Cloud Gaming Market Size, Share & Trends Analysis Report By Device (Smartphones, Gaming Consoles, PC & Laptops, Tablets, Head-mounted Displays, Smart TVs), By Type (Video Streaming, File Streaming), By Gamer Type (Casual Gamers, Avid Gamers, Lifestyle Gamers, Hardcore Gamers), By Offering (Infrastructure, Gaming Platform Service, Compute, Memory, Storage, Content Service, PC Service), By Deployment (Public Cloud, Hybrid Cloud, Private Cloud), By Gaming System (G-Cluster, PlayStation, Stream My Game, Steam in Home Streaming, Remote Play, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global cloud gaming market size was valued at USD 1.33 billion in 2023. It is expected to reach USD 38.43 billion in 2032, growing at a CAGR of 45.32% over the forecast period (2024-32). Continuous improvements in cloud computing infrastructure, including higher processing power, reduced latency, and enhanced network bandwidth, enable seamless streaming and gameplay experiences. Cloud gaming platforms leverage these advancements to deliver high-quality gaming content to users globally.

Cloud gaming is a new technology in the gaming business that allows gamers to stream top-tier games to portable devices such as laptops, tablets, and smartphones with fast network connectivity, eliminating the need for a gaming console, PC, or laptop. It is projected that such variables will have a beneficial impact on the expansion of the market. Additionally, adopting cloud technology in the gaming industry is predicted to improve demand and player engagement for various games, propelling market growth over the forecast period.

Market Dynamics

Market drivers

Expansion of cloud gaming with the launch of 5g

Mobile cloud gaming has some restrictions despite the evolution of data connectivity technology. For instance, Fast broadband infrastructure is not always readily available, and 4G has a low level of dependability and speed. Players' proximity to cloud servers may cause delays, while last-mile packet loss and network congestion make it even harder to fulfill performance standards. Adding modest amounts of latency from capturing a button push, gesture, or external input might result in noticeable delays. Many businesses are moving into mobile cloud gaming as a result of the promises made by 5G to address these issues.

Through mmWave, 5G effectively utilizes the signal spectrum. Since TV and radio transmissions mainly occupy lower frequencies, mmWave uses higher bandwidth frequencies to communicate. For places with large user numbers and dense populations, mmWave is more efficient (e.g., stadiums for eSports venues, Internet gaming cafes, etc.). Additionally, gaming traffic could be offloaded in highly congested locations using an unlicensed frequency.

Market restraint

Low bandwidth issues

The use of cloud gaming services requires a real-time gaming experience. Low latency needs to be combined with high resolution and frame rate to provide a seamless gaming experience that meets players' expectations. However, cloud gaming services are constrained by the speed of current internet technology and struggle to live up to gamers' expectations. Developing countries with low bandwidth penetration are likely to forego using cloud gaming services and instead choose traditional gaming options. Data transmission has substantially grown as a result of the vast volumes of data that must be transported from the server to the output medium in the cloud computing environment due to the increasingly lifelike images of contemporary games.

According to highspeedinternet.com, typical online gaming requires a minimum download speed of 3 megabits per second (Mbps), with 15 Mbps being advised for more intensely competitive games. One device can upload data at a minimum of 1 Mbps, providing a ping rate of less than 150 ms. A ping of this magnitude is typical for online games to function properly. This requirement holds for online and single-player games because cloud games are not processed locally. Thus for cloud gaming to perform as well as traditional games, 3.33 times as much internet speed is required.

Market opportunities

Growing government initiatives related to cloud infrastructure

Numerous regional startups entered the cloud gaming market due to governments' robust cloud infrastructure plans in the European and North American regions. Shadow, Parsec, Blacknut, LiquidSky, and others are a few of the startups in the region. Furthermore, the US government previously introduced the Cloud First Initiative, which aimed to reduce waste and boost efficiency in the US federal government's technological services by lowering government IT expenditures and encouraging cloud infrastructure development. As stated in the Data Strategy, Digital Strategy, Industrial Strategy, and EU recovery plan of the European Commission, cloud computing also intends to strengthen the data sovereignty of Europe.

Creating a European Alliance on Industrial Data, Edge, and Cloud by the European Commission will allow for the growth of many workstreams. The EU Cloud Rulebook for cloud services will offer a uniform European framework of regulations, transparency on their compliance, and best practices for cloud use in Europe. These include European marketplaces for cloud services, where users will have a single portal to cloud offerings meeting crucial EU standards and rules. Together, these initiatives will help build the next-generation cloud supply.

Regional Analysis

The global cloud gaming market is divided into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-pacific dominates the global market

Asia-Pacific is the most significant shareholder in the global cloud gaming market and is expected to grow at a CAGR of 44.50% during the forecast period. Cloud infrastructure is becoming more common and has made it possible to access a wealth of computing, storage, and communication resources in a dependable, economical, and low-maintenance way. Gaming services have been designated as one of China's fastest-growing cloud computing businesses, and a wide range of applications may take advantage of these cloud computing capabilities. Future game development and operations are anticipated to rely more on the cloud, particularly mobile games. The potential market for the game on-demand to households in China with a very high-speed connection is surrounded by the great compatibility of cloud gaming with IPTV and the current technical limits on the flow.

