Cloud gaming has been around for a while now and with the emergence of 5G and other technological advancements it is on the course for a rapid growth. In 2022, the global cloud gaming market witnessed an estimated 31.7 million paying users, spending a combined US$2.4 billion on cloud gaming services and games streamed via the cloud. In the past, the adoption of cloud gaming among the hardcore and devoted gamers did not pick up mainly because of latency and high-speed connectivity issues. However, the landscape has significantly transformed, driven by the increased usage of cloud infrastructure as well as ongoing efforts from cloud gaming vendors to provide players hardware-free and on-the-go gaming experience.
Cloud gaming, also referred as on-demand gaming or gaming as a service (GaaS), enables gamers to access high-quality games on any device with a stable internet connection for a subscription fee. Games are no longer needed to be downloaded digitally or purchased physically to access them on the player’s console, computer or smartphone. Cloud gaming provides a wide array of services and offerings, including alternative pricing structures, diverse gaming repositories, different performance categories and varied device accessibility, catering to all categories of gamers. Moreover, it equalizes the playing field for game play by eliminating the performance advantages long enjoyed by those with the fastest hardware.
In our recent articles, in-game advertising and hybrid monetization, we touched upon the various monetization strategies that can be leveraged by game developers. In this article, we will explore how cloud gaming is paving the way to make the gaming experience device- and environment-agnostic. We will also look at how gaming companies as well as CSPs can together explore new growth opportunities along with enabling the transformation of the hardware-tied product-based business model to “as-a-service”.
Cloud gaming landscape is evolving quickly and is on course to become an integral part of the gaming market
- Cloud gaming vendors are proactively collaborating with telcos and putting forward attractive offerings to lure in more gamers to this space. The rapid deployment of 5G infrastructure and hi-speed connectivity prospects across the developed markets are acting as a catalyst for this uptake. For instance, in January 2023 Blacknut, a European cloud gaming service provider, collaborated with Saudi Telecom Company (STC Group) to promote its offerings across MENA region.
- Content is the key to attract and retain gamers as they tend to follow the titles irrespective of the delivery medium. Cloud gaming vendors are making efforts to add-in more AAA titles with larger fanbase in their offerings to attract skeptical hardcore gamers (whales), who are also the major revenue-contributing customer group in the gaming space. Moreover, to make the prospect more attractive for core gamers and drive their transition to the cloud, new waves of AAA cloud-native games (games specifically built for cloud gaming that cannot be processed locally due to high technological requirements) are also expected to be launched. Recently, Kojima Productions and Xbox announced a partnership for their upcoming cloud-native game.
- With the increasing traction around the cloud gaming, more non-gaming players are entering in this space and the existing vendors are fine-tuning their offerings to target and attract more gamers to cloud. For instance, Netflix, after taking a bigger leap in the mobile gaming space last year, now plans to seriously explore the cloud gaming offerings, with 55 new games in development to reach subscribers on TVs and PCs.
