Global Cloud Gaming Market is Estimated to be Doubled by 2027, Technavio Report

According to Technavio, a leading market researcher, the global cloud gaming market is estimated to reach $1.61 billion by 2027, almost double that of 2022.

Between 2023 and 2027, cloud gaming is projected to grow annually by over 10-11%, attracting an expanding audience and industry experts.

In 2022, North America held the top position in cloud gaming and is projected to contribute 48% to future growth.

Recently, Xsolla reports also predicted cloud gaming as a significant disruptor in the global games industry with an expected revenue of over $8 billion by 2025.

Key Cloud Gaming Players in North America

In recent years, North America has witnessed a meteoric rise in cloud gaming services like Google Stadia, xCloud, and NVIDIA GeForce.

Google Stadia has been leading the charge in the cloud gaming industry since 2019. It offers seamless gameplay across a range of devices, including laptops, desktops, TVs, and mobile devices.

Apart from its gameplay capabilities, the platform’s appeal extends to its diverse game library that can be accessed through individual purchases or a convenient monthly subscription.

Not to be outdone, Microsoft’s xCloud and NVIDIA GeForce Now have also etched their mark, allowing users to savor Xbox and PC games on the go.

Technological Tapestry: 5G and AI’s Role

The surge in cloud gaming is driven by the widespread adoption of secure cloud services and the integration of cutting-edge technologies such as 5G and artificial intelligence.

These technological advancements not only improve the gaming experience but also expand the possibilities of what can be achieved in cloud gaming.

Because of this revolution, many AI-based startups come forward in recent years and are working on cloud gaming.

Some of them also receive big support from major industries, such as NVIDIA’s helping many gaming startups through their Inception Program.

Video Streaming’s Ascendance

During the forecast period, the video streaming segment is expected to experience significant growth and become a major player in the cloud gaming industry.

Video streaming technology has revolutionized cloud gaming by eliminating the need to download or install games.

Cloud gaming providers typically use video streaming technology to deliver high-quality games to players in real time on a variety of devices, from smartphones to gaming consoles.

There are two primary approaches to video streaming in cloud gaming, each with its own advantages and challenges: Thin-Client Architecture and Local Device Processing.

• In thin-client architecture, the game is run on a remote server while video is streamed on the player’s device over the Internet. Here, the player’s device only needs to be capable of video streaming and sending input back to the server. This approach is ideal for games with low latency requirements, such as turn-based or puzzle games.
• On the other hand, there’s an alternative approach Local Device Processing that uses a more powerful client device, which can handle some of the processing locally. In this model, the game runs partly on the local device and partly on the remote server. This option can reduce latency and improve the overall gaming experience, but it requires a more strong device and a more intricate architecture.

In both cases, the video streaming technology used must be capable of handling the high bandwidth and low latency requirements of cloud gaming.

In 2017, the video streaming market was valued at $11 billion. By 2027, it is expected to double to over $22 billion.

Driving Forces: The Internet Speed Revolution

A key driver propelling the cloud gaming market is the increased availability of high-speed internet.

Globally escalating internet speeds empower gamers to seamlessly stream games from the cloud, offering superior graphics and faster response times.

The convenience of accessing games from any internet-connected device drives the industry forward, creating a burgeoning market for cloud gaming services.

According to Internet Data, Western Europe holds the top position in internet and broadband speed while North America and the Baltic nations follow it.

The lagging South Asian and African countries are expected to experience growth in the near future.

Mobile Cloud Gaming: A Pervasive Trend

Mobile cloud gaming emerges as a transformative trend, redefining how and where gamers engage with their favorite titles.

The union of convenience and advancing mobile device capabilities fuels this unstoppable trend.

Besides the PC cloud services, big mobile manufacturers such as Apple and streaming platforms such as Netflix, and Amazon Luna also taking steps to launch big, high-graphic games through cloud services.

With the latest launch of the iPhone 15 Pro, Apple announced the inclusion of one of the biggest PC, console titles such as Residental Evil, Assassin’s Creed, and many in their library.

Netflix has recently launched its beta cloud service in Europe and North America, following Apple’s lead as a frontrunner.

Hurdles on the Horizon: Infrastructural and Bandwidth Challenges

Yet, amid the excitement, challenges loom large. Infrastructural and bandwidth challenges, Game availability, and Data Privacy pose a formidable obstacle to the seamless growth of the cloud gaming market.

While high-speed internet availability has expanded, regions with limited data plans or slow connections like Africa and some Asia-Pacific regions need more support.

Latency issues also persist, demanding constant innovation to bridge the digital divide and ensure widespread access to cloud gaming experiences.

The issue of data privacy has become increasingly prominent in recent years, as several major corporations have come under scrutiny from European countries.

European countries have very strict data privacy laws. Many countries in South Asia, Africa, and South America have also introduced their own data privacy acts.

Above all, child safety, payment methods, hacking and cheating, and online bullying, are also gaming issues that need consideration.

In Conclusion: Navigating the Cloud Gaming Horizon

In a nutshell, the global cloud gaming market is a dynamic landscape shaped by innovation, technological prowess, and the evolving preferences of gamers worldwide.

As we embrace the future, the symbiosis of high-speed internet, mobile cloud gaming trends, and overcoming infrastructure challenges will undoubtedly define the next chapter of this enthralling journey.

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Disclaimer: The article is based on information from Technavio, and the writer has provided some additional insights.