The Viability of Cloud Gaming.

The idea of cloud gaming is a seductive one especially for those of us who lived through the times when upgrading your computer every 12 months was a requirement if you didn’t want to be watching a slide show. Abstracting the hardware requirement away from the user and then letting them play on any device above a certain, extremely low threshold would appear to be the solution to the upgrade and availability issues of dedicated gaming platforms. I’ve long made the case that the end product is something of a niche market, one that I was never quite sure would be viable on a large scale. With the demise of OnLive I could very easily make my point based around that but you can never write off an industry on the failures of the first to markets (see Iridium Communications for proof of this).

Providing even a small cloud gaming service requires some rather massive investments in capital expenditure, especially with the hardware that’s currently available today. For OnLive this meant that only one of their servers could serve one of their users at a time which was terrible from a scalability point as they could never really service that many customers without bleeding money on infrastructure. For cloud gaming services of the future however they might be in luck as both NVIDIA and AMD are working on cloud GPUs that will enable them to get much higher densities than the current 1 to 1 ratio. There’ll still be an upper limit to that’s much lower than most cloud services (which typically serve thousands per server) but at the very least the scalability problem is now an engineering issue rather than a capital one.

The second major challenge that cloud gaming companies face how latency sensitive a good portion of the games market is. Whilst you can get down to very low latency numbers with strategically placed servers you’re still going to be adding a good chunk of input lag on top of any server latency which will be unacceptable for a lot of games. Sure there are titles where this won’t be an issue but cutting off a large section of the market (FPS, RTS, RPGs and any mix of them inbetween) further reduces the viability of any potential cloud gaming service.

In fact for many of the titles that could benefit from a cloud gaming service can already be ported to the web thanks to things like Unity or the use of OpenGL extensions in HTML5. Indeed many of the games that I could see being published on a cloud platform (casual MMORPGs, turn based strategy games, etc.) wouldn’t be much different if they were brought to the traditional web instead. Sure you lose some of the platform agnosticity because of this but you can arguably reach the same number of people using that as you could with a cloud platform.

User expectations are also set rather high for cloud services with many of them being flat fee, unlimited usage scenarios (think Pandora, NetFlix, etc). The current business models for cloud gaming didn’t gel well with this mindset as you were paying for the games you wanted to play (often cheaper than retail, sometimes not) for a limited period of time, akin to a long term rental. Whilst this works for some people most users will expect to be able to pay a flat fee in order to access a catalogue they can then use at their leisure and this has significant ramifications for how publishers and developers will license their games to cloud developers. It’s not an insurmountable problem (the music industry came around eventually so the games industry can’t be far behind) but it does introduce a market dynamic that cloud gaming services have not yet investigated.

With all these things being considered I find it hard to see how cloud gaming services can viable in the near term as whilst all the issues are solvable they all work against delivering something that can turn you a profit. Cloud GPUs, ever increasing quality of Internet connections and the desire by many to migrate completely to cloud based services does mean that there’s a trend towards cloud gaming services becoming viable in the future however the other, fundamental limitations could see those pressures rendered null and void. This is something I’m willing to be proven wrong on though as I’ve invested myself heavily in cloud principles and I know that its capable of great things. Whether cloudifying our gaming experience is one of them is something that I don’t believe is currently feasible however and I don’t see that changing for a while.

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