The services cloud gaming providers offer are quite dependent on the company. Some provide a Windows-based desktop with all features of a fully-fledged Windows environment (Shadow), others provide access to a set library of games (Xbox Cloud Gaming), and some provide access to hardware that’s compatible with specific games that a user must buy independently (GeForce Now). The innovations are there, but are these enough to shift console, PC, and even mobile gaming to the cloud?
What makes cloud gaming attractive to users is that it’s a cheap and easy way to access video games. A monthly subscription for the Xbox Game Pass Unlimited costs 12.99€ and provides access to over 100 games and access to cloud hardware equivalent to the 499.99€ Xbox Series X (Subhan, 2021). With fully-fledged Windows environments, such as those provided by Shadow, the cost savings margin is even greater, providing access to hardware upwards of 1500€ if you include costs required to build a pc (Motherboard, Case, etc.). But with these great offers, what is holding back cloud gaming and why did platforms like Stadia fail?
Cloud gaming requires a fast and stable internet connection. With the progressive implementation of high-speed fibre cables, which provide network speeds of up to 1 GB/s, this will soon no longer be an issue. Solely having high network speeds is however not enough for all games. Online games, which have a market share of 56.5% of the total gaming market when excluding mobile games (Statista, 2022) require low latency to prevent lag and improve reaction time. Cloud gaming practically doubles latency from the user’s standpoint by having to connect to the cloud and form the cloud to the game server instead of directly to the game server (Campbell, 2022). This is especially troublesome for competitive E-Sports games such as League of Legends and Counter Strike. Due to this, the online game genre will likely not see a growth or shift in gamer base stemming from cloud gaming until latency can be improved.
According to Fortune Business Insight (2022), the cloud-gaming industry will see a CAGR of 43.6% until 2029. The main drivers of the Cloud gaming industry are hardcore gamers and mobile gamers (Fortune Business Insight, 2022). Hardcore gamers spend a majority of leisure time on gaming, due to this they tend to have higher hardware requirements. Mobile games currently account for 77% of the total gaming market (Statista, 2022). These run-on mobile processors with limited power. Cloud gaming has the potential to disrupt this market, making high power hardware accessible from phones and tablets and allowing users to run console level games and graphics on their mobile devices.
References
Campbell, A., 2022. Cloud gaming latency – the main stumbling block of the industry. [online] HelpWire Blog. Available at: <https://www.helpwire.app/blog/cloud-gaming-latency/#:~:text=If%20you%20are%20restricted%20to,add%20to%20your%20latency%20issues.> [Accessed 9 October 2022].
Fortune Business Insights, 2022. With 43.6% CAGR, Cloud Gaming Market Size worth USD 40.81 Billion in 2029. [online] GlobeNewswire News Room. Available at: <https://www.globenewswire.com/en/news-release/2022/05/23/2448235/0/en/With-43-6-CAGR-Cloud-Gaming-Market-Size-worth-USD-40-81-Billion-in-2029.html> [Accessed 9 October 2022].
Statista, 2022. Video Games – Worldwide. [online] Available at: <https://www.statista.com/outlook/dmo/digital-media/video-games/worldwide#revenue> [Accessed 9 October 2022].
Subhan, I., 2021. Xbox Cloud Gaming now runs on Series X hardware. [online] Eurogamer.net. Available at: <https://www.eurogamer.net/xbox-cloud-gaming-now-runs-on-series-x-hardware#:~:text=Series%20xCloud.&text=Microsoft%27s%20Xbox%20Cloud%20Gaming%20service,framerates%20and%20lower%20loading%20times> [Accessed 9 October 2022].
Hi Tim, very interesting text! However, while living in Rotterdam, high fiber internet will not be available within the next 5 years. Which could be a flaw in this “business model”. I do like your argument of the PC costs vs hardware costs of a cloud device. But, a PC you can upgrade without having major costs. For a Hardware device, you have to buy an entire new device. Which at the end of the day could result in higher costs.
Nice post. I can see why competitive online gamers do not want to rely on cloud gaming due to latency issues. Do you think that singleplayer games will also go towards cloud gaming or do you think these will stay locally stored? I can definitely see mobile cloud games becoming bigger and bigger so you can play with friends and data is stored online for others to see. I feel cloud gaming creates a more unified way in which gamers interact with each other. Good post