Facebook Is Moving In On Cloud Gaming

Issue 42

10.26.20 - The tech big four are gearing up for war in yet another stage. Facebook first started moving into cloud gaming after it’s 2019 acquisition of Madrid based PlayGiga a company that specializes in the space. Facebook is now launching a new library to its gaming platform to include more complex multiplayer titles. It’s model differs than Microsoft and Google’s comparable services because it doesn’t require a paid subscription. Facebook’s model is to keep more people on Facebook for as long as it can.

Cloud has been a fierce battleground among the top tech firms for one reasoning, positioning. These companies understand that controlling the longer-term revenue flows of the internet are hinging on a hierarchy through platform control. On the front end this is done by creating superior products, and platforms, that users and business want to use through the economies of networks.

Apple holds one of the most coveted positions on this hierarchy because they have one of the best phones and mobile operating systems on the market, this makes them an internet landlord and a gatekeeper to other internet connected software applications. Google also has an incredibly powerful position because they own the world’s most popular operating system, Android. It puts them in a slightly more vulnerable position, because hardware producers such as Samsung may wake up one day and ultimately decide they want to create their own operating system. Unlike previous monopolies, these were not created by consolidating economies of scale, they were user elected bottom up created monopolies, economies of networks. Cloud is somewhat different but also the same. Cloud is about owning the digital and physical infrastructure behind how companies manage their data.  

Cloud gaming’s first point of contact is on digital marketplaces and libraries that are subject to gatekeepers. Facebook currently has 380 million people playing games on its platform with 2.7 billion monthly active users.

Facebook is taking baby steps into the space because it understands the limitations of its position. Apple recently rejected an application by Microsoft that allowed a streamed game library and put other companies on notice that if they wished to submit games they could do it with individual title applications to the App store.

Source: Wall Street Journal