What does Facebook’s acquisition of cloud gaming firm PlayGiga tell us?

19 Dec 2019

Image: © MR/Stock.adobe.com

This week, Facebook confirmed that it has acquired Madrid-based cloud gaming business PlayGiga in a deal worth €70m.

In the next decade, we’ll get to see whether game streaming is the massive hit that major tech companies such as Google hope that it will be, or whether it will be a luxury afforded only to those with high-speed internet connectivity.

While there’s still plenty of uncertainty around whether game streaming will take off, Facebook also seems to be expressing an interest. On Wednesday (18 December), it emerged that the social media giant acquired Madrid-based cloud gaming business PlayGiga, in a deal worth €70m.

The news was confirmed to CNBC after Spanish newspaper Cinco Dias reported that the acquisition was in the pipeline. A Facebook spokesperson said: “We’re thrilled to welcome PlayGiga to the Facebook Gaming team.”

The €70m ($78m) deal is a relatively small acquisition for Facebook, which raked in a total of $17.7bn in its most recent quarter.

What is PlayGiga?

Founded in 2013 by Cesar Valencia, PlayGiga is a premium video game streaming platform that charges users a monthly subscription fee.

In May of this year, its CEO Javier Polo published an article on MCV UK about how the company has been collaborating with telecoms businesses and tech giants such as Intel to research 5G performance for streaming VR games.

Polo wrote: “Thanks to 5G, ISPs, developers, publishers and even e-stores will be able to offer their customers a gaming subscription service with the same quality as a high-end console, but accessible from any TV or PC and even mobile devices.

“That’s because as well as much higher bandwidth and download speeds, 5G will also have much lower latency than 4G – meaning that streaming games becomes a possibility.”

The CEO added that cloud gaming offers a great opportunity for telcos, who may eventually be able to add gaming to subscription packages in the same way that many of them are already offering TV, internet and phone bundles.

The current cloud gaming landscape

While Sony has been running its PlayStation Now cloud gaming subscription service for some time and Microsoft has recently launched previews of its xCloud streaming service, Google’s Stadia marked a big step forward for cloud gaming, even though it was met with disappointment.

Wired dubbed the console-free gaming platform a “terrible but tantalising glimpse of the future”. When the console was launched on 19 November, it was initally missing a number of features, leaving reviewers underwhelmed.

With all of that said, there’s currently no other product on the market that has been developed by a Silicon Valley titan that enables gamers to play triple A titles through multiple devices, including their TV via a Chromecast Ultra, their laptop or tablet through the Chrome browser, or their smartphones if they have a Pixel 4.

As it is a relatively new industry, there’s plenty of room for innovation in this space and Facebook’s latest announcement may be a sign that the company is trying to lay down a solid foundation for itself.

The future of gaming on Facebook

PlayGiga’s website now says: “We are excited to announce that the PlayGiga team is moving on to something new. We are continuing our work in cloud gaming, now with a new mission. We want to thank all of our partners and customers for their support over the years.”

Facebook claims that there are more than 700m users engaging with gaming content in some fashion on its platform each month.

Last month, head of product for gaming at Facebook, Vivek Sharma, said: “It’s easy to assume that because it’s gaming and because Facebook is so big that perhaps this is a niche. But the 700m people that engage every month – that’s a huge number even at Facebook’s scale. And we know that number is growing rapidly.”

The news comes just a few weeks after Facebook acquired the VR games studio behind Beat Saber, suggesting that Facebook may have big plans to ramp up its game offerings in the 2020s.

Kelly Earley was a journalist with Silicon Republic