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  • Writer's pictureRavid Hadar

All you need to know about cloud gaming

When video games first emerged in the 1970s, they were marketed toward children. More recently, though, video games have become all the rage with people of all ages. No longer are video games designated as a simple hobby for kids. They have grown to include a much larger user base and seen an increased economic impact.

The money made from the video gaming industry is expected to grow to $174.9 billion in 2021, in part a result of competitive gaming and an improvement in graphics, performance, user interest, and the launch of popular titles.

Another recent contributor to the industry is cloud gaming. But what exactly is cloud gaming, and what are some of the biggest challenges that this newest platform for gaming faces?

What is cloud gaming?

Cloud gaming is the ability to stream a game to any device or display that you own without the requirement to physically store it on your device. Want to play a game on the go? With cloud gaming you can easily stream some of your favorite games to your phone or tablet. You can also stream your games to a Smart TV in your home.

Cloud gaming is similar to Netflix video streaming, but instead of watching movies, you stream games (interestingly, Netflix recently announced it is getting into the cloud gaming business, but we’ll talk more about that later). Of course, this type of gaming requires a reliable internet connection and delivery.

When first created in the late 2000s, cloud gaming was held back by the available technology and slow internet speeds. But with recent technology improvements, interest in cloud gaming has grown.

How cloud gaming is different from console- or PC-based gaming

Console- and PC-based gaming requires the use of a gaming console or PC to play. With cloud gaming, neither are mandatory. This is because with cloud gaming you have the ability to play on any device, including your Smart TV, tablet, or other mobile device by simply streaming your games from the cloud.

With cloud gaming, you can play anywhere a network allows, not just at home, as is the case with a PC or console. While PCs and consoles do have their place even in the cloud gaming world, cloud gaming opens up many more accessibility options and makes it easier to play where you want to play.

With cloud gaming, games are stored on the provider’s dedicated hardware and they use the provider’s computing power while running the games. From there, the game streams from the cloud onto your device over the network.

Along with this increased accessibility, improving 5G networks and larger deployment of fiber to homes across countries are making it even easier to game in the cloud.

The benefits of cloud gaming

Cloud gaming has many benefits over traditional video game playing, including:

  • Lower cost for the gamer: A gamer isn't required to buy expensive physical hardware (premium gamer laptop, game console, expensive graphics card) that can become outdated every two to three years.

  • Accessibility and freedom: The gamer is able to play on any device or screen, including smartphones, laptops, and TVs, or even just opening a web browser and signing in. This offers the freedom to play anytime and anywhere.

  • Ability to play using cutting-edge graphics and processing power: The player leverages the computing power of the provider’s servers and hardware.

  • Play immediately: Gamers can start playing a new game without waiting for a long download time.

  • No updates: There is no need to update the games they play, as the cloud gaming provider takes care of the updates and always streams the latest version.

  • Massive game portfolio: Gamers can have access to a large number of games via a subscription instead of needing to purchase each game and own it.

The biggest names in cloud gaming

When it comes to how you game in the cloud, a variety of options aid the adoption of cloud gaming by users across the internet. In fact, many companies and services are jockeying for a piece of the cloud gaming pie.

The companies offering cloud gaming options range from some of the biggest names in the industry to newer entries into the cloud gaming field. In fact, most of the companies involved are not considered to be traditional gaming providers.

Whether a more traditional company or a lesser-known company offering cloud gaming services, each brings their own brand of cloud gaming to the table. Even Internet Service Providers (ISPs) are offering internet services designed exclusively for cloud gaming since they offer a higher bit rate and lower latency (key for gaming). Some of the different types of cloud gaming services offered include:

  • Subscription-based services: These offer different levels of video quality for various fees, including HD and UHD 4K. The different plans also offer more hours and more games for higher level tiers. Plans are subscription based with monthly fees which range between $5/m to $25/m. Of course, certain premium games aren’t included in the packages offered. However such services could be considered attractive by gamers who would like to gain experience with multiple game titles. Subscription-based services include Microsoft Project xCloud, Google Stadia, Amazon Luna, Sony PlayStation Now, and Nvidia Geforce Now.

  • B2B/B2C: Some companies offer a dual business-to-business and business-to-consumer model for cloud gaming. Unlike video streaming, where there is a clear separation between video platform providers and video service providers, in the case of cloud gaming, there are multiple players that have dual roles. These companies offer their own cloud gaming "direct to consumer" platform, as well as a B2B platform for new entrants to cloud gaming. For example, a mobile operator that wants to launch a cloud gaming service on its own brand without investing in developing a platform and service from scratch might use such a B2B offering. Some dual B2B and B2C cloud gaming companies include Ubitus, RemoteMyApp, Unity, and Hatch.

  • Gaming marketplace: Companies also offer cloud gaming as a service, where the company hosts a gaming marketplace that allows consumers to either download games directly from their Website or stream games from the cloud. One such service is Steam Remote Play (currently in beta), which allows you to play games you purchased directly from the cloud.

