Cloud-Streamed Gaming: More Questions Than Answers

Gaming is an ultra-hot topic in the world of tech right now, made clear by recent big announcements from both Google (Stadia) and Apple (Apple Arcade). Gaming has been one of the bright spots for a challenged PC market, with PC gamers willing to refresh hardware more often than other consumers and to spend more money every time they do it. Gamers spend money in online gaming marketplaces, in a still-thriving console gaming market, and—of course—increasingly on mobile platforms such as Android and iOS. All told, gaming drives huge profits across a wide range of companies, and that’s before we start adding up the dollars associated with eSports. One issue that’s becoming increasingly clear, however, is that in the near term the gaming market is likely to experience some growing pains as new technologies become available and long-standing business models face disruption.

Cloud Gaming, or Cloud-Streamed Gaming?
At IDC we’re about to embark on a very ambitious gaming survey and forecast project. We plan to run surveys in five countries (U.S., China, Brazil, Germany, and Russia), capturing responses from more than 12,000 respondents, including hardcore and casual gamers as well as dabblers and nongamers. Our goal: to better understand consumer sentiment around everything from hardware and brand loyalty to device refresh rates to spending on software, services, and accessories. We’re also devoting an entire section on cloud-streamed gaming. One of the most challenging things to do in any consumer survey is to ask respondents about technologies or services that are not yet widely shipping (or understood). As we’ve been building our survey, we’ve had some spirited internal debates about the nature of cloud gaming versus cloud-streamed gaming and more.

What’s the distinction? As my colleague Lewis Ward notes, most games today have some cloud element to them. Certainly, every multiplayer console, mobile, or PC game that lets us play against friends, family, and strangers all over the world falls into this camp. Apple made a point of saying that Apple Arcade will let you play offline, a dig at Google’s online-only Stadia. However, in the next breath, Apple points out that you can jump from iPhone to iPad, Mac, and Apple TV, clearly utilizing a cloud component. And I’m guessing some of those new iOS-only games will have multiplayer modes.

So, essentially, we already live in a cloud gaming world. Stadia, however, is clearly cloud-streamed gaming, as subscribers will be able to play games across a wide range of devices (as long as they’re online and support a Chrome browser). As Ben Bajarin notes, other cloud-streamed services from companies such as Sony and nVidia are even more cross-platform friendly. We’re still waiting to see what other big players, such as Microsoft, will offer. Bottom line, however, is that the experience when it comes to a cloud-streaming gaming service will be highly depend upon that network connection.

And it’s here where Google left us with more questions than answers, at least for now. The company didn’t talk in its announcement about specific home broadband requirements or address network latency, which is what will dictate the quality of the experience on Stadia. It also didn’t talk about pricing tiers (or pricing at all). Will games streamed at 4K cost more than 1080P games? Will everyone get 60 frames per second?

At least one promise of cloud-streamed gaming is that with the CPU and GPU in the cloud, gamers can meet on an even playing field, regardless of the device upon which they are playing. Moreover, it means players can play games across their devices, instead of having games they can only play on PC, on console, or on their mobile device. In theory, it’s a very compelling offering, but as with most thing in technology, the real value won’t be apparent until we see the execution.

Impact on PC and Console Gaming Markets
If cloud-streamed gaming delivers on its promise (or perhaps the right question is not if, but when) and it removes the local computing power from the gaming equation, what will the impact be on the hardware vendors that sell high-end gaming PCs, CPUs, GPUS, and more? I know at least one prominent PC gaming executive thinks cloud-streamed gaming will never impact his business and he argues that some people will always want a high-powered gaming rig to play on. To date, this has certainly been true. Hardcore gamers will spend big bucks to gain frame rate advantages that can mean the difference between life and death in a game. Frankly, that element of PC gaming has always bothered me a bit, as it effectively means that those with deeper pockets enjoy often significant in-game advantages.

However, it’s this desire to have the best that makes the PC gaming hardware market so appealing to vendors. Moreover, it’s this faster refresh cadence that also enables game developers to embrace next-generation technologies before any other consumer categories (ray tracing-capable graphics cards being a good current example). The PC gaming hardware market thrives in this cycle, so what happens if cloud-streamed gaming disrupts this? Where does that booming market go if in the future a person using a three-year-old $300 Chromebook has the same experience and gaming capabilities as somebody on a brand new $4,000 gaming rig?

In the end, that is the biggest question nobody can answer right now. Is cloud-streamed gaming disruptive, additive, or something else? The cost of access, the available games, the buy-in from eSports athletes, and the quality of experience will all play a role in the final answer. Regardless, it’s going to be very interesting watching it all unfold over the next few years.

Published by

Tom Mainelli

Tom Mainelli has covered the technology industry since 1995. He manages IDC's Devices and Displays group, which covers a broad range of hardware categories including PCs, tablets, smartphones, thin clients, displays, and wearables. He works closely with tech companies, industry contacts, and other analysts to provide in-depth insight and analysis on the always-evolving market of endpoint devices and their related services. In addition to overseeing the collection of historical shipment data and the forecasting of shipment trends in cooperation with IDC's Tracker organization, he also heads up numerous primary research initiatives at IDC. Chief among them is the fielding and analysis of IDC's influential, multi-country Consumer and Commercial PC, Tablet, and Smartphone Buyer Surveys. Mainelli is also driving new research at IDC around the technologies of augmented and virtual reality.

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