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Situation in the world

GFN.Ru, together with the consulting company PwC, conducted a study of the Russian cloud gaming market, the main figures and facts from which I would like to share.

The gaming and eSports market is growing at a steady pace. But coincidentally, we discussed this moment with you yesterday. In short, the most actively growing market is mobile gaming, where people prefer to play and “donate” often unthinkable money to games like “three in a row” or PUBG. The market for high-end AAA games, on the other hand, is not feeling so excited.

But here I would like to note that, given the volume of spending on donations, players on smartphones, in theory, can be considered as a potential audience for cloud gaming, which allows playing computer games from a smartphone.

PwC is very successful in providing forecasts for the development of cloud gaming from various analytical agencies. As you can see, there is no agreement among them either. Those who take the line to the skies assume that part of the mobile audience will switch to higher quality games. This is facilitated by the development of the quality of the mobile Internet, as well as the emergence of subscription services like Microsoft’s Gamu Pass, which can be called “Netflix for games”. For a modest $ 15 per month, the user gets access to an extensive catalog of games. And cloud gaming services help get rid of the need to buy gaming hardware. [Note to readers: yes, yes, I remember the concept that hardware at home, content from torrents is better, and subscriptions to films, games, music are bought only by fuckers].

Cloud gaming reached $ 500 million in 2020. But Analysys Manson expects the volume to reach $ 2024 billion by 6.6. I am more conservative, as cloud gaming requires not only high-speed internet, but also low ping. And it is unlikely that the wired home Internet will be pumped so actively by 2024. It’s more about 5G. Considering that 5G is actively developing in the United States and South Korea, these countries can become the locomotives of the industry. Of course, there is also China, but obviously there will be some kind of separate market.

In fact, everyone should be interested in the development of cloud gaming:

• The absence of piracy (only licenses are launched on remote servers) attracts game studios and online game stores. Here you can quote the regional director of Wargaming: “From a gaming publisher’s point of view, cloud gaming frees us from the additional costs of debugging release versions across dozens of different configurations and devices. It simplifies the architecture, while preparation still requires significant resources to develop and maintain the underlying cloud systems, but this is most often a one-time investment. “
• Mobile and Internet providers. A good game requires a lot of traffic and high speed, which by definition costs more than the standard plan.
• PC makers can produce more laptops from the thin and light category. Such products are easier to manufacture and develop and generally have high margins.
• It is easier for smartphone manufacturers to justify why such large “shovels” and sliding screens are needed.
• Users who play from time to time now have fewer restrictions. One interesting story came out – rented a subscription in Game Pass or through Ubisoft, played in the cloud, satisfied curiosity and forgot.
• Also, ordinary users should be attracted by the fact that you can play on absolutely any hardware. PwC leads the story of how Nvidia invited iPhone owners to play in the browser in Fortnite, which was removed from the app store due to a conflict between Epic Games and Apple.  

Leading global players

Perhaps we cannot say that the cloud gaming market has already formed and monopolized, but all the headliners of the high-tech industry are already here. It is also important to note that cloud gaming has a very high barriers to entry that few people can afford. Cloud gaming requires not only powerful data centers, which would be located at a distance of no more than 600-800 km from the player, but also a high-speed Internet channel.

Today the solutions were presented by:

Google Stadia. Google’s advantage in a vast ecosystem and promotion opportunities. I looked on YouTube – immediately play Google Chrome or an Android smartphone.

Sony PlayStation Now. The service has existed since 2014. Recently, Sony has taken on its development more actively. So, at the end of April it was announced that now streaming will finally be in Full HD (previously only 720p). However, the product is still limited as it requires a PlayStation controller to play.

Amazon Luna. So far, a dark horse, as the service is still in closed testing mode.

Microsoft products xCloud. Perhaps, almost the strongest player on the market. Firstly, Microsoft owns a huge number of game studios, and secondly, it has combined with xCloud with Game Pass, that is, you do not have to pay for the cloud rental, everything is in one subscription. Third, Microsoft is closest to the concept of “Netflix for games”: bought a subscription, and immediately there are games and the cloud to play. Fourth, the company has a powerful cloud infrastructure based on its own Microsoft Azure product. By the way, Microsoft leases its facilities to Sony.

