Cloud gaming industry to be the next investment hub for the business tycoons globally, Amazon’s involvement dramatically changing the market landscape
Category: #world  By Shikha Sinha  Date: 2017-04-06
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Cloud gaming industry to be the next investment hub for the business tycoons globally, Amazon’s involvement dramatically changing the market landscape

Amazon’s participation in cloud gaming industry has undoubtedly led to a dramatical shift in the gaming business space. The retail giant has successfully completed a few years in cloud gaming market, with a strong beginning in 2014- the acquisition of Twitch, a live-streaming service, with a deal strike price of USD 970 million. The deal has since then proved to be a solid asset for Amazon rather than being just a tool for ad monetizing.

Global Cloud gaming market is still in the developing stage, and the market players are hitting hard to capitalize the most of it. For instance, at CES, 2017, NVIDIA listed ‘GAMING’ as one of the most lucrative business prospects for the company over the years ahead. Automotive was another area addressed as a strong investment focus by Jen-Hsun Huang, CEO of NVIDIA. The gaming segment of the company recorded a Y-O-Y of 44%, leading to an overall exponential revenue growth, of which 59% can be credited to the gaming division. In Fiscal 2017, the overall revenue from NVIDIA’s gaming segment was approximately USD 4 billion.

However, the gaming spectrum of NVIDIA is being threatened by other biggies in the cloud gaming industry space, particularly based on the pricing models. For instance, Nintendo’s switch gaming console is offering a major challenge to NVIDIA’s revenue from GPUs. Apple is another magnate collecting a huge revenue from cloud gaming market via its iOS App platforms, building a huge risk for GPUs from NVIDIA. The popularity of AR Pokemon Go and Super Mario Run from Nintendo well depicts the aforementioned fact.

Amazon Web Services is also taking on against the sales of NVIDIA’s GPUs, pertaining to the lower cloud hosting pricing models of the former. Not only this, the retail biggie has indeed established its strong footprint in the cloud gaming industry by firmly believing in the potential of gaming in the overall entertainment eco space. A survey depicted that in 2016, Americans spent approximately 43 billion hours to play Activision Blizzard games which was close to 45 billion hours of Netflix engagement. The figures clearly validate the huge potential cloud gaming industry holds for the market participants over the years to come.

Addressing this enormous business opportunity, Amazon Lumberyard made a big hit with the integration of Amazon Web Services and Twitch. The game engine allows the developers to host their games on AWS with live streaming service, leading to a huge audience base right from the moment the game goes live.

However, these moves are certainly not the end for Amazon with the company claiming a bright roadmap in the cloud gaming market space. The hiring of industry’s best such as Louis Castle, co-founder of Westwood studios and John Smedley is another smart move depicting the serious involvement of Amazon in cloud gaming industry.

In addition to this, the industry has also been an irresistible investment focus for the Chinese e-commerce giant, Alibaba, who recently made an announcement of investing 1 billion yuan in 2017. This is unquestionably going to be a great move by Alibaba taking into consideration the evolving gaming market in China.

Summing up the aforementioned moves in this business space, Cloud gaming industry is certainly the next big thing in the entertainment ecosystem. The market has seen numerous development over the past years right from the pricing models to hassle and lag free streaming services. Had the data centers market seen the massive growth some years back, Onlive, which went through a massive failure, on account of video-latency constraints, would still have been one of the major names in the cloud gaming industry. Nevertheless, the new entries in the cloud gaming industry is set to bring forth profitable avenues for the market participants, game developers, and for the gaming community on the whole.



About Author

Shikha Sinha

Email: [email protected]   

Shikha Sinha

Shikha currently manages content operations for a series of news and business portals including MSF, Algosonline, and the like. An electrical & electronics engineer by education, she has prior experience in content & technology writing, content marketing, market resea...

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