It’s 2019 and the cloud gaming industry has already reached over $1 billion. What is amazing is that according to Global Market Insight, this is set to increase to $8 billion by 2025.
The last 5 years have seen quite a steep increase in the price of games. The standard edition of games like Call of Duty or Super Mario may start at around $60. Anyone looking for limited editions can expect to pay an awful lot more. This is enough to put off many gamers who aren’t prepared to spend so much money.
Cloud gaming platforms are the perfect solution for gamers who want to play hundreds of different games without paying the associated prices. There is also more flexibility in payment options. People are able to sign up for subscription plans for monthly or yearly payments. With these options, plus the fact that the gaming experience is cheaper, gamers can access more games at the same time, making cloud gaming ever more popular.
AR (Augmented Reality) and VR (Virtual Reality) are now commonplace within the gaming industry and have changed the way we experience gaming. Both VR and AR are considered extremely latent sensitive applications that require large computational power. Not even high-end CPUs can meet the expectations for user responsiveness and computation power that is needed for games, let alone the next generation of games. CPUs aren’t equipped for numerous parallel operations on massive amounts of data- and at the same time. Whereas a GPU-as-a-server can render and stream demanding games at the same time as delivering incomparable gaming performance. Cloud gaming services use GPU-as-a-service, which allows for high-quality graphics and higher frame rates and reduces latency.
It’s not just the gaming industry that is set to grow. Connected television cloud gaming is expected to see a CAGR increase of 15% in this time period. The manufactures of televisions are looking for new ways to increase features, making their products stand out from the rest. They have been able to produce TVs that raise revenues through strategies like subscription fees. TV manufacturers are working together with platform providers to integrate aspects of cloud gaming.
The cloud gaming industry has also had a knock-on effect on the B2B cloud gaming market, with a predicted CAGR increase of more than 40%. These companies are now striving to provide advanced connectivity via current fiber investments, again, working together with cloud gaming companies to gain higher revenues. A perfect example is the joining of Ooredoo (a Qatar-based telecom operator) with PlayGiga. Together they provide high-definition gaming services to massive numbers of gamers without the need for gaming equipment.
Big names such as Microsoft, Electronic Arts, and Google allow North America to hold 45% of the cloud gaming industry. These companies are able to carry out extensive research and development to drive forward the enhancement of products. Project Stream was launched by Google in October 2018. This project tested game streaming services over the Internet via Chrome. As the average Internet speed was up by 22% from the year before (now at 18.7Mbps), more and more companies will be exploring such products in order to take advantage of the improving communication infrastructure.
By forming partnerships with other companies, the cloud gaming market is able to maintain a competitive edge over their mainstream counterparts. Platform providers are working with game developers and publishers improve the capabilities of existing products. Agreements are being signed to stabilize revenues in an industry that is somewhat volatile. We are seeing larger companies buying up smaller platforms to make the most of their technical skills, as in the case of Electronic Arts purchasing GameFly.
Below you will find some of the major names in the cloud gaming market:
- Electronic Arts
- Advanced Micro Devices
It’s impossible to completely predict the future of any industry, however, it is fairly safe to say that there are exciting times ahead for the cloud gaming industry and those associated with cloud gaming.