Netflix of Video Games, the start of Cloud-Gaming

By Gokul Siddharthan J, DCMME Graduate Student Assistant

Cloud Gaming

The ability to stream songs and movies over the internet has transformed how we watch movies and listen to songs over the past decade, but the $140bn market for video games hasn’t yet entered the cloud subscription services such as Netflix, Hulu, and others. Recently, Google began tests of a cloud gaming service called “Project Stream”, using a big-budget game, “Assassin’s Creed Odyssey”. The game is computationally heavy and usually runs on consoles and high-end computer systems. But with the computational heavy lifting transferred to Google’s data centres, even a modest laptop can run the game.

Microsoft is due to start testing a similar service called “Project xCloud”. Electronic Arts, a big gaming company with famous titles such as FIFA, has plans for a streaming product of its own. Nvidia, a maker of graphics cards and chips, is testing a similar service. Sony already has a cloud-gaming service called “PlayStation Now”. There are also a few startups in the fray.

The mechanics of cloud gaming involves the game being run on a data centre hundreds of miles away, and the feed relayed to the user. The success of the cloud-gaming services rely on the infrastructure. The computer running the game must react instantly to the user’s input or the game will feel sluggish. If the latency, time taken for a round trip of data from the data centre to the player’s computer, takes more than couple of dozen milliseconds then the user experience will start breaking down, especially when playing high end action games. Connections must be rock solid.

Earlier attempts at cloud-gaming resulted in failed attempts due to an insufficient network infrastructure. But nowadays, many homes are connected to high-speed broadband connections. Firms such as Google and Amazon have data centres present all over the world, and they have the technical expertise to establish such a service. Incumbents such as Microsoft and Sony face a threat from these new entrants. But it’s still too early to predict who will win the battle.

Cloud-gaming appeals for other reasons too. The gaming industry is increasingly making money from users buying digital goods in a game. The marginal cost of generating such digital goods is almost zero, so every sale is a profit. Often the margins on consoles aren’t very profitable so the business model in the gaming industry will see some changes.

People are trained to expect entertainment to be portable, transferable between different devices, and instantly available. The hope is that cloud-gaming will be appealing to consumers, and the industry will have to simply be keeping up to their habits.

 

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