Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
May 9, 2021
arrowPress Releases

If you enjoy reading this site, you might also want to check out these UBM Tech sites:


2021 will be a landmark year for cloud gaming, generating $4bn in consumer spending

by George Jijiashvili on 09/17/20 10:30:00 am   Expert Blogs   Featured Blogs

3 comments Share on Twitter    RSS

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

  • Subscription services such as Xbox Game Pass Ultimate and PlayStation Now to drive cloud gaming to $4bn.
  • Revenues are set to increase by $8bn in four years, reaching $12bn in 2025.
  • Cloud gaming is finally overcoming its challenges, as it becomes a viable option for both serious and casual gamers.
  • Telcos have a big role to play in delivering reliable cloud gaming experiences to end-users.

New research from market analyst firm Omdia shows that cloud gaming revenues will hit $12bn by 2025. The latest outlook comes from Omdia’s Cloud Gaming and Subscription Revenue Forecast 2020-2025, an annual deep dive into the global cloud gaming market with individual forecasts for 50 countries. It predicts that in 2021 alone, the revenue generated from cloud gaming will reach $4bn, a growth rate of 188% compared to 2020.

One of the key factors driving this growth is Microsoft’s inclusion of xCloud in the Xbox Game Pass Ultimate service – which has, overnight, allowed millions of existing subscribers to stream games. Microsoft’s focused xCloud strategy, as well as its technical capabilities and games ecosystem means the company will emerge as the clear leader in the cloud gaming category in 2021. It will however face stiff competition from Sony and Google, as well as upcoming entrants such as Amazon and – in Asia – Tencent.

New console launches in November are set to further boost the adoption of cloud gaming services. Past launches of new consoles have closely aligned with an uptick in online services such as Xbox Live Gold and PlayStation Plus; a similar impact is now expected with the cloud gaming-capable services Xbox Game Pass Ultimate and PlayStation Now, which Omdia expects to provide a complementary experience to console gaming. These types of services will drive the majority of revenue, with 70% coming from subscriptions in 2021, supplemented by one-off purchases and microtransactions. ‘PC in the cloud’ services such as Nvidia GeForce Now will remain a small proportion of the total, representing 7% of the market in 2025.

As part of Omdia’s methodology for sizing the cloud gaming market, Omdia has analyzed the performance of over 20 existing game streaming services, past console launches, as well as the uptake of media streaming services to forecast a significant jump in cloud gaming revenues. Omdia has also tracked more than 120 partnerships between cloud gaming service providers and telcos, tech companies and media companies since 2017.

In many ways, 2021 will be a landmark year for cloud gaming, with most of the vital pieces finally coming together to make it a viable option for both serious and casual gamers. As household entertainment budgets are squeezed, partly as a result of the ongoing Covid-19 pandemic, cloud gaming and game subscription services will prove to be an attractive route to premium titles for more price-conscious consumers who will hold off from purchasing the latest consoles or upgrading PCs.

Challenges around cloud gaming remain, but the outlook is positive

Network issues such as latency and capped data tariffs on mobile and home broadband pose ongoing challenges to the uptake of cloud gaming. 5G promises to significantly boost network performance and solve latency issues; however, given its gradual rollout, 5G’s impact will be mostly felt towards the end of the forecast period. In the near term, Omdia expects telcos to take a proactive approach through close collaboration with cloud gaming service providers, in addition to offering new cloud gaming-suitable data packages for consumers.

The distinguishing feature of cloud gaming is its potential to deliver premium gaming to any internet-connected media device, though certain platforms’ rules can impose obstacles upon realizing this. As predicted by Omdia, Apple recently loosened its App Store rules around game streaming apps – a positive development which will allow cloud gaming services to be delivered to the coveted iOS user base.

Content will be the determining factor for success (or failure) of cloud gaming services. Several major game companies including EA, Epic Games and Ubisoft have already embraced cloud gaming platforms as a way of complementing their existing platforms and revenue streams. Omdia expects more to join soon, which will further boost the growth of this burgeoning market.

About Omdia
Omdia is a global technology research powerhouse, established following the merger of the research division of Informa Tech (Ovum, Heavy Reading and Tractica) and the acquired IHS Markit technology research portfolio.
We combine the expertise of over more than 400 analysts across the entire technology spectrum covering 150 markets and publish over 3,000 research reports annually, reaching over 14,000 subscribers, and covering thousands of technology, media, and telecommunications companies.
Our exhaustive intelligence and deep technology expertise allow us to uncover actionable insights that help our customers connect the dots in today’s constantly evolving technology environment and empower them to improve their businesses – today and tomorrow. 

Related Jobs

Hinterland Studio Inc.
Hinterland Studio Inc. — Vancouver, British Columbia, Canada

Director of Platform & Publishing
Hinterland Studio Inc.
Hinterland Studio Inc. — Vancouver/Victoria, British Columbia, Canada

Director of Community
BUCK — Los Angeles, California, United States

Games - Gameplay Engineer
Sheridan College
Sheridan College — Oakville, Ontario, Canada

Professor, Game Design

Loading Comments

loader image