Cloud gaming industry overview: Which industry giant has the edge?

Cloud gaming industry overview: Which industry giant has the edge?

The technology sector has experienced a very difficult year in 2021 on many levels. The global shortage of chips affected many high-value industries. The year 2022 does not look much different with major supply chain concerns. But it’s not all doom and gloom. The tech sector and the gaming industry specifically are known for their great adaptability. 

The cloud gaming market is led by several giant companies with various models, including Google, Amazon, Facebook, Apple, Intel, Nvidia, and Sony. 

But what is cloud gaming about? How does it work? 

Cloud gaming promises top-notch graphics and performance without the need for expensive hardware or extensive updates or downloads. Instead of having a high-end PC gaming console at home, cloud gaming platforms run the software from a remote data center.

Amazon, Microsoft, EA, Sony, Facebook, and Google are betting that the emerging business of cloud gaming will become the future of the gaming industry and an alternative solution to the supply chain issues faced by the sector.

Amazon

Amazon Luna is only available in early access, which means users must receive an invitation to sign up for the service. However, users of Fire TV and/or Fire Tablet devices, don’t need an invitation and can instantly sign up for one or more of Amazon Luna’s subscription plans.

Buyers can purchase the Luna Controller even if they don’t have an Amazon Luna subscription. Amazon Luna has three “Channels” subscription packages, which give access to different game selections. 

At the same time, Amazon has an extremely important competitive advantage, namely its video game streaming platform, Twitch. In 2020, there were about 41.5 million Twitch users in the U.S., and that number is expected to grow to 51.6 million by 2024. Twitch remains a high potential tool for Amazon to switch or even onboard users to its cloud gaming platform. It seems Amazon has a well-laid plan to take the crown of cloud gaming platforms.

It’s hard to say whether Luna will be a success, as the cloud gaming service is still in its infancy. Also, when comparing Amazon Luna to other cloud gaming services, from Xbox’s xCloud to PS Now, it doesn’t seem to attract many gamers. However, at a price point of $5.99, Luna is ideal for those just getting into cloud gaming. That said, Amazon’s cloud gaming service behaves similarly to its larger competitors: even with a great internet connection, gamers will notice a slight delay.

One of the key factors in Amazon Luna’s success compared to other platforms is the way the service is approached as a whole: no additional fees when a new game is introduced, no hidden charges, and consistent quality of service.

Amazon has acted differently in its strategy, focusing on what consumers want – better access to the games they already love or look forward to and not exploiting its platform to promote and highlight its games as Google Stadia did, which has had a positive effect on user perception. The idea of exclusivity is not as important as it used to be, and the release of a library of Google Stadia exclusives is a testament to that. 

Nvidia GeForce Now

Nvidia did not let the opportunity pass without launching its streaming platform. The final version of its GeForce Now was launched in February 2020 after several beta versions and offers three levels of service. GeForce now service is not a platform with a catalog of games like Luna, but more of an access to a selection of compatible games from Steam, Epic Games, GoG, or Uplay game stores. With Cloud Play, Steam integrates GeForce Now directly into its platform, which makes it possible to play directly on Nvidia’s servers from the Steam client with a few clicks. 

A pertinent question arises in this case, what’s the point of subscribing to the GeForce Now service if the service will also redirect us to another game store? 

The answer lies in the fact that Nvidia offers these games on high-performance servers, so the real service is the rental of servers included in the subscription, such as its RTX 3080 which delivers the ultra-performance that gamers crave. However, Nvidia’s weak point is the lack of agreement with some publishers who explicitly refuse to offer their games on the service. 

Nvidia’s GeForce Now has a free tier, but the best experience costs $10 a month for the priority tier or $100 every six months for the new RTX 3080 tier (graphics cards deliver the ultra-performance that gamers crave), which allows 1440p gaming at 120Hz. Since the end of 2021, a third level is available, using RTX 3080. This power boost allows for a 1440p definition at 120 frames per second. The servers are also separated, with an Adaptive-Sync system.

PS Now – Sony

Sony, one of the leaders of the gaming market in the world, offers through its PlayStation Now platform a catalog of more than 600 games available for streaming in 720p definition. Sony’s experience in the gaming market with the PlayStation, as well as its large user base, have contributed to the company’s smooth transition into cloud gaming. The service, which has several million subscribers, offers its catalog of PS4 games for download on a PS4 or PS5, which can be played even offline and in native definition. 

Faced with the competition, Sony had the idea of offering each month strong games from its catalog such as Metro Exodus or Spider-Man that are available temporarily, usually for three months, in the catalog. This was for the gaming giant, a way to remedy the fact that the catalog of games is a bit sparse in recent titles.

Google Stadia

Google was one of the first entrants into the cloud gaming market in 2019. The concept was neither more nor less than a dematerialized game console. The platform’s compatibility makes it accessible on a TV using a Chromecast Ultra and a Stadia controller, on a PC with Google Chrome, and on Android with the official app.

In early February 2021, Google decided to shut down its video game studio after several technical problems, in addition to its very limited catalog of games. Google could not take advantage of the promising start of the service. Stadia’s hastened launch, compared to other operators, had implications that contributed to its fall.

Unlike the other players in the gaming industry, Google did not have much to show for it, except for the technology, which is mainly seen in the games offered on Stadia. The company had to find expensive solutions to feed its catalog by introducing third-party games on the platform such as Red Dead Redemption, which would have cost tens of millions of dollars.

Stadia’s case has prompted other players to seek third-party support before launch, coupled with a strong lineup of exclusives. This experience has shown that being the first to enter the market does not ensure an advantage, even when backed by significant funding.

Microsoft: Xbox Game Pass (xCloud)

Microsoft has launched its Xbox Game Pass Ultimate offer in September 2020. The company has benefited from its gaming successes (Gears of War, Forza, Halo, etc.), but has also made use of games from third-party studios or independent games. Every month, new games are added to the catalog, which ensures that xCloud has a strong position among users.

Potential entrants

Apple, Netflix, and Facebook have thought about launching their own cloud gaming services. Electronic Arts also wants to enter the race. The game publisher announced at “The annual Electronic Entertainment Expo (E3) 2018” that it is developing its cloud gaming service. In October 2018, EA’s CTO Ken Moss said that this cloud gaming service was called Project Atlas, but the offerings of this product remain unclear. This service should combine Frostbite (graphics engine designed by DICE for EA), servers in the cloud, and artificial intelligence. 

Cloud gaming is transforming the video game market, with all the main players in digital technologies either already offering or currently developing their cloud gaming services. However, some players remain very discreet on the subject.

The diversity of products and packages offered by Amazon, the flexibility in the use of its hardware, and the monopoly on streaming with its famous platform, Twitch, which continues to attract millions of users each year, make Amazon a major player in the sector. Amazon could also allow Twitch streamers to earn revenue from streaming Luna games and encourage viewers to join them in the game using Luna. There is also the prospect of a “Play on Luna” feature eventually appearing on Amazon as an alternative to buying physical or digital copies, although publishers may have a big problem with that.

Cloud gaming has everything to be the future of video games, although it is not ready yet to completely replace home computers and consoles. The technology is in its infancy, and its development would depend on advancements in connectivity to provide a better alternative to gaming machines. 5G offerings could be a catalyst for the cloud gaming industry, eliminating connectivity issues and enhancing user experience.

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