Everything You Need To Know About Cloud Gaming

by Goran Damnjanovic, Gaming Columnist

Published in Gaming on 30th January, 2019

Learn everything about cloud gaming, find out why everyone talks about it, and discover why game streaming is such a big deal nowadays.

What is cloud gaming and how it works?

The modern world is an all-connected place where everyone and everything can communicate over the internet and where more and more services are moving to the cloud.

This means that you don't have to download movies or TV shows, or even rent them at your local video store - everything can be streamed over Netflix or some other video streaming service. Office 365 offers access to the whole Microsoft Office suite from any device you own, as long as it is connected to the internet.

how it works

The same goes for Google Docs, and in the case of Google Photos all photos taken on your smartphone can be automatically uploaded on the cloud, making them available for access from any device. And most of us use some streaming music service for years, which was the first major form of entertainment to completely move to the cloud. Music streaming services actually saved the music industry.

So, if every form of entertainment can be enjoyed via streaming why games are still played locally, on a console or a beefy gaming PC? The thing is, music and videos are quite simple to stream; all you need is a steady but not really fast internet connection (HD Netflix content demands around 10Mbps, while music can be streamed even over 1Mbps connection) and a device capable of playing music and videos and that's it!

All files can be kept on one server located anywhere in the world because latency isn't a problem when it comes to music and video streaming. The same goes with other services available over the cloud, like Google Photos or Google Docs. But games are a different beast and making them work over the cloud is quite tricky.

Video games are an interactive form of entertainment where you lead your character (or characters) and control them while exploring various virtual worlds. Next, they require powerful hardware capable of rendering all those virtual worlds. This puts two new variables into the streaming equation that aren't present in other forms of content streaming.

First, a video game streaming service has to assure that input lag (the time between pressing a button and character's response to the pressing of the said button) is low enough to provide a seamless gaming experience. And secondly, streaming service has to own powerful servers equipped with top of the line hardware in order to render games before sending them to consumers. This asks for much more complex infrastructure than what's needed for video or music streaming and much higher investments.

And finally, users have to have quite high internet connection speed if they want to play their games over the cloud because games ask for lots of data - video and audio elements have to be streamed, controls have to be uploaded to a server and processed before the data is sent back to a user and all this is in constant motion chewing up lots of bandwidth. On average, you need about 30Mbps in order to enjoy cloud gaming as supposed to.

In order to ensure low input lag companies have to secure data centers that are near end users meaning that in order to offer low latency cloud gaming service a company would have to own an entire network of server farms located all around the world.

On average, in order to have a lag-free experience a server has to be located close enough to allow for input latency that's below 200ms. The desired value would be somewhere around 150ms or lower, which can be found on the Xbox One X. This means servers have to be located relatively near gamers, which also means relatively high number of server farms located on every continent, and only a couple of companies own such powerful server farms.

The most notable is Microsoft with Azure, a cloud computing service that relies on powerful servers capable of performing massive loads of work. Azure enables developers to rent compute power located on remote servers and to use it for all kinds of user scenarios. And one of those scenarios is video game streaming. But even with its current number of server locations, Microsoft still has to open new data centers (which is planned for the future) in order to offer seamless cloud gaming experience.

azure locations

These high requirements made cloud gaming hard to achieve goal for many companies, even though there's lots of interest from big names to offer cloud gaming services. But with the constant advancement of technology, we can stream our games for years now. The results are less than stellar but if you have a fast internet connection and money to burn (these services are quite expensive) you can play all your favorite games anywhere, anytime. We already published a piece covering the best cloud gaming services on PC, so make sure to check it out.

As you can read in the article, most services are still in their infancy and most of them ask for users to own games they want to stream. But all that will soon change because technology is finally advanced enough to support cloud gaming.

The present and future of cloud gaming

At the moment there are about half a dozen cloud gaming services that offer video games streaming. Most of them ask for users to own games they want to stream and they all are pretty expensive.

The thing is, setting up the infrastructure needed for cloud gaming is pretty expensive, and you also have to pay big money in order to ink deals with publishers in order for your service to run their video games, and that can be extremely expensive and only the biggest companies could afford it. Even NVidia, with its NVidia Now cloud gaming service, asks from users to own games they want to stream. But that will soon change because some big players will enter the arena in the near future.

