Parks: 35 Million U.S. Internet Households Covet Cloud-Based Gaming Subscription Services

Internet-based video game play continues to entice consumers. New data from Parks Associates estimates that more than 35 million U.S. internet households are interested in subscribing to a cloud-based gaming service, with demand growing to nearly 39 million households by 2024.

Dallas-based Parks, which is hosting a webinar on the subject Sept. 29, reports that 78% of interested U.S. broadband households would subscribe to a cloud gaming service at $9.99 per month. The webinar aims to identify and discuss the specific factors hindering the viability of cloud gaming and its potential mainstream success at the ecosystem, network and experience levels.

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“A variety of players are testing the cloud gaming market, as it has tremendous opportunities for recurring revenues and service expansion, provided companies can deliver a strong and positive consumer experience scalable to mainstream audiences,” Elizabeth Parks, chief media officer, said in a statement.

Dr. Dhananjay Lal, senior director of advanced R&D with Adeia, contends that cloud-based video games represent new market opportunities across the both the gaming and technology spectrums.

“Challenges around network performance, convenience for consumers, and models of monetization are hindering adoption today,” he said in a statement. “In this webinar, we break down the future development needed to make widespread adoption of cloud gaming a reality.”

Analysis: Video Game Streaming a Fraction of the Market — For Now

The video game market, like much of home entertainment, is transitioning to a subscription-based streaming business. New data from Ampere Analysis finds that 5%, or $3.7 billion, of the North American, European video game market comprised cloud gaming PC subscriptions. That’s up 57% from $2.3 billion in revenue in 2020. That percentage is projected to double by 2027.

Ampere contends the subscription streaming market is being spearheaded by Microsoft’s Xbox Game Pass Ultimate and Sony’s PlayStation Now digital platforms, in addition to Nvidia’s GeForce Now, and telco-based cloud gaming services. Sony and Microsoft already dominate the packaged-media market through the Sony PlayStation 5 and Microsoft Xbox Series S/X consoles, respectively.

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Meanwhile, Ampere suggests streaming video games will top game downloads in the next five years. The report found that while console users represent the core of Microsoft’s game business, converting non-console users via streaming is the future. Game Pass had about 60% market share in digital gaming in 2021. That percentage is expected to grow.

Ampere reportedly expects Microsoft to bring Game Pass to additional mobile-first markets in the near-term, possibly with a mobile-only lower priced subscription. These new gamers will gradually shift the overall usage of the service more towards streaming.

“Eventually, we’ll get one or more big third-party franchise releases going straight into Game Pass; we could see that happen this year,” Ampere wrote in the report.

Amazon Launches ‘Luna’ Cloud Gaming Platform

Amazon March 1 announced that its much-hyped Luna cloud gaming service is finally available in the United States with an expanded library of games and features. The subscription-based platform lets users across all skill levels play games on their own devices, including Fire TV, Fire tablets, Windows PCs, Chromebook, Macs, iPhones, iPads and Android phones.

The new Prime Gaming Channel also affords Prime members a rotating selection of free games on Luna. Players can access additional games by subscribing to the Retro Channel and Jackbox Games Channel at $4.99 each monthly. Features include “live broadcasting” to Twitch and the Luna phone controller, which is available in the Luna Controller app for iPhone and Android phones.

“Luna [enables] customers to instantly play high-quality, immersive games on the devices they already own,” Daniel Rausch, VP of Amazon Entertainment Devices and Services, said in a statement.

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Luna offers six gaming channels with an expansive catalog of titles that can be streamed in high-definition. Titles this month include Devil May Cry 5; Observer: System Redux; PHOGS!; Flashback; and, from March 8-14, Immortals Fenyx Rising.

The Retro Channel features classic games from publishers such as Capcom and SNK, so subscribers have access to titles such as Street Fighter II: Hyper FightingMetal Slug 3 and Castlevania Anniversary Collection, among others

The Jackbox Games Channel features eight family-themed game party packs available with one subscription. Games include Quiplash, You Don’t Know Jack, Drawful and Trivia Murder Party. These titles support Luna Couch, a cloud-first feature that lets you invite others to join a multiplayer gameplay session instantly, even if they don’t have a Luna subscription.

