Gaming as a Service Market - Forecast from 2020 to 2025

The global Gaming as a Service (GaaS) market is projected to grow at a CAGR of 32.04% to reach a value of US$7.790 billion by 2025 from US$1.470 billion in 2019

The increasing number of gamers globally is the major factor behind the growing demand for gaming as a service market. The growing number of smartphone users coupled with rising internet penetration is supporting the market growth of gaming as a service. An upsurge of competitive gaming on mobile, laptops and consoles along with increasing expenditure required to customize and upgrade the assembled PCs and gaming laptops in order to play upcoming games is also contributing to the escalating demand for gaming as a service. Gamers are increasingly demanding the advanced hardware requirements to experience the best graphics, refresh rate, and FPS (frames per second) settings. This is encouraging gamers to switch their preferences to other solutions such as gaming as service (GaaS), thereby, augmenting the market growth.

However, due to the presence of the substitute, that is, traditional gaming on PCs or consoles in which the game needs to be purchased, downloaded and updated, is restraining the market growth of gaming as a service. Furthermore, the unavailability of proper infrastructure to provide a good internet connection strength and internet speed in some of the developing and emerging economies is another factor that is hampering the growth of this market.

The commercialization of 5G provides a great opportunity for the growth of gaming as a service market during the next five years. In addition, supportive government initiatives to boost the adoption of 5G in emerging economies is also encouraging market players to boost their market share, thereby positively impacting the market growth. For example, the Government of India has formed a High-Level 5G India 2020 Forum with Ministry/Department of Telecom and Ministry of Electronics and Information Technology (MeitY). The goals of this forum are to facilitate the early deployment of 5G in India, which would, in turn, help improve the connection strength and speed allowing for better and unfettered access to gaming as a service (GaaS).

Furthermore, the key players in the market are involved in collaborations and launching enhanced services in order to boost their market share and contribute to the growth of the market. For example, recently in February 2020, NVIDIA announced the public launch of its cloud gaming/gaming as a service solution. This service provided by NVIDIA is able to run demanding games and is backward compatible, which means that it is able to access data from the previous versions also. Also, in December 2019, the company announced they had entered into a collaboration with Tencent to bring gaming as a service in China. The “START” is gaming as a service product by Tencent, powered by a GPU from NVIDIA, which makes the availability of AAA (Triple-A titles, those that are produced by prominent game producers) games on underpowered solutions for the users and games possible. In addition, in November 2019, Google announced the launch of its new gaming as a service “Google Stadia”. The gaming as service and game streaming product is able to beam any high-end console and PC games to Chrome browser or the Chromecast dongle or the Pixel 3 smartphone and was launched in selected countries such as the US, UK and much of the European countries.

The gaming as a service (GaaS) market has been segmented based on platform, technology, and geography. By platform, the market has been segmented as PCs and laptops, smartphones and tablets, and gaming consoles. By technology, the market has been segmented as file streaming and video streaming.

Mobile Phones and Tablets segment holds a significant market share

Mobile phones and tablets are estimated to hold a significant market share owing to the advanced features such as the good amount of RAM and processors that are loaded into mid-level phones and some of the entry-level phones, which provide a good and cheap gaming platform. For instance, Xiaomi sells a gaming phone called the Black Shark 2 and ASUS also sells a phone series called the “ROG Phone”.

File Streaming to contribute significantly to the market growth over the forecast period

File streaming technology is poised to grow at a decent CAGR during the forecast period. This is due to the fact that the use of this technology enables the streaming of the games easier as by only downloading a little portion of the game, the game is accessible by the players even in low-bandwidth and poor internet speed conditions. The market for video streaming technology holds considerable market share. For video streaming, the game is available on the cloud, and no part of the game needs to be downloaded, although a high bandwidth and high-speed internet connection is required.

The North American region to grow at a noteworthy pace over the forecast period

Geographically, the global gaming as a service (GaaS) market has been segmented into North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC). The North American region is projected to hold a significant market share and grow at a noteworthy pace over the forecast period, which is attributable to the fact that in countries such as the US, there are increasing investments in the R&D for the improvement and enhancement of capabilities of this service. The players such as Google and Microsoft are leveraging every opportunity to increase the adoption of this next-gen service. The APAC regional market will experience significant market growth on account of the rising popularity of cloud gaming and the rapidly growing gamer population in APAC countries. Countries such as China and South Korea are among the largest online gaming industries in the world, with mobile gaming increasingly popular in Korea. In conjunction, the increasing investments and initiatives being taken by the market players also support the market growth of gaming as a service in this region. For instance, in September 2019, SK Telecom announced to be the operating partner under the tech giant Microsoft, in order to deliver a cloud gaming service based on 5G network called the “Project xCloud” in Korea.

Some of the major players covered as a part of this report are NVIDIA Corporation, Parsec Cloud Inc., Tencent Holdings, Shadow by Blade, and Sony Interactive Entertainment LLC among others.

Segmentation

By Platform

• PCs and Laptops
• Smartphones and Tablets
• Gaming Consoles

By Technology

• File Streaming
• Video Streaming

By Geography

North America

• USA
• Canada
• Mexico

South America

• Brazil
• Argentina
• Others

Europe

• Germany
• France
• United Kingdom
• Spain
• Others

Middle East and Africa

• Saudi Arabia
• Israel
• UAE
• Others

Asia Pacific

• China
• Japan
• South Korea
• India
• Others