Level 75: Facebook's Cloud City

Facebook's mobile-first approach to games and some really old bread

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📜 This Week’s Notable News

Facebook’s Vision of Gaming

Earlier this week we got our first real look at Facebook’s Cloud Gaming offer — and it’s suprisingly good. Helmed by VP of Play and Naughty Dog Co-Founder Jason Rubin, the service is all about integrating gaming into the current Facebook platform via mobile-first free-to-play games. Essentially this means that a consumer can launch a game directly from the Facebook platform, without having to download a standalone app.

Facebook’s history with games has been tumultuous. After seeing notable platform growth off of early hits like Farmville and Jetman, the company largely abandoned games after making the shift to mobile in the early 2010s. Now, gaming is seemingly poised to become a cornerstone of its future business. Let’s break down the thinking behind Zuckerberg and team as they launch the next generation of Facebook games.

Why Free-To-Play Cloud-Based Mobile Games?

Facebook already has mastery of the free mobile-first market. Where competitors like Google and Amazon are trying to build something from nothing, Facebook already has world class expertise in delivering value at “zero-cost” to customers. The free-to-play model also lends itself extremely well to advertising — placing advertisements while someone boots a game unlocks an entire new supply of ad inventory that the social media giant didn't have access to before. The added benefit here for Facebook is that cloud allows them to go beyond the Farmville-esque titles and deliver cutting edge mobile-content without being constrained by technical limitations of smartphones.

The key drawback to the model here is distribution. In an ideal world a player could go from playing a game on Facebook to downloading the game’s app and have all their progress carry over. The catch? Apple won't let Facebook launch the service on their platform due to ongoing legal concerns about marketplaces + distribution networks within their App Store. The company will surely find a way to survive in the long-term, but that’s a big “If” standing in the way of a major portion of their users.

So Why Should I Care?

Remember all of those cool features that Google Stadia promised? Integration into your favorite streaming platform? “Game States” that allow players to jump in and out of games at a moment’s notice? Theoretically Facebook is better positioned to deliver on most of those cutting edge promises than Google ever was. The obvious caveat being that everything is via mobile games, instead of console. That being said, a bigger and bigger population of gamers are shifting to mobile as their go-to platform every single day, so being a market leader in this space is a key differentiator.

What’s Zuck’s End Game here?

Every new feature on Facebook is in service of a single goal: keep you on the platform longer. After all, the more time on Facebook, the more chances to show you ads. However, when you look at the arsenal of services Facebook is building on its app — Marketplaces, Payments, Gaming, Dating etc — it’s starting to look more and more like something you’d see out of a China-based “super-app” like WeChat. The comparison isn’t new by any stretch, but it’ll be interesting to see how successful the model will be in Western markets. Mobile Phones and Apps simply aren't as ingrained in everyday life in the U.S. as they are in China. Combined with growing antitrust concerns and stricter data regulations almost on the horizon, Facebook will need to find its way toward consumer trust if it wants to become the one stop shop for consumer app usage.

Further Reading
  • Facebook’s Official Announcement for Cloud Gaming Link

  • Seth Schiesel’s interview with FB’s VP of Play Jason Rubin Link

  • Industry Analyst Daniel Ahmad on the launch of FB Cloud Gaming Link


💡 Industry Content

Gaming is Among Us: Following AOC’s Among Us stream last, major investors and media outlets have been flocking to understand what’s driving the game's popularity. In a podcast, Andreesen Horowitz’s Jonathan Lai gives his take on why the game has sky-rocketed in the last few months. The most interesting concept is the idea of streaming as the next generation of American reality television. Viewers tune into their favorite creators who yell at their screens as they foolishly vote the wrong person out of the game. Not quite the Kardashians but close enough? Link

Investment Activity Report (Q1-Q3): Invest Game released a recap of all investment activity so far in 2020. The TLDR here is that there’s greater interest in (notably) early-stage private investments and M&A. We’re keeping our eyes on how these early stage investments pan out in the long run — will games-related studios, tools and services continue their positive trajectory? Link