Microsoft is working on its cloud gaming service codenamed Project Xcloud but the company is already preparing the ground with its Xbox Game Pass. You see, the ultimate goal is to offer a cloud gaming service that is basically Netflix for video games like Sony is offering with its PlayStation Now cloud gaming service. And Microsoft wants to already have a bunch of games in its library before it launches its cloud gaming service.

That's why the company is so invested in Xbox Game Pass, a service that offers a huge selection of games for $10 per month. You will notice that its price is much more affordable compared to cloud gaming services, and we reckon that this affordable price will be the main strength of the upcoming Microsoft's cloud gaming offering.

It will probably go up once server costs enter the equation but it should stay noticeably below current cloud gaming services. And Microsoft is already offering lots of third-party games on Xbox Game Pass, meaning that once they launch Project Xcloud, it will offer hundreds of games (there are rumors that Xbox 360 and the original Xbox games will also be offered with Project Xcloud) to play from the start, which is great in theory.

Microsoft is ahead of competitors when it comes to the second large part of cloud gaming formula - server infrastructure. In order to offer cloud gaming service with low input lag, a company has to have servers that are near their potential customers. And Microsoft's Azure servers are located all over the US, Europe, and Asia, the three most lucrative video games markets at the moment.

And these Azure servers and data centers are beefy enough to support the rendering of most demanding games on max quality. This gives Microsoft the edge over its competitors and once the company launches its cloud gaming service (which should enter the Beta sometime during 2019) it will probably be available in most major markets. Further, Project Xcloud will offer seamless gaming on any supported device, even offering touch controls in order to play your favorite games on your smartphone or a tablet.

And finally, Microsoft probably works on stream-only future Xbox console that will debut alongside next-gen Xbox console. Phil Spencer mentioned that the company is working on "new Xbox consoles" meaning there will be more than one flavor of next-gen Xbox and you can bet that one of those will be a streaming-only device.

The streaming version will probably be extremely affordable, maybe even come free with a subscription (similar to what Microsoft offered with its Xbox All Access offer), which will be great for gamers who simply want to play their favorite games without shelling out lots of money on new hardware, and the added benefit of playing those games anywhere they want certainly won't hurt either. So, at the moment, it looks like Microsoft will dominate cloud gaming in years to come, but there are other players who also could disrupt the video games market.

streaming cloud games

Google is certainly one of them, with the company already having a massive server and data center infrastructure because all of its business revolves around the internet and the cloud. But Google doesn't have any experience in offering gaming products which will make it hard for it to conquer the cloud gaming market.

On the other side, the company tested its Project Stream cloud gaming service during 2018 with Assassin's Creed Origins and the results are excellent. But while the technology is up to the task, we still don't know anything else about Project Stream.

When it will debut? How many games would it offer? Will it come with console exclusives (certainly possible because it is after all cloud gaming service but the question is whether Microsoft, Sony, and Nintendo would allow for a third party company to include their exclusive games as a part of a streaming service) or would it just offer multiplatform and PC titles? How much will it cost and will it come to the PC and mobile devices, or will Google somehow offer it on the Xbox and PlayStation? Too many questions and not many answers, but what is certain is that Google will make a move at some point and will definitely become a player in the cloud gaming space sometime in the near future.

Next, we have two big name publishers in the form of Ubisoft and Electronic Arts. Both publishers are quite vocal when it comes to cloud gaming being the future of gaming. Ubisoft's CEO talked about the rise of cloud gaming more than once and EA also laid plans of its future in the cloud at the last year's E3.

Ubisoft later went on and partnered with Google during the Project Stream beta and EA recently unveiled Project Atlas, the company's upcoming game development platform that specializes in creating games that are made from the ground up to run on cloud servers. And EA, similar to Microsoft, is already laying the groundwork for the imminent arrival of its cloud gaming service with Origin Access Premier, a subscription service that gives you access to every single game published by EA from day one.

It even gives early access for new EA titles, like it was the case with Battlefield V and FIFA 19. So once EA launches its game streaming service it will simply seamlessly be implemented alongside Origin Access Premier, like Microsoft's Project xCloud will seamlessly integrate with Xbox Game Pass.

But, unlike Microsoft, Google, or NVidia, EA and Ubisoft don't own server farms located all around the world, creating one major hurdle for them to jump over in order to come up with a cloud gaming service that will be available worldwide. This is where third-party cloud services come to the rescue. And the biggest one of them all is owned by Amazon.

