Facebook’s Master Plan to Win the Game Streaming War
It’s not just about throwing massive contracts at top streaming talent
When Facebook launched its gaming creator program in January 2018, the reaction was muted. Facebook Watch, the company’s attempt to take on YouTube, had largely flopped, even in spite of increasingly desperate attempts to get users to click on the tab (the company eventually allowed users to turn off the infamous red dots in November 2019). And there was little indication that Facebook Gaming, even with influential players streaming their gameplay via the creator program, would ever be any different.
And yet two years later, Facebook is the fastest-growing live game streaming platform in the world, with 210% growth in the number of hours watched in the last year, according to StreamElements, a provider of livestream tools and services that regularly monitors the streaming market. It now has an 8.5% share of the game streaming market, compared to just 3.1% a year ago.
Facebook Gaming works like Twitch: Anyone can stream a game through the platform provided they have the right equipment and software, while a select number of streamers — those who belong to the creator program — can monetize their content by asking their fans to subscribe for $4.99 a month or give them “stars,” the platform’s currency. One star equals one cent. Some top creators can also make money from in-stream ads, via a system still in beta.
One key to Facebook’s game streaming success is how it competes for talent. Livestreaming platforms like Amazon-backed Twitch and Microsoft-backed Mixer have deep pockets that lead to enormous contracts for gamers who can bring in eyeballs. Ryan Morrison, the chief executive of Evolved, a gaming talent agency, reckons that streamers who can bring 10,000 people concurrently to a stream can earn a $10 million contract in the highly competitive streamer market. Streaming became especially lucrative when Tyler “Ninja” Blevins, the world’s biggest streamer, moved to Twitch from Mixer in August 2019 — though there’s little evidence that Mixer’s big-money moves made much of a difference in its market share.
Facebook has enough money to play the same game when it comes to scoring exclusive rights to top talent streams, and it has. But its ultimate plan is to eventually opt out of the talent wars altogether.
“We would love to get out of the way as much as possible and let people build these amazing businesses.”
Facebook began luring top talent to its gaming platform by anointing 40 initial “creators.” At the end of 2019, the company announced it had locked up streamers Disguised Toast, ZeRo, and Corinna Kopf, a close friend of YouTube star David Dobrik, in exclusive contracts. These names were bigger than the creators who kickstarted the program: Kopf was a bona fide online video celebrity, with 3.5 million followers on Instagram at the time and connections to Dobrik and Logan Paul, two of YouTube’s most-followed gamers, who have a combined 36 million subscribers. It likely took a lot more than the option to monetize to sign names like these — though in an interview, Leo Olebe, global director of games partnerships at Facebook, declined to explain the value or terms of Facebook Gaming’s contracts with talent.
Olebe claims that beyond what Facebook can offer creators in contract money, its advertising infrastructure is better established than those of Twitch and Mixer, and eventually it will be able to offer gamers better opportunities to monetize their streams that don’t involve big contracts.
Facebook has also made a major investment in emerging streamers that it hopes will become stars in the future.
In June 2018, Facebook launched its Level Up Program, a sort of Double-A league for the streaming world that allows streamers to hone their craft with some support. Level Up creators are given Facebook support — including access to communities where peers exchange advice and help — and a stepping stone toward monetization. They can earn stars from their audience, but they don’t sell subscriptions The program has since rolled out to more than 40 countries, and according to a Facebook spokesperson, a third of those who have participated told Facebook that broadcasting through Level Up was their first attempt at livestreaming.
More than half of those in Facebook’s gaming creator program have graduated from Level Up. “It’s about always giving people the opportunity to grow their audiences,” Olebe says.
Olebe sees the talent pipeline as virtually limitless. “We’re at the point where basically everybody is a gamer,” he says, going as far as to suggest getting rid of the nomenclature in the first place. “I’m not a movie-er, I’m not a TV-er,” he explains. A number of other celebrities, including porn star Mia Malkova and U.K. comedian Limmy, are starting their own streaming channels — in both cases, on Facebook’s competitor Twitch.
“We’re in the era of the gamer, and gamers are going to continue to rise in terms of engagement, interest, and popularity,” Olebe says. The executive believes that the spread of 5G will only make gaming more prevalent, increasing accessibility both on the streaming and viewing side of the equation.
Rather than forking out for multimillion-dollar contracts, Facebook wants to rebalance talent expectations in the streaming industry, attracting talent with its monetization platform instead of big contracts. “Our goal is that when somebody is putting content on the platform, they can monetize it directly,” he says. “We would love to get out of the way as much as possible and let people build these amazing businesses.”
That may take time, though. “We can come up with new features and ways for people to monetize their streams and grow audiences, or new ways to create interactive opportunities to people and creators,” says Olebe. “But we’re in this constant learning process.”