Adara Ventures is proud to partner PlayGiga, the leading B2B cloud gaming solution, that has developed a proprietary technology that allows telcos, publishers, media companies, and retailers to offer a cloud gaming solution to their customers.
We sat down with Javier Polo (CEO) to discuss the megatrends driving cloud gaming adoption and the attractive market opportunity it presents for independent tech players like PlayGiga.
First, it is important to put videogaming into context, because it is often underestimated. The videogames industry has a double digit growth and generated $138 billion in revenues in 2018 (according to Newzoo 2018 Global Games Market Report). Videogaming is larger than both film and music and is growing in every region of the world.
Within this huge market, the way we purchase and play videogames varies dramatically from region to region, but has traditionally involved purchasing consoles, or games, upfront, which can be prohibitively expensive for the consumer. Cloud Gaming saves the user time and money by eliminating the need to download, install or upgrade games or to spend significant sums on consoles or hardware. With cloud gaming, the consumer doesn’t need physical (or even virtual) space to store games, as the whole gaming experience is cloud-based.
It is not just us at PlayGiga that think this. Electronic Arts (one of the worlds largest publishers, and creator of Fifa 19, Battlefield V, Madden NFL 19) believes cloud gaming is “the greatest disruption” to the world of entertainment in the last 5 years. That is why they acquired Gamefly’s cloud gaming technology in May 2018.
And it is not just Electronic Arts, now all the major publishers are facing the dichotomy of either developing their own solution or licensing it from a tech provider to compete in this new paradigm of the video games industry.
The majority of gamers cannot play the best games on their PCs. Steam, the main video games online store, estimates that 53% of existing PC gamers that have purchased games through Steam, are unable to play the latest AAA games, as their PCs do not meet the minimum hardware requirements. This affects most of the bestselling games such as Assassin’s Creed® Odyssey or Fallout 76® the most. Cloud gaming eliminates this barrier, as the game is streamed online, meaning that all of gamers who were previously unable to play these games can be brought back to these titles.
Therefore, streaming games from the cloud is significantly increasing the total addressable market of videogaming.
We believe we improve the gamers experience dramatically, for three reasons:
It already is a reality! PlayGiga already has a fully deployed cloud gaming service in four different countries with blue chip partners such as Telecom Italia (TIM) and Turner Broadcasting and has been live for a few years! However, it is clear that recent market developments provide a platform for acceleration in 2019:
One interesting point is that the market is not only beginning to recognize the opportunity that cloud gaming presents, but also just how difficult and time-consuming it is to develop the service in house.
5G combined with cloud gaming will be a gamechanger for videogaming due to four reasons:
We are already seeing major developments in the US and South Korea. By the end of 2018, Verizon began to offer 5G services in five cities in the US. South Korea is even more ambitious, targeting access for 30% of mobile subscribers by the end of 2020 (according to their government’s Ministry of Science and ICT).
For PlayGiga in particular 5G is really speeding up the transformation of the cloud gaming space. Since May 2018, we have been invited to collaborate with leading Telcos, such as ATT Foundry, or tech giants like INTEL, to research 5G performance using our technology to stream virtual reality games (as VR is an extreme stress case for 5G networks). We are also in discussions with leading US and South Korean Telcos to potentially launch our service in their markets leveraging their 5G network deployments.