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Cloud Computing: The Future of Video Games?

The gaming industry is currently developing a new type of service: cloud gaming. With the Electronic Entertainment Expo (E3) just around the corner, more exciting announcements have been or are about to be made. Based on current and potential offerings, what will the future hold in terms of offerings and pricing?


Cloud Computing

On Friday nights, a group of three friends and I play video games. It’s nice to be able to chat and do something together, especially because half of us live in the Midwest and the other half live on the east coast.

While it sounds like we are playing an online mass multiplayer game, such as Overwatch or Final Fantasy XIV, we aren’t. The game that we play together, Tales of Vesperia, doesn’t use the internet for its multiplayer mode; one of my friends runs the game on his computer in Chicago. Then, using a program called Parsec, we connect remotely from New Jersey. We all play together using the computing power of his machine. In a way, my friends and I are gaming by using a more private form of cloud computing.

While I was doing cost research on a related project for PRICE ®, I discovered that companies are starting to roll out their own public cloud gaming platforms. It will certainly be a hot topic at the Electronic Entertainment Expo (E3), slated to begin on June 11th.

However, using cloud computing to deliver media to a customer is nothing new. Video streaming services such as Netflix use cloud computing to allow users to stream video on a variety of hardware. Therefore, it’s no surprise that gaming companies are trying to take advantage of this technology. Cloud gaming extends what is currently seen as Gaming as a Service (GaaS). In the past decade, GaaS has usually meant things like paid additional Downloadable Content (DLC) or monthly subscriptions to online games.

Similarly, Netflix, users are currently limited as to what media they have access to through these services. Nvidia’s GeoForce now has a free beta, and Shadow, which charges $25/month for their yearly commitment, only lets users play games that they’ve purchased separately. Vortex is a service that includes a limited selection of free games at a cheap subscription price (only $10/month). Users must pay extra money to own most of the popular titles offered on this platform. Google, who generated a lot of buzz recently by announcing their project called Stadia, have just announced this week that there will be multiple tiers of paying for the platform. Stadia will have a free version that will let users play games that they buy separately and a $10/monthly version that will come with free games. A special trial is expected to begin this November.

Other major companies are about to make this industry even more competitive. Microsoft, which makes the popular Xbox gaming console, announced that their streaming project xCloud will probably be released within the next year. The fact that Microsoft has access to a massive catalog of popular games will certainly be a huge advantage. Tencent, a Chinese company, has been testing a beta version of a cloud gaming service.

It’s unclear how much the services of these recently announced cloud gaming services will cost. Google, Tencent and Microsoft would probably have an advantage over some existing services because they already offer GPU configurations in their popular cloud computing services. But considering Microsoft already offers a multitude of games through Xbox Gold for a monthly subscription of $15, and that the most expensive cloud gaming service I’ve seen so far is $25, I would give a rough estimate that the highest cost of a cloud gaming service with a huge catalog of games are no more than $40 a month. Considering the competitive nature of the market, prices will be much cheaper.

As mentioned earlier, the E3 expo may bring even more updates to the industry. Beginning with Xbox’s presentation on Sunday before the conference, there are sure to be more announcements very soon. It will be interesting to compare performance across the different pricing structures. As an avid gamer, I look forward to the future of cloud gaming!