Can the pandemic be a turning point for cloud gaming?

It is crucial for cloud gaming companies to focus on innovation in the post-Covid-19 era to ensure new business opportunities are seized to drive the future growth strategy of the industry at large.

Cloud gaming platforms provide an immersive gaming experience and the flexibility to play across devices without upgrading specific hardware or investing in expensive consoles. (Pixabay)

The stay-at-home economy triggered by the Covid-19 pandemic proved to be a game-changer for the traditional video games and home console industry. Over the past year, the global cloud gaming market witnessed a surge in demand and is estimated to grow by $2.75 billion in the next four years (from 2020-2024). It is not surprising that cloud gaming has grown in popularity. The technology offers multiple tangible benefits to users. Cloud gaming platforms provide an immersive gaming experience and the flexibility to play across devices without upgrading specific hardware or investing in expensive consoles. 

Further, the processing power of the cloud does not require the user to download games, thereby saving time on installing and updating large media files. Since games are run on the gaming provider's servers, it enables users to play a game almost instantly, thus avoiding latency. The unprecedented shift to cloud gaming platforms has enhanced the customer experience and disrupted the industry like never before.

Innovation-led best practices

It is crucial for cloud gaming companies to focus on innovation in the post-Covid-19 era to ensure new business opportunities are seized to drive the future growth strategy of the industry at large. In recent years, a container-centric approach led by Kubernetes has fueled innovation and supported even complex hybrid cloud architecture. A Kubernetes-powered game development platform enables game developers to innovate on the cloud and perform dynamic functions, such as auto-scaling and auto-recovery. Kubernetes is portable and can swiftly adapt to help teams to scale from one cloud to another, thus increasing developer productivity.

Challenges in going mainstream

Although the pandemic has boosted the demand for cloud gaming, companies operating in this space need to overcome unique challenges before they are perceived as “mainstream.”

For one, even though the promise of cloud gaming is here to stay, a subscription-based model could pose a barrier for gaming companies. Charging a monthly subscription fee may discourage those subscribers who find it expensive and are not serious about becoming hardcore gamers and professionals in the industry. Second, online gaming experiences can be enriching for users only if the technology and infrastructure powering these games can deliver uninterrupted bandwidth at a high Internet speed. Thus, users from regions with poor Internet connectivity will suffer latency issues and cannot stream graphically intensive games in real-time. Third, game companies have to invest in multiple locations worldwide as players require proximity to a data center to avoid latency issues and remote data centers are expensive to maintain. Fourth, although cloud gaming is device-agnostic, users cannot play across platforms, for instance, between the PC and a streaming game service.

Although the rise of cloud gaming amid the pandemic has disrupted the industry at large, the technology can thrive only if users are assured a reliable and seamless experience in the long run.

The future of cloud gaming

The powerful capabilities of cloud technology will ensure the long-term survival of the cloud gaming industry, even beyond the pandemic. 5G deployments will drive the growth of cloud gaming, its superior speed allowing consumers to experience next-generation entertainment by leveraging AR/VR technologies. 5G is truly a game-changer for cloud gaming as it creates new monetization opportunities for gaming publishers across industries and markets. Further, new trends in cloud gaming, such as fantasy sports and casino gaming, have also emerged as potential revenue channels.

However, to sustain the cloud gaming revolution, the industry should constantly innovate and create dynamic content to cater to changing consumer needs. Further, key stakeholders in the cloud gaming industry—game creators, publishers, and distributors—should strengthen the security architecture and ensure that consumers are protected from malware and ransomware attacks. Cloud gaming companies need to be aware of geography-specific regulatory requirements to ensure that consumers' data privacy is protected.

While cloud gaming is booming amid the pandemic, the industry should sustain the momentum for the long run by building on new growth opportunities. Crucially, game developers must remove complexity in the infrastructure and empower users to stay engaged with the game. Only then will cloud gaming go truly mainstream.

This article has been written by Prabhakar Jayakumar, Sr Director & Global Head at DigitalOcean