PC Gaming, A $32 Billion Industry, Is Going To Change Dramatically Due To New Cloud Technology – Forbes

Nvidia Founder, President and CEO Jen-Hsun Huang delivers a keynote address at CES 2017 at The Venetian Las Vegas on January 4, 2017 in Las Vegas, Nevada. CES. (Photo by Ethan Miller/Getty Images)

At the Consumer Electronics Show two weeks ago, Nvidia announced the GeForce Now product and improvements to their Shield TV. Based on the pricing model announced, $25 for 20 hours of gaming, they’re offering a service for people to test PC gaming before making the full investment in owning their own hardware. Since, the starter card in the latest generation of GPUs from Nvidia (the GTX 1060) costs only $250 on Amazon, it doesn’t make much sense to use GeForce

Now, in terms of serious gaming. If you plan on playing more than 200 hours, you should just buy the card. The infrastructure costs for hosting these GPUs is unknown, but it’s absurdly expensive relative to what Amazon Web Services charges for similar cloud hosting. It’s likely a play to protect Nvidia’s massive $3.5 billion consumer PC gaming business. But cloud gaming is coming for many reasons, and times have changed since the spectacular failure of OnLive. The confluence of more bandwidth, ubiquitous access to h.264 hardware compression, and cloud data centers makes this the right time to build cloud gaming technology.  

Why Are People Excited About Cloud Gaming?

The general goal for cloud gaming is to unbundle gaming from the hardware that plays high quality games. If you want to play PC games or console games, you have to make a significant investment in that hardware prior to playing a game. If you want the best experience at a low price, you’ll have to build your own gaming PC, which is still really difficult and expensive. Unbundling the hardware from the games will have a drastic impact on growing the gaming market, especially for graphically intense AAA budget games. PC games are already a multibillion-dollar market, but a lot of players are stuck using low quality machines. Steam, the largest seller of PC games online, identifies approximately 20% of its users on machines without discrete graphics cards. All of these people are ready to try cloud gaming. Additionally, if you separate the hardware from the games, there’s also a potential to lower the development costs of games due to legacy support and the overall price due to hardware licensing.

Why Is Cloud Gaming Happening Now?

Cloud gaming has certainly been tried before. The biggest company in the space a couple years ago was OnLive. The company failed after burning $5 million a month on server costs. Consumers also weren’t happy with the performance because of a lack of bandwidth and significant lag. Gamers hate lag, which is caused by the latency between a mouse click and the time it takes to see the result. OnLive was based on software that has been replaced by specialized chips called h.264 encoders. These offer much better performance on video compression. Additionally, cloud data centers offer incredibly low latency to densely populated areas. The median users of Parsec.tv, a cloud gaming company that I founded, have 54mbps of bandwidth and 28 milliseconds of latency to Amazon data centers. Amazon continues to invest and open new data centers and optimize connection routes for.

Amazon Web Services Global Datacenter Footprint

Amazon Web Services Global Datacenter Footprint

What Does This Mean For PC Hardware Companies?

Intel expects the gaming PC hardware market to grow at 26% annually. One researcher believes that the PC gaming hardware market will reach $30 billion in 2018. With overall PC sales slumping, this market is a very bright spot for hardware makers. AMD and Nvidia specifically don’t want this market to be replaced by cloud resources, and it’s likely a reason Nvidia released the GeForce Now product at such a high price. With the launch expected in March, it should be very exciting for gamers, and gaming will only become more popular as people, especially men, look for an escape during their leisure time.

Benjy Boxer is the co-founder and CEO of Parsec. You can follow him on Twitter.

Comments

Write a Reply or Comment:

Your email address will not be published.*