The growth of cloud gaming offers an opportunity for video game producers but poses a potential threat for console manufacturers, according to a new report.
GlobalData’s Console Gaming report suggests that cloud gaming – the streaming of games on any device from remote servers eliminating the need to download and install them – could allow game producers to reach broader audiences and generate new revenue streams. However, it also notes that demand for consoles could be reduced.
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Cloud gaming will be a staple of the 10th generation of consoles that will have emerged by 2028, the report contends. Worth $4bn in 2024, the global market for it will be worth $22bn by 2030, according to GlobalData’s forecast. The report suggests that this growth is likely to have ramifications for the wider industry, though.
“Cloud gaming’s success will potentially jeopardize the long-term future of expensive consoles by disrupting how games are distributed, monetised and consumed,” it says. “However, companies have yet to identify the best approach.”
Among the major players, it notes that Microsoft is building on the foundation of its Xbox Game Pass service by giving Game Pass Ultimate subscribers access to cloud gaming, Sony is pushing the PlayStation Now collection of games via the cloud and Nintendo is enhancing its online infrastructure and game development.
“The cloud gaming market is at an early stage of development, but competition is intensifying,” the report outlines. “Microsoft and Sony are well-positioned in the market, given their parallel focus on consoles and cloud gaming services. Nintendo is safe until the cloud gaming market matures, but it risks losing market share to Microsoft and Sony if it delays its move into cloud gaming. That said, Nintendo offers a cloud gaming experience on the Switch console, enabled by technology from Ubitus.”
For cloud gaming itself, the report suggests that success will depend on how the major players innovate with user experience. In terms of how it will impact the different segments of the gaming market, meanwhile, it is predicted that mobile gaming will be the big winner.
“Mobile gaming’s revenue share will increase from 56.8% in 2023 to 57.9% in 2030,” the report says. “PC gaming’s market share will drop seven percentage points between 2023 and 2023, primarily due to the increased prominence of cloud gaming. Console gaming’s market share will remain stable between 2023 and 2030 despite the challenge from cloud gaming.”
