Cloud Gaming ready for launch

The cloud gaming market appears to be poised for substantial growth, although it will be difficult for new players to enter the market.

In her newsletter published Tuesday, consumer technology guru Elizabeth Parks claimed the cloud gaming market is at a turning point as industry heavyweights continue to increase their engagement and gaming gains popularity in consumer households.

As of 2021, 75% of the heads of U.S. broadband households report playing video games for at least an hour a week, and 30% of those households acknowledge that they have subscribed to or tried a trial of a free or paid gaming service, Parks said. who is the president and CMO of? Parks Associatesin Addison, Texas.

“Cloud gaming services provide another opportunity to serve the gaming market and capture the consumer segment without game consoles or PC gaming hardware,” she wrote.

“Ongoing technological advancements, growing expectations for entertainment consumption to be cross-platform, and the prospect of integrating cloud gaming into ecosystem strategies make this an interesting market to watch in the future,” she added.

Few newcomers

However, Parks predicted that there will be few new entrants to the market. Setting up and operating a cloud gaming service is prohibitively expensive and challenging, she noted.

The key requirement is a performance-oriented cloud infrastructure, she continued. It is expected that if there are new entrants, given the state of current competitors, it should be a party that is willing to deploy the cloud resources of one of the current competitors, or already has a substantial cloud computing infrastructure of its own.

One place a new player can get the infrastructure they need is at Google, noted Ross Rubin, principal analyst at Reticle Investigation, a consumer technology consultancy in New York City. “Google’s decision to focus on white label offerings indicates that it believes there are better prospects for working together than going alone as a first-party service,” he told TechNews All.

He added that while the newcomers window isn’t closed, it may be getting smaller. “It’s still an enthusiastic market,” he said. “There are more opportunities at the cheaper, ad-driven end of the market, as opposed to the relatively expensive subscription end.”

Fighting established brands

Mark N. Vena, president and chief analyst at SmartTechResearch in San Jose, California, agreed that conditions for new entrants to the market are getting tough.

“It’s hard for companies that don’t have a history in the gaming space to be seen as credible as so many of the established players have strong brand reputations in the gaming space, especially from an outdated game title standpoint,” he said. to TechNews All.

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“Both Microsoft and Sony really cornered the market a few years ago by gobbling up some of the more prestigious game studios with franchise titles under their belts, shutting out potential newcomers,” he said.

“Netflix, for example, is clearly trying to penetrate the cloud gaming space and is getting into trouble because they don’t have well-known titles in their gaming arsenal and, most importantly, they are not perceived by consumers as a gaming game. destination,” he added.

Established players can also afford to trade losses for market share. “Microsoft has focused on using its cloud service as a lost leader. Most companies can’t afford to do that,” David Cole, analyst at DFC intelligencea market research firm in San Diego, TechNews All told.

Entering the gaming market is usually a challenging proposition at first, and doing it through the cloud has additional hurdles, claimed Michael Inouye, a principal analyst at ABI researcha global technology intelligence company.

“A new cloud gaming service will in most cases be at a competitive disadvantage when it comes to game libraries,” he told TechNews All. “Publishers are just not willing to put their games on every cloud gaming service.”

“In some cases,” he continued, “publishers may push their own platforms, have preexisting deals with other cloud gaming services, or simply disagree with the business model.”

Cross-Platform Demand

Nevertheless, Inouye claimed that the market is huge and that there are opportunities for new players, especially in mobile gaming.

“Mobile-based cloud gaming, at least for premium services, can be challenging due to competition with free-to-play in many cases,” he said, “but success can be achieved in the Asia-Pacific region because gamers there have demonstrated a willingness to pay for mobile game-based content, although revenue per player is lower.”

Parks also predicted that consumer desire for aggregation in the video streaming market will spread to cloud gaming. Subscribers to cloud gaming services can respond to marketing campaigns that focus on the simplicity of a single point of subscription, purchase, billing and consumption — one that allows them to play across platforms, she wrote.

In addition to increasing the appeal of the services to consumers, she added, this aggregation approach could potentially lead to increased revenue for game developers by increasing their reach and making it easier for consumers to subscribe to their content services.

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“More consumers are demanding cross-platform gaming experiences so they can play and participate in whatever device they’re using — console, smartphone, tablets, PC, or even a Chrome laptop,” explains Vena.

“Gaming has now become a multi-platform phenomenon and gamers don’t want to be limited by gaming on a single device or OS platform,” he continued. “It’s a consequence of the multi-device world we live in now, which will only grow in significance as 5G connectivity becomes more ubiquitous.”

Economical Gamers

Inouye agreed that there is definitely a growing demand for cross-platform titles, and gamers especially appreciate it when games are cross-platform purchases – meaning if you buy a game for the console, you can access the PC version too – but gamers can also be frugal.

“Ultimately, consumers will always be happy with the chance to play their games on more platforms, but not if they have to pay for each copy or make compromises across all platforms to get that opportunity,” he said.

“Gamers willing to upgrade their hardware will not accept degraded PC or console performance to access content on all three platforms for the same price,” he concluded.