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The cloud gaming industry could be worth $2.5 billion by 2023, analyst claims

By Polycount · 28 replies
May 22, 2019
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  1. According to a report from IHS Markit, an increasing number of consumers are more than happy to give up ownership of their games (even digital "ownership") in favor of cheaper, more convenient alternatives. Indeed, the analysis website says the cloud gaming industry generated a whopping $387 million in "consumer spending" throughout 2018, with Sony leading the charge.

    For the unaware, "cloud gaming" typically refers 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 game selection and specific features, they have one thing in common: they don't require users to have powerful consoles or PCs to play the hottest games.

    All you need to use them, in most cases, is a solid internet connection and enough cash to cover a small monthly subscription fee. Think of them as the Netflix or Hulu of gaming.

    IHS Markit believes this burgeoning industry will grow even further in the coming years: first to over $500 million in total worth by the end of 2019, and then to roughly $2.5 billion by the close of 2023. Markit analyst Piers Harding-Rolls notes that there will likely be "significant lag" between initial industry disruption and widespread adoption of the idea; hence the slower initial forecasted growth (in other words, it will take some time for gamers to get used to the idea).

    Obviously, these numbers are just forecasts and not guarantees of what the future will hold. Perhaps gamers at large will reject the lack of control that these cloud gaming services bring to the table, or maybe they will embrace the idea wholeheartedly -- only time will tell.

    Permalink to story.

  2. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,180   +859

    Cloud Gaming is only worthwhile if:

    #1 people don't have broadband data caps
    #2 broadband speeds improve to the point LAG isn't an issue (LOL like that'll happen anytime soon)
    #3 The cost of low latency broadband without data caps comes down.

    I can't see doing cloud gaming beyond the PC or Smartphone environment.
    Impudicus and Uncle Al like this.
  3. yRaz

    yRaz Nigerian Prince Posts: 2,864   +2,169

    Cloud gaming might be what we need to bring prices down and bring up performance. However, for the time being, you're right and the US broadband infrastructure can't handle it.
  4. Trillionsin

    Trillionsin TS Evangelist Posts: 1,806   +407

    I don't want to ****ing cloud game!
    Morris Minor likes this.
  5. Uncle Al

    Uncle Al TS Evangelist Posts: 5,300   +3,706

    "Cloud gaming might be what we need to bring prices down and bring up performance. However, for the time being, you're right and the US broadband infrastructure can't handle it."
    Don't kid yourself ... prices will go up rather than down. These kinds of "improvements" have nothing to do with performance and everything to do with raising prices while cutting costs. The same reason behind all those "loot" boxes ....
  6. mcborge

    mcborge TS Guru Posts: 568   +463

    Even with a 300 mbit connection (uk, Virgin media) I still don't want to game via the cloud. I will always prefer to have actual installed games on my drives and all my pc gaming friends here in the uk feel the same regardless of how fast their internet is. I guess it must be a generational thing in our case.
    Morris Minor likes this.
  7. koblongata

    koblongata TS Addict Posts: 186   +56

    I think for people with fiber to home (~1ms ping), there really is no incentive to put together a noisy power sucking gaming rig at home that requires upgrade every few years anymore.

    (well... provided that if the Stadia game selection is robust enough...)
  8. BSim500

    BSim500 TS Evangelist Posts: 602   +1,211

    "Cloud gaming" is just a glorified Youtube / Twitch video stream with a feedback loop, and it's obvious that ugly over-compressed video stream bitrates have hardly jumped up 50-100x from 3-6Mbps to 300Mbps just because someone got themselves a 300Mbps Fibre connection for cost reasons (at the server end). "Play Streamed Crysis 3, no expensive PC required but comes with smeary plastic grass!" Huge LOL at the raw naivety in people actually believing that "cloud gaming" video streams will be tailored to whomever has the fastest connection rather than minimising cost-per-user...

    Indeed, the whole thing is going to end up like video streaming - impressive for the very first service that tries it all the time it has a monopoly, but then industry fragmentation kicks in and over time one single $20 subscription will turn into $30pm for EA streaming, $30pm for Ubisoft, $30pm for Square Enix, $30pm for Blizzard, etc, and since gamers no longer own their games it'll be a "captive audience" too.

