Dating back to as early as the 1950s, computer scientists began revolutionizing the era of gaming by developing simple simulations, such as Tic-Tac-Toe (1951), Strachey’s Draughts Program (1951), Tennis for Two (1958), Nimrod (1951), and others. As systems continued to become more complex and intricate, games have become more in-depth and highly sensitive to player capabilities, rapidly paving the way for the evolution of a billion-dollar industry. According to Inkwood Research, the global gaming market is projected to grow with a CAGR of 11.60% between 2023 to 2032, reaching a staggering $1065.12 billion by 2032.
Global Gaming Market: ‘Game-Changing’ Role of Cloud Technology
The 1990s broke new ground for noteworthy innovations in gaming, including the transition of graphics from raster to 3D; this gave rise to popular genres, such as first-person shooter (FPS), real-time strategy, and massively multiplayer online (MMO) games.
With the year 2024 expected to see 3.32 billion gamers globally, present-day gaming enthusiasts strive to utilize the best technology and devices in order to compete at the highest levels. However, problems associated with hardware compatibility can be a major obstacle for game players and developers alike. Since operating systems and hardware parts are continually changing, developers must regularly update their products to ensure compatibility with newer hardware and software releases, thus further hindering compatibility.
In this regard, the gaming market is being forayed by cloud technology, enabling users to stream high-end games on portable devices with faster network connectivity. Cloud gaming has also minimized the constant need for regular hardware upgrades, enabling gamers across the globe to play on their existing and future devices. As per Inkwood Research, the hardware segment, under the component category, captured the highest revenue share of 65.03% in 2022.
With cloud gaming expected to break down the existing barriers of platform and costs in the market, cloud gaming solutions are also set to proliferate in emerging countries, where economic as well as low bandwidth barriers have long constrained easy access to gaming. Since consumers from developing regions are more inclined towards the free-to-play gaming model, this factor also creates favorable prospects for players to showcase their products in the market. For example, Nexon (Japan), a leading online game provider, attracts a vast and loyal player base globally owing to the company’s focus on free-to-play games.
Maximizing Revenues with Cloud Gaming | A Smartphone-Driven Era
In the global gaming market, cloud gaming or gaming as a service (GaaS) plays a pivotal role in fueling the demand for online services, wherein games are run on servers owned by gaming service providers. Moreover, with faster 4G and 5G internet services, consumers are highly persuaded by companies offering GaaS across all devices. Accordingly, a lucrative opportunity for vendors operating in the cloud gaming sector is to target smartphone gamers, who constitute a sizeable portion of the gaming audience.
Based on this, Inkwood Research’s analysis suggests that the mobile gaming segment is projected to lead and dominate the device type category during the forecast period of 2023 to 2032.
Since mobile gaming users’ preference mainly entails the convenience of playing console and PC games on their mobile devices easily, cloud gaming platforms, like PlayStation, Amazon Luna, and Google Stadia, are already turning a profit in the market by increasing their accessibility to console and PC gamers.
In a smartphone-driven era, the gaming market is witnessing a notable surge in demand for mobile-based apps, especially with the advent of cloud gaming. Accordingly, several key players are capitalizing on this trend, aiming to maximize their revenues in the mobile gaming space.
For example –
- Zynga (United States) – Zynga, acquired by Take-Two Interactive, is a leading social game developer and publisher engaged in the development of a wide range of games, particularly on mobile devices. Some of the top-performing titles offered by the company are FarmVille, Zynga Poker, Words with Friends, CSR Racing, Merge Dragons, Empires & Puzzles, and others. Zynga’s primary focus is designing free-to-play social games, available on various platforms, including Facebook, iOS, and Android devices. Take-Two Interactive’s mobile app revenue in April 2023 was $108 million, including $60 million for iOS apps and $48 million for Android apps.
- Ubisoft (France) – Ubisoft’s portfolio has successfully expanded beyond traditional gaming platforms, entailing services, such as ongoing content updates and multiplayer experiences, in addition to mobile gaming and virtual reality (VR). Given this versatility, Ubisoft has the potential to appeal to a broader audience, including smartphone users, and capitalize on rapidly emerging trends. The company’s brand names include The Crew, Far Cry, Assassin’s Creed, For Honor, Just Dance, Prince of Persia, and others. Moreover, Ubisoft’s mobile app revenue in April 2023 was $2 million.
- Gameloft (France) – The company is primarily engaged in creating games specifically for iOS, Android, and Java. It also develops games across digital devices, such as mobile phones, connected TVs, tablets, smartphones, etc. The total revenue of Gameloft mobile apps in April 2023 was $6 million, including $3 million each for iOS and Android apps. Gameloft’s Uno & Friends, for example, is a mobile version of Uno, the classic card game, with multi-player modes as well as in-game rewards. The online mobile game also includes various customization options, such as avatars, backgrounds, and card layouts.
- Activision Blizzard (United States) – The gaming firm creates and distributes interactive software products, entertainment material, and services for smartphones and other devices. The company’s mobile games include Call of Duty, Diablo, Candy Crush, etc. In April 2023, Activision Blizzard’s total mobile app revenue equated to $161 million, including $74 million for Android apps and $87 million for iOS apps.
Moreover, since 5G services are being launched in several countries, cloud gaming services are expected to accelerate at a staggering rate. This factor has greatly helped leverage mobile ubiquity and faster connections in order to deliver AAA-quality gaming to users. Accordingly, game publishers, platforms, and developers are also expected to witness higher profits with greater reach over the upcoming years.
In addition to being in tune with current gaming trends and user consumption patterns, cloud gaming is also highly accessible. In essence, it has the potential to reach a wider number of potential consumers and incorporate various technological advancements, such as augmented reality (AR), virtual reality (VR), and 5G. Accordingly, as more sophisticated technologies and solutions continue to emerge, the global gaming market is set to witness remarkable growth during the forecast period.
How has streaming and content creation influenced the global gaming market?
While content creators help shape consumer preferences and drive game sales, streaming platforms such as Twitch and YouTube play an essential role in providing novel avenues for game promotion, encouraging community engagement, and also offer a lucrative prospect for influencer marketing.
What is the role of 5G in online gaming?
Compared to earlier generations of mobile networks, 5G technology provides significantly faster network speeds, resulting in better performance and lower latency for online gaming.