Cloud gaming is on the rise worldwide, but so far it’s had something of a rocky road to success. Research group Omdia estimates that the sector will generate $3.2 billion in revenue in 2023, but this is just 2% of the total expected revenue for the entire gaming industry. While analysts predict that the cloud gaming market will double in size in the next five years, Ubisoft believes otherwise, and that the sector will see a boom akin to Netflix's move into streaming.
“We strongly believe in the next five to 10 years, many games will be streamed and will also be produced in the cloud,” Ubisoft CEO Yves Guillemot told The Financial Times.
“When Netflix first said it was going to go into streaming, their shares fell a lot and they were widely criticised.
“Today we see what they have become. It’s going to be the same with video games but it will take time. But when it takes off, it will happen very quickly.”
When Netflix first said it was going to go into streaming, their shares fell a lot and they were widely criticised.Today we see what they have become. It’s going to be the same with video games but it will take time. But when it takes off, it will happen very quickly.”Yves Guillemot
Ahead in the Cloud
Ubisoft’s belief in the cloud gaming m arket’s potential has some significant veracity. The UK’s Competition and Markets Authority (CMA) initially blocked Microsoft’s acquisition of Activision Blizzard due to its belief that the deal could give Microsoft a monopoly in cloud gaming just as it began to accelerate. In order to close the deal, Microsoft eventually sold its cloud gaming rights for Activision Blizzard’s titles to none other than Ubisoft.
Guillemot stated that those streaming rights, as well as the launch of the iPhone 15, mean that cloud gaming is poised for a period of rapid expansion, and with more and more major names in gaming putting mobile at the center of their expansion plans, including bringing console and PC titles to mobile devices, having the cloud gaming rights to Activision’s portfolio could yet prove to be a massively successful move for the French game maker.
“Countries that need to progress very quickly often jump to new technologies and skip old methods of the old systems,” said Guillemot, citing the adoption of mobile payments throughout Africa as one example. “So we think that [these regions] will move more quickly to streaming and the cloud than others.”
Whether Guillemot’s beliefs will prove to be true remain to be seen, however it’s worth noting that regulators and games companies worldwide are seemingly convinced that cloud gaming is poised for rapid growth - and with mobile being the most accessible gaming platform of them all, it could well find itself at the center of the booming industry.
Earlier this month, it emerged that 33% of committed gamers and 10% of casual gamers have already used a cloud gaming service.
We listed Tencent, who owns a 49% stake in Ubisoft parent company Guillemot Bros, as one of the top 50 mobile game makers of 2023.