Cloud Set To Shake Up Gaming Arena

By The Console Connect Team|4 June, 2019

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Although games consoles are still heavily reliant on physical media, the cloud gaming market has burst into life again in recent months. According to a recent report released by IHS Markit, the news that newcomers like Google and Tencent are entering this market, and that existing champions such as Sony and Microsoft are moving in this direction, underlines that cloud, working as a platform and offering games-related services, is the new competitive platform dynamic within the games industry.

Piers Harding-Rolls, research and analysis director for games at IHS Markit, said he refers to this next wave of interest in this segment as ‘next-generation cloud gaming’ and expects it to make more of an impact on the market in 2019 than at any time previously.

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Major growth in cloud gaming content and infrastructure

The cloud gaming content and cloud gaming PC services markets were worth a combined $387 million in 2018, which is forecast to grow to $2.5 billion in 2023, Harding-Rolls said. IHS divides the cloud gaming market into two distinct service types: content-based services and gaming PC services where consumers bring their own games to a rented cloud PC.

The market is getting increasingly crowded thanks to platforms like Sony's PlayStation Now, Nvidia's GeForce Now, Google Stadia, and the upcoming Project xCloud from Microsoft. Though these services vary in terms of content and specific features, they don't require powerful consoles or PCs to play the games. Instead all that is required is a reliable internet connection to the data center the games are run from.

New alliances, new threats

These new developments are causing significant changes in the traditional landscape. Microsoft and Sony – once leading rivals – this month announced an unusual partnership around cloud-based gaming services. “The two companies will explore joint development of future cloud solutions in Microsoft Azure to support their respective game and content-streaming services,” Microsoft said in a statement. Sony’s existing game and content-streaming services will also be powered by Microsoft Azure in the future.

With two of the games console powerhouses committing to Microsoft Azure for their cloud needs, the big losers will be Amazon and Google – although the move does seem to suggest a very real threat from Google in the cloud gaming arena. Google unveiled its own Stadia game streaming service earlier this year as a threat to both Microsoft and Sony. Indeed Google already has the YouTube network for streaming content delivery and Stadia will take the cloud gaming experience to the Chrome browser, Chromecast, and Pixel devices.

Topics: Networking
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