Cloud technology will usher in the Netflix era of gaming

Article By : David Harold

The next evolution stands to be one of its most exciting yet, paving the way for a true revolution in how, when and where we play our favorite games...

Long before smartphones, modern PC games and the first consoles, the very best interactive entertainment experiences could be found at arcades. A distant memory today in most countries (and yes, I’m still mourning the closing of Kaikan Monaco, my favorite arcade in Tokyo), arcades featured the most advanced video games of the ‘70s, ‘80s and early ‘90s. Then came the revolution with the arrival of high-end consoles, including SEGA Dreamcast, which offered for the first time a wide collection of modern arcade-perfect games (the differences between Dreamcast and its arcade cousin, Naomi, being limited to memory size and processor speed). Apple’s iPhone and other smart devices then allowed virtually anyone to continue playing on the go without the need for a dedicated gaming device. Now another major transition is upon us: the rise of cloud gaming.

Essential hardware

Cloud technology will effectively remove the burden placed on consumers to continually upgrade their devices. This principle applies to a wide variety of application areas that extend well beyond smart home and work-related Internet of Things (IoT) devices, reaching (perhaps most noticeably) into entertainment. Designed from the ground up to provide high-end, console and PC-quality experiences to a multitude of devices, cloud gaming is delivered entirely over the Internet. Think of it as the Netflix of video games.

Like Netflix, streaming game services have had a gradual rollout. But that will change in 2020 as Google Stadia ramps up, NVIDIA enters the market with a Steam-compatible service, and as Microsoft’s xCloud project inches closer to reality. All are striving to expand the market to more consumers by eliminating the costly hardware barriers that currently limit the industry’s overall reach, although their business models have subtle but important differences.

Cloud gaming will rely on hardware on the server side, which will do most of the heavy lifting. This is what will make it possible for budget phones to play modern AAA games, but the same technology can also be applied to any application that requires substantial processing. For example, augmented reality glasses could be smaller, delivered faster and its software could be offered to a greater number of consumers if they offload most of the processing demands. Cloud technology will also make it possible for all app developers, not just game creators, to expand their reach beyond users with the most high-end devices.

One important driver of growth includes robust virtualization, which will allow streaming game services to reliably and simultaneously use a single GPU for multiple customers. This is not easily achieved, which is why most cloud providers continue to use a dedicated GPU for every player. As you can imagine, that is the most expensive, resource-heavy way to deliver cloud gaming. It also requires a much larger footprint than is necessary when virtualization is finally used.

Theoretically, better algorithms and resource management will, in time, make it possible for GPUs to apply unused resources to other players connected to the cloud. If, for example, every GPU used 90% of its capability for each player, it would only take 9 GPUs to stream games to 10 players. The 10th player could draw from the remaining 10% from each GPU. As virtualization and resource management improves, GPU efficiency will surely increase.

All told, virtualization will allow for greater player density and utilization of existing GPU resources, improving their value. Much like streaming video, it will take a tremendous amount of capital and resources for streaming game services to get started, so this will be incredibly beneficial to those looking to maximize their investment.

Ongoing growth

Cloud gaming is only the latest among numerous important and distinct transitions, allowing the game industry to flourish at every step. U.S. video game content grew more than 2% and generated more than $35 billion in revenue in 2019 alone. That’s more than three times the amount of money North American movie theaters raked in during the same period, serving as a powerful reminder for how big interactive entertainment has become.

As the arrival of ubiquitous cloud gaming draws near, it’s exciting to imagine where the industry will go next. But this technology is not without obstacles – in fact, there are a few standing in the way of a cloud-powered revolution.

Unlike Netflix and other streaming video services, which only require the content provider to deliver content directly to you with minimal input from consumers, cloud gaming must deliver an outstanding experience to and from a device. The faster the game and the higher framerate, the bigger this challenge becomes, which is the primary reason why the technology has yet to be deployed on a large scale. Yes, it is in the testing phase – and yes, there are signs that the revolution could be inching closer to reality. But Internet connections are not all created equal, and until they are – or until compression improves, reducing the amount of bandwidth that’s necessary for cloud gaming – the technology may be held back.

There are also challenges ahead for cloud gaming providers, who will have to figure out an optimal technology mix that doesn’t price them out of the market. Can one ultra-powerful GPU handle the streams of 10 consumers? Or will it demand a one-to-one ratio that requires frequent upgrades? If these issues can’t be addressed, how much will consumers ultimately have to pay for the privilege of gaming anywhere? To increase market penetration, will any of the providers be willing to take a massive loss today for financial gain tomorrow? Streaming video services have been doing this for years, but that doesn’t mean game companies will follow suit.

That said, cloud gaming is still an incredibly exciting technology and there is still a lot to look forward to when it is ready for mainstream deployment. For the first time ever, consumers who don’t have a powerful PC or the latest game console will still be able to play the newest and most advanced games. It will soon be possible for emerging markets to enjoy a backlog of content that was previously inaccessible.

Portability makes it even more interesting – who wouldn’t want to play PC-quality games at the park, on a bus or a hotel lobby? The possibilities are endless. With the freedom to jump in anywhere and at any time, cloud gaming could usher in even more changes, particularly regarding how and when we play.

Full speed ahead

Wi-Fi, 3G and later 4G helped transform the way we consume movies and TV. Now Wi-Fi and next-generation cellular networks (5G) are going to play a significant role in the way we enjoy the future of interactive entertainment.

That latter technology is especially important. With the promise of faster Internet – with lower latency and superior, always-on connectivity – 5G will make it possible to enjoy the very best games from any location and on any screen.

Surprising benefits

Cloud gaming isn’t just about ubiquity – it’s about the lesser-known benefits that will drastically change the future of the industry.

Right now, every game is sold on a disk, cartridge or via digital download. The former two take up physical space, while the latter can overload internal device memory very quickly. Demos and betas must also be downloaded, further compounding the problem.

With cloud gaming, none of that will be necessary. Just as streaming video eliminated the need to download an entire season of TV, streaming game platforms will do the same for interactive entertainment.

I remember the launch of phones with 3D graphics and the struggle of ‘sideloading’ games from computers and memory cards. Simply, the networks couldn’t deliver the content to the device. Today, with 5G it will be possible for games that take up 40+GB on console to play instantly on any screen connected to the network.

Where you need it, when you want it

From arcades and PCs to game consoles and mobile phones, the game industry has gone through numerous evolutions since its inception roughly five decades ago. The next evolution stands to be one of its most exciting yet, paving the way for a true revolution in how, when and where we play our favorite games.

— David Harold is Chief Marketing Officer at Imagination Technologies.

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