Report: Facebook trialing mobile game publishing platform
Facebook (NASDAQ:FB) is testing a new mobile game publishing platform designed to help the social network monetize its mobile efforts beyond advertising revenues.
Sources told TechCrunch that Facebook is offering a handful of small mobile game developers distribution through highly targeted mobile ads in exchange for a share of revenues, helping startups more effectively compete with deep-pocketed gaming giants like King.com, Kabam and Supercell. Facebook confirmed it is testing mobile game distribution options, but the company declined to share additional details.
Facebook earns more than $800 million a year from payments and virtual currency transactions inside of social games across the desktop, but it has been unable to replicate that model on the mobile platform, where Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) claim a 30 percent cut of all in-app sales across their respective iOS and Android operating systems.
Facebook instead relies on advertising to support its mobile efforts: The social network reported first-quarter 2013 ad revenues of $1.25 billion, with mobile generating 30 percent of that total. Mobile game developers contribute to Facebook's bottom line by purchasing mobile app install ads that target consumers based on the apps and games they already access on their smartphones. Developers select their intended audience demographic, budget and method of payment, and Facebook inserts ads for their apps directly into targeted users' mobile news feeds.
Facebook's total mobile monthly active users eclipsed desktop users earlier this year and reached 751 million in the first quarter, a year-over-year increase of 54 percent. The social network's mobile-only MAUs also increased to 189 million, up from 157 million in the previous quarter.
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