    The whole thing has far more to do with the final step in pushing for digital de-ownership, replacing free community modding with the rental equivalent of Creation Club, and going full steam ahead with implementing already patented garbage like "Dynamic Difficulty Adjustment" (where gameplay in games rendered on the server is easily altered on-the-fly with the sole intention of manipulating almost everything you do in game into "further driving user engagement with micro-transactions"), than any "benefit" to the end user.
    ShagnWagn likes this.
  9. Nobina

    Nobina TS Evangelist Posts: 1,904   +1,417

    I don't know what kind of noisy machine do you have but most of them, especially higher end machines are not noisy at all. Most kitchen appliances suck more power than any PC and anyone who can afford fiber internet probably afford a high end gaming PC that will run games better and smoother than some cloud.
    ShagnWagn likes this.
  10. TechGamer

    TechGamer TS Evangelist Posts: 516   +115

    Why is everyone complaining about network speed being the main culprit for cloud gaming. Improving network speed will reduce lag overall but the main issue remains that there is far too long of a distance from the client user to the data centers. Even Gigabit connections have the same issues just as 100Mbit.

    What needs to be fixed is less network hops to reach the data centers and a lighter protocol of sorts to perform the streaming not everyone internet connection. Network connection would only be seen as the limiting factor in terms of not having enough bandwidth to support a 60 fps 1920x1080 stream but not latency wise.
  11. LogiGaming

    LogiGaming TS Addict Posts: 129   +101

    They are still noisy, even if you spend a lot on cooling. It also needs maintenance for cleaning dust regularly, it takes space, it demands cables, etc etc. With that being said, I would never go full cloud gaming, but I can see the appeal for a lot of people, casual gamers. And we all know casual gamers dominate the market, look at PS4 and Switch sale numbers.

    Do you think some parents would mind paying a small fee to let their children have fun with Mario kart on the TV by stream? Do you think they would still prefer buying a 200€/300€ console? I don´t think so..

    Cloud gaming won´t end the traditional way of gaming, is just another viable option. Stop being a dinossaur and let things evolve. There´s room for everything, that´s called options. That´s why there are PCs, consoles, handhelds, mobile. That´s why there are still physical games and PS5 will still have them, if you opt for it. Options are always welcome.
  12. Bubbajim

    Bubbajim TechSpot Staff Posts: 661   +647

    My experience with game streaming comes from PS Now and it's definitely a mixed bag. For reference, I have a mid-tier connection of 40mbps, nothing amazing but in theory more than capable of running services like this.

    For some games, the slower-paced types like adventure games, strategy and some RPGs, this is great. You don't feel much of the latency, and it's cool to be able to go through a Netflix-style catalogue of games and just try them out before deciding on something to get stuck into. I treat it like a demo library for that kind of thing.

    But for anything that requires fast, precise reactions, it's just not feasible right now. Playing any FPS is infuriating because even a tiny bit of latency makes you so bad compared to other players you want to throw the controller across the room. Similarly, I tried out Rocket League - which I also own on Steam - just to see what it's like via a streaming service. It was awful. The precision required to get the ball to go where you want it to is impossible to achieve because the latency means you're not able to react properly to what's happening on screen.

    If you want to try out games that you think you might want to play through, and those are slower games, streaming is great. But really, download & install will be the way to go for a long time to come.
  13. Nobina

    Nobina TS Evangelist Posts: 1,904   +1,417

    They really aren't noisy and you don't have to spend anything on it, you're look like you don't know much about the subject. By the way, cloud gaming doesn't mean you are literally on a cloud playing a game, you still have to have a PC which means you have all those (non)issues you mention even if you use cloud. I don't know where did you get the idea that I'm trying to stop cloud gaming from existing, I'm just stating the obvious and that is that cloud gaming in the current climate doesn't look promising.
  14. Impudicus

