There are currently three major poles of the global video games market: we have PC gaming in one corner, mobile gaming in the other, gaming consoles in the third. And there is, of course, Nintendo, the Japanese console maker that seems to ignore all of the above, making its own rules. Soon, in turn, there might be a fourth that could completely change the way we look at gaming. Just like live casinos took the iGaming industry to the next level, cloud-based gaming may alter the way people play their favorite video games – and this may cost the traditional video game market dearly.
The gaming market today
In just a decade, smartphones tore an important piece out of the market of handheld consoles, and they became the most popular (and most lucrative) gaming platform today. PC gaming, the platform that was once the biggest and the most profitable branch of the gaming business, is now the third-biggest, overtaken by both consoles and smartphones when it comes to revenues – and projected revenue growth, according to Newzoo.
Newzoo’s projections expect mobile to continue to grow in the coming years, with the console market to stagnate and the PC gaming market to shrink by a few percentage points. But these predictions don’t account for cloud gaming, a segment that’s been lurking in the shadows for some time only to break into the market in force this year.
Gaming as a service
Gaming has driven the development of PCs – especially GPUs – for years. The innovation in the field has, in turn, slowed down recently – there’s only so much processing power one can cram on a circuit board, after all. There are many gamers who have grown tired of constantly keeping up with the fresh chips and technologies released by gaming hardware manufacturers and developers. This is good news for the many “TV gaming” services that have recently emerged.
Gaming has first crawled into people’s living rooms via consoles – but there is a new approach emerging today, with the hardware running the games not even in the same room (perhaps not even in the same city or state). With the increase of the wired broadband internet speeds, streaming high-quality video is the new norm. Combining this with a cloud server capable of running even the highest-profile games and handling thousands, perhaps millions of users from all over the world was a big next step but it was taken by several providers who introduced “gaming as a service”.
And when Google, one of the biggest tech companies today, has presented “Stadia”, its own cloud gaming solution, things have become serious.
Cost-effective gaming
An average gamer will invest quite a serious amount in hardware and peripherals and will spend a lot on the games themselves. Cloud-based gaming takes the investment in hardware out of the equation, replacing it with one flat monthly fee. With Stadia, Google plans to launch a service that will bring high-profile games to even the most modest hardware – Chromebooks are one example. Besides, it eliminates the need for waiting for the game to download and install – ideally, it will already be there on the server, ready to run.
Will Stadia and its likes hurt the gaming market?
Probably not. If anything, it may be able to boost it by offering masses of prospective gamers access to a library of high-profile games without the need for high-profile hardware (they will still need to purchase the games at full price). In the long run, it may shift the balance of power slightly in the short term after its launch.
It may reduce the demand for gaming consoles, though – this possibility was enough for Slightly Mad Studios, the company that planned to launch a competitor for Microsoft’s Xbox and Sony’s PlayStation, to withdraw the patent applications it submitted for its prospective Mad Box console, and Ubisoft CEO Yves Guillemot to state that the days of the gaming consoles are numbered. But don’t expect these changes to show in the next couple of years.
