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23.7 Million Paying Users Will Generate $1.6 Billion for the Cloud Gaming Market This Year

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We’re delighted to announce the general public launch of our 2021 World Cloud Gaming Report, which continues to be the usual for sizing, exploring, and contextualizing all issues cloud gaming. To have fun the launch, we’ll share some high-level findings from the report.

 

Table of Contents

By the tip of 2021, there shall be 23.7 million paying customers of cloud gaming providers, spending a mixed $1.6 billion on cloud gaming providers and video games streamed by way of the cloud.

That is in response to our base situation (the total report options three totally different situations to replicate the market’s ongoing developments). You may be taught extra about our cloud gaming methodology right here.

This text will shine the highlight additional on the thrilling market (and the gamers enabling it), extra particularly:

  • Paying customers and income forecasts towards 2024.
  • An outline of the cloud gaming ecosystem.
  • Snippets of interviews with key cloud gaming stakeholders.
  • A sneak peek at outcomes of thefull report‘s cloud gaming survey.

Able to dive deeper already? Obtain this free model of our 2021 World Cloud Gaming Report.

2020 and 2021 Have Been a Enormous Progress Interval for Cloud Gaming: Can It Proceed?

All through the pandemic, cloud gaming has provided an accessible various for veteran and returning gamers to play video games—in addition to a gateway to gaming for brand spanking new gamers.

On the similar time, the worldwide semiconductor scarcity has hindered the availability of high-end PC parts and new-generation consoles, additional emphasizing cloud gaming’s use case of high-end gaming without having costly {hardware}.

On the enterprise aspect, many cloud gaming service suppliers have shifted their advertising methods to deemphasize the technological aspect of cloud gaming from the primary narrative. As a substitute, these providers current themselves as instruments that allow players to play the newest titles immediately and seamlessly on any gadget.

In 2020, the worldwide cloud gaming market generated $669 million—a quantity that may greater than double to $1.6 billion for 2021. Whereas cloud gaming corporations initially confronted challenges in maintaining with demand, the state of affairs has markedly improved. However a key query stays: can this spike in revenues proceed?

 

As you may see, the reply to that query is sure. We count on that the cloud gaming market will proceed to develop healthily, hitting $6.5 billion in international yearly revenues in 2024.

The power of corporations to achieve would-be cloud gamers will decide the success of this thrilling market. Whereas providers initially focused just a few outstanding areas, cloud gaming providers are signing new partnerships with web suppliers and native communications service suppliers (CSPs) all around the globe each month.

For instance, by the tip of 2021, NVIDIA’s GeForce NOW can have strengthened its presence in Latin America and the Center East whereas additionally increasing to Southeast Asia, owing to partnerships with native CSPs.

Due to the continuing rollout of worldwide providers, bolstered by these native partnerships and enhancing web infrastructure, we count on cloud gaming’s service obtainable market (SOM) to achieve 164.6 million by the tip of 2021. The SOM represents the whole variety of people who find themselves conscious of what cloud gaming is, have a sufficiently good web connection, and are doubtlessly excited by paying for a cloud gaming service.

As you’ll uncover in the free model of the report, this quantity is about for even additional progress as time goes on.

What Does the Cloud Gaming Ecosystem Look Like At this time?

Talking of rising cloud gaming providers, the ecosystem has seen an unprecedented variety of developments over the previous yr.

Not solely has the quantity of providers continued to develop since our final World Cloud Gaming Report replace, however many corporations have considerably expanded their providers (particularly B2C corporations exploring the B2B house). The diagram beneath exhibits the cloud gaming ecosystem on the time of writing:

 

But, providers just like the above are only one piece of the puzzle; the expertise enabling cloud gaming is, in fact, very important.

To assist readers higher perceive the community infrastructure powering cloud gaming behind the scenes, we added a brand new part to this yr’s report, together with its personal ecosystem diagram outlining the important thing gamers in cloud gaming’s infrastructure.

