Snapchat is betting big on social gaming

Platform to feature original games

Carl Court/Getty Images

(CNN) - Snapchat's next big bet for getting people to spend more time on the app: social gaming

The social media app is launching a new gaming platform called Snap Games that features original games only available on Snapchat through its group chats.

The app's parent company, Snap, made the announcement at its first ever Partner Summit, an event for developers and content partners, in Los Angeles on Thursday.

The move is about getting users to spend more time on the platform. Snap's audience growth has stalled — it only recently stopped losing users after two straight quarters of declines — and it has faced heightened competition from Facebook's Instagram.

Snap Games focuses on multi-player games that happen in real time. There will be six games to start, including one created by Snap itself and others from developers Game Closure, PikPok, Spry Fox, Zeptolab and Zynga. The games will begin rolling out globally on Thursday.

Snapchat previously experimented with social games, called Snappables, which use the camera and typically incorporate users' faces.

The company aims to make playing mobile games with friends easier and more accessible by offering them directly on the app.

Games are also a potential new revenue stream for Snap. The titles on Snap Games will feature six-second ads, and users may get some type of reward for watching them, such as digital coins or other virtual perks related to the game.

But Snap is latest tech company to jump into the crowded gaming market, and each is taking a slightly different approach, with the similar hope of finding a new way to make money off of existing users.

Last week, Apple unveiled a new game subscription service called Apple Arcade, which requires users to download games. Its angle is offering curated, original titles without in-app purchases, ads or sharing private data. Apple has not said how much the service will cost.

Last month, Google launched a gaming platform called Stadia. The Netflix-like streaming service just for video games will work on any TV with Chromecast, computers running a Chrome browser and Google's Pixel devices. Users can play games over any Wi-Fi connection rather than downloading games to their devices. Google's platform will include popular titles such as "Assassins Creed Odyssey."

Paul Verna, principal analyst at eMarketer, said these companies are interested in gaming to increase engagement and pull in different types of people.

"Gaming is very broad now," Verna said. "It appeals to a lot of people, different ages and across genders. It's not like in the really old days when you were kind of looking at a male teenage demographic."

Although there is lot of competition and interest in the space, Snap thinks it can stand out because users won't have to go to an app store, download a game and then tell their friends to get it too.

"It's hard to get everybody to install the same game, then find friends to play with and it's hard to chat," said Will Wu, director of Snap Games, at the event. "So even if you're playing together, it doesn't really feel like you're hanging out. Snapchat has the right ingredients to break down these barriers."

It's also easier for Snap to place ads in games than into private chats, according to Verna. When users are connecting through messaging platforms, their core goal is to communicate and anything that gets in the way can be considered an annoyance. But when they are playing games, people are more accepting of ads.

However, Snap will need to keep its game offerings fresh. Users can easily get bored as the novelty of games wear off.

"People love to play certain games for awhile and then they move on," Verna said. "That's where having an ecosystem of developers helps, so that you're not just relying on your own IP [intellectual property] for games. That spreads the risk a little bit."

When asked at a media briefing ahead of the event if Snapchat was late with its roll out, Snap executives said gaming is currently having a moment largely due to the popularity of Fortnite. Snap's gaming platform had also already been in the works for some time.

Daniel Ives, an analyst at Wedbush, said in an investor note earlier this month that gaming will be a "multi-billion dollar green field opportunity" in the coming years. Ives said the sector has been "turned upside down" with Fortnite's worldwide success.

Mobile gaming is expected to be a $100 billion dollar market by 2021, according to Newzoo, a provider of games and e-sports analytics.

Verna doesn't think Snap is too late in trying to claim some of that market.

"Snap is not chasing after something that somebody has already done really well," he said. "It doesn't seem like they have missed the boat."

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