Cloud gaming market to cross $8 billion by 2025 (Reader Forum)

According to research report by Global Market Insights, Inc., the Cloud Gaming Market is set to grow from its current market was valued at over USD 1 Billion in 2018 to USD 8 Billion by 2025.

The robust popularity of gaming and the widespread adoption of advanced technologies has led to a major surge in cloud gaming market share. The past five years have seen a significant surge in game prices. Purchasing high quality games in the current scenario requires a substantial investment from customers. The rise in prices has limited access to these games for over 70% of potential gamers. 

Introducing cloud gaming platforms will provide price sensitive customers an economical alternative for unlimited access to a wide range of games, with flexible payment options like month and annual subscription plans.

The emergence of 5G technology has brought about a fundamental shift in the communication landscape and given rise to new distribution models in the gaming industry. Countries across the globe including China, the U.S., Japan, and South Korea are investing in upgrading the connectivity infrastructure to gain larger macroeconomic benefits. 5G communication technology can offer faster transmission speeds across various remote locations. As the cloud gaming model requires high transmission speeds, the introduction in 5G architecture incentivizes platform providers to expand their network in the region. The 5G architecture effectively deals with latency issues, providing a seamless gaming experience to customers. 

The file streaming segment held over 60% share in the cloud gaming market in 2018. The approach is being extensively implemented by large players, such as Sony and Microsoft, due to the presence of their proprietary gaming consoles. This file streaming mechanism has been adopted by large players to offer their services in regions with low internet speeds. It also allows gamers to personalize their gaming library according to their preferences. The video streaming market is expected to rapidly grow over the projected time period as the approach has been widely implemented by start-ups and smaller companies. The use of video streaming mechanism eliminates the need for any high capital expenditure; however, the need for faster communication speeds is hindering its usage in certain developing economies with weak connectivity infrastructure.  

The smartphones & tablets market is projected to attain a growth rate of more than 45% over the projected time period due to the gradually rising adoption of smartphones around the world. The global smartphone penetration in 2018 was over 39% in 2018 and is anticipated to grow to over 48% by 2022. The cloud gaming platforms are leveraging the growing adoption of smartphones to expand their customer base in numerous price-sensitive regional markets. The console market dominated the cloud gaming market with over 60% revenue in 2018. This is attributed to the robust distribution network of gaming majors such as Microsoft and Sony. The high price of gaming consoles has been restricting its adoption among price-sensitive buyers. The advent of the cloud gaming model has provided console manufacturers with lucrative opportunities to monetize their existing library of games, enhancing their profitability.    

The Business-to-Business (B2B) cloud gaming market is anticipated to attain a growth rate of over 40% over the forecast timeline. This is credited to the rising number of strategic initiatives among cloud gaming platform providers and internet service providers. The internet service providers are forming tie-ups with cloud gaming platforms to capitalize on their existing fiber investments in various developed regions. The Business-to-Consumer (B2C) model has been widely adopted by console manufacturers to reduce their reliance on external stakeholders. It also allows companies to personalize their product offerings to best suit their customer requirements.  

North America held more than 45% of the total revenue in the global cloud gaming market in 2018. Large players in the region, such as Microsoft and Electronic Arts, are conducting various strategic initiatives to augment their existing product features. The presence of strong telecommunication architecture is encouraging the companies to launch their product offerings in the region. The Asia Pacific cloud gaming market is expected to register a CAGR of 46% over the forecast time period due to the rising frequency of 5G development initiatives in the region. The inexpensive nature of the cloud gaming platform is driving its usage among various cost-sensitive gamers.

The players operating in the market are Apple, Cloudzen, Electronic Arts, Broadmedia GC, RemoteMyApp, RemotrCloud, Sony, Wiztivi, PlayKey, Rainway, Playcast, Playgiga, Playcast, Playgiga, Nvidia, Paperspace, Parsec, and Advanced Micro Devices.