In 2018, Facebook introduced its own game streaming hub and put its steps into the game streaming industry, competing with popular platforms like Twitch from Amazon and Google with YouTube Gaming. Facebook Gaming began its journey as an independent and dedicated hub called FB.gg. It provided the live streamers with a perfect landing page to find and start streams.
Launched in the year 2004, Facebook has now become a social media giant. Apart from the global social media industry, it also has a stellar reputation in the technological communications sector.
Since its launch, Facebook has been continuously changing its platform for better alignment with the current trends, especially the live streaming of games. We all know that this trend is here to stay for years.
Fast forward to 2019, Facebook made its Gaming platform more accessible through an easy to access tab within the Facebook app but later launched a dedicated Facebook Gaming app.
Current Business Model
Facebook has been continuously changing its business model based on market trends. It follows a diversified and ambitious business model. To learn more about their business, let’s check out the companies owned by Facebook.
Companies Owned by Facebook
Atlas: An ad-service platform that offers services to ad agencies and advertisers.
Facebook Payment Inc: It helps Facebook generate revenue from the payment business.
Onavo: A popular mobile utility application.
Instagram: A highly used media sharing platform.
WhatsApp: Instant chatting app.
Parse: A platform that offers back-end infrastructure for mobile app development.
Live Rail: A popular monetization platform for publishers.
Now, let’s have a look at how Facebook earns its revenue.
Facebook Gaming Revenue Sources
The most crucial money-making source of Facebook is the advertisement program. In fact, Facebook generates 99 % of its total revenue from ads. Some users started to spread some conspiracy theories that the platform would start charging the users for using the platform, but all were fake theories.
In regards to Facebook’s advertising, ads are generally posted on the main page of the platform as well as in Messenger, Instagram, and other affiliated sites. Facebook generated $55.8 billion of revenue in 2018. Besides, Facebook earned $16.6 billion of ad revenue for the second quarter of 2019. The ad revenue contributed 98.5.%, with net income for the year totaling over $22 billion.
Compared to the year 2017, for 2018, the total ad revenue grew by around 38%. In 2019’s first three quarters, Facebook’s ad revenue grew by 27%. In Q2 of 2018, the revenue was $3.83 billion. But in Q2 of 2019, it was $16.62 billion.
Facebook Payment Revenue
Facebook Payment Revenue is the money that Facebook gets from the wholesalers and developer community for using the payment infrastructure. The platform charges fees for the following transactions:
App selling by developers.
The market featured deals.
Transferring money to friends.
Selling of various digital products, such as Zynga chips.
Fundraising transaction fees.
Facebook also makes money by selling virtual reality products by Oculus.
Well, the Facebook Gaming platform, even though it is not fully developed yet, can help Facebook generate revenue like Twitch. Additionally, WhatsApp is not yet monetized to its maximum potential.
Facebook Gaming Content
Back to Facebook Gaming. Facebook offers a pure gaming platform that deals with only gaming content. Speaking about its gaming content, the platform offers video content of popular games like Free Fire, Mobile Legends, PUBG, League of Legends, Minecraft, Dead by Daylight, Arena of Valour, Grand Theft Auto, American Truck Simulator, Call of Duty Mobile, Call of Duty Warzone and more.
On the other hand, users can also play various instant games on this platform. Examples of these games are Basketball FRVR, Flip Bottle, Angry Ball 3D, and more.
If you compare this platform with Twitch, Twitch offers content more than just games, such as music, sports, travel, and more. It is expected that with time, Facebook Gaming may also let the streamers to stream other content too. As a social media platform, the number of experiences that can be live-streamed is endless.
How Do They Serve the Content Creators?
The platform offers an excellent opportunity for content creators or streamers to reach out to wider audiences. Promotion and outreach are easily manageable here. At the starting of each stream, the streamers can post the stream link to their timeline or a page.
Users will now come across the stream whenever they browse the home feed. As long as they are entertaining, the steamers can earn more followers. Besides, the viewers can share the content with others, giving the streamers more reach.
For the streamers who cover Fortnite, this platform can be the perfect place. Why? On other platforms, the game is oversaturated, but on Facebook Gaming, it is all new. Besides, gaming content is generally for younger viewers, and that’s what Facebook has, a vast user base of younger people.
On the other hand, the streamers can now take advantage of VR and stream VR versions of their game streaming. Thanks to Facebook ‘s Oculus to make this possible. This will attract more VR viewers.
How Do They Serve the Audience?
The platform is not just for streamers; the viewers can also use it just to follow the streamers. Additionally, viewers can also watch all the games videos posted on the platform to learn more about the games. The audiences or users can get access to casual games to play on this platform. Popular games like Uno, Bubble Shooter, Words with Friends, etc. all are here on this platform.
