Near the end of 2018, Google and Microsoft both announced plans to provide cloud gaming services. Cloud-based gaming allows you to play any game on any device, a technology that has the potential to completely disrupt the industry in much the way that Netflix did for film. Here we’ll discuss what the concept of cloud games is and how it stands to change games distribution and publishing forever.
The base idea of cloud-based gaming technology has immense potential for sparking mass change in the games industry. When you play a game from the cloud, the game itself is stored and executed on a machine in a server. Through the use of a client, you receive live video of the game from their server. You issue controls (movement, shooting, etc.) to the cloud from your home machine. In short, cloud gaming frees players from the constricts of hardware requirement. So, if the technology is so groundbreaking, why is the gaming community so aggressively apathetic to it?
In 2010, OnLive first opened its cloud gaming service – at the time marketed as “gaming on demand” – to all gamers. Well, all gamers with a stable broadband connection who lived close enough to their servers that propagation latency wasn’t game breaking. Five years and a lot of bad press about poor service quality and unplayable input delays later, the company shuttered its doors in 2015. History is full of the sad tales of ambitious companies full of enterprising individuals hoping to be the first to succeed in bringing the mass market appeal to cloud gaming. The story always goes the same way: they fail to solve the latency problem and are bought out or discontinued.
Things look to be changing, however. Google’s Stadia and Microsoft’s Project xCloud both promise solutions to the latency issues that have plagued the technology since its inception. Both Google and Microsoft boast robust global server infrastructure, with speedy access from nearly any location in the world. Microsoft also promises to reduce the latency introduced by Bluetooth and wireless controllers by connecting their controllers directly to the cloud.
How Cloud Gaming Will Change the Industry Forever
In February 2017, Microsoft announced the Xbox Game Pass. Essentially a subscription to a library of game titles, the Xbox Game Pass is the gaming service most resembling Netflix. This seems to be where the industry is heading, with Sony rumored to be restructuring their Playstation Now service to something similar. It’s a compelling concept but hardly novel to cloud games. Almost every cloud gaming service has implemented this subscription-based format in one form or another. Now that the technology is finally looking to capture some real market share, it’s time to take another look at how it might transform the business of video games.
We can learn a lot by looking at the birth and growth of Netflix’s digital streaming service. Netflix introduced cloud technology to film and TV, inciting widespread change in how creative products are produced and distributed and greatly affecting the lives and careers of many indie film creators. With the industry moving toward subscription-based access, looking at how Netflix works and operates gives us an idea of how a cloud gaming platform might run and operate.
Netflix’s greatest expense is the securing of content for their platform – in 2018 they spent a total of $13-billion on licenses and production. So far, the response of publishers to cloud gaming has been positive if not enthusiastic. Regardless of how well (or not) previous cloud gaming services have been, publishers have largely been willing to take part in the adventure, with many failed services having boasted large libraries. A platform that is willing to spend cash to secure – and more importantly produce – exclusive content means such services essentially replace the role of the traditional publisher.
Traditional game development involves shopping around for publishers to help bring your game to market. The advent of the Steam Marketplace and crowdfunding platforms helped reduce the importance of publishers, at least to an extent, by allowing game creators to finance, publish, and market their titles on their own. The rise of a Netflix for gaming – access to a library of games for a monthly fee – would mean players would no longer be purchasing individual games at all. To remain competitive, such services are dependent on securing as many popular licenses as possible – the AAA titles from huge studios – as well as differentiating their platform from other services by producing exclusive content. Whereas in the old system a developer might approach publishers for funding, cloud gaming platforms following the Netflix growth strategy would actively seek indie development studios to produce titles for targeted niches in their customer pool.
Piracy has been an on-going issue and a hot topic of debate in community forums. Indie developers are particularly hurt by piracy, with such small teams and little capital, someone leaking a cracked version of an indie game could mean the difference between the developer staying afloat and bankruptcy. It’s been proven time and again that the primary reasoning behind piracy is the inability to afford games. From 2011 to 2015, the amount of North American upstream traffic on BitTorrent fell from 52.01% to 26.83%, largely thanks to the accessibility and reliability of Netflix. A robust, high quality, low latency cloud gaming service could potentially curb piracy rates. Add on top of that the fact that players are no longer restricted by the limits of their machine/console/PC at home, and you’ve potentially got a larger market with less overall piracy.
How Market Fragmentation Could Ruin Cloud Gaming
One potential threat to the success of cloud gaming services is market fragmentation. Netflix was lucky enough to be the first of its kind, with little to no competition for several years. Now that there is competition from the likes of Hulu and other streaming services, the resulting war for exclusive content means that viewers must subscribe to multiple platforms to have access to all of the titles they want. Unfortunately, platform exclusivity is a decades-long tradition with no end in sight. Since competitors have risen to challenge Netflix’s dominance in the digital streaming business, piracy of film media has begun gone up after years of falling. When the Epic Game Store bought out exclusive rights to several highly-anticipated games, the amount of Internet traffic through BitTorrent, indicating a distribution of cracked or illegal content, rose significantly.
Cloud gaming looks to be poised to change the face of video games forever after a decade’s worth of stumbling and failing to find any significant success. Developers can look to similar services like Netflix for how cloud gaming might disrupt the games industry.