GeForce Now. The strength of Nvidia’s product is that the company is essentially selling a turnkey product that any wealthy company can buy. For example, the mobile operator LG Uplus did this in South Korea, and the Russian project GFN.Ru appeared in the same way. At the same time, Nvidia collaborates with the largest number of game stores.

Tencent. Interestingly, there is still no cloud gaming in China, despite the active development of 5G. PwC believes that Tencent, which has a dominant position in the local cloud market and has a large library of games, has the best chance of success.

Russian cloud gaming market

Russia is in the top 10 largest markets for video games and esports. Interestingly, Canada is in 9th place, with a population of about 38 million people. In third place is Japan with 126 million people. 

So our 10th place, taking into account the population, slightly hints that either we do not like to play very much, or pay. And, of course, it should be understood that gaming is a premium entertainment that is not available to every average Russian citizen. This idea is confirmed by the cross-section of the types of games. The mobile segment dominates. That is, there are just all freemium games.

PwC forecasts for the Russian cloud market

In 2020, the market volume was $ 4,6 million. And this, apparently, is the entire share of GFN.ru, which actively promotes its service. Mail.ru (My.Games service), MTS (in partnership with GFN.RU) and Sberbank (SberPlay service has been available on the SberBox smart console since December 2020) opened their cloud gaming divisions in public beta testing.

Our market is isolated from foreign services (from Microsoft, Sony, Amazon, etc.). And it’s not worth waiting for their arrival in the near future. It is costly in money to build data centers for launch, and the political / economic environment is too unstable for Western companies to actively invest in Russia. Here we are going to slow down Google, what kind of Google Stadia can we talk about?

The most active development on the Russian market is GFN.Ru, which both promotes a product under its own brand and enters into collaborations.

Perhaps, the Mail.Ru project – MY.GAMES Cloud, which is still in a conditional beta test, can be singled out separately. And it is rather a catalog of free games, some of which are available in the cloud.

I wanted to highlight the PlayKey company separately, but just a couple of days ago, news arrived that Mail.ru Group had bought 100% of the developer. In this case, it is interesting and a little commendable that Mail.Ru did not go to the same Nvidia for a ready-made solution (or could not, since there is GFN.ru?), But took up the development of the direction on its own.

About the audience of cloud gaming

In conclusion, a few words about the cloud gaming audience. So far, a relatively small audience, which has stabilized at around 120 thousand people.

Curiously enough, a high proportion of users use Android to play the game. But iPhone users in Russia somehow did not pay attention to the ability to play through the browser, although Fortnite remains the most popular game in the cloud.

Well, for the game you need a stable Internet. Only a minimal percentage of players are trying mobile networks.

Conclusion

PwC did an interesting study. Very positive in terms of global trends. The development of Mail.Ru cannot but rejoice. The current catalog of games is, of course, questionable. But buying a PlayKey could make things right.

Obviously, GFN.ru will remain the market leader in the coming years. The company does everything right, regularly adds all the latest innovations and simultaneously implements all the innovations from Nvidia along with the releases.

Perhaps a fly in the ointment is the size of the audience, which has stabilized at around 120 thousand people. It seems to me that there is also a certain mental block. Not so long ago, they learned to pay for TV shows, but here you have to both a subscription and a game to buy. At the same time, a rather low percentage of those who play via Wi-Fi, and not everyone is ready and can bother with the wire. With the development of Wi-Fi 6, the situation, of course, in this aspect will change.

However, the volume of the world market is also small. It is likely that those who follow the games do not need cloud gaming, since the console / PC is available. And those who might have played are not yet particularly aware of the possibilities. At the same time, such a person has to go through a difficult path: register in a game store and buy a game there, and then buy a subscription to the cloud. It is likely that with the development of services, when the one-click purchase technology is introduced, this will attract new users.