The era of cloud games is coming, how will the game industry be reshaped?
The wave of 5G applications swept through, and cloud games may become killer applications in the 5G era. On the one hand, the features of 5G broadband and low latency make it possible for cloud games to run smoothly. In turn, cloud games' high color depth, high resolution and other requirements make them consume huge amounts of traffic, which will effectively improve the 5G network utilization of operators, thus promoting the popularity of 5G in the consumer end.
The following content will be analyzed in depth from the perspective of market space, business model and industrial chain. As one of the applications expected to take advantage of the rapid development of 5G Dongfeng, what changes cloud games may bring to the entire game industry in the future.
Transform users and expand market
According to Newzoo data, the global game market in 2018 reached US $134.9 billion, of which mobile games, console games and PC games accounted for 47%, 28% and 25% respectively. Mobile games account for the largest proportion of the market due to the convenience and economy of using devices, while console games and PC games each account for about a quarter of the market share.
Yiou Think Tank believes that the popularization of cloud games in the future will reduce the threshold of hardware devices and enrich user experience modes to a certain extent, thus bringing new user increment and market scale to the game industry.
In terms of hardware threshold, according to the survey data of Alphawise, 10% and 7% of the players do not play console games and PC games because the hardware is too expensive. It can be seen that the high hardware cost has raised the user access threshold, making it difficult to release the demand of some players. This potential market space needs to be stimulated.
Cloud games do not need to run games on their own devices. Instead, they can receive game images on local devices after the cloud server processes data and renders, realizing the transfer from the player end to the cloud server end, freeing the hardware devices on the user end. Therefore, the popularity of cloud games will make it easier for players who used to be constrained by hardware prices to become new users and realize market space growth.
In terms of experience mode, cloud games can break the current multiple restrictions and bring more in-depth and interactive game experience. The development of cloud games can promote the rapid introduction of more high-quality games, make the game trial mode more mature, reduce the trial cost of users, and further improve the user's game experience and willingness to pay. For example, "Tencent Play Now" does not need to download and install and cumbersome login process. It can start playing directly after entering the game interface through the public account, significantly improving the user's trial and conversion rate.
Innovative payment and optimized mode
Along with the development of the industry, the game payment mode has also undergone many changes, including the purchase and download of games, the payment of card time, the payment of free games but props, and subscription payment. From the following figure, 2014-2023E, the proportion of various types of revenue in the global game market, we can see that the proportion of subscription revenue in the global game revenue is rising year by year, and it is expected to gradually become one of the mainstream payment methods in the game industry in the future.
Cloud games provide streaming media game content. The whole process is carried out in the cloud, and the charging mode will also show some unique features.
In the white paper on cloud games jointly released by Huawei iLab and Shunwang Technology, it is pointed out that at present, subscription mode or hourly "cloud cafe" mode is widely used for cloud games at home and abroad. The subscription mode mainly charges for the set package of game content, and packages and rents the cloud game console and game content to users; The "Cloud Internet Cafe" mode mainly charges for the cloud game platform, that is, the cloud computer is leased to users according to the configuration and use duration.
The figure below is a summary of the charging modes of some currently running cloud game platforms. Generally speaking, there is little difference between the charging levels of various platforms. The two main modes can basically meet the needs of users while ensuring the benefits of the platform. According to the calculation of Huawei iLab Lab, the charging mode of 3-4 yuan per hour for cloud games can achieve break even within two years.
Weakening channels and encouraging content
Different from the traditional game industry chain, which mainly includes game developers, game publishers and distribution platforms, the cloud game industry chain mainly includes upstream (game developers, cloud computing service providers, software and hardware manufacturers), midstream (cloud game platforms) and downstream (terminal device providers), as shown in the figure below.
At the initial stage of the development of the game industry, due to the scarcity of user resources, the channel providers have strong bargaining power in the industry chain, and the "channel is king" effect is obvious. However, in the later stage of development, on the one hand, due to the continuous improvement of industry concentration, the strength of high-quality content manufacturers is constantly increasing, and their voice is also gradually increasing; On the other hand, the deep penetration of instant messaging and the rapid rise of emerging media have diluted the importance of major channels such as app stores by multiple channels, thus gradually weakening the voice of channel merchants.
The popularity of cloud games will also promote this trend and further promote the restructuring of the traditional game industry chain. Game developers will benefit greatly from the weakening of channel roles.
From the perspective of channels, many high traffic applications emerge one after another in the era of cloud games. Cloud games no longer need to be downloaded through channels, and the decline of barriers for players to enter and exit new games will also lead to a decline in the retention rate of customers in traditional channels. The combined effect of these factors will reduce the commercial value of traditional channels. Under the combined effect of the above factors, the commercial value of traditional channels will decline, and the bargaining power will be weakened. Channels will no longer be the most important link in the cloud game industry chain.
From the perspective of content supply, high-quality content is scarce in the early stage of the development of the cloud game industry, and the competitiveness and differentiation of the cloud game platform need to rely on high-quality games to achieve, so as to conduct horse racing and education market through high-quality content. Therefore, in the future, the bargaining power of game developers in the cloud game industry chain will be further improved and they will have more say.
On the whole, cloud games are in the early stage of development, with low technology maturity and incomplete infrastructure construction. Therefore, in the short term, cloud games are more catalytic to the valuation of enterprises in the industry. But in the long run, the popularity of cloud games will bring new development opportunities to the entire industry chain and inject more new vitality into the game industry. Industry participants need to recognize the industry change trend in advance and seize the opportunity to seize the cloud game market in time to occupy the commanding heights of the game industry competition.