    Impudicus TS Addict Posts: 120   +77

    I don't see could gaming coming anytime soon. Especially with competitive online games. Latency is a constant issue as is with just the small amount of data transferred. You add all the video to that and it's just going to multiply. Not to mention households with multiple gamers. Now single player games this can be viable. Even messing around with the in-home streaming on steam there's a noticeable input latency, and that's on a 1Gb connection <1ms ping on the same network. Not to mention the reduced video quality, gamers spend a lot on hardware just so things look a little bit better. And those playing high res 4k or 144hz.. I could just keep going.
  15. koblongata

    koblongata TS Addict Posts: 186   +56

    How old are you?
  16. lexster

    lexster TS Maniac Posts: 320   +167

    I do not and will not use subscription based business models for gaming. Nor do I or will I use cloud service game platforms.

    Morris Minor and Impudicus like this.
  17. neeyik

    neeyik TS Addict Posts: 47   +34

    Instead the cost will be shifted towards requiring the appropriate telco service, and I have no doubt in markets where such organizations have the opportunity to change end users an additional fee for cloud gaming on their network, they will jump on the cash cow big time.
  18. LogiGaming

    LogiGaming TS Addict Posts: 129   +101

    So you want to teach someone that builds PCs for almost 20 years? If you don´t overspend on cooling, a powerful rig will always have noise. There´s no other way to avoid it. I´m not saying it will sound like a jet, but it will have more noise than a cloud solution.

    And wtf you mean with "you still have to have a PC?". Nowadays TVs come with OS, unless you call that a PC, I cant get your argument. Someone that strictly plays cloud gaming doesn´t need a PC on his living room for sure.
  19. Nobina

    Nobina TS Evangelist Posts: 1,904   +1,417

    I don't know about your PC building experience. Maybe 20 years more and you'll get it right.

    I can see people playing it on a TV but they are a dying breed and those good ones with OS on em can be quite expensive, opposite of what cloud gaming is trying to achieve. I'm sure you can play games on a casette player as well if you have one lying around, or maybe a pager. I think most of the folk will use PCs (mostly laptops) as a primary cloud gaming platform because of the keyboard and mouse.
  20. LogiGaming

    LogiGaming TS Addict Posts: 129   +101

    Lol dude you literally have no idea. Playing videogames on a TV is a "dying breed"? I guess you are not aware of the current market.That must be why the big TV companies are pushing towards lower input lag, high refresh rates, and even monitor companies like Asus or HP are releasing BFGD monitors (65 inches). Also you think most gamers use a keybaord and mouse? Again 99% of console games do not support keyboard and mouse and they still sell. PS4 alone has sold almost 100 million units. I really think you live on your own bubble dude.

    Btw, a 4k TV with an OS costs as low as 400€ nowadays.

    You are one of those guys that think gaming is only about sitting on a chair constraining your whole veins and circulatory system, using a keyboard and mouse on a desk while playing counter strike or league of legends. Cmon.
  21. 144hzGamer

    144hzGamer TS Addict Posts: 206   +127

    People playing on tv a dying breed? Ahahah welcome to 2019 old man! Playing games on a desk isnt the only option anymore, in fact the gaming market on the living room increased in the last 10 years. So whats the only way to play games? On a desktop computer? Lel
  22. 144hzGamer

    144hzGamer TS Addict Posts: 206   +127

    He is so clueless. FML a 10€ android usb pen runs playstation now or nvidia cloud gaming service. Dude is clueless
  23. Nobina

    Nobina TS Evangelist Posts: 1,904   +1,417

    I love people who tell me what I think when I never said I think that. Defintely not a sign of mental illnes.
    Again, never said desktop gaming is the only option, it never was. Arguing with illiterates in a nutshell.
  24. LogiGaming

    LogiGaming TS Addict Posts: 129   +101

    You said gaming on TVs was a dying breed. Fact. What other ways of gaming exist apart from mobile? Desktop gaming or TV/big screen gaming right?

    And I don´t get the "mental illness" argument. Dodging now aye? Nice argument.
  25. Nobina

    Nobina TS Evangelist Posts: 1,904   +1,417

    I tell you I never said that desktop gaming is the only option when gaming and you quote me saying TV is a dying breed, how the **** are these two the same thing? See the mental ilness now?

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