Cloud Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Cloud Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global cloud gaming market (hereafter referred to as the market studied) is expected to register a CAGR of 45.2% during the forecasted period. These platforms are increasingly attracting more than hundreds and thousands of new visitors in online traffic. According to Verizon's study, there has been a 115% increase in gaming usage in the United States alone, compared to a general day before COVID-19. The live streaming services and online gaming platforms also continued to break their records for concurrent users throughout March and April 2020. An increase in gaming traffic was witnessed during peak hours by 75% over the last year.

Key Highlights

• Cloud gaming is an emerging technology across the gaming industry, allowing the user to stream high-end games across hand-held devices, such as laptops, tablets, and mobiles, with fast network connectivity, thereby eliminating the requirement for a regular hardware upgrade gaming console/PC/laptop. Such factors are expected to impact the market's growth positively. Additionally, leveraging cloud technology in the gaming industry is likely to fuel the demand and engagement of multi-players for different games, boosting the market growth during the forecast period.
• Cloud gaming, considered a revolution in the gaming sector, is expected to remove existing cost and platform barriers. It is also predicted to dwell well with 5G. Cloud gaming platforms are expected to present multiple benefits to gamers, who can access various high-quality titles without expensive hardware. The developers, publishers, and platforms will witness more profits with greater reach and ways to monetize their solutions. However, the companies owning most parts of the value chain, from the IP to infrastructure, will benefit the most and other gaming sectors.
• The advent of cloud gaming has also removed the constant need for hardware upgrades, and players across the globe will be able to play cloud games on their existing devices or possibly on future devices that may have low specs but can accommodate games that can be played on the cloud. The most significant opportunity for vendors in the segment is to access smartphone gamers, who comprise a substantial share of the gaming audience and prefer to play PC and console games easily on their mobile devices.
• As cloud gaming platforms, such as Google Stadia and PlayStation, already exist in the market, they primarily target console and PC players. With 5G services launching across multiple countries, it is expected that cloud gaming services will also increase in the market, leveraging the mobile ubiquity and fast 5G connections to provide AAA quality gaming to smartphone users. Cloud gaming services from game publishers and mobile network operators will also drive the adoption of cloud gaming on mobile devices.

Key Market TrendsSmartphones Adoption to Drive the Market Growth

• The evolution of cloud gaming is an emerging technology across the gaming industry, which allows the user to stream high-end games across smartphones with fast network connectivity, thereby eliminating the requirement for regular hardware upgrades or gaming consoles/PCs/laptops.
• The increasing demand for mobile games is a direct result of the various technological advancements in cloud gaming, such as AR, VR, and 5G. This trend is not surprising, considering the mobile game industry primarily relies on new technology. A poll by the Mobile Video Industry Council suggests that mobile operators expect cloud gaming to generate 25-50% off 5G data traffic by 2022.
• The global games market report 2022 by Newzoo suggests that Nearly 3.2 billion people will play games in 2022, spending a combined total of $196.8 billion, holding more than a 55% market share and registering spending of over the primary driver of the market growth across the world is mobile, which will generate revenues of $103.5 billion in 2022. The report also suggests that cloud gaming is expected to become increasingly relevant across smartphones, coexisting with the global mobile gaming market.
• The release of 5G and the emergence of unlimited data plans are also expected to be critical factors aiding the success of cloud gaming worldwide, as most gamers today prefer playing games on their mobile devices. In addition, the increasing services and investments in 5G infrastructure are essential for this success. According to Ericsson, the number of 5G mobile subscriptions in the Asia-Pacific region would reach around 1,545 million by 2025.

Asia Pacific to Witness the Highest Growth

• The increasing prevalence of cloud infrastructure has provided abundant computing, storage, and communication resources in a reliable, cost-effective, and low-maintenance manner. Various applications may employ these cloud computing resources, and gaming services have been acknowledged as one of the fastest-growing sectors in China for cloud computing.
• With the emergence of cloud gaming platforms that allow users to stream their favorite video games rather than download them on smartphones or any gaming consoles, the market is witnessing new platform launches. For instance, in April 2019, Tencentstarted testing a cloud gaming service called "Start. "The company has started deploying these solutions in several test markets, including China, where the company is letting a select group of users sign up for the service. The company's strategic move is to get ahead of its competitors in the next big gaming industry trend.
• Japan is one of the prominent players in the gaming market in the world after China and the United States. With the rapid growth of technological adaption and many leading gaming companies, such as Sony, Nintendo, Konami, and others, for decades in the country, the country's gaming market is evolving and expected to grow significantly during the forecast period.
• With one of the world's largest youth populations, India is expected to become one of the world's leading market destinations in the gaming industry. The growth in the country is driven by the growing younger population, higher disposable incomes, the introduction of new gaming genres, and the increasing number of smartphone and tablet users.

Competitive Landscape

The cloud gaming market is concentrated, with few companies gaining a significant market share. Companies like Tencent are partnering with other tech giants to build bigger and better cloud gaming services. Other companies, like Google, Nvidia, PlayStation, and Vortex, are providing more imaginative gaming solutions.

• January 2022- Utomikannounces that they have signed a partnership with Samsung to bring Utomik's game subscription service to Samsung Smart TV users globally using its unique hybrid gaming platform .that will make use of hybrid gaming platform, allowing gamers to play on any device and transition seamlessly to other devices, using both the smart download technology or cloud gaming technology depending on device and context.
• January 2022 - Microsoft acquires Activision Blizzard to bring the joy and community of gaming to everyone across every device. This acquisition includes iconic franchises from the Activision, Blizzard, and King studios like "Warcraft," "Diablo," "Overwatch," "Call of Duty" and "Candy Crush," in addition to global eSports activities through Major League Gaming. Furthermore, The acquisition will bolster Microsoft's Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, making Game Pass one of the industry's most compelling and diverse lineups of gaming content.
• June 2021 - Utomikpublished Summer in Mara, a craft-based adventure game. The user plays as a young Koa, an adventurous girl who travels while taking care of planting crops, harvesting them, creating new tools, and fetching things.
• May 2021 - NVIDIA Corporation announced that the GFN to offer 22 new games and support for three DLCs joining the GeForce NOW library on May 27. The company stated that GeForce NOW is increasingly ensuring that the games are automatically up to date, avoiding game updates and patches. Users must log in, click PLAY, and enjoy an optimal cloud gaming experience.

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• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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