Feature Article

July 02, 2013

Facebook's Next Page May Involve Mobile Game Publishing

While Facebook is already seeing quite a bit of success in the advertising space, selling ads can only go so far. It's never a bad idea to have more than one iron in the fire, so to speak, and Facebook is reportedly testing a new route that would prove a bit familiar for the company. Reports indicate that Facebook is currently testing a mobile game publishing system that would allow it to distribute games for a percentage of revenue.

Currently, Facebook is working with several small mobile game publishers in a bid to offer publishing services, offering a distribution setup with mobile ads, in exchange for a percentage of the revenue realized. Facebook is keeping somewhat mum on the plan, confirming that it's working on tests for a mobile game distribution system, but didn't share more than that.

Such an approach actually works well for all involved. Facebook has been doing well by most standards, bringing in about $200 million every quarter with payments and assorted fees, mostly from virtual transactions from within the games offered. Additionally, it pulled in about $373 million in the first quarter with normal ad buying done with mobile game developers, but Facebook hasn't been able to get much into the mobile gaming industry thanks to Apple and Google's stranglehold on the market and the resulting 30 percent cut it takes on digital transactions. Getting in on the games directly, at the publisher level, would pose a great opportunity for Facebook.

Meanwhile, small game developers are having a tough time getting games noticed, especially against names like Kabam and King, who can put a lot of firepower behind marketing efforts. With Facebook in the small game developer's corner, that's some serious marketing, and gives small developers a lot of reason to bring out the best and most innovative titles they can bring to the field. That's an additional plus for Facebook, who can develop a reputation for having great games no one's ever heard of.

What's more, this isn't even a tactic without precedence. South Korean social networking giant Kakao publishes nine out of the top 10 grossing games in South Korea for Android. China's WeChat will be getting games from Tencent by the end of the year, at last report. So this isn't even a first so much as it is a first in the Western Hemisphere, although reports from Facebook say that it won't be going the Kakao route and is doing something different instead. Reports indicate that the Kakao model is a little too unfocused for a good user experience, and Facebook is instead looking at a more targeted experience.

Developers, meanwhile, are a bit skeptical about just how much value Facebook can bring to the table, but Facebook's marketing prowess—and sheer reach—is hard to deny. It's not a foregone conclusion that Facebook can get users going to the games in question, but it's certainly a safe bet that it can at least get a percentage of its active users up and running. That's no small crowd, and no small exposure for the games in question. Considering that Facebook doesn't get paid on this one until the game developers do, it's extra incentive to make it happen. Only time will tell if it actually works, but it looks like a reasonably safe bet.




Edited by Blaise McNamee


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