Cloud Gaming Market Size, Share & COVID-19 Impact Analysis, By Device (Smartphone, Laptop/Tablets, Personal Computer, Smart TV, and Consoles), By Streaming Type (Video Streaming, and File streaming), By End-User (Casual Gamers, Avid Gamers, and Hardcore Gamers), and Regional Forecast, 2021-2028

The global cloud gaming market size was USD 121.2 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with cloud gaming witnessing a slightly negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 39.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 169.2 million in 2021 to USD 1,861.3 million in 2028 at a CAGR of 40.9% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Cloud gaming technology is the future of the gaming industry, wherein the cloud is an important part of providing a seamless gaming experience to users’ overall devices without the need for additional hardware setup. The increasing demand for a low-latency, innovative, and immersive gaming environment is likely to drive the market potential. Gamers can directly play games over an external cloud server, without downloading the entire game. They can access these games through any device, thus, reducing the cost of the hardware setup and storage space. For instance, in November 2019, Google introduced its game streaming service, Stadia, providing online streaming of games across smartphones, laptops, tablets, and others.

COVID Impact

Lockdown and Stay at Home Restriction to Boost Market Growth amid COVID-19

The COVID-19 pandemic has impacted manufacturing units and supply chain industries drastically. Owing to the pandemic, manufacturing units suffered temporary shutdown or 50% working capacity, supply chain disruptions, shortage of material supply, and closure of country borders, among others. This adversely impacted the supply of hardware devices such as smartphones, smart TV, personal computers, laptops, and consoles, among others.

However, owing to the lockdown restriction across countries, cloud-based gaming solutions and services witnessed significant demand during the pandemic. As it does not require any additional hardware and can be played through any device, the demand for cloud-based games rose during the lockdown. People across the world shifted towards digital entertainment and cloud-based gaming services to pass their time during the lockdown. In 2020, Verizon Communication’s gaming platform witnessed a high demand spike. Several gaming companies such as AWS games, WinZo Games, Microsoft Corporation platforms witnessed a drastic rise in the traffic during the pandemic. Thus, the lockdown and stay-at-home restriction shifted the consumer’s interest towards a cloud-based gaming experience.

LATEST TRENDS

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Rising Mobile Cloud Gaming Trend Likely to Surge Market Growth

Today’s digital world is driving the adoption of smartphones. As per the GSMAi Report, the year 2019 reported 5.2 billion smartphone connections, and the year 2025 is likely to witness 80% smartphone adoption. Considering the rising adoption of smartphones, game developers are focusing on building mobile gaming environments for users. The network providers are also investing in offering mobile devices gaming experiences through their high-performing connectivity.

With high-end smartphones, cloud technology, and 5G infrastructures, users can gain a better gaming experience over any platform and at any place. Mobile cloud gaming can be addressed with a low-latency, high-quality gaming experience. As per the Ericsson analysis, in October 2020, amongst 106 service providers, 22 have already announced mobile cloud gaming services. The report also states that there are approximately 2.4 billion mobile gamers worldwide. Thus, the rising trend of cloud-based mobile gaming is likely to fuel the market.

DRIVING FACTORS

5G Technology’s Low-latency Capability to Drive Cloud Gaming Market Growth

Market providers are aiming for lowering the technological barriers and associated high-cost to attract all gamer types present worldwide. To provide an immersive and innovative gaming experience, it is essential to attain low latency in gaming services. The emergence of 5G technology is offering new support to providers with its low-latency capability. With the introduction of 5G, cloud-based gaming is getting redefined for providing a better gaming experience. As per the October 2020 Wipro whitepaper, many gamers are planning to switch to 5G networks and pay more to gain a superior gaming environment. Thus, the low-latency capability offered by 5G technology is further likely to drive the market growth.

Similarly, market players and telecom providers are entering into partnerships and collaborations to provide a 5G cloud gaming experience to gamers. For instance, in 2021, S K Telecom and SingTel collaborated to attract gamers using technologies such as 5G and multi-access edge computing (MEC). Similarly, in 2019, Microsoft Corporation and S K Telecom announced a partnership for cloud-based gaming services. Also, in October 2020, EU mobile operator POST Luxembourg collaborated with Blacknut to launch a 5G cloud gaming service. This is likely to drive the industry growth in the future.

RESTRAINING FACTORS

Latency and Responsiveness Issues to Hinder Market Potential

Streaming games on a cloud platform requires a low latency network and high bitrates with the required bandwidth. However, the cost associated with obtaining an internet connection with the required bandwidth may be high and may not be available in some countries. If the necessary network and bandwidth requirements are not met, latency and responsiveness can create a problem. However, the restraining factor can be reduced in the future, as telecom providers are initiating to introduce high-speed connectivity and major players, such as Google LLC and Microsoft Corporation investing in data servers.

SEGMENTATION

By Device Analysis

Smartphone Segment to Grow Rapidly Backed by Investment in 5G Technology

Based on devices, the market is categorized into smartphones, laptops/tablets, personal computers (PC), smart TV, consoles. The laptop, tablets, and personal computers segments are set to lead the market during the forecast period. The early adoption of PCs and laptops for gaming and the availability of high-end computers are driving the adoption of new innovative games.

