Cloud Gaming

Discovering the Future of 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  Another group might be the older generations of gamers – people more likely to have old/outdated gaming platform set-ups.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.

Discovering the Future of Mobile Gaming

Mobile gaming has achieved massive popularity in recent years.  The pandemic of 2020 has seen it boom, with Facebook figures reported in the Drum, showing mobile gaming hours spent on its platform doubling when comparing Q4 2019 with Q4 2020.  So, what might we expect to see in the coming year?  Here’s our take on four key things to look out for in the development of mobile gaming in 2021.

Firstly, 2021 will see the roll out of 5G. The consequence of this is that it will become increasing easy to stream games over mobile and this will open the door to new possibilities in terms of gaming development. 

The most popular mobile games up to now have tended to be puzzle games, arcade games and other what might be termed “casual” games.  Part of the reason for their popularity relates to the fact that they are well suited to playing quick games on-the-go on your phone (for example, whilst you are commuting or taking your lunch break).  No doubt that will remain very influential in how the market develops.  That said, other types of games may currently be less popular on mobile only because of the limitations of the technology.  So, if 5G is combined with a great use of edge computing this will allow mobile gamers to play games that offer better graphics combined with a more interactive, immersive experience than has previously been the case.  As a result, we may well find that other gaming genres can finally become more popular on mobile.

Secondly, we should look out for further developments in terms of the links between gaming and social media on mobile over the coming year.  The original Farmville demonstrated the potential of social media gaming on Facebook over a decade ago.  Recently Farmville was retired from Facebook (its flash technology finally consigning it to the history books) but it has provided the blueprint for casual gaming success.  Zynga’s founder, Marc Pincus, noted in his recent Twitter feed that “The real innovation of FarmVille was in making games accessible to busy adults, giving them a place to invest and express themselves and be seen by people in their lives as creative.” Farmville on Facebook may be gone but Farmville 3 will aim to emulate its success on mobile.  But Zygna are by no means done with social media.  In 2020, Snap Games’ players exceeded 100 million, prompting Zynga to enter into a partnership with them to create multiplayer games for their platform.  Facebook too has moved on with its own gaming app and has seen gaming activity double in 2020.  It will be interesting to see how social media platforms and gaming companies seek to find new ways to exploit the opportunities offered by such an obvious symbiotic relationship during 2021.

Thirdly, is the huge potential mobile gaming offers as the advertising media of the future.  There is clear potential here to reach an engaged, fast growing, mass market audience.  Finding ways in which to make this work & exploring how best to use this new media will be an area where we’d expect to see some significant developments in 2021.  And the way forward may not simply be in-game ads but also sponsorships and in-game product placement (less intrusive and potentially as impactful as any influencer endorsement).   Reaching global audiences in the tens of millions means that mobile gaming is not a medium that advertisers can afford to ignore.

Fourthly (and finally), mobile gaming may well prove to be an area to watch in terms of cloud streaming services such as Google Stadia, Microsoft’s Ultimate Game Pass and Amazon Luna. 

These services will need to do some work to get the technology right and (more important in many ways) the content.  5G will have a role to play in terms of the former but, assuming they can get their ducks in a row, mobile could well be the platform to watch.  Why?  Because the mobile gaming audience will include a great many new as well as casual gamers who are not wedded to traditional console and PC gaming.  They will also include many people who are comfortable with streaming film or music to their mobiles already, so Cloud Gaming will not seem like a strange concept to them. 

However, there are barriers here that will need to be overcome – the availability of faster reliable connections (which 5G can play a role in providing) and the limitations of data caps will likely mean that cloud gaming on mobile will start off niche.  More important will be the availability of a strong library of mobile games (and here it is still very early days).  Of course, these services also need to get their business model right – can they evolve a model that is closer to a Netflix or a Spotify to really enable them to connect with a mass market?  All that said, mobile has the potential to offer some significant longer-term opportunities for Cloud services and it is worth watching out for how this develops over 2021.

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