Why Microsoft, Sony, Nintendo Should Fear Facebook

By James Brightman

This week Facebook and Warner Bros. unveiled a partnership enabling movies to be rented or purchased through Facebook using Facebook Credits. The first movie to be made available under the program is The Dark Knight (more to be made available in coming months). Rentals costs $3 for 48 hours, and Facebook takes a 30% cut. According to Business Insider, Netflix shares are now tanking, as investors are beginning to worry about Netflix’s future. But what about the future of the games business?

Facebook already has a stranglehold on the social games market and most of the top developers are using Facebook Credits. Although the impact of the Facebook rentals service won’t be felt immediately on the traditional games business, it’s a sure sign that Facebook is not hesitating to expand its entertainment aspirations. While Microsoft and Sony are clearly battling it out for control of the living room, and Google is getting involved more and more with games, Android and Google TV, it would be foolish to ignore Facebook.

Facebook is truly ubiquitous, with over 500 million users, and the social network is even present on game consoles like Xbox 360 and PS3. What will happen to these consoles, however? Cloud technology is very real, and both OnLive and Gaikai are ironing out the kinks as you read this. David Perry’s Gaikai has already shown Mass Effect 2 running within Facebook on a browser. What if Facebook decides to acquire Gaikai (or develop its own proprietary tech) and make it possible to buy/rent game time in triple-A titles with Facebook Credits (which users don’t even need a credit card to get)?

Suddenly, as a publisher, your game is available to over 500 million people (far better than the installed bases combined of PS3, 360 and Wii) and you immediately benefit from all the social and viral marketing that the social games space already benefits from. And of course, publishers won’t have to deal with the hassle of retail and futile attempts to mitigate the impact of used games.

There may not be a ton of overlap between social gamers and core console gamers, but the common thread is that both kinds of gamers have Facebook accounts. Everyone has a Facebook account. 

Facebook is the unifying force. It already dominates many people’s lives on the web, and it just might control the future of entertainment. Microsoft, Sony and Nintendo, your next round of consoles could be in trouble.

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