Cloud gaming to surpass $1 billion in revenue for first time, according to some estimates
The growth of cloud gaming can be attributed to 5G technology
2021 is expected to be a big year for cloud gaming, with the current revenue outlook coming in at over $1 billion for the first time, about double what it was raking in last year, according to research conducted by Safe Betting Sites. But, Omdia thinks cloud gaming revenue will grow even more than that, hitting $4 billion in 2021, and then tripling to $12 billion by 2025.
By running a game on a nearby server and streaming it to the player, cloud gaming frees the player from the confines of relying on a computer or console with powerful graphics and hardware to play a game. Much of the market’s growth can be attributed to advanced connectivity technologies, particularly 5G, which offers the required low latency and high-speed connectivity, as well as the ability to handle the high data demands expected from gaming platform subscribers.
In fact, according to the November Ericsson Mobility Report, 106 communications service providers (CSPs) have launched commercial 5G services, and of those, 22 have already announced mobile cloud gaming services. There are different strategies for getting involved as a service provider, including launching your own gaming platforms or developing partnerships with gaming companies. Either way, gaming is considered a stellar use case for 5G, and service providers should be seriously thinking about how to get a piece of the growing pie.
When it comes to the devices that will be predominantly running cloud games, the mobile variety are expected to be the most common, as mobile gaming is most popular form of gaming, which will only become more true in 2021. AppAnnie reported that revenue from mobile gaming will likely rise 20% this year to reach $120 billion. For perspective on how quickly the market is growing, consider that in 2019, Newzoo reported that mobile gaming generated $68.5 billion.
Mobile gaming, like cloud gaming, is being driven by 5G network penetration. Now that the iPhone is 5G-compatible, consumer use of 5G services is expected to increase. Further, Strategy Analytics stated that, by the end of 2021, there will be more than 600 million 5G smartphones out in the wild, many of which will be used to dodge enemies and collaborate with teammates.