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Cloud-gaming platforms were 2020’s most overhyped trend

The future of the technology is bright, but much less sexy

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Friends play a games console
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It was an unprecedented year for [insert anything under the sun], and while plenty of tech verticals saw shifts that warped business models and shifted user habits, the gaming industry experienced plenty of new ideas in 2020. However, the loudest trends don’t always take hold as predicted.

This year, Google, Microsoft, Facebook and Amazon each leaned hard into new cloud-streaming tech that shifts game processing and computing to cloud-based servers, allowing users to play graphics-intensive content on low-powered systems or play titles without dealing with lengthy downloads.

It was heralded by executives as a tectonic shift for gaming, one that would democratize access to the next generation of titles. But in taking a closer look at the products built around this tech, it’s hard to see a future where any of these subscription services succeed.

Massive year-over-year changes in gaming are rare because even if a historically unique platform launches or is unveiled, it takes time for a critical mass of developers to congregate and adopt something new — and longer for users to coalesce. As a result, even in a year where major console makers launch historically powerful hardware, massive tech giants pump cash into new cloud-streaming tech and gamers log more hours collectively than ever before, it can feel like not much has shifted.

That said, the gaming industry did push boundaries in 2020, though it’s unclear where meaningful ground was gained. The most ambitious drives were toward redesigning marketplaces in the image of video streaming networks, aiming to make a more coordinated move toward driving subscription growth and moving farther away from an industry defined for decades by one-time purchases structured around single-player storylines, one dramatically shaped by internet networking and instantaneous payments infrastructure software.

But shifting gamers farther away from one-off purchases wasn’t even the gaming industry’s most fundamental reconsideration of the year, a space reserved for a coordinated move by the world’s richest companies to upend the console wars with an invisible competitor. It’s perhaps unsurprising that the most full-featured plays in this arena are coming from the cloud services triumvirate, with Google, Microsoft and Amazon each making significant strides in recent months.

The driving force for this change is both the maturation of virtual desktop streaming and continued developer movement toward online cross-play between gaming platforms, a trend long resisted by legacy platform owners intent on maintaining siloed network effects that pushed gamers toward buying the same consoles that their friends owned.

The cross-play trend reached a fever pitch in recent years as entities like Epic Games’ Fortnite developed massive user bases that gave developers exceptional influence over the deals they struck with platform owners.

While a trend toward deeper cross-play planted the seeds for new corporate players in the gaming world, it has been the tech companies with the deepest pockets that have pioneered the most concerted plays to side-load a third-party candidate into the console wars.

It’s already clear to plenty of gamers that even in their nascent stages, cloud-gaming platforms aren’t meeting up to their hype and standalone efforts aren’t technologically stunning enough to make up for the apparent lack of selection in the content libraries.

Google is farther along in their launch that any of their competitors, yet feedback has been less than positive for the effort, and given the company’s track record of killing consumer products that fail to gain traction early on, it’s unclear how much longer Google will support its Stadia platform.

Amazon has had plenty of time to observe Stadia’s pitfalls as it preps a wider launch for Luna, its own cloud-gaming platform. The company’s big differentiation is an early partnership that will bring a number of games in Ubisoft’s library to the platform if users also subscribe to the $15/month service. It’s hard to tell whether Amazon will be able to throw its weight around and score deals to bring more publisher deals into the fold, or whether the company will meet its match entering a space where everyone wants to own the biggest slice of the pie.

Amazon announces Luna game-streaming platform

The hiccups betray that while cloud gaming may be the most hyped technology shift in 2020 consumer tech, it’s not likely that the current product iterations will be the way most gamers experience the tech. Instead, consumers will likely see the tech in less sexy integrations revamping marketplaces and providing deeper experience to users.

Today’s products are far from dead ends for what the broader industry does with the technology, though it might not be enough to sustain a unified upstart effort like Stadia or Luna. What seems more likely is that cloud gaming provides a path toward greater discovery across marketplaces. This falls more in line with what Microsoft seems to see in xCloud as a vehicle for widening the appeal of their Game Pass subscription service with the cloud tech offering a lower friction path toward discovery and potentially enabling gamers a way to dive straight into a title while downloads carry on in the background.

The sell seems particularly strong for console downloads where certain titles can take hours to download. But as storefronts look to strip away steps from the buying and discovery processes, it’s likely that cloud-rendering downloads before saving them on-device will be something gaming and app marketplaces pursue on desktop and mobile platforms as well.

While Google and Amazon are pitching a subscription service that sells the convenience of hardware agnosticism for a low monthly fee, others see ways to channel cloud streaming tech into their existing revenue channels. Facebook announced this year that it was launching a cloud gaming service, albeit one centered on mobile games that it can easily push users toward after they click on an advertisement in their newsfeed.

Facebook won’t be charging consumers any monthly fees, instead taking a 30% cut from in-app purchases that take place while users are playing the title inside the company’s Facebook Gaming portal. This is an easy pitch for the technology, but their path to success is complicated by a familiar 2020 bogeyman: Apple’s App Store rules.

Facebook steps into cloud gaming — and another feud with Apple

Stadia, Luna and xCloud have each placed a particular premium on the fact that their platforms technically allow mobile users to play console-quality titles on their mobile phones. For Android users, that promise is a reality. But on iOS, Apple spent much of the year aiming to find a path forward that would allow the functionality in its base form but would prevent any revolutionary shifts that might complicate the company’s ownership of what it lauds as the world’s largest gaming platform across its mobile devices.

Though few consumers are knocking down the App Store’s front door to ask for less-restrictive iterations of the tech, outlawing cloud-streaming and subsequently forcing platforms to repackage solutions into comparably clunky networks of shortcut icons seems like some of the company’s most consumer-hostile decisions in years and something that will genuinely slow progress as the gaming industry tries to level up its marketplaces amid so much consumer growth.

The reality is that cloud gaming is very likely the future of the App Store, and Apple has more to gain than anyone. By preventing competing platforms from fully realizing the fruits of the tech, Apple has ample opportunity to play catchup and present itself as the company that wasn’t early to the technology but was instead right on time.

Apple goes to war with the gaming industry

If Microsoft, Google and/or Amazon aren’t successful with consumerized cloud-gaming platforms, they are all still poised to win big if other major platforms adapt technology that leans so heavily on cloud computers.

Cloud gaming has a pretty daunting infrastructural path to a minimum viable product especially when it comes to global rollouts. Users need more than a strong internet connection to stream high-quality games — they must be near data centers to play with low levels of latency.

Even if publishers or studios are avoiding working with these companies now for their own siloed subscription products, it’s likely that the cloud giants will have a big role to play in the future of how consumers play their titles regardless.

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