We are in an eternal war over streaming services, which have undoubtedly revolutionized how we consume content. Even as these wars intensify, two of the most capitalized technology companies on the planet are joining forces to create another wave of content disruption.
This time, we will examine the global video game market, which is currently valued at $150 billion and may shape the future of media and entertainment.
Today, most video games are downloaded and played locally on phones, consoles, and PCs, and they are dependent on some devices to be able to play them.
One thing that video game companies are working on is building services around top game titles. This would allow them to offer ongoing updates that add new games and respond to audience feedback on social streaming services. In this sense, gaming has expanded to the cloud for some time.
With cloud gaming, a game lives entirely in data centers, eliminating the need for downloads and transforming a user’s device into a high-resolution connected terminal. This has tangible benefits for both the player and the provider.
To enable this shift, cloud gaming services are leveraging the capabilities of hyper-scale cloud and media streaming services to build the next generation of platforms for interactive, immersive, and social entertainment.
With over 2.5 billion gamers worldwide, the opportunity and impact could be considerable, as cloud gaming could remove the need for specialized consoles and allow gamers to play any game from almost any device; it could enable gaming companies to develop richer experiences that support many more players; but this also represents an opportunity for other industries, as telecoms and internet service providers could be prompted to expand their capabilities as demand for 5G accelerates significantly.
It could shift the balance of power in the gaming industry, placing major cloud gaming providers at the center of the distribution channel.
The gaming industry is mature, and it’s unclear whether the prospect of cloud gaming offers enough incentive for gaming companies and gamers to radically change the way they create, distribute, and consume video games.
However, many technology and telecom companies are steadily entering media and entertainment, and even gaming companies are beginning to recognize the situation.
According to Statista, the video game market reached 947.1 million dollars in 2020; the estimate for the end of 2024 is more than 1,617.7 million dollars.
And how does it work?
On the market for years, services that stream games have been slow to take off, hampered by bandwidth challenges in the first instance, and where most games are purchased as physical media or downloaded to a device.
Something significant to consider is that when games are played locally, quality and performance can be controlled and optimized for the device – the game looks good, and gameplay is smooth enough. Also, online multiplayer games demand bandwidth between players to coordinate actions – if some players are out of sync, latency can quickly destroy the experience.
Cloud gaming moves content execution from the consumer’s device to the cloud. Like video streaming services deliver content, the game view is streamed to the player’s device via content delivery networks (CDNs) with regional points of presence near population centers.
As with video, size matters: a small smartphone screen can display a good enough game stream with considerably fewer bits than are required for acceptable playback on a 4K TV.
A larger stream consumes more bandwidth, placing greater demands on user connectivity. To manage performance, cloud streaming services must dynamically adjust to deliver the fewest bits needed for the best experience on a given device.
With this in mind, cloud gaming moves the execution of content from the consumer device to the cloud. Every time a player inputs an action, the system sends it back to the game engine, traversing the network along the way.
The game must then update the view to reflect the action and send it to the players over the network. This sequence must work immediately and continuously for all players in the game, as for many games, any latency more significant than 75 milliseconds or so can result in players and actions falling out of sync.
The promise of cloud gaming
Cloud gaming services promise to untie gamers from specific hardware and allow them to access their accounts from anywhere, logging into the same game from any capable device. The services suggest that by removing the need for gamers to purchase a high-end gaming console or PC, lower-income consumers will be better able to participate, increasing the number of gamers.
They also aim to shorten the time between interest and engagement, making it easier for viewers to become gamers and for casual or infrequent gamers to improve their level of engagement. Recommendation engines could improve discovery to match interests to specific games or play styles.
Downloading games would be unnecessary, as updates to existing games happen automatically in the background — a relief to gamers, more than three-quarters of whom are frustrated with downloading and updates.