Cloud gaming witnessed $387 million in consumer spending in 2018: IHS report

The growing market of cloud gaming could expand to up to $2.5 billion in the next five years

Cloud gaming has become the latest buzzword in gaming and it’s forecasted to turn into a $2.5 billion industry in the coming five years. Consumers have spent up to $387 million in 2018 and it’s only on the rise as more companies are boarding the bandwagon.

Xbox controller.

Xbox controller.

A report on cloud gaming by IHS Markit considers the cloud gaming market into two categories including “cloud gaming content services and cloud gaming PC rental services”. The report says that companies that have access to cloud infrastructure and the operating costs for it, will be the ones entering this industry. While the forecast of $2.5 billion seems huge, it’s a mere 2 percent (less than that) of the forecast of the entire gaming market currently.

According to the report, there were about 16 cloud gaming and cloud gaming PC services that were operational at the end of 2018. Among the services, Sony’s PlayStation Now gathered the majority of the market share of 36 percent. Sony has been more aggressive in the last 12 months and its recent announcement of a collaboration with Microsoft’s Azure platform indicates how serious they are about it.

Among the few countries where cloud gaming services are available, Japan was in the lead in 2018 with a consumer spending of $178 million. The country has high-speed fixed and mobile broadband services that have enabled this number. The United States was the second biggest while France was third in the market share in 2018.

The numbers obtained in the report does indicate an upward trend in the adoption of cloud gaming services that could actually kick off on a larger scale next year or even this year itself. Apart from Sony and Microsoft’s deal, Google also showcased its take on cloud gaming with Stadia. NVIDIA has been operating its GeForce NOW service for PC gaming for a few years now. At this year’s E3 gaming expo, we might see Xbox announcing something about  Microsoft’s Project xCloud, officially making its entry into cloud gaming.

While latency will still be the biggest hurdle to cross in cloud gaming compared to physical PC hardware and consoles, it will eventually become more accessible with local datacentres and better infrastructure.

From an Ookla report, India’s fixed broadband connections have average download and upload speeds of 26.46 Mbps and 21.91 respectively. Although this is just the bare minimum of the recommended bandwidth suggested by Google and NVIDIA, there’s also the issue of FUP packages. Streaming games will require up to 12 GB of data every hour (for 1080p 60 fps gaming) and gamers may hit their FUP cap in just a couple of days, depending on their internet plans. The IHS report showcases a global perspective to the adoption of cloud gaming, however, in India, the scenario is different.

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