We additionally interviewed a number of the ecosystem’s key stakeholders, offering qualitative insights into their methods, the trajectory of the cloud gaming market, and the expertise that underpins it.

An Intimate Take a look at Cloud Gaming Corporations

This yr, we carried out in-depth interviews with decision-makers from 4 main corporations:

  • Phil Eisler, VP of NVIDIA and Head of GeForce NOW:“We primarily see cloud as an incremental progress alternative for your complete gaming ecosystem. GeForce NOW extends the power to expertise high quality PC gaming to thousands and thousands of individuals with out succesful {hardware}. We see that 80% of GeForce NOW gaming classes occur on gadgets that can’t in any other case play video games as a result of their {hardware} is beneath minimal spec or incompatible.”
  • Jinfeng Dang, Founder and CEO of Haima Cloud:“We’ve got skilled person progress in each cellular gadgets and bigger screens. Furthermore, we have now seen customers who play by way of their TVs and PCs beginning to play cellular titles on these similar gadgets, increasing the attain of cellular video games past their native gadgets. In any case, platform agnosticism is without doubt one of the distinctive options that cloud gaming allows.”
  • Nathan Huey, CMO of StackPath:“The video games corporations we all know are keeping track of and dealing exhausting at learn how to take multi-cloud—or multi-edge—methods to a different evolutionary technology. As a substitute of simply utilizing multi-cloud for failover methods or regional enlargement, they would use it to distribute purposes and providers heterogeneously throughout suppliers and totally different sorts of platforms.”
  • Rosen Sharma, CEO of now.gg:“We envision a future during which cellular gaming can be unbiased of any gadget or OS restrictions. With 5G empowering the gadget with an uninterrupted connection, sport builders can construct a cloud-native sport, which might perform throughout any gadget or OS with no affect on the gamer’s expertise.”

Client Insights: The Gamers Driving Cloud Gaming’s Rising Engagement and Revenues

Incentivized by new and increasing providers, extra customers than ever earlier than are experimenting with cloud gaming. To be taught extra, we went straight to the supply.

As a part of our 2021 World Cloud Gaming Report, we surveyed 6,788 customers throughout China, the U.S., Japan, and Germany.

Round 94% of these conscious of cloud gaming have both already tried it (50%) or need to attempt it (44%), suggesting a widespread shopper curiosity—or no less than curiosity. However what is definitely driving customers to attempt it out?

In response to our respondents, main drivers of cloud gaming adoption embrace:

  • Ease of entry: Many providers are immediately out there by way of a browser, chopping out the necessity for costly {hardware} or having to attend for the video games to obtain.
  • Interesting content material: Companies are persevering with to double down on their (third-party) content material choices.
  • The power to play on the go: A lot of the greatest providers, together with Stadia, can be found by way of a cellular (net) app.
  • Cross-progression throughout totally different gadgets: Xbox Cloud Gaming with Recreation Go permits customers to maintain their sport development throughout all platforms suitable with Recreation Go (cloud and native alike).

Our survey outcomes additionally present that cloud gaming has caught with many customers. In reality, of respondents who’ve tried cloud gaming, over a 3rd now play video games by way of the cloud for 3 days or extra per week. One other 29% play by way of the cloud a couple of times per week, and 19% as soon as a month.

Given this stickiness, it’s unsurprising that respondents’ satisfaction ranges are excessive for all of the cloud gaming providers coated within the survey. That is one other optimistic signal of the expertise’s potential.

Nevertheless, the survey outcomes weren’t unanimously optimistic. In addition they highlighted some obstacles the market wants to beat to maximise its attain and person acquisition. We define a few of these obstacles within the Client Insights part of the free report, which you’ll obtain right here.

Regardless of these obstacles, one factor is certain: cloud gaming is turning into a extra essential a part of the video games ecosystem every year and is on a transparent trajectory to turning into an vital section of the worldwide video games market.