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Cloud gaming beckons, but 5G isn’t the only answer

Cloud gaming beckons, but 5G isn’t the only answer
Photo Credit: Pixabay
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The shutdown of Google Stadia last week has cast a shadow on the advent of cloud gaming, which has been pushed by Indian telcos as a key use-case of the just launched 5G networks. The Big Tech firms announced plans to shut down its cloud gaming service last week, noting that it “hasn't gained the traction with users that we expected”.

All three of India’s top telcos — Reliance Jio, Airtel and Vodafone Idea (Vi) — have been showcasing cloud gaming at their booths at the Indian Mobile Congress (IMC) 2022, the same event where Prime Minister Modi announced the launch of 5G services in India. Vi even announced a partnership with gaming firm CareGame to provide cloud-based gaming to users.

However, experts say that the rollout of 5G networks is only a piece of the puzzle for this next generation of gaming.

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Cloud gaming, or cloud-based game streaming, uses internet connectivity to connect a user to a remote server. Instead of owning expensive gaming hardware themselves, users can tap into these remotely hosted gaming rigs, and stream a game to their smartphone or laptop. It negates the need to spend on expensive consoles or PCs required for high-end games.

Justin Shriram Keeling, founding general partner at gaming venture capital fund Lumikai, said that as a “frontier market”, cloud gaming’s potential will remain niche “for the foreseeable future”.

“Even with a cheap cost of data, I do not see cloud gaming replacing mobile game downloads,” Keeling said. He further added that one of the reasons why Stadia may have failed is due to its pricing model — that of charging a subscription fee for access to the platform, as well as a full price tag for whichever game a user wanted to play.

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As a result, Keeling said that as a service Stadia just did not stack up even in the international markets, which are more mature in paying for subscription models than India. Google never launched Stadia in India.

Pricing, according to stakeholders, could play a major role alongside connectivity to push adoption of cloud gaming in India. Akshat Rathee, co-founder and managing director of homegrown gaming firm Nodwin Gaming, said that the gaming industry must help the telecom sector “build utilities” around 5G — of which cloud gaming could play its part.

“Stadia failed since it did not find any mainstream adoption. Even in India, with 5G, early adopters will definitely flock to cloud gaming at the onset,” he said, adding that adopting a pricing model like Microsoft’s Game Pass could help go beyond the early, enthusiast-driven adoption. Microsoft allows gamers to pay around ₹500 for unlimited access to a library of hundreds of games.

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“It will be interesting to see if 5G can turn phones entirely into a Chromebook-like model — that of streaming apps as required. Affordable data and phones combined could potentially give us a gamer base of around 800 million users in the country, whom cloud gaming platforms can target,” he said.

Further, pricing aside, games themselves would need to be adjusted for markets like India. Oliver Jones, co-founder of Bengaluru-based gaming firm, Bombay Play, said that for cloud gaming to truly work, developers will need to bring the format to a touchscreen-first experience. “Companies aren’t investing enough to bring games to the cloud format. They need to design specifically for cloud games, but they have not done that since there is no market yet,” he said.

To be sure, Indian companies have already had initial trysts with cloud-based game streaming. In September 2020, a Bengaluru-based startup, Doofy, attempted to offer the service. As of today, Doofy’s domain no longer exists. Its founder, Anirudh Balagopal, could not be reached for a comment.

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As a result, even as an August 2022 report from Research and Markets pegged cloud gaming to hit $10.5 billion in global revenues by 2027, the industry stands at a catch-22 situation — where the lack of user interest is stifling the sector.

It is this, according to experts, that India’s telcos may look to resolve — initially with casual games delivered over the cloud, and offered as bundled value added services (VAS).

As Rathee says, the telcos in India may add their own game servers and promote the sector as VAS, and look to prevent being cannibalized by the likes of Netflix in terms of internet-driven content.

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To be sure, while Google may have shut down Stadia, Microsoft, Sony and Amazon remain firm in their commitment to cloud gaming, at least for the time being.