After ruling the social media social media circle for long, Facebook is now trying to move beyond. It had already ventured into the gaming ecosystem. Now it’s experimenting to be a Mobile Games Publisher. Not divulging much of the details publicly, Facebook confirmed working with a handful of small mobile games developers to do publishing by offering distribution through mobile ads in exchange for a cut of revenue.
Facebook earns a little over $200 million per quarter from payments. Most of them come from virtual monetary transactions inside the social games. But, Facebook has not been able to replicate this success in the mobile games arena. Apple and Google with their smartphone apps tend to rule in this and already take a 30 percent cut on digital transactions. The thought behind this certainly comes out to be that, gaming is still considered a old-console model and that a big gaming company would distribute games from a small ones to promote their work.
Bigger companies like Kabam and Supercell are making it difficult for the smaller companies to flourish, since the initial costs of producing and distributing games have risen from hundreds and thousands to millions of dollars. So Facebook is partnering with these small developers, focusing on the distribution and without editing or tweaking the games for their production, unlike other publishers.
Kakao, a big publisher in South Korea and WeChat in China have also started to exercise power in the gaming market. The Facebook introduced sticker packs became popular on a Japan’s messaging app Line.
Facebook, unlike Kakao whose distribution methods might be a bit too untargeted and spammy, is targeting only at highly placed ads.
The reason of such complexity in the gaming market lies due to the fact that when games aren’t successful, the developer and the publisher won’t make much money. And when, the games are hits like the Angry Birds, there can be debates later. The original developer might question the revenue share being given to another party. They can also go down other ways by releasing games that are similar to the original and earn revenue for themselves.
Also, developers, however big or small, might be wary about partnering with a company that has a history of being capricious with delivering traffic to certain apps. Its said that Facebook dialed up and down traffic for certain categories of apps, back in 2007.
Since its advent, advertising on PCs and mobile apps has been the mainstay of Facebook’s economic model. It remains to be seen whether it is able to fully explore the many revenue possibilities availing on the mobile devices.