The concept of cloud gaming is both logical and innovative. By shifting the processing power to remote cloud servers, instead of relying on dedicated hardware, gamers can seamlessly stream their favorite games. This opens up the possibility of attracting a larger audience, free from the constraints of expensive consoles, as long as high-speed internet connections are readily available.
However, despite numerous attempts, the launch of video game streaming services has not been entirely successful. One of the pioneers, OnLive, emerged more than ten years ago with the promise that any internet-connected device could serve as a gaming interface. Unfortunately, users faced issues such as poor graphic quality, leading to OnLive being shut down by its buyer, Sony. Google’s Stadia, a cloud gaming service launched a few years later, addressed these problems with its technical prowess, but eventually met the same fate and was discontinued.
Nevertheless, companies are still determined to make cloud gaming a reality. Amazon Luna, Nvidia’s GeForce Now, and Microsoft’s Xbox Cloud Gaming are all competing for users. Even Netflix has plans to enter this domain. According to Newzoo, revenues in the cloud-based gaming sector grew by an impressive 73% to $2.4 billion last year. However, this still only represents about 4% of the console games market and is merely 2% of the size of the mobile gaming industry. Therefore, both the market and the business model for cloud gaming are still a work in progress.
Microsoft, with its declining Xbox sales compared to Sony’s PlayStation 5, sees cloud gaming as a potential battleground where it can thrive. However, its attempt to acquire Activision Blizzard was rejected by the UK antitrust regulator due to concerns that Microsoft might monopolize the market by leveraging popular games like Call of Duty. US regulators are also opposing this deal, further complicating Microsoft’s plans.
One of the primary challenges faced by cloud gaming services is the absence of compelling and exclusive titles. Netflix gained popularity not only because it was convenient but also because it offered popular shows like House of Cards to stream. Similarly, cloud gaming needs to provide users with exciting content. No one wants to pay a monthly fee or endure in-game advertisements just to play the same old games. Only by delivering better and more diverse content can cloud gaming truly dominate the gaming sector.
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