The sector managed to gross $633 million last year, meaning it is projected to more than double in 2021. Moreover, by 2023 cloud gaming will surpass $5 billion in revenue.
Meanwhile, the serviceable obtainable market within cloud gaming will reach 196.5 million this year.
There are a variety of reasons why the cloud gaming market is expected to see a huge influx of revenue.
One of which is the ongoing coronavirus pandemic. Millions worldwide have been confined to their homes, and games have proven to be a crucial source of entertainment.
"With people spending more time at home due to the lockdowns, video games became a key source of entertainment and way to socialise," said Blacknut VP of business and head of licensing Nabil Laredj.
"When we compare the data between Q1 and Q2 2020, our D2C service saw a five-fold increase in session length and three times the number of games sessions.
"Overall, the increased engagement trend was maintained all year, and Blacknut has seen its number of active users grow by eight times in 2020."
Another reason is that many companies, both big and small, have decided to enter the space. Perhaps the biggest of which is Microsoft with Project xCloud.
The Big M brought its cloud gaming service to market last year, allowing mobile users to play games from Xbox Game Pass on their devices.
Currently, those that use Microsoft's service can only achieve resolutions of 720p. However, the company is currently testing 1080p resolutions.
Of course, Amazon also sniffed out an opportunity and has since entered the fray with Amazon Luna.
Then there is also Nvidia with GeForce Now – granted, it had a rocky start with licensing – which boasts more than 800 readily available titles.
Due to the number of companies looking to make their mark on the sector, cloud gaming sees 23.7 million users across the range of services on offer.
"Having so many people that were suddenly stuck at home was an opportunity of a lifetime for all companies offering entertainment services," said RemoteMyApp CEO Andreas Hestbeck.
"RMA registered great spikes in interest and many new players entering both the Vortex.gg platform and the MagentaGaming service.
"However, the effects wore off as markets reopened, although we did see a resurgence during the second wave. In general, the overall awareness of cloud gaming has been very positively affected by the lockdowns.
"We expect that this will lead cloud gaming to grow even faster in 2021 as a great number of people got to experience the power of the cloud while gaming in 2020."
It's not just cloud gaming that is predicted to cross the $1 billion mark this year, as esports is on track to generate $1.6 billion.
Newzoo has also revealed what five mobile trends it thinks are worth keeping an eye on this year.