Technological advancements continue to revolutionize the gaming industry. APAC currently holds the largest share of the global gaming market with 48 percent as of 2020 with revenues that hit $84.3 billion during that year. The emergence of cloud gaming platforms has only made it easier for developers, publishers, and platforms to produce new games for a wider market.
On March 10, 2021, TechNode Global, in collaboration with Alibaba Cloud, hosted a webinar on how the cloud serves as a backbone for the thriving gaming industry. It was hosted by Michael Waitze, host of the Thailand GameChanger Podcast, with participation by Moonton Esports Managing Director Lucas Mao, Alibaba Cloud Solution Architect Ken Xu, Yoozoo Games AI Technical Director Chi Keong Goh, Facebook Strategic Partner Manager for Games and Partnership Nick Li Ke, and Unity Technologies Business Development and Education Head Yi Ren Lim. Get to know more about our panelists and moderator here.
In this webinar, the panelists discussed the following topics:
- Introduction to Cloud Gaming
- Access vs. Ownership
- Event vs. Narrative
- Performance and User Experience
- Limitations and Challenges
- eSports and the Pandemic
- Business and Venture Opportunities
If you are having trouble watching the embedded video, click here for the YouTube link.
Introduction to cloud gaming
Changes in user behavior and gaming preferences
As explained by Nick, it is important to see where the gaming industry started to better understand users’ behavior and preferences. In the past, the industry was very reliant on hardware, from physical arcade machines to consoles or computers that require CDs or DVDs. The evolution of the internet has brought with it the digital age, wherein digital download is the favored medium.
Although cloud gaming has great potential, it also has its limits. With the Internet now more powerful and accessible to the public, the next biggest hindrance would go back down to hardware: the end users’ devices. Programmers end up having to lower the barrier when it comes to the quality of games in order to make them become more accessible across a wider selection of devices.
Yi Ren follows up by explaining how Netflix and other streaming services have revolutionized the way we all consume our content. Gone were the days where we are at the mercy of our cable television providers’ schedules. This model is very similar to how consumers will now be playing video games on the cloud gaming platform.
Yi Ren explained that “users are going to get access to a buffet of content that’s not normally accessible, perhaps in areas where hardware penetration is not as robust.”
We are already seeing bigger companies providing partial cloud gaming services on their platforms. Having services or devices such as Xbox Game Pass, Google Stadia, Apple Arcade, and Amazon Luna will lower the barrier when it comes to hardware and will become a more attractive environment for cloud gaming developers to enter. The industry is definitely improving and heading towards a positive direction.
Developers, publishers, and platforms adapt to the cloud
Chi Keong gave a deeper dive on the important things to consider when it comes to the different stakeholders within the industry. Although the industry is already established, there is still so much more room for new players within the ecosystem. It is important to take into account how the different stakeholders will work together and the possible incentives for game developers in order to entertain the cloud platform.
Putting some perspective on the matter from the game developer’s point of view, Lucas’ own experience is that his company is currently exploring the different possibilities of cloud gaming and is already even testing the different kinds of games that would be more attractive on this platform. He explains the need to study user acquisition, user experience, network latency, and monetization. And as technology advances, so will the possibilities for cloud gaming.
Improved accessibility for indie game developers
With the technology becoming more and more accessible, Ken explains how indie game developers have grown in number on the cloud gaming platform. Accessibility to technology has lowered the barrier for game developers to release their platform and the different Software Development Kits (SDKs) available have made it a lot easier for these developers to create their games and properly study its data.
Moving further into the topic, Nick expounded on the different possibilities for indie game developers to enter the market. He said that compared to console games, which will usually go for triple A games to cater to a certain market based on its genre, the cloud gaming platform usually puts out games that would be appealing to a wider demographic.
Access vs. ownership
Data retention, data analysis, and even data science in the gaming industry
Ken explained that technology has made data and data analytics tools very accessible for any developer. The different SDKs and data libraries are all becoming a lot easier to use. Alibaba Cloud, along with other cloud service provider platforms, helps developers implement proper data operation by helping them foster data-driven technologies. Mainly by providing developers with SaaS for proper data analytics, as well as ITeS to help developers create their own data models and deploy these models onto their APIs to better understand their users.
Overall, these services “help them to use data-driven technologies to look into the user behaviors or gamer behaviors. And we call it data operation. Using this data operation, it can gain customer insights, they can better enhance their product and find which media or what type of gameplay is the most famous or the most popular.”
Nick agrees with Ken with how the barriers for entry have been lowered for indie developers mainly because of the different tools available at their disposal as brought out by the different SDKs. This gives developers more opportunities to concentrate on the gameplay and overall user experience instead of having to take all the other details into account.
Event vs. narrative
Seeing the opportunity to bring both narrative and live events together, Chi Keong explains how developers can create proper narratives within the different event “loops” in an average cloud-based game or maybe even use these “loop” events to form a narrative. When it comes to live events, Lucas focuses on how its main purpose strays a bit further away from narrative and moves closer towards general entertainment.
Yi Ren expounds on the possibilities for both narrative and live events to further develop as we have already seen the two work together in the different MMORPGs that have been released throughout the years. Now with cloud technology, there are so much more possibilities such as supporting a greater number of players on the platform.
From a cloud service provider’s perspective, Ken explained how narrative-driven gameplay is usually saved for single-player games that involve less human interaction. However, new technology such as AR and VR as well as consumer technology such as Facebook’s Oculus Quest brings so many new possibilities to bring the two together.
