Even as the battles over streaming video intensify, two of the most financially successful technological firms on the planet are uniting to launch a new wave of content disruption. The anticipated worldwide video gaming market of US$150 billion1 is the beachhead this time, and it could influence how media and entertainment are consumed in the future.

On smartphones, gaming consoles, and PCs today, the majority of games are downloaded and played locally. While player accounts, in-game purchases, and social features are supported via network connections, the games itself are run on the players' devices. Game developers create services around popular game titles so they may continuously update those games with fresh content and react to user input on social streaming platforms. In this way, cloud gaming has been developing for a while.A game is totally stored in data centres and delivery networks when it is played in the cloud, which eliminates the need for downloads and effectively turns a user's device into a linked high-resolution terminal. This has real advantages for both the player and the service provider. Cloud gaming services are utilising hyperscale cloud capabilities, international content delivery networks, and streaming media services to create the next generation of interactive, immersive, and social entertainment platforms in order to facilitate this transformation. Leading gaming corporations have reacted by announcing alliances with disruptors or strategies to create their own competitive solutions. Numerous telecommunications companies are evaluating their networks' capacity to handle the extraordinary demands of moving potentially billions of gamers to streaming services. A game's whole existence in data centres and delivery networks is possible with cloud gaming

With more than 2.5 billion gamers worldwide,the opportunity and the impact may be considerable.Cloud gaming could eliminate the need for specialized consoles while allowing gamers to play any game from almost any device; it could enable game companies to develop richer experiences supporting far more players; it could drive telecoms, internet service providers, and content delivery networks to significantly expand their capabilities while stoking demand for 5G; and it could shift the balance of power across the video game industry, placing top cloud gaming providers at the hub of the distribution pipeline.

The video game industry is mature, and its success has only grown. It is unclear whether the prospect of cloud gaming offers sufficient incentive for game companies and players to radically change how they create, distribute, and consume video games. Nevertheless, many technology and telecom companies are steadily moving into media and entertainment, and even game companies are beginning to think like broadcasters.

Indeed, some have dubbed cloud gaming “the Netflix of video gaming.” This comparison may be instructive, but not for the ways many people think. Netflix introduced its streaming service in 2007 and in four years had exceeded 23 million subscribers—over 280 percent growth, mostly in streaming.Few at the time recognized the value of streaming, so competition was minimal, and the company found it relatively easy to license content. Neither of these conditions exists today, and streaming video games is a much bigger technical challenge than streaming video.

The technology: How does it work?

On the market for years, services that stream games have been slow to take off, hampered by bandwidth and latency challenges. Most games are purchased as hard media or are downloaded to a device—a smartphone, gaming console, or PC.

Cloud gaming moves content execution off the consumer’s device and into the cloud. Similar to how video streaming services deliver content, the view of the game is streamed to the player’s device via content delivery networks (CDNs) with regional points of presence near population centers. As with video, size matters: A small smartphone screen can display a good-enough game stream with considerably fewer bits than are required to render acceptably on a 55” 4K television. A larger stream consumes more bandwidth, placing greater demands on the user’s connectivity. To manage throughput, cloud streaming services must dynamically adjust to deliver the fewest number of bits needed for the best experience on a given device.

The content of streaming video, such as a movie, is the same for everyone watching, and it only reaches the user downstream. In video games, players constantly control the media that is shown to them, giving each player a different perspective. Video games typically cannot buffer to eliminate lag, whereas video streams can. The majority are essentially real-time.

Cloud gaming moves content execution off the consumer’s device and into the cloud.

Every time a player inputs an action in gaming in the cloud, the system sends it back upstream to the game engine through the network. After that, the game needs to send the action back across the network to the players and update the view to reflect it. Due to the fact that for many games, any latency greater than 75 milliseconds can cause players and actions to become out of sync8, the difficulty of this sequence is increased for massively multiplayer online games, in which hundreds or thousands of players participate simultaneously.

More and more gamers are using messaging, audio chat, and even streaming video of their games as they play, sending even more data upstream.9 Mobile gamers may not notice these bandwidth issues, but immersive gamers, fans of multiplayer games, and esports players may require even more connectivity.

The promise of cloud gaming—opportunity or inevitability

Cloud gaming services promise to break gamers' hardware ties and let them play the same game on any device that can access their accounts and accounts. Services suggest that lower-income consumers will be better able to participate by not having to purchase a console or high-end gaming PC, thereby increasing the number of players. They also want to make it easier for spectators to turn into players and for casual or infrequent players to increase their level of participation by shortening the time between interest and engagement. Discovery could be enhanced by recommendation engines that match interests to specific games or play styles. Since updates to existing games would take place automatically in the background, downloading games would be unnecessary—a relief for gamers, of whom more than three-quarters are dissatisfied with the time and potential for play interruptions associated with downloading and updates.

Cloud gaming's ability to overcome a player's smartphone, console, or PC limitations is a key promise for game developers. The cloud may not be able to handle a game that is as large or complex as it is, and multiplayer games that typically limit player counts to 100 may expand to thousands or more. Even if they continue to control in-game purchasing, game companies would no longer be required to manage downloads and purchases. Although it is unclear who would own player data in a streaming arrangement or what proportion of in-game advertising delivery services might take, there may be a more direct link. On top of the new infrastructure, new hybrid entertainment formats and business models might emerge.