The future of the gaming industry will be shaped by a range of disruptive themes, with cloud gaming being one of the themes that will have a significant impact on gaming companies.A detailed analysis of the theme, insights into the leading companies, and their thematic and valuation scorecards are included in GlobalData’s thematic research report,Gaming Market Analysis by Region, Platform (Smartphone, Console, PC, Tablet, Handheld Controllers, Head-mounted Displays), Gamer Type and Segment Forecast, 2022-2030. Buy the report here.
Cloud gaming is a technology that allows video games to be streamed directly from the cloud and played using any device with a display and an internet connection. The global cloud gaming market will grow at a high compound annual growth rate (CAGR) of 40% over the 2020-2030 period, according to GlobalData estimates.
Cloud gaming will fundamentally change the video games industry over the next ten years, just as video and audio streaming has reshaped the music, film, and TV industries. The market is at a very early stage, but competition is intensifying, drawing in tech giants (including Sony, Google, Tencent, Microsoft, Nvidia, Facebook, and Amazon) and telcos (like Deutsche Telekom, Verizon, AT&T, Vodafone, KT, and China Mobile). Game publishers like Ubisoft and Electronic Arts have formed partnerships with service providers to increase their prominence in this developing market.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
According to GlobalData’s thematic research report, Cloud Gaming, leading adopters include: Microsoft, Nintendo, Nvidia, Sony, Tencent and Ubisoft.
Insights from top ranked companies
Tencent is working on two cloud gaming platforms at the time of writing. Its first cloud gaming initiative, Start, opened for public testing in China in 2019 and features prominent PC games such as Fortnite, Blade & Soul, Path of Exile, and NBA2K Online 2. The service is powered by Nvidia’s GPUs and, in December 2020, Tencent partnered with TV makers like TCL, Hisense, Changhong, and Suning’s Biu to roll out the official TV version of the service in China. In March 2020, Tencent announced a new cloud gaming initiative called GameMatrix in partnership with Huawei. The service, specifically designed for Android smartphones, will use Huawei’s Kunpeng CPUs and Intel’s Xeon GPUs. It is unclear if the services are specifically designed for China or will be rolled out globally.
Microsoft launched Xbox Cloud Gaming, formerly Project xCloud, in September 2020. Microsoft released the service across 21 countries on select Android devices, offering more than 150 games at launch. It is integrated with Xbox Game Pass Ultimate, which is available for a $14.99 monthly subscription. Xbox Game Pass surpassed 15 million users in September 2020 and is the foundation for Xbox Cloud Gaming. Microsoft runs Xbox Cloud Gaming using Xbox One S hardware but is planning to upgrade to Xbox Series X hardware in 2021. The powerful processors used in the Xbox Series X console will benefit the cloud gaming service by reducing latency and improving graphics quality. Xbox Cloud Gaming has received a positive response from users and reviewers across all platforms: consoles, PCs, and Android smartphones. The web-version of the service for iOS is planned for 2021. Microsoft also competes with Amazon and Google in the cloud services market.
Ubisoft‘s CEO Yves Guillemot, in an interview with Variety in 2018, stated that cloud-based streaming of games would replace consoles after the next generation of devices, which finally arrived in November 2020. Since then, the company has been partnering with tech firms to offer its games on their cloud gaming services. It supported Google in the development of Stadia and is now backing others like Nvidia with its games. In 2020, it announced a channel on Amazon’s Luna and rolled out Uplay+ (a subscription-based streaming service for all Ubisoft games) on Google Stadia for $14.99 a month. It also inked a multi-year deal with Parsec to showcase demos and events around Assassin’s Creed Valhalla and Watch Dogs Legion. Ubisoft aims to become the most prominent content provider in the cloud gaming market.
To further understand the key themes and technologies disrupting the technology industry, access GlobalData’s latest thematic research report on Cloud Gaming.
- Epic Games
- Activision Blizzard
- Valve Corp
- Glu Mobile
- Bandai Namco
- GungHo Online
- Take-Two Interactive
- Square Enix