How Will Facebook’s Cloud Gaming Service Impact the Mobile Gaming Industry?


Facebook makes an entry into the competitive cloud gaming market by launching a new cloud gaming service for desktop and Android users. How different is Facebook’s cloud gaming service from its rivals Google Stadia, Microsoft xCloud, Amazon Luna?

The pandemic surged gaming engagement worldwide, with 82% of global consumersOpens a new window playing and watching video games during the lockdowns. According to an NPD reportOpens a new window , 244 million Americans played video games in 2020 compared to 32 million Americans in 2018. Video games are no longer just an entertainment platform. Due to COVID-19, gaming platforms have diversified to view virtual concerts for virtual celebrations, messaging, and dating. According to Activate, the consumer gaming industry is projected to become a $198 billion market by 2024Opens a new window .

Online gaming platforms have blurred the lines between entertainment and business. Recently, the booming video gaming popularity even lured the upcoming U.S. elections. On October 20, 2020, Rep. Alexandria Ocasio-Cortez live-streamed a video game on Twitch and encouraged her viewers to vote. Several politicians, including Donald Trump, Joe Biden, Bernie Sanders, have explored Twitch and other gaming services to reach voters of all ages.

The fast-growing and competitive online gaming industry has gauged the attention of industry heavyweights, including Microsoft, Google, Amazon, and NVIDIA. Recently, Facebook dipped its toes in the gaming industry with a new cloud gaming strategy. On October 26, 2020, Facebook launched a cloud gaming service in beta version on the Facebook Android app and desktop platforms. 

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What Is Cloud Gaming?

Cloud gaming or on-demand gaming is online gaming that runs on remote servers and streams directly to the users. With cloud gaming, gamers don’t have to invest in expensive local hardware or even download the game. Instead, the gamer only requires a high-speed internet connection and can play on any device such as console, TV, mobile phone, or desktop. 

The need for high-speed internet and a subscription-based model has made the cloud gaming industry a niche market with Google Stadia, Microsoft Project xCloud, as front runners. But since the cloud gaming market has a CAGR of 42% from 2019-2025, it now has competitors such as Amazon Luna and NVIDIA GeForce.

Facebook’s cloud gaming service is not an independent gaming service, and users can play directly in the Facebook app or news feed. Currently, the latest gaming service is available only to specific U.S. regions, including California, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Texas, Virginia, Washington, D.C., and West Virginia. 

This service might be the fruition of an acquisition Facebook made last year. In December 2019, the company took a giant leap into the cloud gaming world by acquiring Madrid-based cloud gaming company PlayGiga for $78 million.

Sean Cullen, EVP of product & technology at FluentOpens a new window sheds light on Facebook’s cloud gaming strategy. He said, “Facebook’s massive acquisition of Oculus several years ago and the launch of Facebook Gaming have brought the tech giant’s interest in the gaming category to the forefront. As one of the largest drivers of game installs, Facebook’s treasure trove of data and insights uniquely positions them to understand gamers’ tastes and preferences. While it may not own a mobile platform like Google or Apple, the cloud element of this launch will allow them to navigate around this obstacle.

“If the ultimate goal is to lock consumers into the Facebook ecosystem for as many hours as possible each day, gaming is a natural strategy. It also allows them to target younger consumers that maybe otherwise be less active on the Facebook platform.”

Today I’m excited to talk more about my new role and what I’ve been working on. I joined #FacebookGamingOpens a new window recently as VP of Play and today we’re rolling out our take on cloud gaming: Instant. Free. No subscriptions. No controllers.

— Jason Rubin (@Jason_Rubin) October 26, 2020Opens a new window

Facebook’s Mobile Approach

Facebook’s cloud gaming service is different from its rivals — it is focused on free-to-play mobile games. It won’t be an independent gaming service like Microsoft xCloud, Google Stadia, Amazon Luna, or NVIDIA GeForce.

Jason Rubin, VP of play at Facebook, explainedOpens a new window , “All cloud-streamed games are playable in the same way you play games now on Facebook — whether it’s in our gaming tab or from the news feed. No special hardware or controllers are needed; your hands are the controller since we’re launching with native mobile games. And you can play these games with a mouse and keyboard on the desktop.” 

Facebook’s cloud gaming service model is unique. The business model offers free games to users and aims to keep the gamers on Facebook, while the company gains profits through cloud playable ads. The cloud-streamed games are launched in two formats —  free-to-play mobile games and cloud playable ads. The social media giant announced latency-tolerant, free-to-play mobile-native games, including Asphalt 9: Legends, Mobile Legends: Adventure, PGA Tour Golf Shootout, Solitaire: Arthur’s Tale, and WWE SuperCard. At the same time, the cloud playable ads include 2K, FunPlus, Gameloft, Glu Mobile, Gram Games, Rovio, and Wildlife Studios.

Sharing his point of view on the gaming and ad tech market, Dave Morgan, CEO of Simulmedia, saidOpens a new window , “Gaming will become the dominant platform for digital activities over the next decade. As a result, gaming will become one of the most important platforms for advertising and marketing during that time frame as well. It will become the place where people don’t just play games but watch their TV and their movies (and their ads, too).”

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The Silent War Between Facebook and Apple

The Facebook cloud gaming service is not available on Apple’s App Store due to Apple’s strict policies. Since cloud gaming platforms let gamers access free or paid games directly from the cloud, Apple finds it challenging to review these third-party cloud games. Besides, this subscription-based model affects Apple’s revenue. 

On the contrary, Apple’s App Store already has various subscription services such as Netflix, YouTube, Spotify. In recent months, Apple has rejected the Facebook Gaming app at least five times, and its strict guidelines have been condemned by Microsoft Project xCloud, Epic Games, Google Stadia. However, Apple introduced new guidelines for cloud gaming platforms, but they don’t look promising. 

Rubin saidOpens a new window , “Unfortunately, we’re not launching cloud games on iOS, so only Android and web players will enjoy integrated cloud games on Facebook while we work on alternative options for iOS. Even with Apple’s new cloud games policy, we don’t know if launching on the App Store is a viable path. 

Of course, there is always the open internet, so mobile browsers may wind up being an option, but there are limitations to what we can offer on Safari. While our iOS path is uncertain, one thing is clear. Apple treats games differently and continues to exert control over a very precious resource.” 

Unlike its competitors, Facebook doesn’t promise to deliver AAA video games. Instead, the company is focused on providing free-to-play games on the mobile front, which the company believes is a bigger opportunity from a business perspective. With more than 380 million people playing games on Facebook, the new cloud gaming service might gradually disrupt the existing market and reshape the mobile gaming industry.

Gamers, are you excited about Facebook’s new cloud gaming service? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!