Facebook Instant Games is on track to upend the app economy (FB, GOOGL, AAPL)

Facebook’s striving to break the Apple-Google app store duopoly by expanding the audience and incentivizing development for its Instant Games platform.

Facebook Instant Games

Instant Games are HTML5-based games that can be launched within Facebook’s chat apps, eliminating the need to download a game or be redirected from Facebook’s properties. The ability to launch an app within Facebook’s entities means users can bypass an app store, which presents a threat to revenue generation for both the App Store and Google Play, particularly in the casual and social gaming categories.

And as Facebook continues to build out the Instant Games platform, its ability to pull users and developers away from Apple’s and Google’s app stores grows.

Here’s an overview of the latest moves Facebook made to boost consumer usage and adoption of Instant Games:

Facebook announced that it's expanding the platform to the stripped-down Facebook Lite app in October. The integration with Facebook Lite is a big move, as Facebook Lite’s user base will likely be attracted to the download-free nature of Instant Games since the app caters to users who have handsets with limited storage space and memory.
And it opened Instant Games to the Facebook Groups tab in the same month.This gives gaming-focused Groups users easier access to something they already love; each month, 90 million people actively participate in more than 270,000 Facebook Groups dedicated to gaming. Now, those users can play some of the games they’re discussing without leaving the Groups space.

Facebook brought Instant Games to its Portal smart displays in December. Initial support on Portal devices included a preliminary package of games such as Words with Friends, Battleship, and Draw Something. The new support means users can play Instant Games on handsets, tablets, computers, and now smart speakers.

Facebook also made Instant Games more appealing to developers by increasing their revenue share on Android. As of August 1, Facebook no longer takes a 30% cut of revenue from in-app purchases (IAP) from Android-based Instant Games, leaving developers to relinquish 30% to Google only.

When Facebook first introduced IAP to Instant Games in May, Facebook and Google each retained 30% of IAP revenue on Android, leaving developers with the rest. Providing Instant Games developers with a better revenue split from their games could encourage more developers to switch and rely on the Instant Games platform.

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