Facebook Kicks Off Cloud Gaming Launch With Free-To-Play Games

Facebook Gaming (FB) has launched several cloud-streamed games in the Facebook app and on browser. This means the games can be played instantly, with no downloads required.

“We recently had 200,000 people playing our cloud-streamed games per week in limited regions, so while it’s not exactly a secret, I’m excited to lay out what we’re building” FB’s Jason Rubin wrote in a blog post.

“Cloud game streaming promises to deliver unprecedented access to games across every screen. And while we’re thrilled to play a part in that future, that future is a ways off… Cloud gaming announcements are prone to hype, so I’m going to speak openly from the outset” he added.

According to Rubin, the company’s goal is to not overpromise and under-deliver. That’s why the company is starting with free-to-play games that are typically played on mobile devices, without the need for any special hardware or controllers.

Initially, the games will only be launched on Android and web, rather than iOS. “Even with Apple’s new cloud games policy, we don’t know if launching on the App Store is a viable path” Rubin explained, writing “Apple treats games differently and continues to exert control over a very precious resource.”

The first set of games available this week include Asphalt 9: Legends by Gameloft; Mobile Legends: Adventure by Moonton; PGA TOUR Golf Shootout by Concrete Software, Inc.; Solitaire: Arthur’s Tale by Qublix Games; and WWE SuperCard by 2K. In the coming weeks FB will add Dirt Bike Unchained by Red Bull.

“This is cloud gaming after all, so even with latency-tolerant games players may notice some glitches. We’ll occasionally show player rating cards and feedback forms to help improve the experience over time” Rubin wrote.

However, from 2021 FB will start introducing action and adventure games. Games will launch with in-app purchases and ads enabled, depending on game format and developer choice.

Access to cloud games on Facebook will initially only be available in California, Texas and Northeast and Mid-Atlantic states. In the coming months, regional access will expand as infrastructure is scaled up, says Facebook.

Shares in the social media giant are up 35% year-to-date and the stock scores a bullish Strong Buy Street consensus. The $303 average price target indicates 9% upside potential from current levels.

Stifel analyst John Egbert sees Facebook beating earnings estimates on October 29. “Based on strong indications of an ad market rebound, we are raising our y/y revenue growth forecasts for Facebook by 2-3% over the next few quarters,” the analyst wrote recently.

The 5-star analyst expects total revenue to increase by 14% year-over-year to $20.16 billion, ahead of FactSet’s reported consensus of $19.76 billion. The figure also represents a “slight acceleration” on the previous quarter’s 11% COVID-impacted growth. Egbert also expects 3Q GAAP EPS of $2.04 to beat the Street’s call for $1.89.

Despite a ban on Facebook advertising by many leading brands in July, according to data from Gupta Media, ad demand “appears to have rebounded with y/y growth in ad pricing turning positive by the end of September.”

As a result, Egbert raised his price target on FB from $290 to $320, while keeping his Buy rating intact. (See FB stock analysis on TipRanks)

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