4 Market Trends Shaping the Future of Cloud Gaming

Imagine a world where video gamers could untether from their PCs and Xbox consoles and play crystal-clear versions of their favorite games from anywhere. This is the future promised by cloud gaming – a rising technology that's seeing immense growth in 2021.

Earlier this month, Facebook announced that it had expanded the reach of its cloud gaming platform to cover 98 percent of the mainland United States. Microsoft made its cloud gaming service available on more devices. And Amazon broadened access to its burgeoning cloud gaming service, Luna, giving Prime members a free trial version during Prime Day.

It's been a busy year for the industry, which has already exceeded $1 billion in revenue – and is on track to surpass $5 billion in 2023, according to Newzoo, a gaming analytics firm. 

As cloud sellers look to grow their presence in this billion dollar market, here are four trends that today's cloud providers should be paying attention to, from Intricately's 2020 Cloud Gaming Report.

1. The rise of remote work has accelerated the growth of the global gaming market.

Before the arrival of the coronavirus pandemic, the gaming vertical was already on an upward trend year-over-year. With more people staying home, however, the market was flooded with new users and dramatically increased traffic demands – particularly in the cloud gaming and streaming spaces.

Unsurprisingly, last year's stay-at-home mandates dramatically increased digital content consumption. Nielsen reported that:

  • Daily Twitch viewership in the United States more than doubled in Q1 2020.
  • The number of gamers who state they're playing video games more now due to the pandemic has increased week-over-week since March 2020.
  • The amount of streaming grew by 1 billion hours across internet-connected devices between March and May.

In 2020, consumers were hungry for new games and new opportunities for socially-distanced interaction via the cloud. Providers that sell digital infrastructure began adapting quickly to meet the increased demands from both gamers and gaming companies alike.

2. Global cloud growth rates match a growing consumer demand. 

As cloud technology and internet accessibility expands across the globe, there are fewer barriers than ever for gamers to join the community through cloud gaming. Rather than needing to invest in a costly console and physical copies of each game, those with an Internet-enabled device can play any time, anywhere.

Given the many benefits that cloud gamers enjoy, they'll embrace cloud gaming as rapidly as it becomes available to them. These include: 

  • High-end games can be played on low-end consoles, so gamers can experience excellent quality – even on a cheaper device.
  • Information is protected by industrial security standards (providing little to no opportunity for hackers).
  • Gamers can play and save their progress in multiple games, as well as seamlessly switch between them.

3. Social gaming and streaming are as relevant as new hardware and game releases.

This market encompasses more than just game developers and hardware manufacturers. One growing phenomenon revolves around social interaction via games (“social gaming”) and live broadcasting game play over the internet (“streaming”).

In 2019, 1 in 3 gamers reported having watched a live gaming stream over the course of one month. Today, however, broadcasting and social gaming are gaining steam even faster. After smashing viewership records in early 2020, the largest game-streaming service, Twitch, saw a whopping 62.7% increase in hours watched – ultimately settling at 5 billion hours watched in Q2.

Given the increased emphasis on mobile gaming, social media platforms are also dipping their toes in the water: Facebook is building a social network-gaming hybrid called Horizon, and TikTok’s parent company, ByteDance, has announced entry into the gaming landscape as a direct competitor to Chinese gaming giant Tencent.

4. The cloud gaming competitive landscape is concentrated as major players stake their claim.

The cloud gaming market is concentrated, with only a few companies holding the major market share. Companies like Tencent are partnering with other tech giants to build bigger and better cloud gaming services. Others, like Google, Nvidia, PlayStation, and Vortex, are building their cloud infrastructure to meet the demand for smarter gaming solutions.

Intricately can see the adoption, usage and spend rates of cloud services of these gaming companies that are rapidly grow their cloud infrastructure to meet the demand of their growing user base.

Nvidia

  • Estimated monthly cloud spend: $10M
  • Primary cloud hosting provider: Amazon EC2
  • Number of CDN providers: 13
View Nvidia's cloud footprint in Intricately.

Playstation

  • Estimated monthly cloud spend: $10M
  • Cloud hosting providers: Snowflake, MSFT Azure, Amazon EC2, and more...
  • Number of CDN providers: 7

View Playstation's cloud footprint in Intricately.

Zynga

  • Estimated monthly cloud spend: $900K
  • Number of cloud hosting providers: 20+
  • Number of data center providers: 10

View Zynga's cloud footprint in Intricately.

See how the gaming vertical is growing, shifting, and being disrupted in Intricately's 2020 Cloud Gaming Report

Cloud infrastructure companies have a lot to gain from this growing market. Generate more revenue with a full view of the global cloud gaming market in Intricately's 2020 Cloud Gaming Report.

Download the Report

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