On April 1, a new subscription for Luna+ will cost $9.99 per month and the Family Channel will cost $5.99 per month. Existing early access customers, and customers who sign up for Luna+ or Family Channel by March 31, can lock in founder’s pricing and keep Luna+ at $5.99 per month, and the Family Channel at $2.99 per month.

Luna+ offers more than 100 titles, including Devil May Cry 5GhostrunnerTeam Sonic Racing and Yakuza: Like a Dragon; while the Ubisoft+ Channel ($17.99) provides access to publisher’s releases, such as Assassin’s Creed: ValhallaFar Cry 6 and Immortals Fenyx Rising. The Family Channel comes with a curated selection of titles for all ages, including Monster Truck Championship, Heave Ho and Sponge Bob Squarepants: Battle for Bikini Bottom.

Separately, with an update on PC, Mac and Fire TV, a new “live broadcast” button lets users stream gameplay live with a camera feed overlaid on-screen, providing a simple way to broadcast to friends or the Twitch community.

Gamers can also try Luna on Fire TV using just an iPhone or Android phone as the controller through the Luna Controller app, available as a free download in the iOS and Android app stores. The on-screen controller is an option for new or casual gamers without a controller who want to check out side-scrollers, turn-based RPGs, and trivia titles.

Report: Digital Content Spending to Reach $432 Billion by 2026

Consumer consumption of digital entertainment is not slowing. A new study from Juniper Research found that the total market value of digital content will reach $432 billion by 2026, rising from $211 billion in 2021. This represents growth of 105% over the next five years — driven by gaming, premium VOD, pay-per-download, in‑app content spend, subscription streaming revenue and ad-supported VOD, among other distribution channels.

The new study identified digital games as the sector to generate the highest revenue by 2026, accounting for 45% of the global market value. It predicted that, as subscription services increase in popularity, digital games providers must differentiate their services through unique content.

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The report forecast that there will be more than 3.3 billion games users by 2026, rising from 2.7 billion in 2021, and urged games publishers to capitalize on this growth by offering subscriptions that leverage extensive content partnerships to provide regularly updated content libraries that justify ongoing subscription costs.

“Over half of digital content spend will come from smartphones,” Saidat Giwa-Osagie, co-author of the report, said in a statement. “However, as subscriptions become increasingly competitive, niche areas, such as augmented and virtual reality, will need to be considered when onboarding content partners.”

The report identified two key device channels anticipated to provide new revenue opportunities over the next five years: immersive reality headsets and smart speakers. Digital content revenue attributable to these device categories will grow from $2.4 billion in 2021 to $8.1 billion by 2026, representing growth of 275%.

North America and Europe will account for more than 50% of revenue from immersive reality headsets and smart speakers by 2026, and the report anticipated that high device ownership will result in these regions providing the most opportunities for monetization over the next five years.

Google Set to Reveal Video Game Streaming Service

As online gaming grows (and disc-based video games decline), tech/media giants such as Google and Apple are eyeing the $100 billion industry for new cloud-based streaming platforms.

Google is reportedly set to disclose a streaming platform March 19 offering high-end games across all platforms, including Android, iPhone, Mac, Chrome, Windows 10 and TVs at the Game Developers Conference in San Francisco. The search behemoth teased a YouTube video about it.

The company, which would enable users to buy games directly from the TV screen or portable media device, will also unveil a gaming controller (and possibly a console) that could be used with a smart TV.

The move comes as the gaming industry – dominated by Sony (PlayStation), Microsoft (Xbox) and Nintendo – grapple with changing consumer habits and distribution revolving around their longstanding gaming consoles.

Google’s service could enable users to play top games without having to buy an expensive console.

“Cloud gaming will enable publishers to broaden their reach even further by potentially taping into new audiences on any device and any screen,” Thomas Husson, analyst with Forrester Research, told CNBC. “Beyond music or video, gaming represents another opportunity to offer recurring streaming revenue for companies in the gaming ecosystem. For cloud platforms like Amazon, Google or Microsoft, it will also become an opportunity to offer cloud storage and services to game publishers, who spend more and more in their IT infrastructure.”