North America is expected to grow at a CAGR of 43.5%, generating USD 5,547.61 million during the forecast period. The Entertainment Software Association estimates that 65% of American adults enjoy playing video games. Except for the NFL, esports viewers in the US were expected to outpace all other professional sports leagues in 2021. The high penetration of desktops, laptops, and even smartphones in the nation permits a quicker rise in cloud gaming. Cloud gaming services combine hyperscale cloud capabilities, worldwide content delivery networks, and streaming media services to develop the next generation of platforms for interactive, immersive, and social forms of entertainment. The rapid expansion of cloud gaming in the United States is aided by the deployment of edge data centers across the country and the general ease with which cloud gaming may be accessed.

The high levels of digital literacy in Germany are very beneficial for the country's expanding cloud gaming market. According to Bitkom, Germany's digital association, while more than eight out of ten Germans used digital technologies to better prepare for the pandemic in 2020, the average amount of time Germans spent in front of screens each day increased from 8 to 10.4 hours. Traffic at internet exchanges, particularly during the lockdowns imposed due to the COVID-19 epidemic, demonstrated the growing popularity of cloud gaming. DE-CIX in Frankfurt observed a more than 50% rise in the use of cloud and gaming services during the height of the German national lockdown. In 2020, the German Games Industry Association claimed that smartphones and PCs were the two most common gaming platforms used by Germans.

The Brazilian gaming market is expanding and has the potential to rival those of other nations. The nation is also proud of a number of locally created video games that have achieved international fame. These include the popular racing game Horizon Chase, the action-adventure game Toren from the Brazilian developer Swordtales, and the popular shooting game Ballistic from the Brazilian developer Aquiris. The gaming industry is growing in the United Arab Emirates thanks to increased interest in and investment in locally produced games and talent.

Segmental Analysis

The global cloud gaming market is segmented by device and type.

Based on devices, the global cloud gaming market is bifurcated into smartphones, gaming consoles, pcs, and tablets.

The smartphone segment is the highest contributor to the market and is expected to grow at a CAGR of 47.40% during the forecast period. Cloud gaming services are expected to develop in the market as 5G services roll out across several nations in the region, using mobile ubiquity and fast 5G connections to provide AAA-quality gaming to smartphone clients. Mobile device adoption of cloud gaming would also be fueled by cloud gaming services provided by game publishers and mobile network operators. Additionally, mobile games are expanding faster than online games on PC, mainly due to the availability of a free-to-play option. The majority of mobile game developers also choose the free downloads and endless potential of the free-to-play price model.

The demand for gaming consoles has consistently grown over the past few years as a result of the players' continued rise. The continued viability of gaming consoles has been severely threatened by technological advances in cloud gaming, as most developers are now concentrating on creating games that rely on specific technology. Customers play games for longer periods because there are more games available. Continuous original content creation is another feature. The use of gaming consoles has changed as immersive technologies like virtual reality, augmented reality, and mixed reality are increasingly applied. Users can make their experience more fun and practical than the standard options.

Based on type, the global cloud gaming market is bifurcated into video streaming and file streaming.

The video streaming segment owns the highest market share and is expected to grow at a CAGR of 46.20% during the forecast period. With the aid of a thin client, cloud gaming has gained popularity worldwide by utilizing broadband connections, sizable server clusters, encryption, and compression to broadcast game material to desktops, consoles, and mobile devices. Numerous businesses offer cloud gaming based on video streaming, including CiiNOW, Ubitus, Playcast Media Systems, and Gaikai, a division of Sony Corporation. The development of 5G technology allows for lower latency cloud gaming providers. This has led to numerous collaborations between video streaming, telecommunications companies, and cloud gaming platforms.

For instance, Singapore-based Singtel began testing its standalone 5G network for businesses in October 2020, partnering with Ubitus to take advantage of the progress in technology brought about by the lower latency achieved using the 3.5GHz spectrum and MIMO technologies. Companies rely on data centers to handle the high graphics needs and provide an immersive gaming experience with ongoing improvements in augmented reality and virtual reality technology for cloud gaming to support the video streaming business. However, the availability of GPUs in the cloud and their high cost have proven to be obstacles to the market's expansion.

Gamers can take advantage of progressive downloading's benefits by using file streaming, which enables only a small portion of the game to be downloaded first and the rest to be downloaded as the game is being played. However, the need for specialized and compatible technology may make it difficult for file streaming in cloud gaming to gain traction. Businesses like Kalydo, Approxy, and SpawnApps provide cloud gaming using the file streaming approach. Gamers are increasingly using the file streaming technique to access lag-free games on low bandwidth internet connections conveniently. However, in order for this cloud gaming model to work, the game needs to be played on hardware such as PlayStation 4, Xbox One, PlayStation 3, Xbox 360, WII U, or PS Vita.

File streaming models, which provide instant playability without lag, are driving the cloud gaming business since they focus on lowering distribution costs and improving the gaming experience. Gamers can transition between platforms thanks to organizations like Utomik, who also take advantage of the reduced bandwidth operation capacity of the file streaming-based architecture. The growth of the subscription-based gaming-as-a-service model is what distinguishes the market. Major stakeholders are bridging the gap between subscription rates based on game offerings to take advantage of the potential.

Recent Developments

• April 2024 - Cloud Play was introduced in India by Vi and CareGame, a cloud gaming firm. With the Vi Games app, users of Android, iOS, and the web can now play AAA games on their devices. But the majority of the games available on the service right now are smartphone games.
• April 2024 - Microsoft released the Xbox Cloud Gaming's new test user interface. Microsoft has shown a new test interface for Xbox Cloud Gaming that resembles a console's dashboard. According to The Verge, Xbox Party Chat will now be accessible through the browser-based client rather than a stand-alone application for friend communication.