  • Gaming publishers: Game publishers are positioned to offer streaming services for their own titles on the cloud. The first one to announce such a service was Ubisoft, which launched Ubisoft+. It offers streaming on its own cloud gaming service. Ubisoft also cooperated with Amazon to offer cloud gaming as part of the premium services it offers. Another example is Electronic Arts, which bought out GameFly’s cloud gaming service and now offers players the option of playing the company’s games in the cloud via EA’s Origins Access Premiere service.

  • Alternate pay models: Some cloud gaming companies offer customers alternative payment models, such as SaaS-based models, in which subscribers rent remote desktops located in the cloud and pay by the specs of the instances and the amount of playing time. Shadow, Netboom, and Parsec offer such cloud computing-based models.

  • Telecom and Mobile operators: Telecommunication companies are also eager to obtain new revenue streams and are expected to get involved in the market. We see a trend similar to what happened with internet TV; however, in this case, some of these companies buy complete solutions from B2B cloud gaming vendors and launch them on their own brands. New entrants to the market include Verizon, MTS, Etisalat, Deutsche Telekom, and Vodafone, which offer subscription-based services that, in certain cases, can be bundled with your phone or internet subscription, where you can stream games to your phone without needing to purchase the game.

How popular is cloud gaming?

Cloud gaming, a small but fast-growing piece of the overall gaming scene, has gained popularity as demand for easier accessibility to gaming grows.

The popularity of cloud gaming has driven sales of various devices and services. Most notably, the cloud gaming market size is projected to hit USD 7.24 billion by 2027. This is still relatively low considering that the gaming market as a whole is expected to reach around $287 billion by 2026.

Overall, this is good news for gamers, but this expected increase in the popularity of cloud gaming brings its own set of challenges.

Wide deployment of cloud gaming: what are the challenges?

Cloud gaming offers gamers some amazing benefits, as long as the Quality of Experience (QoE) remains on par with traditional downloadable gaming. Good QoE equates to the ability to support constant, high-quality, and low-latency gameplay combined with high responsiveness to user actions and the ability to provide a great user experience on any device at any time. Some of these requirements are easily supported on downloadable gaming services, but they become an obstacle once shifting to cloud gaming.

Failing to meet the QoE requirement results in customer frustration and might cause a customer to abandon the cloud gaming service and shift back to a downloadable gaming service. Most of the QoE challenges are related to latency and bandwidth issues.

In many instances, cloud gaming services struggle to provide UHD 4K, which requires sustained bitrates of 30 to 50Mbps. Unfortunately, the delivery of these bitrates is not supported in most cases, even in countries with great internet connections and fiber to home. This does not even take into account mobile networks and countries with older network infrastructure. At this stage, many cloud gaming companies face challenges in streaming games with Full HD and to a higher extent UHD 4K, which are still not offered by most services.

It becomes even more challenging when facing the requirement of cloud gaming for low latency. For example, a network is considered cloud-gaming ready if it provides latency at 100ms or less, yet some games require almost instantaneous feedback of less than 30ms for optimal playing. Most mobile networks in developed countries, and even the fixed networks in developing countries, struggle to meet this criterion. Latency is critical to cloud gaming, especially in synchronous multiplayer games, because with high latency you can lose the game if you don't see the image of a new scene in time.

Unlike live video streaming in which even a few seconds delay behind the actual event can still be considered acceptable, the latency for cloud gaming must be low enough in order for you to not lose the game or be unfairly disadvantaged when playing against a competitor. By combining this requirement with the bandwidth requirement of cloud gaming, it becomes clear that the network infrastructure as it is today is not ready, in most cases, for high-quality and ultra-low-latency cloud gaming.

Another challenge is the ability to play anywhere (today, in many cases cloud gaming providers limit their service only to areas that are close enough to their data-centers). For this to happen, service providers need to invest much more in the availability of gaming content and in servers in locations that could better serve gamers. But here there is a chicken and egg issue: To have the content available in different locations with ultra low latency, there needs to be more investment in edge locations, which would only be justified by the increasing numbers of gaming subscribers shifting to cloud gaming.

To summarize, cloud gaming is still in its early stages and facing multiple internet delivery challenges. It’s also important to keep in mind that cloud gaming can’t be supported yet in markets with a less than adequate internet connectivity such as in developing regions.

These challenges will continue to grow as more and more people start to use cloud gaming on mobile networks and in newer and emerging markets. As a result, improvements in internet delivery, including a bigger deployment of fiber to home and 5G, are crucial to the successful growth of cloud gaming.

How Compira Labs can help with the challenges of cloud gaming

Compira Labs offers personalized internet data delivery that extracts more out of existing networks to enable excellent QoE (Quality of Experience) for media streaming services. Compira Labs implements in cloud gaming servers a machine learning-based solution, which analyzes network characteristics in real time and customizes data delivery to allow the highest possible bitrate and the lowest latency on the existing network.

By improving QoE, the Compira solution can increase service coverage for cloud gaming and accelerate its adoption. It could allow better utilization of the existing network and delivery infrastructures to support UHD 4K and extended reality (XR)- based services over fiber and 5G networks, and support the introduction of basic cloud gaming services on less modern networks.

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