Cloud Gaming: A New Source of Revenue for Operators

The cloud gaming industry is set for a period of strong and sustained growth. In 2024 it is projected to reach 6.5 billion U.S. dollars in revenue, up from an estimated 1.5 billion U.S. dollars in 2021. These numbers suggest an extraordinary opportunity for businesses that can satisfy the relentless demand for interactive, immersive and social entertainment.

>> Download: “How to set up a profitable cloud gaming solution”

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The reasons for such dramatic growth are numerous; more cost-efficient ways of playing vs traditional consoles and expensive game titles, more smartphones in circulation than ever before, and a generation coming into maturity who see no reason why their games should not be available at all times, in their living rooms and on their mobiles. Cloud gaming is a powerful convergence of technological innovation and social progress. It has the potential to become one of the principal modes of entertainment for years to come.

However, despite this potential, and the fact that it is a service that could be easily added to their core offering, many operators risk missing out on the cloud gaming boom. The perception seems to be that an investment in cloud gaming would be disruptive. In reality it is a fantastic opportunity to capture new users and increase revenues while continuing to delight current subscribers.

In this article we will explore why building a cloud gaming system to complement your core product is the perfect next move for your business. We will cover the following key points:

  1. An innovative way to increase your customer base
  2. Easy upsell of gaming accessories
  3. A multitude of cross-selling opportunities
  4. Which monetisation model is right for you?

Cloud gaming: an innovative way to increase your customer base

There are currently more than 2.5 billion gamers worldwide. While the traditional video game market is now mature, with established players, cloud gaming – dubbed ‘the Netflix of video gaming’ – is still up for grabs.

For operators working in closely related markets, it is the perfect opportunity to build new, and strengthen existing audience relationships, as well as demonstrate the value of traditional offerings, such as TV and broadband plans. For operators wanting to differentiate themselves from similar competitors, it is also a compelling way to gain a competitive advantage for acquiring more subscribers.

One of the key promises of cloud gaming is that it removes the need for specific hardware, allowing games to be played from any device capable of video playback. This opens up the market to people who perhaps cannot afford a high-end PC or console, and have until now only been infrequent or unengaged gamers. With cloud gaming, if you have a Smart TV, Set-top Box or mobile with an internet connection, you are ‘good to go’.

This makes cloud gaming the perfect entry point for notoriously hard to reach consumers, such as families and casual gamers unwilling to invest income in hardware they’d need to renew in a few years’ time. For an operator with an existing customer base, it is a great way to engender loyalty, improve perceived value, increase engagement and attract countless others via word of mouth and the viral effect of social media.

Easy upsell of gaming accessories

The cloud gaming platform is also an opportunity to monetise add-on products related to the gaming experience, such as gamepads and game passes. These offerings are high margin, simple to market products that are available from a number of reputable and established partners.

Another fantastic opportunity that all operators have is to bundle gaming into a high-value subscription offering with TV channels and established franchises. By providing easy billing integration with existing services, and low-friction access to highly desired accessories via a dedicated portal, operators can move in a unique and space with less competition and more revenue streams than ever before.

A multitude of cross-selling opportunities

Operators have a unique opportunity to deliver a fully immersive experience to subscribers. By providing all of the above services under the same subscription – from watching a movie, to playing the game tie-in, to shopping for associated accessories and merchandise – users can undertake a rewarding journey all on the same platform. It is a holistic, self-perpetuating ecosystem and content delivery cycle which will be simultaneously satisfying to the consumer and consistently lucrative for the operator providing the service.

Which monetisation model is right for you?

As Chief Marketing Officer, your objective is to figure out how to capitalise on the impending cloud gaming boom in the most cost-effective and profitable way. How can this new offering be developed to a high standard? How can it help you achieve subscriber growth goals and revenue targets? How will it support and delight your existing customers?

The most effective way to launch your service is a continuous and well-planned long-term campaign that utilises available content and leverages diversified channels. The main marketing channel to be utilised is the TV set itself and the TV UI should have continuous marketing highlights of great games titles that attract various audiences. Content must also be regularly refreshed to keep the service vibrant and new.

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Your chosen monetisation model will also have an impact. Will you choose to offer a yearly or monthly subscription? Will you offer the option to rent games before purchase? There are many options available, but these decisions will depend on the market segment you intend to pursue, and the preferences of your target audience – do they like to pay for services upfront? Or are they part of a demographic who like to pay as they play? Only an experienced partner, with the help of market research, will be able inform your strategy.

For more information on cloud gaming, and how you can get involved in this lucrative market, download our latest guide: How to set up a profitable cloud gaming solution.

How to set up a profitable cloud gaming solution

and create a new source of revenue

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