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Facebook Unveils Gaming Tab: YouTube & Twitch on Alert?

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Facebook FB is adopting several measures to boost engagement level. The company’s recent launch of a “gaming tab” on the navigation panel of Facebook’s app is a step toward that direction.

The tab is aimed at making it convenient for gamers to find the content they are looking for. Notably, the contents are divided into three categories.

The first category is Instant Games, which was previously available on Facebook Groups. The second category will feature gaming videos from e-sports leagues, aimed at luring streamers. The last tab will cater to gaming groups, wherein gamers can discuss their favorite gaming titles and fix a time to come online.

However, the new tab will initially be available for a few gamers only. The criteria for determining the availability will include a user’s recent gaming activities on Facebook’s platform. Other users can access the game from the Bookmarks menu on Facebook app.

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Facebook, Inc. Price and Consensus | Facebook, Inc. Quote


Initiatives to Boost Position in Gaming

Facebook’s effort to strengthen its position in the gaming space is noteworthy. Apart from the rollout of the gaming tab, a separate Facebook Gaming App is currently in beta test phase on Android.

Further, the company also launched a game streaming hub Fb.gg in June, 2018. Fb.gg features live and pre-recorded gaming, video e-sport competitions and gaming conferences.

Additionally, Facebook launched Level Up to enable streamers to build a fan base and monetize from the same by collecting digital currency called Facebook Stars. For every star a streamer receives, Facebook pays a certain sum after deducting its own tip.

Notably, to capitalize on the growing demand for video games, the company added live streaming and video chat to its Instant Games platform in 2017. The new feature benefited users by allowing them to video chat with other players while playing.

However, the company’s effort to launch Fb.gg as a standalone app seems to have backfired. Per reports, the game had a total install base of 100,000+ only.

Competition Rife

Facebook’s recent move in the gaming space poses fresh challenge for tech players like Amazon AMZN and Alphabet GOOGL as it takes on Twitch and YouTube Gaming, respectively.

Microsoft MSFT too is ramping up its effort in gaming segment. The company announced the roll out of a new gaming development service, Game Stack. It is a comprehensive platform enabling the developers to design, test, publish and monetize on robust engaging games.

However, Facebook is gearing up to strengthen its footprint in the gaming segment. In a bid to attract more streamers on its platform, the company’s tip on Facebook stars stays in the range of 5-30%. The tip will reduce when users buy larger packs of Stars.

Facebook also reduced the subscription payment it received for streaming video games on its platform by 30%. Notably, this move was undertaken by the company to compete with YouTube’s cut of 30% and Twitch’s cut of 50%.

The company’s endeavors to attract subscribers and streamers on its platform are expected to drive growth of the company’s ad business. Facebook’s ad business accounted for 98% of total revenues in the fourth quarter of 2018.

Currently, Facebook carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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