google and Apple from the loop. This walled garden increases the stickiness of their ecosystems as they gradually develop into independent platforms.

For example, Epic recently launched a Android App Store that only contains 12% of an app's revenue to challenge Google Play Samsung has on its Android devices as well pre-installed its own Galaxy Apps store. Facebook and Tencent (NASDAQOTH: TCEHY) follow a similar path.

Following Tencent's Battle Plan, Tencent has developed China's leading mobile messaging app, WeChat, into an "all-in-one" platform with integrated apps to greet rides, order food and tickets, Make payments, play games and other services. The growth of WeChat is arguably one of Apple's biggest headwinds in China, as users can easily download "mini-programs" in WeChat instead of apps from the App Store.

With 2.3 billion monthly active users, Facebook can mimic Tencent's strategy by expanding Messenger's platform. It can add more instant games and expand the range of messenger services. These include ride-hail services from Uber and Lyft, mobile payments from PayPal and streaming videos from Watch.

The Facebook library of 6,000 instant games is tiny compared to the Google Play library with over one million Android games and over 800,000 games on iOS. However, Facebook's goal is not to become a larger platform for mobile games, but is just part of a broader plan to expand its own mobile ecosystem within iOS and Android and connect the parts to social connectivity. If Facebook steps in and breaks through Tencent's footsteps, it could undermine Apple's and Google's hegemony of mobile operating systems and apps.

Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Leo Sun owns shares of Apple, Facebook and Tencent Holdings. The Motley Fool owns shares in Alphabet (A-Shares), Alphabet (C-Shares), Apple, Facebook, Netflix, PayPal Holdings and Tencent Holdings. The Motley Fool has the following options: long January 2020 calls of $ 150 at Apple and short January 2020 – $ 155 calls to Apple. The Motley Fool has a disclosure policy.


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