AWS (Amazon Web Services) is a platform that allows anyone to rent powerful cloud hardware and use it for a plethora of purposes, one of them being cloud gaming. One of the cloud gaming services mentioned in our previous article, Parsec, is already using AWS data centers to bring game streaming for its users. AWS server infrastructure is on par with Microsoft Azure and Google's cloud infrastructure with data centers located around the world.

aws amazon web services

And there are rumors about Amazon launching its own cloud gaming service in the future (probably not before 2020), which is a logical next step for the company. Amazon already has its own music and video streaming services, its own gaming division, and their AWS servers are powerful enough to run any game you want. So, in case Amazon really enters the cloud gaming market we could have another major player offering game streaming.

And that's not all because other major companies are also into cloud gaming. Sony is offering game streaming on PC and PS4 with PlayStation Now, and the service is okay but not quite good when it comes to streaming quality.

Next, Verizon is reportedly testing their own cloud gaming service that, interestingly, should offer console exclusives alongside multiplatform titles. And finally, Nintendo Switch owners in Japan can play Resident Evil VII and Assassin's Creed Odyssey on the Switch by streaming them (the games wouldn't work on the Switch's humble hardware). But with Nintendo Switch, the streaming is offered by publishers, not by Nintendo.

And at the moment game streaming on the Switch is available only in Japan, which is one of the countries with fastest average internet connection speed, and one of the countries with the best 4G internet coverage. As you can see, the cloud gaming market will explode in the next couple of years and, let's say four years from now, you will probably be able to stream all your favorite games on any device you own for an affordable monthly fee.

Why is everyone talking about it?

It is clear that all major companies who have gaming ties (and even those who don't) are going all in on cloud gaming, but why? Well, the answer is, of course, the almighty profit. Right now recurring revenue is the alpha and omega in the business world. Every company wants to come up with a product or a service capable of generating a steady stream of profit over time.

This is why gaming companies came up with the idea of games-as-a-service, a new way of generating income over longer periods of time by selling DLCs, cosmetic items, loot boxes, and more. And live games are quite profitable. More and more games are going this way, some successfully (Gran Turismo Sport, Forza Horizon 4, Overwatch, Assassin's Creed Oddysey, Rainbow Six Siege, GTA V Online, Fortnite, Warframe) and some not so well (Fallout 76, Destiny 2, Star Wars Battlefront 2) but the reality is that we are living in a games-as-a-service world and moving those games to the cloud is the next logical step.

By offering their games over the cloud game companies will be able to rake in steady monthly profit coming from subscription and they will also earn money by selling cosmetics, or loot boxes, or some other form or in-game purchases. And since the video games industry is the biggest entertainment industry by far, profits will massively increase once you completely switch from selling games to selling access to them for a per month basis. But profit alone isn't the sole driver behind the imminent rise of cloud gaming.

For starters, in the world dominated by cloud gaming services piracy will disappear. You cannot pirate a game if you can't download it to your PC or console and crack groups need to have access to the game's files in order to, well, crack them. In the world where you cannot download games, no one will be able to pirate them. But at the same time, video games will become more affordable, increasing the number of people ready to pay for playing games.

why is everyone talking about

It is much more affordable to, let's say, pay $20-30 per month and get access to hundreds of titles than to buy just one AAA game each month, which cost $60 a pop. Even now, in case you like playing shooters and sports games, EA's Origin Access Premier is more affordable than buying FIFA, Madden, Battlefield, and a couple more AAA games made by EA each year (like NHL, NBA Live, Battlefront, or Anthem). You pay $100 for a 12-month subscription, which is less than the cost of two brand new AAA games. And just imagine the future version of Xbox Game Pass that would offer hundreds of next-gen games alongside Xbox One, Xbox 360, and the original Xbox titles for let say $15 a month?

That's much better than the current state where we spend hundreds of dollars each year in order to keep up with the latest titles. Even better, you won't have to spend money on powerful hardware; games will work anywhere, all it would take is a fast internet connection and some kind of control device (controller, mouse, and keyboard, or a touchscreen). You can spend zero dollars on getting a new streaming Xbox device and only pay for Xbox Game Pass monthly fee, which is tremendously more affordable than what we have right now.

Next, the cost of developing games will fall because developers won't have to work on different versions of one game. Instead of releasing three versions of one game (for PC, Xbox, and PlayStation) or more if you include the Nintendo Switch and mobile devices they will work on one perfectly optimized for resources available in the cloud.

