Many participants in the global video game market agree that the sector holds an unparalleled amount of growth potential, primarily related to the rising popularity of gaming as a hobby, which is linked to the steady release of exciting new titles, the recent sharp rise in gaming live streaming, and other additional factors.
While still showcasing profitable prospects, growth in the global video game market is significantly hampered by the prohibitive costs of gaming hardware and software. The recent supply chain challenges, which have led to skyrocketing gaming hardware prices, are not the only issue. The acquisition of gaming-related products in emerging markets proves to be a challenge, further worsened by recent macroeconomic issues.
For more information on this topic, please access our research report – Analysis of the Global Cloud Gaming Market.
In response to this restraint, cloud gaming has introduced potential opportunities. Cloud gaming allows users to enjoy gaming content across devices without owning specific hardware or downloading the full software. This is done by rendering the game titles in specialized data servers and sending the gaming content to the end-user, which can then interact locally and send its own inputs.
However, surpassing this budget-related challenge is not the only major benefit of cloud gaming. This groundbreaking offering allows users to enjoy their gaming content on a wide range of devices (mobile phones, tablets, TVs, etc.). As such, cloud gaming will introduce a vast number of users to the world of gaming, as partially interested individuals can easily get into the hobby through their preferred platform.
Thus, cloud gaming allows users to circumvent price-related barriers and enjoy the latest gaming content, usually through a subscription. While some outlier models exist, most cloud gaming is from B2C providers, offering their services to end customers via subscription plans. Nonetheless, the cloud gaming market also has a sizable number of B2B providers that focus on providing the technology, data center infrastructure, and game content to business clients, allowing them to offer gaming services or provide cloud-based capabilities to video game publishers and developers.
Though cloud gaming brings many benefits to the end-user, the numerous possibilities for telcos, data center providers, video game companies, streaming platforms, and other industry verticals should not be understated. Most notably, as cloud gaming requires stable connections with low latency and minimal packet losses, growth in this market will lead to increased demand for 5G connectivity and the development of edge data centers.
Cloud gaming market growth will also allow companies to provide a wide range of innovative offerings. For instance, telcos will be able to provide specialized services such as dedicated network resources or even metrics analysis. Meanwhile, streaming networks and video game companies can leverage specific cloud technologies to create gaming experiences that have never been seen before.
With these huge benefits and profitable opportunities, it is no surprise that cloud gaming will significantly grow in the coming years. Frost & Sullivan’s research has found that the market will grow at a CAGR of 69% from 2021 to 2025, reaching a value of $13.05 billion by the end of the forecasted period. Consequently, Frost & Sullivan also estimates that users enjoying cloud gaming content will grow from 60.6 million in 2021 to almost 349.4 million by 2025.
From a regional standpoint, APAC (particularly China) has experienced massive adoption of cloud gaming technology, with many participants competing in a semi-saturated market. This competition has promoted the adoption of innovative business models, which Frost & Sullivan believes will soon be observed in Western markets as soon as network connectivity improves and general adoption increases.
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