The cloud gaming industry is still in its infancy, but similar to the “Netflix” model, but attention has turned to this type of platform focused on video games, the British Competition and Markets Authority decided to stop Microsoft this week. Blizzard’s acquisition of video game company, American Activision.
Below is an overview of this sector that is expected to witness strong growth in the coming years.
What are cloud games?
Cloud gaming offers the ability to play the game on any screen (PC, smartphone, connected TV…) with an online subscription, without having to own a physical copy of the game. Games are processed on remote information servers (cloud) and transferred directly to the user’s device so that he can play smoothly. The emergence of cloud games is due to the availability of high-speed Internet, and the best example of the success of distributing physical copies of games is embodied in the phenomenon of “Fortnite”, one of the most popular video games in the world. , with a massive user base of around 200 million players, it can only be played through a dedicated online platform.
How big is this market?
Newso, a company specializing in video game data, expects the cloud gaming market to reach $8.17 billion in 2025, three times what it was in 2022 ($2.38 billion). Despite this huge growth potential, the sector is still underdeveloped and in its infancy in the global video game market, which consulting firm Accenture estimates is worth more than $300 billion.
Who are the key stakeholders in this industry?
According to data from the British Competition and Markets Authority, “Microsoft” currently accounts for between 60 and 70 percent of global invisible digital game services, and the number of subscribers to its “Game Pass” service, which allows unlimited play, reaches 25 million. Over a hundred A games for a monthly subscription fee of around $10. Although “Sony” and “Nintendo” have launched two similar services, it was explained to Agence France that what they offer is far from the list of games offered by the American group and the strength of the cloud infrastructure- press, economist specializing in cultural industries, Julien Beau. Other tech giants like Amazon (Luna service) and Google (Stadia service) have also entered the field, but they have yet to achieve the same success. Julian Book noted that Amazon, which owns the most popular video game streaming platform Twitch and is a global leader in cloud computing, is not considered an “industry credible” player in the video game space. In September 2022, Google shut down its Stadia platform, three years after its launch, due to a lack of attractive games. Others include “Nvidia” (G-Force Now), “Apple” (Arcade) and “Netflix” for mobile games.
What are the implications of the Microsoft and Activision Blizzard merger on the cloud gaming market?
Despite the British Competition and Markets Commission’s decision to block the record-breaking $69 billion deal, experts don’t expect major repercussions for the cloud gaming industry. “This may slightly affect Microsoft’s willingness to invest in its service, but Activision’s acquisition of Blizzard is not a prerequisite for Activision games to be available on Game Pass,” Newzo analyst Tom Wegman told AFP. Activision Blizzard currently doesn’t allow games like the hugely popular Call of Duty to stream through its cloud gaming service. But as Professor Joost Rietveld at University College London predicts, this is unlikely to be the case “for the foreseeable future”. However, “Cloud gaming is still a small part of the gaming industry. I think this acquisition will give the sector a positive boost.”
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