Cloud Gaming

People keep talking about it, but will 2021 finally be the year that cloud gaming comes of age?  Will we be seeing an end to discs and downloads as gamers discover a new age of streaming?

The emergence of new services

At the end of 2020 new Cloud gaming services like Stadia, Microsoft’s Ultimate Game Pass and now Amazon’s Luna began to emerge as serious, more rounded, offers.  However, let’s not get too ahead of ourselves, many of these services remain at an early stage of development.  Clearly, the ability to offer a wide range of good quality game content, that works well on many different platforms, represents two essential preconditions that need to be met before these services can make a real impact.  Progress is being made but there is still a long way to go.

The elephant in the room – internet connectivity

The elephant in the room, of course, is the quality of the player’s internet connection.  Looking ahead, you can see how developments like 5G will open up the potential for streaming to mobile, and broadband services in general can be expected to help expand this market. 

That said, the situation today is that many people lack an internet connection that can adequately stream these services as they stand.

This means that the sweet spot for these services at present will be those people with a good broadband connection, who aren’t wedded to the idea of having the latest and greatest console/PC set-up.  The big question is – how small/large is this sweet spot? 

The sweet spot

Those in the sweet spot will include those new to gaming, who are not particularly devoted to a specific hardware set-up.  The PS and Xbox lovers seem keen to continue to invest in consoles.  So too, I would argue, the hardcore PC gamer.  I am sure that some of these people will be happy to experiment with game streaming.  As they are likely to be open to experimentation with any new developments in gaming.

However, there may be newer audiences emerging in terms of people who have taken to gaming a lot more during lockdown.  Another group might be the older generations of gamers – people more likely to have old/outdated gaming platform set-ups.  A third group to look out for would be female gamers – less wedded to consoles and PCs and far more at home gaming on a mobile device.

Cloud gaming might provide these people with a relatively quick and easy way to play new games without needing to get the latest consoles.  Obviously, these services will need to effectively connect with these people and get their messaging right.  After all, many of these people are a different audience from the hardcore gamers currently queuing up to buy the very latest consoles. 

The need to promote real benefits

There is also a potential problem here – and that is that I wonder if they are even promoting the right benefits?

To use these services effectively at the moment you must have a great internet connection.  I suspect that those gamers with great connections are also likely to be the same people with the latest Xbox / PS console or with high powered PCs.  They will be the very same people who have easiest access to the latest games because their tech can handle them.  They are also likely to be the people who will suffer the least from problems when downloading games. 

As a result, some of the benefits that cloud gaming often talks about are least likely to be issues for people with the best internet connections.  So, what is the point of pushing the message that you do not need the latest hardware, if the people with the fastest, most reliable speeds have the latest hardware anyway? And what is the point of telling them that they do not need to worry about slow downloads or troublesome upgrades when it is not a problem, because most of them have top-end fibre connectivity? 

So, the big question is, what other benefits are these services offering? 

Content is King

The obvious key requirement for these services to have any future at all will be for them to offer a strong library of relevant content.  Because for any streaming service, content is king after all.  Offering a few dozen titles (not all of which work on all platforms) is not that great to say the least.  100 titles – so what?  Steam offer thousands of titles!  Once people can be sure, for example, that all Xbox games are available for streaming on Ultimate Game Pass – then we would be cooking on gas.

At present content libraries are a bit scant, although they are growing.  The appeal of a streaming service will be limited by the range and quality of the content it can offer and its ability to deliver that content on any platform with consummate ease.

Just compare these services with successful, mass-market, film or music streaming services.  Netflix UK offers 6,500 films and box sets, including much unique content, available over pretty much any platform you could want.  Currently, cloud gaming services come nowhere near offering that kind of choice.  And if those services can take one lesson from film and TV streaming, it will be that the provision of attractive original content is likely to be the most important determinant of longer-term success (or failure).

The Right Business Model

Finally, these services are going to need to find the right business model for delivering cloud gaming.  Currently, things are at an early stage and, I suspect, many providers are still feeling their way.

The benchmark standards have already been set by the music and film streaming services.  These are the standards by which cloud gaming will ultimately be judged. 

Netflix UK deliver their service for an all-in cost of £84-£168 a year.  Now, buying a film on a DVD is generally cheaper than buying a game on disc so, granted, it is not 100% comparable.  That said, film and music streaming services have, in many ways, set expectations in consumers’ minds as to how successful streaming services should work. Which is that an all-in price provides access to a large amount of content.

On the other hand, Amazon’s film and TV streaming works a little differently in so far as you get access to a lot of free stuff and then pay extra for the premium content.  That works because there is a lot of essentially free content. 

So, when all is said and done, cloud gaming is likely going to need to develop an approach like the models that have been shown to work well for film and TV.  And that, of course, brings us back to the need for content.

A year of evolution rather than revolution

On balance, 2021 is more likely to prove to be a year of evolution and experimentation rather than one of revolution.  It is likely that these services will need this time to build their functionality and gaming libraries.  In addition to that, they will probably go through a period of experimentation whilst they get their business models right.  

That said, it is quite possible that by the end of the year we may see some of these services develop the necessary content libraries, business model and technology to start making a more serious in-road into the traditional gaming market.  The potential is there – at the end of the day, if it can work for film and TV then it can work for gaming.  But there is still a fair journey to go before realising that potential.