Cloud-Based Gaming Market will be the Future with Increased Investments in 5G Infrastructure

 
Cloud Gaming Market

Cloud gaming, or playing video games hosted on remote servers with the game streaming to players, is an emerging market that will grow at the highest pace owing to increased investments in 5G infrastructure by telecom operators. Cloud gaming allows players to access the latest console-quality games through fast, powerful and streaming games, without hardware downloads or updates, on any device. Players simply need a fast internet connection and modern web browser. With cloud gaming, players can instantly start playing a game without waiting for long downloads and patches.


The Global Cloud Gaming Market Demand is estimated to be valued at US$ 591.53 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period from 2024 to 2030.

Traditional console and PC gaming requires high-end hardware to run graphics-intensive titles. Cloud gaming removes this hurdle by shifting the heavy computing resources required to render and run games to data centers. This makes state-of-the-art gaming more accessible on a wider array of Internet-connected devices like smartphones, TVs, and laptops.

Key Takeaways

Key players operating in the cloud gaming market are Daikin Industries Ltd, Sharp Corporation, Mitsubishi Corporation, Hitachi Ltd., Haier Electronics Group Co., Ltd., Carrier, Samsung Electronics, Panasonic, Electrolux AB, and LG Electronics. These players are investing in 5G roll outs and partnerships with game developers and publishers to expand their cloud gaming catalogs. The growing availability of high-speed Internet connectivity and cloud-based services is also expected to drive the demand for cloud gaming worldwide. Major technological advancements like artificial intelligence, machine learning, and edge computing are further enhancing the experience for cloud gamers.

Market Trends

There are two major trends driving growth in the cloud gaming market. Firstly, the emergence of 5G networks will be a game changer by providing ultra-low latency connectivity required for seamless, high-quality cloud gaming. 5G reduces lag and allows more complex open-world multiplayer games to run smoothly in the cloud. Secondly, an increasing number of global technology giants like Google, Microsoft, Nvidia, and Amazon are heavily investing in cloud gaming platforms and content. Their massive data centers and IT infrastructures enable high-performance cloud gaming access to a huge gamer base worldwide.

Market Opportunities

Two prominent opportunities in the cloud gaming market are the increasing popularity of esports and the scope for cloud gaming in emerging economies. Esports audiences and tournaments have grown dramatically in recent years. Cloud gaming improves the experience for esports viewing, streaming and practice by casual and serious gamers. Emerging economies have large gamer populations but infrastructure challenges. Cloud gaming presents an opportunity for inclusive gaming growth by removing barriers posed by high hardware costs in these regions.

Impact of COVID-19 on Cloud Gaming Market
The COVID-19 pandemic had a massive impact on the cloud gaming market. During the initial lockdowns in early 2020, people were confined to their homes with limited outdoor activities. This led to a significant spike in demand for cloud gaming as a source of entertainment. Many cloud gaming platforms like Google Stadia, Nvidia GeForce Now, and PlayStation Now saw unprecedented growth in user base and engagement. However, restrictions on manufacturing and supply chain caused hardware shortages. This posed challenges for infrastructure expansion by cloud gaming companies to support the surging player loads.

As lockdowns eased in 2021, people started resuming outdoor activities slowly. This led to a decline in cloud gaming engagement levels. However, the massive influx of new users during the peak pandemic period helped the market establish itself on a larger scale. Many new users who tried cloud gaming during lockdowns continued playing occasionally even after restrictions were lifted. This helped maintain higher retention rates compared to pre-pandemic levels.

Looking ahead, cloud gaming companies will need to focus on expanding their server infrastructure and coverage to handle potential demand spikes during future crises or lockdowns. Upgrades in 5G technology will also help deliver low latency gameplay essential for cloud gaming's growth. Content partnerships with game developers and live streaming platforms can help attract newer audiences and drive further market expansion.

North America and Europe
In terms of value, North America accounted for the largest share of the cloud gaming market by 2019, followed by Europe. This is due to high availability of fast broadband speeds, advanced network infrastructure and presence of major cloud gaming platforms in these regions. However, Asia Pacific has emerged as the fastest growing regional market especially due to increasing adoption in China, South Korea and Japan. Countries like India are also witnessing rising interest in cloud gaming driven by cheap data plans and proliferation of low-cost Android smartphones.

Asia Pacific
Asia Pacific has emerged as the fastest growing regional market for cloud gaming, especially led by adoption in countries like China, South Korea and Japan. In China, cloud gaming saw a meteoric rise helped by widespread availability of fast fiber internet and popularity of streaming platforms. The presence of tech giants like Tencent and NetEase who have invested heavily in developing advanced cloud server farms and content libraries has boosted the market growth. Other Asian countries like India and Southeast Asian nations are predicted to drive the highest growth in the coming years due to increasing affordable data access and smartphone usage.

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