5G will push cloud gaming market to $4.5 billion by 2024

The cloud gaming market is expected to begin ramping up in concert with the expansion of 5G and the arrival of new cloud gaming services. Growth will come from both existing and new gamers who will find value in exchanging service fees for upfront hardware costs, increased device flexibility, and in some cases, higher quality visuals.

Google Stadia. Photo credit: Arstechnica

By 2024, there will be over 42 million active cloud gaming users, and the overall market revenue is expected to reach $4.5 billion, according to global tech market advisory firm ABI Research.

Despite a robust 61.7% CAGR (2018 to 2024), the cloud gaming market will still represent a relatively small segment of the overall gaming landscape through this forecasting window.

“Google Stadia has brought a great deal of attention to cloud gaming, but the market has a deeper history and already has a growing list of companies operating in the space, serving both consumers and business customers, including telcos and pay-TV operators. While technical and behavioral aspects of the market are in a much better place today, the greatest competitive hurdle remains the incumbent gaming platforms, which will lead to a more protracted transition to the cloud,” commented Michael Inouye, principal analyst at ABI Research.

Currently, there are several million cloud gaming users spread across B2C services that include a more curated approach (e.g., Blacknut, Hatch, PlayStation Now), or a virtualized PC experience (e.g., Blade’s Shadow, NVIDIA’s GeForce NOW), and B2B platforms that target operators, telcos, and other businesses within markets like hospitality and transportation (e.g., Gamestream, PlayGiga, Ubitus, Wiztivi).

5G is anticipated to be a driver for cloud gaming as it stands as a key contender to showcase some of the new technology’s key selling points, including higher data rates and ultra-low latency.

“The transition from physical to digital media within the gaming market has occurred at a relatively rapid pace, and while the future of gaming rests in the cloud, this is a longer-term vision. New consoles are arriving in 2020, and plenty of business and content considerations need to be worked out before the cloud becomes the primary gaming platform of gamers across the world. The next couple of years are certainly shaping up to be an interesting time in the gaming market,” Inouye said.

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