Cloud gaming market is estimated to witness high growth, owing to increased internet speeds and rising investments in 5G infrastructure
Global cloud gaming market is estimated to be valued at US$ 6.21 Bn in 2024, exhibiting CAGR of 49.8% over the forecast period 2024-2031. Furthermore, increasing penetration of broadband and high-speed internet across the globe can drive the market growth.
Market Dynamics:
Increased internet speeds: Increased internet speeds across the globe can drive the market growth. With growing investments by telecom operators and governments in developing high-speed communication networks such as 5G, internet speeds have improved remarkably in the recent years. This has enabled seamless operation of cloud gaming platforms wherein high-definition graphics-intensive games can be streamed over the internet.
Rising investments in 5G infrastructure: Substantial investments by telecommunication companies in deploying 5G infrastructure can boost adoption of cloud gaming services. 5G technology provides ultra-low latency and multi-Gbps peak data speeds, which are critical enablers for cloud gaming. Many regions worldwide are witnessing accelerated roll-outs of 5G networks, which would enhance the connectivity infrastructure and support an improved cloud gaming experience to the users. Various cloud gaming service providers are also focusing on introducing exclusive 5G-supported cloud gaming platforms.
Market Drivers
Increasing Smartphone and Tablet Penetration
Rising penetration of smartphones and tablets across the world can drive the cloud gaming market growth. As per recent statistics, over 6 billion people owned a smartphone globally in 2022. This widespread adoption of mobile devices has made gaming more accessible to people. Cloud gaming removes the need for powerful hardware on mobile devices and allows users to play graphic intensive AAA titles on their phones and tablets. This has increased the appeal of cloud gaming significantly among mobile gamers. More people are now comfortable playing cloud-based games while onthe-go using their smartphones and tablets.
Growing Interest in Subscription Based Gaming
Rising popularity of subscription-based gaming models can also drive the market growth. Both gamers and publishers have shown growing preference for subscription services over buying games individually. Key players like Microsoft, Nvidia and Google have launched their own cloud gaming subscription services, which provide access to huge game libraries for a monthly fee. The subscription approach offers gamers more choice and flexibility as compared to purchasing games. It has aligned well with changing consumer trends.
Market Restraints
Latency and Connection Issues
Latency issues during gameplay can hamper the cloud gaming market growth. For seamless experience, cloud games require very low latency between the data centers hosting the games and the user's device. Even minor latency can degrade the gameplay drastically. However, achieving and maintaining consistently low latency across all regions and network conditions can be difficult. Latency depends on multiple factors outside the control of cloud gaming providers like network traffic, distance from data centers, and others. This undermines the user experience and discourages widespread adoption.
Lack of Dedicated Hardware
Lack of dedicated cloud gaming hardware in the market can also hamper the market growth. While mobile devices and PCs can be used, these are not optimized for cloud gaming. Factors like variable quality screens, controls, data usage limits, and others can. impact the overall experience. Dedicated cloud gaming handhelds or set-top boxes offering features like high resolution display, responsive controls and unlimited data plans could boost adoption. However, high costs associated with manufacturing such specialized hardware can hamper the market growth.
Market Opportunities
Emerging Regions with Growing Internet Penetration
Most cloud gaming services currently have limited geographical reach, focusing only on developed markets. However, several emerging regions like Asia, Africa and Latin America Majorcan offer greenfield opportunities. These areas are witnessing rapid growth in internet connectivity and digital infrastructure. Consumer appetite for gaming is also surging due to young demographics. This makes emerging regions a lucrative untapped market for cloud gaming providers to expand into. Partnerships with local telcos could help address connectivity challenges.
Augmented and Virtual Reality Integration
Augmented reality (AR) and virtual reality (VR) are emerging as promising technologies that could further propel the cloud gaming industry. Integrating cloud rendered games and experiences with AR/VR headsets offers massive opportunities. It could elevate immersive-ness of games to a whole new level and attract a wider gamer base. While the AR/VR market is still in nascent stage, successful integration of cloud and immersive technologies in future could open up a new virtual world of opportunities for gaming studios and cloud platforms.
Link: https://www.coherentmarketinsights.com/market-insight/cloud-gaming-market-4600
Key Developments:
- In December 2023, Meta's VR headsets now support Xbox Cloud Gaming, with a beta app available for Meta Quest 2, 3, and Pro. Users can stream numerous Xbox games via an Xbox Game Pass Ultimate subscription, a Bluetooth controller, and a Quest headset. The beta app can be accessed from the Meta Quest Store, and various Bluetooth controllers, including Xbox, PS4, and Switch Pro, are compatible. Support for PS5 controllers is anticipated in the future.
- In December 2023, Radian Arc and Blacknut launched a new cloud gaming offer for Unifi, a Malaysia-based convergence services provider. Radian Arc aims to enhance gaming experiences for millions of players in Malaysia and beyond.
- In December 2023, Xbox Cloud Gaming services was launched for the Meta Quest line of VR headsets. Users can now download the app from the Meta Quest Store to play VR-based games without needing other devices, indicating a promising future market for cloud gaming services on advanced compatible devices.
- In October 2023, Samsung Electronics Co., a leading smartphone manufacturer, introduced a cloud gaming service for mobile devices. This initiative aims to explore new revenue streams from its vast user base of 1 billion Galaxy users, addressing the sluggish growth in global mobile phone sales.
- In October 2023, Netflix trialed its cloud gaming service in the U.S., allowing members to play games on TV-connected devices and smart TVs using their smartphones as controllers. This beta phase, similar to previous tests in Canada and the U.K., offers a limited game selection and requires downloading a dedicated controller app.
Key Market Players:
Key companies covered as a part of this study include Amazon Inc., Antplay.tech, Apple Inc., Blacknut, Deutsche Telekom, Electronic Arts, Inc., Facebook, Google Inc., IBM Corporation, Intel Corporation, Locus Robotics, Microsoft Corporation, NVIDIA Corporation, Numecent Holdings Ltd., Parsec Cloud Inc. (Unity Software Inc.), Sony Interactive Entertainment, Tencent Holdings Ltd., Ubitus Inc., Ubisoft, Verizon