Performance and user experience
Optimizing cloud services despite differences in cloud and Internet infrastructure globally
As explained by Ken, Alibaba Cloud has been utilizing its connections with China’s three big telcos to create a better experience locally and even in other countries. China’s international presence has helped underdeveloped countries such as Mongolia build proper Internet and cloud infrastructures. Alibaba Cloud also provides a better global gaming experience through its data centers and global acceleration centers scattered across the region.
On-premises datacenter vs. cloud
Over the past couple of years, we have seen how indie games have slowly gained traction and have made a significant impact on the gaming industry. Ken attributes this mainly to the way users are consuming games nowadays. The life cycle of a game is much shorter than it used to be. Back then, mobile games would take as long as three years to develop into the market, but now, games are being generated at a much faster rate. Ken explains why cloud would be the optimal choice for data centers in three points:
- More profitable. On-premises games have a higher barrier of entry for gamers mainly due to the hardware you would have to invest in to play the game. When it comes to profit, developers might not be able to earn from the game at its full potential. Cloud gaming, on the other hand, has elastic and flexible payments that may be more appealing for gamers as they will only be paying for what they need.
- Better global deployment. Alibaba Cloud gives gamers a better overall gaming experience mainly through its more than 60 data centers scattered across the globe. This gives developers and publishers a wider audience when it comes to releasing their games. This also provides developers with more in-depth data to study the market for future releases.
- Better security. Although on-premises has good security, it is difficult to manage mainly because each datacenter will have a different standard of competency. When it comes to the cloud, almost all cloud service operators will have a certain standard that they have to follow in order to maintain the security of the data centers.
With these three points, not only will it be easier for indie game developers to enter the market, bigger companies would also be able to benefit from these services if they wish to scale.
Limitations and challenges
Alibaba Cloud divides the current gaming industry into three different platforms. First, there are the traditional gaming platforms wherein graphics rendering is done locally through gaming consoles or PCs. Second, there are platforms that utilize cloud technology to bring some of the rendering up into the cloud. Last, is what they call True Cloud Gaming, where graphics rendering and all computations are done on the cloud and streamed down to the user’s output device.
Though the future seems bright, there are still many limitations and challenges that the industry must overcome. When it came down to it, the panelists agreed that the main factors to take into consideration are technology, content, and monetization.
Technology
The biggest limitation to making cloud gaming more feasible globally is technology. Gaming latency is one of the biggest factors that can affect a gamer’s user experience. The challenge here is to be able to run quality games without lag and at par with native game platforms.
More developed countries would most likely have access to proper internet infrastructure and would therefore be more feasible markets for the cloud gaming platform. However, when it comes to developing countries, internet speed can definitely cripple the industry. Aside from creating the proper infrastructure for high-speed internet, there would also be problems for data plan costs.
Content innovation
With other companies already established with their content, style of gameplay, and exclusives, cloud gaming needs to set itself apart with innovative content that they release on the platform.
When it comes to the style of gameplay, Nick discussed TwitchPlaysPokemon, where more than a million players take part in playing Pokemon by voting what the character will do. With cloud gaming, the viewers’ role can change from a very passive activity of just observing, to a more immersive experience where their decisions can also dictate where the game goes.
For the types of games that should be released, Ken gave a more realistic view of where cloud gaming can take us. Graphic heavy games such as Microsoft Flight Simulator would be a perfect game for the cloud platform, but games in the fighting genre, which are very demanding when it comes to latency, will be harder to migrate.
Business model
When it comes to publishing games, existing platforms already have established publishing channels. For smartphones, you have the likes of the Google Play App Store. For PC gamers, there is Steam or Epix. Consoles such as Xbox and PS4 have their own content stores as well. When it comes to the cloud, everyone is still testing the waters when it comes to the proper publishing channel. The most common business model for cloud gaming now is the subscription model. There are also free-to-play games with in-app purchases.
eSports and the pandemic
In the early 2000s, we saw how games such as DotA defined the eSports landscape. Since then, eSports has become a massive force in competitive sports. Its leagues and events already had parallels to established sports leagues across the globe when it comes to viewership, prize money, and even ad and sponsorship opportunities.
Even before the coronavirus pandemic, the eSports industry was already growing very fast. However, the pandemic most definitely accelerated its speed of growth. Due to government-imposed restrictions, people were forced to stay at home and had a lot of time to consume more gaming content. Lucas mentions that Indonesia and the Philippines, in particular, saw a 700 percent increase when it came to viewership in 2020. Naturally, along with the increase in viewership came the increase in different monetization channels and sponsorship sales. Aside from this, eSports events became more attractive for brands and sponsors to approach as traditional sports events and leagues were put on hold due to the pandemic.
Business and venture opportunities
With the future looking bright for the gaming industry, the panel discusses the different things that stakeholders should look out for moving forward.
Sharing his thoughts on the topic, Nick advises that game developers keep an eye out for new technology to enable the development of better games through graphics and latency, publishing teams look out for the latest trends in user acquisition and advertisements, and platforms to continue supporting more developers and publishers by creating better user experiences for smoother transactions.
As stakeholders themselves, the panelists expressed optimism regarding trends in what genre games would be headed into. More importantly, the panelists are also excited to see what future developers, publishers, and platforms can do as technology advances. The limitations brought upon them by today’s technologies may no longer be an obstacle that they need to work around in the near future.