However, the growing affordable internet plans and investment in 5G technology is expected to boost the opportunity for smartphones and smart TV for gaming. The increasing penetration of smartphones is estimated to boost the cloud-based gaming solution’s potential. Thus, the smartphone and smart TV segments are likely to gain rapid growth during the forecast period.

By Streaming Type Analysis

Minimum Requirement of Hardware to Propel the Video Streaming Segment

Based on the streaming type, the market is bifurcated into video streaming and file streaming. The file streaming segment is anticipated to lead the market initially owing to its capability to work after downloading a small portion of the file. Thus, players are offering patches of game files and helping the developer in reducing the cost of producing media content. 

The video streaming segment is likely to gain rapid growth during the forecast period as it offers the capability to play on any platform without requiring any specific hardware. It also by far has reduced the latency issue of cloud players. Further, many players such as LiquidSky, Shadow, Vortex, GeForce Now, and more are supporting video streaming games.

By End-User Analysis

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High Quality Streaming Games to Boost the Hardcore Gamers Segment

By end-users, the market is segmented into casual gamers, avid gamers, and hardcore gamers. The hardcore gamers segment is likely to gain rapid growth during the forecast period owing to the rising investment in advanced and innovative gaming solutions. Market players are highly investing in rich media content to offer high-quality streaming games across devices such as smartphones, smart TV, laptops, and others. This is likely to boost the adoption of cloud-based gaming solutions among hardcore gamers.

The casual gamers segment is expected to lead the market during the forecast period. The growing efficient internet facilities and easy availability of smartphones are driving the demand in the casual gamers segment. Similarly, the 5G and affordable cloud-based technology would boost the gaming trend in the avid gamers segment.

REGIONAL INSIGHTS

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Geographically, the market is fragmented into five major regions, such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

The Asia Pacific is expected to dominate the market during the forecast period. The surging demand for gaming content from countries, namely, China, Japan, India, and South Korea is driving the growth in the region. Also, the high penetration of smartphones across these countries is expected to boost the global market. China is set to lead the market during the forecast period owing to the rising investments in telecom and 5G infrastructures. Japan would gain rapid growth during the forecast period owing to the spurring presence of significant market players.

North America and Europe are estimated to gain significant cloud gaming market shares. The early adoption of cloud technology, growing demand for online gaming, and high penetration of efficient internet facilities across countries are expected to drive the market growth in North America. Similarly, the growing gaming industry in Europe is likely to boost the market in this region. These rising opportunities are driving the vast investment, collaboration, and acquisition in the European gaming industry. For instance, in March 2021, the European Commission announced the approval of the ZeniMax Media acquisition, a game developer and publisher, by Microsoft Corporation.

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Latin America and the Middle East & Africa (MEA) are expected to showcase a steady growth rate during the forecast period. The increasing adoption of smartphones is expected to drive the cloud-based gaming potential in Latin America. Similarly, the growing key market players’ investment in the MEA region would boost the demand. For instance, in June 2020, Blacknut launched its cloud-based 400 family-friendly premium games in partnership with Partner TV in Israel.

KEY INDUSTRY PLAYERS

Key Players are Entering into Strategic Partnership to Expand Business Potentials

Prominent players are collaborating with other cloud gaming platform providers to launch and use the platform for reaching out to more target customers. These players through collaboration are offering efficiently performing cloud-based games to users. Also, some of the key players are investing in offering new and innovative games. Through cloud-based deployment, these players are able to focus on the global market, by simultaneously launching new games in all the countries.  

November 2020 – Tencent collaborated with Intel Corporation for deploying the new cloud-based gaming platform, GameMatrix. In collaboration, the company aims to offer more than 100 popular games along with Tencent's low-latency, high-density, and low-power android gaming solution.

November 2020 – Ubitus Inc. in close collaboration with Intel Corporation announced a new Android cloud gaming solution. The solution is based on Intel Server GPU, which achieves better gaming performance.

LIST OF KEY COMPANIES PROFILED:

• Microsoft Corporation (Washington, United States)


• NVIDIA Corporation (California, United States)


• Ubitus Inc. (Tokyo, Japan,)


• Vortex (RemoteMyApp Sp. z o.o.) (Wisconsin, United States)


• Google Inc. (California, United States.)


• Amazon Inc. (Washington, United States)


• Intel Corporation (California, United States)


• Tencent (Shenzhen, China)


• Sony Corporation (Tokyo, Japan)


• Blacknut (Paris)


• Playkey (Massachusetts, United States)


• Loudplay (Dublin, Ireland)


• Apple, Inc. (California, United States)


• Electronic Arts, Inc. (California, United States)


• Hatch Entertainment (Finland)


• Jump Gaming Inc. (California, United States)

KEY INDUSTRY DEVELOPMENTS:

• September 2020 – Microsoft Corporation launched its cloud-based gaming service Xbox for targeting casual gamers in the market. The company aims to offer its services in 22 countries and it requires a better internet connection rather than bulky hardware.


• September 2020 – Amazon Inc. announced the launch of its new cloud type of gaming platform named Luna. The platform is available on PC, Fire TV, Mac, iPad, iPhone, (via web apps), and Android. The Luna Plus channel can be used to avail more than 100 games.

REPORT COVERAGE

An Infographic Representation of Cloud Gaming Market

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The global cloud gaming market research report highlights leading regions across the world to offer a better understanding of the user. Furthermore, it provides insights into the latest industry trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

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