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Gaming’s next destination: the cloud

September 9, 2021

If you’ve been a keen observer of digital innovation over the last several years, you know that almost everything eventually ends up in the cloud. Images, documents, code and even complex software systems have moved relentlessly into the ether that we call cloud computing.

But there has been one exception. Gaming, at least on a broader scale, has been a holdout. Gaming consoles and high-powered PCs are still ubiquitous, and game titles are largely downloaded or installed to be played on powerful local hard drives.

That, however, is changing. Mobile gaming is exploding in popularity. Cloud gaming services and titles are growing. Gaming is gradually falling under the reverse gravitational pull that has reliably pulled the entire digital world toward the cloud.

Grandview Research predicts that cloud gaming will be a $7.2 billion industry by 2027, registering an impressive compounded annual growth rate of over 48% per year.

As gaming moves into the cloud, it is important to understand what this means for the industry, and how it could transform how games are developed, sold and monetised.

Start and Stop

Cloud gaming has, so far, had halting adoption. While some point to this as an indicator that it will never mature, there are actually several reasons for this measured pace of adoption. Cloud gaming has been slowed by three issues: technological limitations, industry giants pushing to keep the status quo, and the lag in internet connectivity.

Now, all of these factors are falling away as industry giants jump into the cloud with offerings such as Amazon’s Luna and Google Stadia

With all the ingredients in play, expect to see cloud gaming catalyse rapid growth in 2021 and beyond as the medium matures and more cloud gaming content comes online.

Developers and Gamers Unleashed

One of the most exciting aspects of cloud gaming is how it will democratise gaming. Complex games that require the processing power of a console can be replicated without the need for expensive hardware.

This will open up huge new audiences as a smartphone or tablet and a stable internet connection become the only requirement to play immersive gaming titles.

But game development is also being democratised. Game engines and cloud computing allow smaller developers to engineer and commercialise huge hits with increasing ease. With just an idea, the baseline technical ability to leverage a gaming engine, and some ambition, game developers can create a sensation from their living room.

The games most likely to benefit from being played in the cloud are those with enormous virtual worlds and large player bases. A pain point for gamers is the amount of storage a large game can take up on their console or PC, as well as load times. Cloud gaming will most likely solve this, creating a way for those games to be played with much faster loading speeds without any drop in fidelity or quality.

That, however, is also slowly falling under the reverse gravitational force that sucks everything inexorably upward to cloud computing.

Content will Fuel Growth

As 5G internet spreads, cloud gaming will grow. But content is the key to the sector’s continued expansion. As more and more gaming publishers invest in new cloud gaming titles, the audience will follow.

One of the most exciting aspects of the anticipated shift is cloud gaming titles that are developed specifically for the cloud. The cloud removes the limitations imposed by console-based games, allowing for unlimited complexity in gaming worlds and intricate game dynamics. As cloud gaming attracts and grows a new generation of cloud game creators, cloud gaming will really come into its own.

A larger audience, more game titles and increased investment by the biggest gaming players — this is the virtuous cycle that will continue to compound growth within this new sector of gaming. And as that engaged audience grows, it will continue to unlock the creative new innovations within game creators and new advertising potential for forward-thinking brands and agencies.

New privacy rollouts by Apple and other major tech players mean that gaming advertising, and its trove of first-party data, are increasingly attractive to advertisers large and small.

It’s been no secret that the growth in the digital space is in the cloud. Gaming may be later to the party than other digital technologies. But once gaming arrives in the cloud, the sky’s the limit.