Mobile Mavens: What do app downloads direct from Facebook mean for the industry? | Pocket Gamer.biz

Facebook is always looking for new ways to ensure that users are invested in the Meta ecosystem, be it through Messenger or other apps such as Instagram. Now it’s seemingly all but confirmed that Facebook is looking at including direct downloads for apps from Facebook itself by clicking on advertisements.

And with the arrival of Twitter rival Threads the potential reach of such a system just expanded exponentially.

But what are the wider implications of apps on Facebook? While Facebook will benefit from ad sales will this be an ideal way for developers to put their apps in front of an audience. How slick with the system be at putting a download just a click away? And is that promise of dodging the app store’s 30% cut too good to be true? We asked our panel industry experts for their take.

The extreme dependency on current distribution channels has always been, by far, one of the main disadvantages in the mobile app and gaming industry. And it’s not just because of the famous 30% payment, but also as a discovery tool for new games or apps. Both Google and the Apple App Store have always been accused, not without reason, of primarily favouring the big players in the industry.

The existence of new distribution channels is always good news, and it’s even better news when companies as big as Meta are behind these initiatives, from my point of view. It’s important not to forget that other marketplaces have tried to compete in this regard without achieving the expected success, so up to this date, the Apple-Google duopoly has remained intact.

One clear thing is that developers have an appetite to seek out alternative stores, distribution, and payment methods. If successful, the impacts of these changes on the app ecosystem could be wide-reaching and complex.

An interesting question arises – could this improve distribution efficiency? On paper, it would. The DMA makes it explicit that “gatekeepers” (read: Apple and Google) must provide advertising companies with “the tools and information necessary to carry out their own independent verification of advertisements.” If this pertains to attribution, then it is excellent news for the app ecosystem, as it would alleviate the cause of the Apple-induced mobile games recession. However, you can bet that Apple will fight this tooth and nail, most likely under the guise of “privacy.”

A second question then arises – if stores aren’t taking a 30% cut, what happens to the extra money that the developers could pocket? Some struggling businesses might become viable, which is good news for them, but this could further saturate the app market. For some developers, a portion of that extra money will go towards advertising. Who benefits from this? Most likely Facebook. With additional data, ad networks can improve targeting efficiency, but will the improved efficiencies be enough to offset the increase in demand? Probably not, especially since the supply (the total number of players) is unlikely to be affected by these changes. So in this scenario, due to increased competition, CPIs inflate to match demand without really allowing more developers to access wider audiences. This mostly benefits ad networks, but could this also create an opportunity for hypercasual to make a comeback?

The most important question is, how will it benefit players? And I’m not sure I see a great benefit so far. It is essentially just Facebook showing a game ad and then limiting the step of going to the Play Store to download the game, which might improve the UA funnel a bit due to the reduced steps. But which user problem is this solving? The users seem happy with the app stores, and even Epic was unsuccessful in launching their own store on Android – even with all the Fortnite players to drive the usage. I mainly see Meta’s initiative as a way to improve its ad revenue.

Similarly, I don’t see a big move to off-platform payments before a clear user benefit exists. The payment service providers also need a cut (albeit much smaller), and unless the players get a significant benefit or saving by going off-platform, I don’t see it working.

For microtransactions, the savings for the player is likely only a few cents per purchase, and I’m not sure that will justify the hassle of off-platform payments. Google and Apple already reduced their cut to 15% on subscriptions more than five years ago, so we might see them reduce their generic fee soon, which I think is currently a more likely scenario. In general, a lot of people under-appreciate the value that the app stores bring. They have billions of players who are willing to spend on games, and they manage all the payments which is quite a hassle. Maybe 30% is too high, though, and I do expect to see it drop in the coming years.

The dominance of Apple and Google has long gone unchallenged, but alternative app stores are gaining popularity, particularly in China, due to the ban on Google Play. Although Meta’s announcement has caught attention, let’s not forget that Xiaomi, Vivo, Samsung, and Huawei have already launched their own app stores. Microsoft also plans to launch one for iOS and Android in Europe next year.

Alternative app stores bring competition to the market, potentially resulting in lower fees and a more favourable revenue share for developers. These stores also allow greater flexibility in pricing, monetisation models, and content restrictions, enabling developers to experiment with different business approaches and reach more audiences. With popular, well-established titles featured in dominant app stores, smaller developers and indie games often struggle to find visibility. Alternative app stores could address this issue by focusing on the promotion of niche or unique games, offering more opportunities for innovative titles to be discovered and succeed.

Ultimately, it’s the players who will likely benefit the most from alternative app stores, who will have an increased variety of choices. These stores might cater to specific genres, demographics, or regions, allowing users to discover games tailored to their preferences. The emergence of alternative app stores, as well as Meta’s play to download apps directly from ads, has the potential to disrupt the games industry by providing developers with more flexibility, players with more choices, and fostering a more competitive environment. However, the actual impact of these alternative platforms will depend on their adoption, policies, and overall success in the market.

We have been game devs since the days of the Facebook canvas games, and I think this was some of the best times to play and share games with friends, it was an amazing platform. Mobile devs need new platforms for players to discover and play games. Mobile is big enough to handle more players in the space. The key will be installing with limited friction to end users. I’m looking forward to seeing what they do!

Alternative app stores present a clear opportunity for both publishers and service providers. The introduction of App Tracking Transparency on iOS a couple of years ago had a significant impact on mobile publishers’ profits, leading them to search for ways to offset the losses. Although optimising expenses is an option, the concern about the 30% commission from App Stores calls for exploring alternatives.

Alternative app stores remain relevant, and governmental regulations are evolving to offer users more payment options. Enterprise publishers are setting up web stores that let users make in-game purchases outside of App Stores, effectively avoiding commissions. Moreover, the growing popularity of crypto games adds an additional layer to this landscape.

This evolving ecosystem demands companies to process, verify, and attribute these payments, leading to the emergence of highly innovative players in the marketplace. However, there is a drawback to consider, which is the potential fragmentation of the mobile market. Payments represent only one aspect of this fragmentation. Although larger enterprise businesses may adapt to these changes, smaller or medium-sized ones might struggle to cope with the new dynamics.