what-happened-to-houseparty

What happened to Houseparty?

Houseparty was an app-based group video chat platform for mobile and desktop. Released in February 2016, the platform rapidly grew to hundreds of millions of users and was the #1 social app in 82 countries by May 2020.

Less than 18 months later, however, owner Epic Games announced that it would be shutting down the app in October 2021. Let’s explain the reasons for Houseparty’s demise below.

AspectExplanation
Founding and Early SuccessHouseparty was founded by Ben Rubin, Sima Sistani, and Itamar Lesuisse in 2016. The app allowed users to participate in group video chats with friends and family. It quickly gained popularity, especially among younger users, for its ease of use and the ability to spontaneously connect with others through video calls. Houseparty also integrated social gaming features, enabling users to play games while video chatting.
Acquisition by Epic GamesIn June 2019, Houseparty was acquired by Epic Games, the company behind popular video games like Fortnite and Unreal Engine. The acquisition raised expectations that Houseparty would be integrated into Epic Games’ ecosystem, potentially introducing gaming elements into the app and expanding its user base. At the time of the acquisition, Houseparty had over 20 million registered users.
Challenges and Security ConcernsHouseparty faced some challenges and security concerns during its rise in popularity. In March 2020, as people around the world began using the app more extensively due to COVID-19 lockdowns, unfounded rumors circulated on social media platforms that Houseparty was responsible for data breaches and hacking. Houseparty denied these claims, stating that there was no evidence of a security breach. However, the negative publicity impacted its reputation.
Decline in PopularityAfter the initial surge in users during the early days of the COVID-19 pandemic, Houseparty’s popularity began to decline. The app faced increasing competition from other video conferencing and social networking platforms like Zoom, Microsoft Teams, and Snapchat, which introduced similar features. Users also became fatigued by constant video calls as the pandemic continued. Houseparty struggled to maintain its user base in this changing landscape.
Shutdown by Epic GamesIn September 2021, Epic Games announced that it was shutting down Houseparty. The decision to discontinue the app was made as Epic Games shifted its focus back to its core gaming business. The Houseparty team was also reallocated to work on other projects within the Epic Games ecosystem. This marked the end of Houseparty as a standalone social networking app.
Legacy and ImpactWhile Houseparty as a standalone app is no longer available, its legacy includes influencing the integration of social features into other platforms and popularizing spontaneous group video chats. Video conferencing and social gaming continue to be essential features in the digital communication landscape, and Houseparty played a role in shaping these trends.

Emergence from the pandemic

Houseparty’s popularity exploded in early 2020 as the pandemic took hold around the world, with over 50 million downloads reported in April alone.

The app also hosted popular live streaming events with celebrity guests such as Katy Perry, John Legend, and Alicia Keys.

However, as people started to emerge from the pandemic, venture outside, or attend functions and events in person, Houseparty started to lose its appeal.

The app reported just under 8 million installs in the first eight months of 2021, representing a decline of 83% over the same period in 2020.

Competition

While Houseparty was popular in early 2020, it was certainly not the only video chat platform to benefit from the pandemic. Zoom, initially a collaboration tool for remote workers, also became a favored place to chat with friends after hours.

Competition for Houseparty’s users also came from Facebook, which launched the video chat feature Messenger Rooms in April, while other users in search of something new migrated to apps such as Twitter Spaces or Clubhouse.

Shut down announcement

In what was seen as a swift and brutal decision, Epic Games announced on September 9, 2021, that it would shut down Houseparty. While the app was removed from stores almost immediately, existing users could continue to use it until the end of October.

Epic Games noted that it could no longer give Houseparty the attention it required, a statement indicative of an app whose return on investment had most likely become unsustainable.

Many also saw that Houseparty’s increasing integration with popular video game Fortnite meant that its days were numbered.

Technology integration

Aspects of Houseparty’s social chat technology now underpin similar features in Fortnite with other features within the game inspired by Houseparty’s live-streaming events.

Recent examples include an Ariana Grande concert and the Operation: Sky Fire event where players assemble to collaborate on quests and other game mechanics.

Most of Houseparty’s employees were also absorbed by Epic Games where they worked on ways to increase social interaction across the company’s suite of products.

In the announcement detailing Houseparty’s demise, Epic Games noted that these interactions would be designed and built to make them suitable for the metaverse.

Key takeaways:

  • Houseparty was an app-based group video chat platform for mobile and desktop. The platform was at one point the most popular social app in 82 different countries before being shut down by owner Epic Games in late 2021.
  • Houseparty’s popularity waned after COVID-19 restrictions started to lift and people could enjoy face-to-face interactions. The decline in users was exacerbated by competition from Zoom, Twitter, Facebook, and Clubhouse.
  • Aspects of Houseparty’s social chat technology now underpin similar features in Fortnite. What’s more, former Houseparty employees are working to further Epic Games’ metaverse-related ambitions.

Key Highlights

  • Houseparty was a group video chat platform for mobile and desktop.
  • The platform experienced rapid growth and became the #1 social app in 82 countries by May 2020.
  • Its popularity surged during the pandemic, with over 50 million downloads in April 2020.
  • Houseparty hosted popular live streaming events with celebrity guests like Katy Perry, John Legend, and Alicia Keys.
  • However, as COVID-19 restrictions eased and people started to resume in-person interactions, Houseparty’s appeal declined.
  • The app reported just under 8 million installs in the first eight months of 2021, representing an 83% decline compared to the same period in 2020.
  • Houseparty faced competition from other video chat platforms like Zoom, which also gained popularity during the pandemic for social interactions.
  • Facebook launched the video chat feature Messenger Rooms in April 2020, offering another alternative to Houseparty.
  • Users seeking new experiences migrated to apps like Twitter Spaces or Clubhouse, further impacting Houseparty’s user base.
  • On September 9, 2021, Epic Games announced the shutdown of Houseparty, removing it from app stores immediately.
  • Existing users were given until the end of October to continue using the app before its final shutdown.
  • Epic Games cited the inability to provide the necessary attention and declining returns on investment as reasons for the shutdown.
  • Houseparty’s integration with popular video game Fortnite also suggested its days were numbered.
  • Some aspects of Houseparty’s technology were integrated into Fortnite, with features inspired by its live-streaming events.
  • Houseparty employees were absorbed by Epic Games, focusing on increasing social interaction across the company’s suite of products.
  • Epic Games is working on enhancing social interactions for its metaverse-related ambitions.

Read Next: Free-to-play business modelEpic GamesFortnitePlay-to-earn business modelgaming industry.

Connected Business Models

Play-to-Earn Business Model

play-to-earn
The play-to-earn model is a business model allowing gamers to farm or collect cryptocurrency and NFTs that can be sold on the market. This model has become a standard already in the “crypto gaming industry,” where blockchain-based games enable token economics to kick in as an incentive mechanism at scale for users to play and be engaged.

Free-to-Play Business Model

free-to-play
A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that has become extremely popular in the digital age of gaming.

Epic Games Business Model

epic-games-business-model
Epic Games is a gaming company that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digital marketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.

Who Owns Fortnite

who-owns-fortnite
Epic Games owns Fortnite; Tim Sweeney, co-founder and CEO, is the major shareholder, with more than 50% of the company. And Tencent with a stake of over 40% of the company. Epic Games develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. While Fortnite primarily follows a free-to-play model with up-sells and digital in-app purchases.

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what-happened-to-houseparty
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