Facebook announced today that they would be launching a pilot program called Mobile Games Publishing. The program will help “small and medium-sized developers take their mobile games global”. The Mobile Games Publishing page states that the company will promote developers’ games on its own mobile apps.
There has been speculation that Facebook would tackle publishing after they split with Zynga last November, especially after the agreement also ended exclusivity of Zynga games on Facebook. This new program will be launching with ten games and will provide promotional, advertising, and analytics support to developers. Although the revenue distribution has not been disclosed, the company intends to help developers reach the right audience and build their business.
The games publishing program offers Facebook another source of revenue namely their growing mobile audience. The company revealed in its second-quarter earnings release that mobile ads sales accounted for 41% of total revenue last quarter, or approximately $656 million. Facebook’s mobile ad business is estimated to be $2.6 billion a year and the new program will introduce games to 800 million mobile users.
Although gaming is a very lucrative type of mobile apps, Facebook does not have an ability to tap into app purchase revenue. Unfortunately Apple and Google still control that market with their respective mobile app stores. However, with their two promotion services, app install ads and the publishing program, Facebook can still generate revenue from these apps. Since developers’ biggest challenge is finding distribution and new users, they would be willing to pay Facebook for their services.