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Facebook might take on Google Stadia thanks to its recent acquisition

Facebook confirmed on December 18 that it is increasing its video game portfolio with the acquisition of PlayGiga, a cloud gaming company based in Madrid, Spain.

The report first broke late last week after Spanish business newspaper Cinco Dias reported that Facebook had purchased the European-based startup company for $78 million (70 million euros). “We’re thrilled to welcome PlayGiga to the Facebook Gaming team,” a company spokesperson said to CNBC. “We are continuing our work in cloud gaming, now with a new mission.”

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What that new mission is, exactly, is not yet clear. Based on this recent acquisition, it appears Facebook may be gearing up to take on other cloud video game services, specifically, Google Stadia, which hasn’t had substantial success in the market since its debut last month. However, Facebook has not commented on what it intends to do with its new subsidiary. Facebook’s previous contributions to the gaming market have been drastically different compared to other companies, with the company focusing more on free-to-play games available on its website.

Established in 2013, PlayGiga ran a cloud gaming service in Argentina, Chile, Italy, and Spain, with the company obtaining licensing agreements for more than 300 game titles with notable publishers including Disney, Capcom, Sega, and Warner Bros. to name a few. Additionally, the company ran proof-of-concept tests in Austria, Guatemala, the Netherlands, and Sweden. Before the Facebook acquisition, PlayGiga was aiming to make the service accessible in the Middle East.

Within the last several years, Facebook has been making small steps to expand its reach in the gaming market. In 2014, the company acquired the virtual reality headset manufacturer Oculus for $2 billion. Just last year, the company launch a livestreaming service, Facebook Gaming, to compete with similar platforms including Mixer, Twitch, and YouTube.

In addition to Google, numerous other tech and gaming companies have also begun releasing cloud video gaming services, including the home gaming console juggernauts, PlayStation, and Xbox. In October of this year, Sony permanently slashed the price of its subscription-based service to $10 and in that same month, Microsoft released a preview version of its cloud gaming service Project xCloud. Nvidia meanwhile has operated its cloud gaming service called Geforce Now since 2013.