When I was younger, I distinctly remember my excitement from visiting a local gaming store to pick up a physical copy of the latest game. But those days are over.

Physical-copy video game sales have fallen every year since 2009, with roughly 17 percent of today’s total sales coming from physical copies. Digital distribution has greatly affected video game brick-and-mortar retailers. Fewer people are leaving their homes today to purchase the games they desire.

However, this evolution was inevitable in an industry driven by technological breakthroughs, and we can only expect the next phase to take shape. That next phase may be cloud gaming.

What is cloud gaming?

Cloud gaming, also referred to as “gaming on-demand,” allows users to stream and play video games directly from the cloud instead of a specific hardware or gaming device.

In other words, just as you’d stream video content from Netflix or Hulu onto your television, you’d do the same in cloud gaming, only the content is playable video games. The ability to stream and play high-definition games, however, comes with some specific requirements.

How cloud gaming works

Cloud gaming works by first signing up for a subscription service with a library of games you can stream, some of which include:

Each cloud gaming service has its own advantages and price points, so it’s worth doing your research to see which monthly or yearly subscription model is right for you.

After selecting a service, it’s time to look at your internet connection. This is because cloud gaming relies on accessing a remote server via the internet, so you should have a reliable connection that can handle steady doses of streaming.

Next, you’ll need a device to stream the content on and some hardware to input your commands when playing a game. For consoles, a controller will do just fine. For PCs, a mouse and keyboard will suffice. For mobile, the device is used for both content delivery and command input.

This is basically the experience of the end-user. For the cloud gaming service provider, there are a variety of technologies at work.

Cloud gaming technologies

One of the most important underlying technologies for cloud gaming service providers is its cloud infrastructure, also known as infrastructure-as-a-service (IaaS).

IaaS is essentially the backbone of the cloud, allowing providers to scale their platforms for new applications and expand existing ones to larger audiences. With a constant surge of new content in the gaming industry, having solid infrastructure is important.

Next, digital content needs to be delivered to the user. This is made possible using content delivery network software (CDN).

CDN software helps route the delivery of digital content from the origin server to one that is as close to the end-user as possible. This allows for efficient and reliable content delivery, which is important since real-time feedback is necessary for gaming.

Another technology associated with cloud gaming includes load balancing software, which helps distribute resources to handle large amounts of traffic. This is important in cloud gaming since fluctuating volumes of traffic aren’t uncommon.

The result of these technologies leads to a seamless gaming experience for the end-user. High-definition, resource-intensive gaming content delivered at 60 frames-per-second on virtually any device is just one reason why the cloud gaming market is expected to surge over the next few years.

Growth of the cloud gaming market

Cloud gaming brings high-end gaming experiences to a larger audience. It allows users with hardware or device limitations to play the same great titles through the cloud with low latency. This isn’t just great for cloud gaming service providers, but the entire gaming industry in general, and the data backs this.

By 2023, the cloud gaming market is expected to surpass $450 million – that’s up from $45 million in 2017.

But cloud gaming doesn’t just consist of game and file streaming, there’s also connected television streaming, which is expected to see a CAGR of over 15 percent in the same duration.

Connected television is cloud applications built by television and video content providers like Netflix, Hulu, HBO, Bravo, and many others.

Connected television has been on the rise as standard cable and satellite plans have dwindled. Television providers have longed for more modern-day revenue streams, and offering new, more personalized services through cloud gaming seems to be their solution.

Is cloud gaming really the future?

Cloud gaming is growing and is expected to reach vast audiences over the next five years. Its ease-of-use through monthly/yearly subscription models paired with high-end gaming experiences for users with hardware or device limitations makes cloud gaming attractive, but is it really the future of gaming? The data tells us so, but there is a compelling counter-argument – lack of adoption.

A study from SuperData shows that while 8 out of 10 gamers are aware of cloud gaming today, only 26 percent of them actually use or plan on using cloud gaming.

Overcoming this hesitation and ultimately adopting cloud gaming is imperative to its future growth. Shadow Ghost, a physical device built solely for cloud gaming, hopes to make cloud gaming and connected television easier to adopt with its seamlessness.

Source: Tech Advisor

Google also announced its entrance into the cloud gaming industry with Google Stadia, which is capable of streaming video games at 4K resolution with support for high-dynamic range. Stadia will launch in November of 2019.

EA, one of the world’s largest video game publishers, announced plans to launch its first cloud gaming service. With nearly unlimited resources, you could expect EA’s service to provide unparalleled gaming experiences.

There have also been talks of Amazon, Apple, and Microsoft looking to enter the cloud gaming industry, which could help drive more adoption. Either way, it will be interesting to see if cloud gaming can come to the forefront in an industry still driven by the sale of physical devices like PCs and consoles.