Report: Cloud Gaming market expected to grow by almost 1000% in 5 years – Is it the inevitable future?

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Cloud Gaming has been the talk of the town for a couple of years now. With Microsoft, Sony, NVIDIA, Valve and Google all pushing for supremacy in the cloud gaming market with their respective streaming services, the future of gaming being cloud based seems inevitable. However, if you’re still skeptical about the feasibility and the adoption rate for cloud-based gaming solutions, here’s something for you.

According to a report published by MarketsandMarkets, the Cloud Gaming market is expected to grow at an impressively high rate of 59.0% annually over the next 5 years. The report includes data from different regions of the world and also separates it into different categories of services and consumers.

At the end of 2019, the cloud gaming market was valued at $306 million USD. However, it is projected to grow and reach $3,107 million USD by 2024, which is a titanic increase of almost 1000% over 5 years. However, there are a lot of factors that come together to achieve such growth.

Project xCloud Xbox

For instance, the commercialization of 5G will bring much higher bandwidth to the masses, especially on mobile devices. In addition to that, the gaming market has also continued to grow at an increasing rate over the years.

There is also just an overall increase in internet users around the globe thanks to better infrastructure. This, paired with better 4G and the introduction of 5G has allowed an ‘upsurge of immersive and competitive gaming on mobile devices’.

For cloud based gaming, especially when it comes to streaming, only having bandwidth is not enough. The biggest hurdle for game streaming so far has been cutting down on latency. While Google Stadia, Project xCloud and PlayStation Now all have their own separate solutions, no one really has it nailed down just yet.

Google Stadia
Stadia Data Centers

Eventually, it all comes back to distance and the speed at which the signal travels between the client and server. Therefore, the implementation of fiber optic internet around the world will prove to be crucial for game streaming in the coming years.

Gaming consoles and PCs are getting more expensive every generation. This is due to increasing costs of newer & more powerful hardware. While consoles are still relatively cheap in the long run since you only have to buy one every 5 years or so, they’re still a pretty big one-time investment.

Gaming Console market expected to grow by $14 Billion despite growing costs – Report

However, game streaming services provide an alternative to that with basically no initial costs. Services like Project xCloud and Google Stadia are already providing that to their users with the ability to play their favourite games on devices that they already own.

Image: GamingScan

Furthermore, basically everyone has a smartphone, tablet or a laptop at this point so eliminating that entry barrier means that game streaming services can be accessible for everyone. Additionally, since the games are streamed from data centers, much like Netflix or YouTube, most devices can run resource-intensive games on them without breaking a sweat.

Smartphones will play a crucial role in growth of cloud gaming in the coming years

Yes, cloud based gaming is possible on devices ranging from laptops to tablets. However, the biggest game-changer for the market will be smartphones. Smartphones have already been a ‘significant contributor to the accelerated growth of video games market’.

With the sheer potential for portability that they offer, smartphones are the prime choice for any one looking to just play some games on the go. Furthermore, smartphone displays and hardware is also getting better with phones now able to support 4K displays and higher refresh rates as well.

However, the biggest issue, as previously mentioned, with cloud gaming currently is figuring out how to cut down on latency. Other things like bandwidth limitations are also restricting growth but they can be somewhat tackled by different video compression methods.

Xbox console streaming
Image: Microsoft

To attain full potential, however, cloud gaming still needs higher bandwidth with low latency as video games require a huge amount of data transmitted in a short span of time. With the rise of 5G though, hopefully we can curb that thanks to higher bandwidth and lower latency on networks. However, carrier data restrictions still need to be sorted out for things to be fully viable.

Overall, there is absolutely no doubt that cloud-based gaming is the future. However, when will we get to the point of it being globally viable is another question, the answer to which will only unfold with time. In any case though, exciting times lie ahead for the gaming industry.

You can check out the full report on cloud gaming right here.

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