Facebook Audience and Viewership
In 2019, the total number of monthly Facebook active users was 2.50 million, and that’s enough to prove that Facebook is the world’s top social media platform. In fact, the platform ranked one under the category of popular search terms globally in 2019.
In its quarterly statement, Facebook mentioned that by the end of 2019, its total MAUs (Average Monthly Users) was 2.50 billion, which is an 8 % increase from the previous year’s MAUs.
Facebook’s control over the internet can further be explained by considering the Facebook Stories. As of April 2019, Facebook Stories witnessed 500M of daily users, which is equal to WhatsApp Status and Instagram Stories.
The popularity of Facebook with time is increasing and will attract more users in the future. In fact, Facebook was the fourth most downloaded app across the globe in 2019. However, it is important to note that Facebook owns 4 of the top 5 apps.
Demographics of Audience
The largest user base of Facebook is located in Asia. Over 1 billion Facebook users are from this region. In regards to other popular regions, Europe has 387 million users, while 247 million users are from US & Canada, and 802 million Facebook cover the rest of the world.
The largest base of Facebook users is from India, the second-most-populous country of the world. India has 86 million more Facebook users than the US. The US has 183 million users, but India is dominating with 269 million active Facebook users.
The major reason behind such growth can be the ongoing COVID-19 pandemic that gives more time to use social media platforms. Besides, the Facebook Gaming platform is now gradually attracting more viewers.
Facebook Gaming Top Streamers
One of the top Facebook Gaming streamers is Jeremy, popular as Disguised Toast Wang. He is famous for streaming League of Legends, Hearthstone, Apex Legends. Another famous steamer on Facebook Gaming is Corinna Kopf.
Well, the platform is new, but it is showing promising results in terms of polarity, giving a fierce competition to Twitch, YouTube Gaming, and Mixer.
Twitch is now dominating the game streaming industry. The platform in March 2020 witnessed more than 1.7 million active viewers. It is now partnering with well-known games like FIFA 2020, Doom Eternal, and League of Legends to offer attractive in-game rewards. Different from other platforms, it provides a Just Chatting feature, which enables users to chat with their favorite streamers. It is gradually becoming less gaming-focused to attract audiences from different fields.
Google launched its YouTube Gaming in the year 2015. Currently, YouTube Gaming has more than 25,000 games. The platform witnessed a tremendous surge in its fans number and viewership after signing the streaming contract with Call of Duty League and Overwatch League.
How Do They Plan to Compete Against Their Rivals?
Facebook has Oculus by its side, a leading VR manufacturer. Facebook is now working on getting exclusive rights for some of its games. Besides, it will let the streamers to stream VR supported games straight to Facebook Gaming with Oculus’s VR equipment.
Facebook has also introduced a Facebook Level Up program through which streamers can earn Facebook Stars from their viewers. This is similar to Twitch Bits and Affiliate Program from Twitch.
If the streamers want to stream some saturated games like League of Legends, CS: GO, Fortnite, and more, then they can easily find the audience on Facebook Gaming. The platform can be an attractive option to casual streamers who just want to handle the communities and the channel in one platform.
One of the major advantages of using Facebook Gaming is the reach and exposure to more potential viewers. Facebook has made it a lot easier for streamers to outreach and promote themselves. They have found the process quite straightforward. Streamers can post the streams to any page or group.
Facebook is also introducing a gaming creator revenue model intending to attract young gaming creators from Thailand to give a tough competition to YouTube. Around 51 million users of Facebook are from Thailand, with Thailand being the first Asian country where the company launched the program. Under this, the company offers tools that enable creators to earn money, engage with viewers and fans.
Another thing that Facebook Gaming has introduced is the Level Up program, a way to let the streamers earn Facebook Stars. To get qualified for this, streamers need to increase their follower count to 100. Facebook Stars functions just like the Twitch Bits. Users can purchase the Stars from Facebook then can donate it to the streamers. The value of each star is $0.01. This is also attracting more streamers.
The algorithm of Facebook won’t allow viewers to know who is streaming live. Besides, the platform gives importance to streamers who are paying for ad space. So, this can present a barrier to new streamers from joining the platform.
Talking about Facebook Gaming’s long-term plan, it is working with Oculus to introduce VR technology in the platform. This will further boost the game streaming experience.
Facebook has also introduced the Facebook Gaming App to help game lovers to discover and get connected with other gamers easily. The streamers can stream their games from the app. Gamers can now stream popular games like PUBG or Call of Duty mobile, etc. from anywhere with just a few clicks. For now, it is only available for Android OS but will soon be introduced to iOS.
Facebook is now supporting the business as a whole for growth. Even though it is not directly connected with Facebook Gaming, but will help it to earn more revenue. Facebook has more than 90 million small businesses that are using Facebook products to manage their business.
Facebook Gaming has a lot of potential, as Facebook is now taking the right steps to expand its business. To stand out, Facebook will have to come up with innovative ideas and integrate its large user base for exponential growth.