CLOUD GAMING MARKET ANALYSIS

Cloud gaming allows the gamers to play games online using internet connectivity and console. In the conventional gaming, all the graphic processing, and video rendering is done on the device (such as smartphones, PC) itself whereas in cloud gaming all the processing, graphics, and video rendering process takes place on the cloud itself, eliminating the need of high-end gaming console, which is expected to drive the global cloud gaming market over the forecast period. The gamer only requires one end device such as smartphone or laptop, high internet connectivity, and a subscription from the cloud game providing company to enable the cloud gaming service.

The global cloud gaming market is segmented into device, type, and region. On the basis of type, the market is segmented into smartphones, gaming consoles, PC, tablets, and others. On the basis of region, the global cloud gaming market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa.

The global cloud gaming market is expected to witness significant growth during the forecast period (2021–2028) due to rapid adoption of high speed internet connectivity across the globe.

The internet connectivity across the globe is rapidly increasing due to the new and advanced technologies such as 5G and Wi-Fi 6. Telecommunication companies are heavily emphasizing on the adoption of 5G technology due its advantages such as high speed connectivity, low latency, higher number of device connectivity, easy implementation of virtual network, and various other benefits. The constant connectivity plays an important role in the cloud gaming especially, when multiple users are connected at the same time, and when sometimes the network might face lag, which might disturb the overall user experience. According to Coherent Market Insights analysis, 5G network might offer higher bandwidth ranging from 100 Mbit/s to 1 Gbit/s (depending upon the radio frequency spectrum and architecture), and reduce the latency to 10 ms. Thus, the low latency connectivity offered by the 5G network will enable players to play games on the cloud without any connectivity issues with a smooth playing experience.

5G network infrastructure witnessed strong growth in the developed countries such as U.S., Japan, and others. However, developing countries such as India, Brazil, and others are still facing challenges in terms of initial 5G network infrastructure. Countries such as India are still in the trial stage of 5G connectivity where the full 5G network connectivity is expected by 2025. Thus, lack of 5G infrastructure might hamper the growth of cloud gaming market especially for developing economies.

Global Cloud Gaming Market - Impact of Coronavirus (Covid-19) Pandemic

The outbreak of COVID-19 has significantly affected all the industries globally. This led to significant effects on economic growth and governments had to shut down commercial as well as educational sectors for a specific period. To combat COVID-19 pandemic, most of the countries had implemented lockdown, and are now easing it phase-wise and industry wise.

The global cloud gaming market witnessed strong growth in COVID era as many people were forced to live indoors, which suddenly increased the demand for gaming consoles, when the gaming console manufacturing companies such as Nintendo and others faced shipment challenges in the span of pandemic.

North America held dominant position in the global cloud gaming market in 2020

Statistics:

North America held dominant position in the global cloud gaming market in 2020, accounting for 46.8% share in terms of value, followed by Asia-Pacific, Europe, Latin America, Middle East and Africa.

Figure 1: Global Cloud Gaming Market Share (%), By Region, 2020

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Over the forecast period, North America is expected to account for the largest market share in the global cloud gaming market. The primary driver of cloud gaming in the North America region is the rapid adoption of cloud gaming services by the North American companies. For instance, in November 2019, Google Inc., a U.S.-based internet company, launched Google Stadia in the US and other selected countries. Furthermore, Netflix, Inc., a U.S. based streaming and TV production company, is planning to offer game streaming services in 2022. Whereas, companies such as Microsoft Corporation and others have already stepped into the cloud gaming market, this is expected to drive the North America cloud gaming market.

Furthermore, adoption of 5G is expected to witness a strong growth in the U.S. Companies such as Verizon, C Spire, AT&T, Sprint, and T-Mobile are already offering commercial 5G services in the U.S. It is anticipated that by 2023, around 35% mobile consumers in the U.S. would be using the 5G network.

Consumer Electronics segment is expected to drive the market growth during the forecast period.

Among device, the smartphone segment is expected to hold dominant position in the global cloud gaming market during the forecast period. As the devices are getting cheaper and more affordable, their demand has also increased. In recent past, developing economies such as India and China witnessed a boost in the demand for smartphones. For instance, according to Coherent Market Insights analysis, India's smartphone shipment reached almost 38 million units in Q1 2021, and witnessed around 23% YoY growth. Rapidly growing smartphones devices market is expected to positively impact the global cloud gaming market.

Figure 2: Global Cloud Gaming Market Value (US$ Mn) Analysis and Forecast, 2017 - 2028

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The global cloud gaming market was valued at US$ 178.2 Mn in 2020 and is expected to reach US$ 2,996.0 Mn by 2028 at a CAGR of 42.3% between 2021 and 2028.

Major players operating in the global cloud gaming market include Amazon Web Services Inc., Apple, Inc., Electronic Arts, Inc., Google Inc., Intel Corporation, International Business Machines Corporation, Microsoft Corporation, NVIDIA Corporation, Sony Interactive Entertainment LLC, Ubitus Inc., and others