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Cloud gaming will fundamentally change the video games industry, says GlobalData

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Cloud gaming will fundamentally change the video games industry over the next ten years, according to data and analytics company GlobalData, bidding farewell to traditional disk-based PC and console games and hefty downloads in the process. Just as video and audio streaming has reshaped the music, film and TV markets, cloud gaming is expected to disrupt the status-quo in the gaming world. In fact, the cloud gaming market is expected to be worth $30bn in 2030, according to GlobalData forecasts – a massive rise from 2020’s $1bn and showing an impressive compound annual growth rate of 40% over the ten-year period.

Rupantar Guha, Associate Project Manager for Thematic Research at GlobalData, commented: “By revenue, cloud gaming accounted for less than 1% of the video games industry in 2020, but it has the potential to disrupt how games are distributed, consumed and monetized. There is no doubt that in ten years’ time, there will be no more new PC and console games on the shelves, replaced instead by games hosted in the cloud and accessed via thin-client PCs, consoles or mobiles.”

The company’s latest report, ‘Thematic Research – Cloud Gaming’, notes that, while the cloud gaming market is currently at a very early stage of development, competition is intensifying, drawing in tech giants (including Sony, Google, Tencent, Microsoft, Nvidia, Facebook, and Amazon) and telcos (like Deutsche Telekom, Verizon, AT&T, Vodafone, KT, and China Mobile). Game publishers, including Ubisoft and Electronic Arts, have also formed partnerships with service providers to increase their prominence in this developing market.

Guha continued: “One major issue for the technology is the need for users to have fast internet connections beyond existing 4G networks’ capabilities. The slow deployment of 5G networks will restrict its growth for at least the next two years. Therefore, cloud gaming providers and telcos will experiment with 5G in specific geographical locations to improve service quality and experience until 5G becomes widespread.”