The video game business is hoping streaming games from the cloud will attract new players
The video game business is hoping streaming games from the cloud will attract new players
Microsoft has finally closed its nearly $69 billion deal to buy the video game company Activision Blizzard. Regulators around the world had been skeptical of the deal — they alleged that the maker of the Xbox could gain an unfair advantage by taking over the company that produces Call of Duty, World of Warcraft, Overwatch and other hit games.
Microsoft finally cleared the last hurdle — opposition from UK antitrust officials — by giving up some control over video games that stream from the cloud, rather than running on home consoles. The cloud is a new frontier in the gaming world.
Streaming games can be a lot cheaper than buying a $500 console, said Joost van Dreunen, a business professor at NYU.
“You pay your $15 you get access to a buffet, and then you can play as you want. So you could stream it to your tablets, you can stream it to your PC, you can stream it to your console,” van Dreunen said.
Cloud gaming sales hit about $5 billion last year, compared to about $35 billion for console games. The leading service — Microsoft’s Game Pass — has about 25 million subscribers.
“If you compare it to Netflix, or Disney+, or HBO Max, like those are really just still rookie numbers,” van Dreunen said.
Streaming games is a lot harder than streaming sports or movies, said Tim Hanlon, a media technology consultant and founder of Vertere Group.
“You double, triple, cube the amount of intense bandwidth needed with data and rich, virtual and visual experiences, and the connectivity of voice and maybe video,” Hanlon said.
When you’re bingeing on Netflix, content can pre-load as bandwidth becomes available. But when you’re competing in a multi-player game while trash talking your opponent, the data needs to refresh immediately.
Michael Pachter at Wedbush Securities said hardcore gamers who want the most high fidelity experience likely won’t be switching to streaming any time soon.
“I do not think it’s the end of consoles,” Pachter said.
Instead Pachter said streaming could bring new audiences to gaming. “You know, it’s the 40 year old guy who’s got a family and he just can’t justify buying a console anymore,” he said.
$15 with the option to quit after a month might be more doable than dropping $500.
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