Gaming’s Pillars of Value: In this Twitter thread, industry expert Jacob Novak breaks down his view on the four “value-drivers” in video games: Content, Platform, Distribution, and Services/Tools. This is a great thread to build frameworks and mental models for the gaming landscape. Link


🎮 Fun & Games

Video Games, Veterans, and PTSD: For many of America’s ex-military, who face struggles with PTSD and mental health, video game escapism is one of the best things that they’ve found for healing. In this piece, hear from one American veteran as they recount their persistent bouts with trauma and how games have slowly turned from an escape to a remedy. Link

A Politician’s Favorite Game: When it comes to power, politics, and influence there is no game more famous than Diplomacy. A favorite of JFK and Henry Kissinger, the game is centered around a series of constantly evolving treaties and deals that see each player vie to subtly shift power and influence into their corner. It’s also a multi-week commitment, so we became acquainted through a breakdown of its rules and history by Foreign Policy. Link

Backbone: Earlier this week, we saw the public launch of Backbone, a handset that turns your phone into a pseudo-controller for mobile gaming. The hardware comes with an equally impressive piece of social software to let you share clips and games with friends. The market for niche gaming hardware is real. Link


😎 Other Cool Reads

South Korea + Gaming: South Korea is one of the world’s fiercest gaming regions, consistently producing top-quality talent across games like League of Legends and Overwatch. So what’s its secret? What societal and cultural differences are driving the fact that many of our favorite esports competitors have roots in Korea? Author Jonathan Lee attempts to identify cultural similarities and upbringings across some of Korea’s best competitors in an effort to understand why Korea is one of the gaming capitals of the world. Link

Genshin’s Impact: It only came out a month ago, but too little has been written about Genshin Impact’s staggering success. $245M its first month! For comparison, Breath of the Wild (which Genshin riffs on) generated around an estimated $1.2B in total revenue as of June 2020. Unlike Zelda, Genshin is a true global, cross-platform game that’s pushing mobile into the realms and level of console and PC games. How will mobile games continue to push the fidelity of the mobile game experience to remain on par? We particularly enjoyed this piece on Genshin from a game design perspective. Link


📊 By The Numbers

4500 — the age of some gluten particles that the inventor of the Xbox pulled off some ancient pottery to bake bread. Seriously. This story is nuts. Link

3 — the number of executives who have stepped down during the development of Halo: Infinite, the next-gen entry in the popular FPS series. This week saw the departure of studio head Chris Lee. Link


😍 Our Current Favorites

Fawzi (@fawzitani)

The League of Legends World finals is finally upon us! I’ll be hopping in a Discord bright and early at 6am EST Saturday, so please DM me on Twitter if you know a watch party or are trying to watch! Max is leaving me in the dust for this one. (Editor’s Note: I am not leaving him in the dust, I just want to sleep)

A small aside: if you’re like me — an avid fan of the Riot Games blog and always wondering how the heck they set up these unreal events —the Riot Events team put together a primer on all things event management (it’s an oldie but goodie). Link

Oh, and I finally got around to reading Snow Crash. I guess the Metaverse is sorta kinda cool.

Max (@MaxLowenthal)

I discovered two gaming-related things this week that I am really enjoying, and I wanted to share them with all of you:

  • A Profound Waste of Time: Fawzi lent me his copy of A Profound Waste of Time, an independent video game zine that we first covered a while back. I never got a copy because I thought it wouldn’t be worth the cost - I was wrong. It’s one of the most high-quality, well-written collections of video game inspired art I’ve ever seen, and I will undoubtedly be getting both Issues 1 & 2 ASAP Link

  • Making Stuff: Matt Demers is a writer with ties to tons of gaming organizations + media. He recently launched a Substack publication called Making Stuff, and has highlighted some of the news we’ve covered in the last few weeks in new and interesting ways. His writing really embodies the entire “Cool Stuff” category of Pause Button - I recommend subscribing. Link


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