In just a few decades, video games went from a niche hobby to a mainstream multibillion-dollar industry and it is expected to rise even further as it grows in popularity as it penetrates new markets and communities around the world. Some analysts have projected the growth of the gaming industry to be around $300 billion by 2025 and expect the biggest revenue drivers to be advancements in innovative technologies that allow gamers to enjoy new experiences. One of those technologies that are gaining traction right now is Cloud Gaming.
In a nutshell, cloud gaming is a new way of running games for users in a similar way to streaming videos over the internet. In this case, gaming data streamed from the cloud servers to the user’s computer to “watch” and control inputs from the user to interact with the game is sent back to the server. The best part of cloud gaming is that most of the heavy work is done by the remote servers and this allows even users with lower spec computers to play demanding games. This puts cloud gaming in a position to revolutionize the gaming industry.
It is worth mentioning that experimentation with the technology had begun more than a decade ago by a handful of companies when it wasn’t well known. For example, video game company Crytek who is most well known for developing the Crysis game series had attempted to build its own streaming service for games around 2005 but stopped in 2007 citing limitations of the available technology at that time. A few years later, other companies such as Gaikai, G-Cluster, and Onlive begin offering their own cloud services before being acquired or going defunct. These companies would also form partnerships with other companies to promote the cloud service. Gaikai, in particular, has managed to develop partnerships with several well-known companies such as Electronic Arts, Capcom, Warner Brothers, Nvidia, and Samsung before being acquired by Sony who would utilize Gaikai’s talent and accomplishments in the development of its own service.
As the cloud gaming industry is relatively new, there is still plenty that needs to be done. However, it is a huge market opportunity and the biggest companies are already eyeing for dominance. Some of the biggest names in the industry including Google, Amazon, Tencent, Microsoft and many others have stepped up efforts in research and development of their own services. While some of these companies have publicly announced their intent to create their own services, others were less vocal in their endeavors. Telecommunications giant Verizon, for example, had been quietly creating and testing Verizon Gaming, their own streaming service on the Nvidia Shield platform.
In addition to that, companies will likely be looking for collaborations in order to remain competitive. Sony and Microsoft is one notable case as the rival companies have announced a strategic partnership to work on several joint ventures including cloud gaming. Google’s cloud gaming service Stadia that is expected to launch in November is actively looking for developers to be part of the platform. The Stadia’s Partner program has reportedly received over 4000 applications to choose from and is still open. Google had also forged partnerships with Unity and Unreal to enable cross-platform capabilities and AMD to create new GPU solutions to support its cloud platform. AMD’s rival NVIDIA, unwilling to be left out launched the GeForce NOW Alliance, a partnership of telecommunications providers that includes the Softbank Corp of Japan, and LG U+ of Korea. The Alliance will utilize the optimized NVIDIA RTX Servers to expand and improve the cloud gaming experience globally and expand into new markets.
Apart from the larger companies, smaller companies and startups also seek to carve out their own paths in the cloud gaming industry. Their entry will give rise to a new wave of creativity and innovation with technology that was not previously available to its predecessors. A few of the notable startups that are making waves in the are listed below:
A French gaming startup company that launched Shadow, a game streaming service. By downloading the app, users are able to gain access to their cloud computer from any device at any time along with the ability to switch seamlessly from one device to the next without having to worry about hardware issues. The company managed to secure investments from American cable provider Charter Communications at towards the end of 2018.
In addition to cloud gaming services, Parsec allows users to play local co-op games online. Only one person needs the game as it is hosted on their computer and streamed to everyone else. Back in January 2018, the company had secured a partnership with Hewlett-Packard to power the OMEN Game Streaming software that is included in every OMEN Gaming PC turning it into an accessible gaming server that can be connected with from anywhere.
UK game streaming startup Antstream is unique as it focuses entirely on retro games and offers plenty of beloved classical games that would be sure to bring back memories in older gamers and introduce retro games to a new audience. Rather than having to look for old cartridges, machines or emulators, users will have the opportunity to enjoy these games from remote servers. Antstream had recently raised significant capital from Chinese tech giant Tencent and British venture firm Hambro Perks. The company hopes to expand to North America and Asia in the coming future.
Despite the excitement around the industry, it is likely that mass adoption of cloud gaming won’t be available for at least a few years as there are still challenges to be overcome. One of the most prominent of those challenges is the lack of proper broadband and network infrastructure. As cloud gaming relies on huge amounts of data being sent over the internet, extremely fast and reliable internet service is needed.
Another issue is streaming games can change how people look at game ownership. The current model is having a physical or digital copy but with cloud gaming, players would also be introduced to a subscription model that may be similar to that of Netflix. The player doesn’t actually “own” the game in a way that is traditionally understood, rather they are paying for the experience of being able to enjoy it. Just like movies, games can be emotionally investing to the player and arguably more so because of the interactive elements that continue even after the game is finished, which is something that movies cannot replicate. If cloud gaming would no longer become profitable or something were to happen, users will be unable to stop the companies from taking away their beloved games from them.