EA's Project Atlas is just that, a game development tool specifically made for the world of cloud gaming. Gone will be days of poorly optimized games (we are looking at you, PC version of Arkham Knight), games that get delayed releases for some platforms, and timed exclusives. With cloud gaming being the main way of playing video games we could finally be able to play any game we want on any device we want.

Further, forget about backward compatibility because you will be able to play any game you want, no matter its platform or origin. Original PS One games, Xbox games, old PC games that never got released for consoles, could run on any smartphone alongside next-gen titles, which is amazing! With cloud gaming, gamers won't have to worry about compatible hardware or specific OS that supports specific games, or any of that.

They will be able to simply turn on their TV, start streaming service and play anything they want. VR gaming will also see a rise in popularity because every game will be run on the cloud, on top-notch hardware thus requiring just super-fast internet connection (around 100 Mbps or even higher because VR games require even more bandwidth because they project the image on two high-def screens instead of one) and a VR headset.

On the other hand, the market could go the way of video streaming services, with each major corporation opting in for their own streaming service, bringing a new form or exclusivity. Instead of console exclusives, we could get service exclusives, with some games being tied with specific cloud gaming services. EA games could be played just on EA's streaming services, Microsoft offering its first-party exclusives just on Xbox Game Pass, Ubisoft tying its games with their own streaming service, etc.

In that case, the whole idea of cloud gaming being more affordable than what we have now wouldn't hold for long because if you have to subscribe for five or more services in order to enjoy all games you want, that wouldn't be so affordable. Sure, gamers wouldn't have to invest in hardware, but still, the price could be high in case everyone ties their first party titles to their own streaming services.

The problem of internet connection speed and quality, and data caps

Cloud gaming is the future of gaming, there's no doubt about it. But the time span of it becoming the main way of playing games depends on two things. The first is the cloud technology which is already advanced enough to offer superb 1080p streaming at least in parts of the US, Europe, and Japan, territories filled with cloud data centers owned by Microsoft, Google, and Amazon.

Each year more and more territories will get server farms that are close enough to guarantee low input lag and in just a couple of years high-quality game streaming will be possible in all major cities in the US and Canada, as well as in the whole of Western Europe (Japan is already pretty much covered by all three major cloud vendors).

But the second piece of the puzzle needed for game streaming to become the dominant force on the video games market is internet connection speed and quality needed in order for gamers to enjoy high-quality game streaming. For 1080p streaming without a major loss in quality due to the high compression rate 30Mbps is the minimum.

warframe cloud games streaming

And while most European countries and Japan offer these speeds as part of unlimited data packages the situation in the US is a bit different. The United States do have average internet speed fast enough for 1080p game streaming but the problem here is the fact that game streaming requires lots of data and US providers simply don't offer affordable plans that come with unlimited data.

And ever since the repeal of net neutrality, most providers offer limited video streaming quality (most lock your streaming quality to 480p), and cap your connection speed after reaching data limit, which is found in most "unlimited" data plans. Also, the US is dominated by wireless internet, which isn't as suited for game streaming as wired connections (cable, DSL, or optic cable connection). But with the rise of 5G networks wireless internet should become as dependable and wired ones. The problem is that 5G won't become available nationwide (at least in the US) for years.

This means that game streaming won't conquer the world in just a few years. It will take at least a decade for cloud gaming to become the dominant force in the video games market, and even more for it to become the de facto standard for gaming.

In the end, we can say that cloud gaming services promise a world where we can play our favorite games on any device we want anywhere we want, all that for a relatively affordable monthly fee. The promise is exciting and it could change gaming forever, bring video games to persons who can't afford to play them today, and make gaming available for anyone. If you live in Europe, Japan, South Korea, Shanghai, Hong Kong, Singapore, a couple of major cities located on Australia's east coast, or in any major city in the US, we have good news.

You will probably be able to get an affordable cloud gaming service in just a couple of years (once Microsoft and Google launch their streaming services). But everyone else will have to wait for their area to get nearby server farm owned by Microsoft, Google, or Amazon, and/or to finally receive fast internet without data caps.

And for the large part of our world, those two things will be a pipe dream even years from now. But ultimately, cloud gaming will conquer the world; the only thing is that won't happen as fast as CEOs of major gaming companies think. If you ask us, we think it will take at least another console generation for cloud gaming to become mainstream, and then another one for cloud gaming to become the only way to play games. We think that Yves Guillemot is too optimistic when he claims that the next generation of consoles will be the last one.

We will definitely see PlayStation 6 and Xbox whatever will it be called before we all start streaming games instead playing them locally.

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