The Revolution in the Video Game Business

The End of Consoles and the Beginning of the Streaming Era

Netflix and Spotify have revolutionized the film and music industries respectively, through the introduction of streaming, introducing the concept of content accessible from any device at any time. A technological innovation that has also brought the business model of subscription services to the fore.

The gaming industry seems to be the next to be hit by this revolution.

The eternal struggle between Sony and Microsoft in the video game market moves on to be able to offer the best game libraries, accessible in streaming, at the most affordable price.

However, there is no shortage of outsiders: digital giants like Google and Apple that forcefully enter the market with their game streaming solutions.

esport gamer

The Revolution

The gaming industry will be the next to be hit by the streaming revolution, the revenue driver for companies will no longer be the sale of consoles, but the sale of subscription services.
The technology is simple, as is the case with Netflix, the contents are not saved locally, for example on the PC, but on servers, allowing access to any content remotely, or in streaming.

This technological innovation profoundly changes the business model of the market players; the revenues will be strictly linked to the number of active players each month, so it will be important to maintain a sufficiently high level of diversification and quality of the offer.

Gamers no longer have to incur a relatively high initial outlay to start playing, eliminating the barrier to buying the console and physical copies of the games. Less enthusiastic gamers will be able to decide to use the service even for short periods, paying it only for the actual use, this could therefore increase the number of subscriptions sold.

Another advantage for players will be that of being able to have always updated hardware, which is not obvious especially for those who play from computers, a platform where quality hardware components (video cards, RAM, etc.) play a fundamental role for a perfect usability of video games. On the other hand, a disadvantage is represented by the need for a very fast internet connection, which is not taken for granted in all parts of the world.


The Response of the Veterans

The giants of the gaming market did not wait for their response to this innovation.
Microsoft has made it known, at the Electronic Entertainment Expo 2019 (E3), that it wants to launch its own streaming service called “Project xCloud” . Microsoft’s goal is to eliminate the console, transforming the Xbox into a sort of server through which to use constantly updated hardware and a vast library of games, offering the possibility to connect from different devices such as smartphones, tablets and computers.

Sony instead, it had launched its library of games that can be streamed, without owning a PlayStation, as early as 2014, making it immediately available in Japan and in 2015 in the USA. This service, called Playstation Now, arrived in 2019, and on the same day the platform was also launched in Spain, Portugal, Norway, Denmark, Finland and Sweden.

PlayStation Now can be used from any device, in fact it is also compatible with different versions of the Microsoft operating system: Windows 7 Service Pack 1, Windows 8.1 and Windows 10; to start playing the game, all the user has to do is sign up for the service, download the PS Now app to the computer and connect the controller.

The fight between Sony and Microsoft has been going on for decades, until now it was based on the sale of consoles, now, probably, whoever manages to offer the best games catalog, in terms of quality and breadth, will win.

New Opportunities

The technological innovation of streaming gaming also opens the market to new companies, which can exploit this lever to diversify their business.

Google is certainly not new to this type of strategy, and has, in fact, recently presented its new project called “Stadia, which even integrated streaming on Youtube, to allow players to create live gameplay.

“Born as Project Stream, we developed it to deliver world-class titles from our Chrome browser. This means that it will be possible to play on any device, starting from the phone, breaking down the traditional limits of the video game sector, it will be a platform for everyone.” Google CEO Sundar Pichai said.

Another company that will enter the video game market is Apple, which aims to create its own streaming gaming platform by focusing on games developed by independent houses and big names. “Apple Arcade”, this is the name of the project, will not only be limited to selecting the titles and production companies, but will work closely with the developers, contributing to the development costs and following the entire creative process.