The last few years have seen tremendous growth in the cloud gaming space. The Covid-19 pandemic and ensuing lockdowns, as well as the global semiconductor shortage, highlighted the need for high-end gaming without expensive hardware. The result was a near-trebling of market revenue – from $669 million to $1.6 billion – in 2020 and 2021. This is predicted to quadruple to $7.1 billion by 2027.
In line with this dramatic revenue growth, the cloud gaming ecosystem has developed at pace. There are now more established cloud gaming platforms and services than ever, with a growing number of providers with both B2B and B2C offerings.
Veteran gaming giants Sony and Microsoft have extended their gaming offers with PS Now and Xbox Cloud, respectively. NVIDIA GeForce, famous GPU provider and best friend of the gaming industry, launched a lucrative service in NVIDIA GeForce now.
Cloud gaming has not escaped the attention of tech behemoths Google, Apple, Facebook and Amazon (GAFA), either. Google launched Google Stadia in 2019 (and stopped it in 2022), Facebook has Facebook Gaming and in October 2020 Amazon launched its own cloud gaming service, Amazon Luna.
The growing presence of GAFA in cloud gaming could be seen as an ominous sign. However, their entry into the market has not been straightforward. Google Stadia launched with technical defects and sub-standard technology. Amazon has experienced teething problems with its games catalogue.
As an operator, this is encouraging, and a strong reminder that businesses can compete with GAFA in cloud gaming with the right strategy. Here are the three elements you need to get right in order to do so:
The cloud gaming industry is extremely (and increasingly) competitive, which means high levels of end-user churn. Indeed, the fact that most cloud gaming platforms work on a monthly subscription model, means end users expect novel experiences to justify the price. As a result, operators are under a lot of pressure to provide fresh and relevant content regularly.
According to the Global Cloud Gaming Report, one of the major drivers of cloud gaming adoption is appealing content. Personalisation is a huge part of this, defined as tailoring the communications and features inside and outside of the game to meet the specific needs of individual players.
Because gaming activity produces so much data, there are many opportunities for personalisation. These include targeting and recommendations based on behaviour and contact information, attractive and ergonomic user interfaces, and even in-game design. The quality of your catalogue will often be evaluated not on its depth of entertainment as a whole but on how personal it appears to each user.
Aside from this, a strong indicator of a good quality platform is its ability to offer AAA games from renowned franchises. Here, as elsewhere, the perception of quality and relevancy is huge. Working with ‘household name’ franchises adds legitimacy to your service, and helps you build loyalty with users.
Wiztivi Tip: When considering your games catalogue, think deeply about your target audience. Who are they? What do they look like? Build a strong picture of your ideal end user.
This is important because different audiences have very different needs. Gaming audiences are no different. For example, a ‘hardcore’ gamer is likely to want the latest games with the best graphics, whereas the casual gamer may care less about graphics and want games which do not require any specific skill to enjoy. Which of these users you intend to target will determine the focus of your initial game catalogue.
End users will be attracted initially through marketing, but will only stay if the quality of your service matches your promises. For a gamer, in-game quality and technical performance is paramount for a positive experience, and a major factor when deciding to subscribe to (or stay with) a particular platform.
Another major driver for cloud gaming adoption, according to the Global Cloud Gaming Report, is the ability to play games across devices. In order to accomplish this, you should adapt game performance (graphics, streaming capabilities) to different devices and different internet speeds. Failure to do this will result in latency issues, which can severely affect in-game delivery and prompt negative feedback from your users.
Wiztivi tip: In order to avoid performance issues, work with the right partner to ensure your cloud gaming solution is built on strong foundations. Our Streamava platform, the world’s leading cloud gaming service for operators, provides a premium quality experience with state-of-the-art technology that can be easily integrated into existing environments. You can find out more here.
Once you have performance and latency challenges solved, the next step is to improve and expand on the different services on your platform. Watch the market, analyse customer feedback carefully and do not hesitate to adopt the latest trends if you have the bandwidth to do so.
For example, promoting social and multiplayer games, and making your platform eligible for esports competitions, can raise your status and improve user adoption and retention.
As an operator, you and your team are in a unique position. Why? You already have a strong and secure user base that has trust in your name and your services. You have brand equity, and a ready-made way to attract and retain end users.
Adopting your cloud gaming platform will also be less complex for your current users than dealing with another provider, as all billing can continue to go through one account. This lack of friction is important and should be emphasised in your marketing materials and made obvious in your user journeys – it is a differentiator that GAFA cannot offer.
Furthermore, your current operation is already more than capable of supporting a powerful cloud gaming offering. You have the infrastructure in place to launch and sustain an engaging platform, as well the in-house digital expertise and experience to keep it evolving and improving.
Finally, due to your current business, you already have the pre-existing connections in the digital world. The gaming industry, especially where franchise titles are concerned, is built on partnerships with publishers and developers. As an operator, you have the wide-ranging service portfolio to offer unforgettable franchise experiences. For example, if a subscriber watches a superhero movie on your TV service, you are in a unique position to market the gaming tie-in on your cloud platform. This is a marketing dream! With the right strategy and partner, you can make this a (very) profitable reality.
Competing with GAFA can be an intimidating prospect. Their omnipresence suggests an impossible task but the reality is not so clear, especially after Google’s withdrawal. The signs suggest that cloud gaming is proving more complex than the Big Four anticipated, and success in one domain is no guarantee of success in another.
This is your opportunity to take a slice of a huge market that is only going to grow in the next decade. You have the technical skills and experience – now all you need is the right partner.
Wiztivi is a global leader in on-demand gaming as well as the design and development of User Interfaces for TVs, set-top boxes, mobile devices. We have been involved in the cloud gaming industry for more than 20 years and would love to hear about your cloud gaming aspirations.
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