Cloud gaming exploded during the coronavirus pandemic. And with the anticipated spread of ultra-fast 5G mobile networks, it is expected to grow even further.
Spending on new cloud gaming services, in which people stream high-quality video games directly to devices such as smartphones rather than video game consoles, is expected to generate $ 584.7 million this year, more than three times more than the $ 170 million spent in 2019. Analysis firm Newzoo said Thursday.
By 2023, the cloud gaming market is expected to grow to $ 4.8 billion, Newzoo noted. That’s a nearly 50% increase over the company’s previous projection, that cloud gaming revenue would be $ 3.2 billion that year.
Newzoo analyst Guilherme Fernandes said that COVID-19 and the ensuing shelter-in-place rules are responsible for the huge growth. People with more free time due to the coronavirus pandemic are more willing to try a cloud gaming service.
Cloud computing giants like Microsoft, Google and Amazon are betting billions of dollars on cloud games. Its rivals include Nvidia, Blade, and Parsec.
Fernandes said he expects cloud gaming to gain even more momentum as more telcos build 5G networks. Higher internet speeds are expected to make the technology more attractive to users.
China will likely be among the largest markets, Fernandes said. In addition to the new 5G networks, Chinese tech giant Tencent is investing heavily in its own cloud gaming service.
In the United States, after nearly a year of testing, Microsoft plans to introduce its xCloud service in mid-September. The service will be included in the premium tier of the company’s Game Pass video game subscription service.
Fernandes said Microsoft is “the strongest player right now,” in part due to the company’s history of selling popular video games through its Xbox console.
Amazon is reportedly developing a cloud gaming service, but problems at the company’s video game unit could delay those plans, Fernandes said. Earlier this summer, Amazon released its long-awaited online shooter Crucible, but then quickly switched the game to a “closed beta” after a poor reception.
While Google and its Stadia cloud gaming service have benefited from COVID-19, the lack of exclusive video games has muted their success, Fernandes said.
“I think Google’s launch of Stadia was a bit disappointing because they haven’t delivered enough content for people to really join in,” he said.
