Facebook: The Next Generation Game Publisher

Upon the eve of Casual Connect one of the big announcements was Facebook becoming a mobile games publisher. Much like how the launch of Facebook’s mobile ad network went largely unnoticed only to become a huge deal later, I suspect we may see this move in a similar light in the near future.

View from the podium before my Casual Connect event.

View from the podium before my Casual Connect event.

A social network like Facebook directly publishing apps isn’t without precedent. Facebook took their lead from Asian mobile social networks like Japan’s LINE and Korea’s Kakao Talk. Both extended their messaging services to include mobile games that use their respective social network for viral reach in ways similar to the bad old days of Farmville spam.

Both LINE and Kakao Talk have been able to send games to the top of the charts in their native countries netting big revenue. With increasing adoption of messaging applications in the West, this trend may continue here.

In the boxed software era you had few options other than to go through a publisher for distribution. Publishers had guaranteed shelf space at national retailers. Now that software doesn’t exist in boxes, there’s no need for shelves. As we’ve discussed before, users are the new shelf space.

Mobile publishers like GREE and DeNA pride themselves on having a huge audience to advertise games to. This usually involves blowing lots of money buying users through ads–many of which show up on Facebook. Pretty much this is the only service mobile publishers provide.

If user acquisition is all a mobile game publisher does, why not cut out the middleman?

Facebook can acquire users much cheaper than GREE or DeNA–they own the network. In fact, this is a major reason why GREE and DeNA make so much money in Japan. Especially in the feature phone era, they operated mobile social networks they also published their own games on.

Perhaps Facebook did the math and figured out that a cut of an app’s revenue in exchange for premium placement of ads is a profitable exchange. Instead of having an audience of 30-40 million users as DeNA’s mobage network does, Facebook has over 800 million mobile users.

In the past, Facebook has proven they can make a game popular–at least for a short time. It’s up for the game developer to create a game that lasts. Given the Chaotic Evil alignment of modern game publishers, I’d much rather make this deal with Facebook* than with one of them.

* Oh, I’d take this deal with Twitter too. They’ve been able to get Vine to the top of the App Store charts all year. Imagine what they could do if they published mobile games!

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