Apple, Facebook, and the Coming War Over Casual Gaming

Facebook vs. Apple

With rumors that Apple is planning to rush the casual online gaming market just as Facebook is planning social-net-centric smartphones, the two giants may end up as unlikely rivals. Can either steal the other's markets?

Apple's online gaming assault

Coders tend to rip into Apple's developer release editions of its operating systems like hogs snuffling for truffles—only in this case the prize is a juicy morsel that hints at the future of the normally cloistered tech company. Now it's Apple TV's turn to get attention: Enterprising hackers have dug into the preview release of iOS 4.3 Beta 3 and discovered fragments that strongly hint that Apple's planning an assault on the online casual gaming market.

Repeated references to terms such as "ATVGaming" and "ATVThunder" have been taken to mean the Jobs squad is working on an Apple TV games engine and possibly a wireless controller. Additional unearthed code fragments suggest there's a forthcoming scheduling service for online multiplayer gaming and a store front, too.

Put simply, Apple could be planning a big entry to the online games market. All the ingredients seem to be there: A cheap powerful console that uses Apple's iPhone OS; a developer community; thousands of gaming apps; a precedent (Facebook's online games); and competition (Sony and Microsoft's much more expensive games systems, that also double as movie and music servers). We've argued before that the Apple TV is a powerful and stealthy device that's at such an attractive price point that Apple could easily use it as a tool to crack open a whole new market, and it would seem that the advances needed to turn the Apple TV into a priced-to-move competitor to the PS3 and Xbox are relatively simple and cheap to make.

Facebook's smartphone assault

Facebook phone rumors have circulated for some time, but have failed to absolutely crystallize—commentators have pondered whether Facebook will produce its own-brand device, with its own social-net-centric UI or whether it'll license existing tech and put a Facebook veneer over the top.

Now rumors suggest that the latter choice seems more likely: HTC and INQ are said to have smartphones en route that use Google's Android OS as a core, but with heavily-tweaked UIs that place Facebook front-and-center to the user experience. HTC's upcoming phone, for example, has a dedicated Facebook button that takes a user directly to their own Facebook content—without needing fiddly logins, whereas INQ's devices leverage Facebook's data stream to modify the user's home page with relevant Facebook data.

In some senses this is a logical progression: Facebook's services are already exploited to share photos and videos, conduct IM chats, email-like messaging, play games, and organize events on a social calendar—many activities that are carried out on typical smartphones. By inserting itself into the front of the user experience, Facebook will raise its profile, its notional "importance" in the mindset of its userbase, and be able to serve up more ads (the lifeblood of the company). Those ads may also be able to be more precisely targeted, since a Facebook phone would reveal deeper data on a user's habits.

The only hill Facebook would seem to have to climb is the one about its trustworthiness—with a history of playing fast and loose with highly private user data, Facebook may have to persuade Facebook phone owners that it's actually not going to abuse their trust.

Apple-Facebook rivalry

With Apple's game-centric tweaks to the Apple TV, the company is intruding on an online casual gaming marketplace that's transforming one end of the computer gaming industry. Meanwhile Facebook, with its assault on the smartphone market, is intruding into a tech sphere that Apple's made all its own with the revolutionary iPhone, and it's increasingly cloud-oriented services like MobileMe.

Can a hardware manufacturing giant really be a rival to a sprawling social-networking phenomenon? You bet. And there's a precedent—Apple's big rival is Google, which is actually an online ad-selling company, rather than the software-based web search engine it perhaps once was.

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