Cloud technology is disrupting almost every field, and the gaming industry is no exception. Cloud gaming is a new-age technology that allows users to stream high-end games with fast network connectivity across various devices, such as laptops, tablets and mobiles. It has eliminated the need for a dedicated gaming con­sole/per­sonal computer, and enables gamers to play games on almost any portable device, from anywhere in the world. Through cloud ga­ming services, gamers can access high quality interactive games remotely without bearing the additional cost of expensive com­puter systems. To construct next-generation social entertainment platforms, cloud gaming services are focusing on leve­raging hyperscale cloud capabilities. With cloud storage replacing on-site storage, cloud gaming is expected to gain further prominence in India.

Market dynamics

The emergence of cloud gaming platforms has only made it easier for developers to produce new games for a wider market. India presents itself as a game-developing ecosystem owing to a growing consumer base. An abundance of creative talent, the presence of a youth demographic and con­du­ci­ve infrastructure and technology mak­e India a suitable destination for game deve­lopment. With around 420 million ac­tive online gamers and a 500 million-strong di­gitally native population aged 15-35 years, India is set to become one of the fastest growing markets globally.

According to Fortune Business Insig­ht, the global cloud gaming mar­ket size stood at $1.72 billion in 2021, and is ex­pected to rise from $3.24 billion in 2022 to $40.81 billion by 2029 at a compound annual gro­w­th rate of 43.6 per cent during the forecast period. The market grow­th is likely to be aided by increased investments in 5G technology and affordable access to various cloud-based games. As investments in the 5G network increa­se, creating an ecosystem for a variety of games, the gaming industry in India is ex­pected to witness enhanced growth.

Growth drivers

5G

With the launch of 5G services in India, cloud gaming is expected to gain traction as 5G promises a fast, stable and low latency network. In the cloud gaming set-up, the server accepts the user’s control inputs, processes them and then tries to deliver the result as soon as it can. So, it all comes down to how fast the server can respond to the input without showing a considerable lag. Cloud gaming requires a network with a very low time gap between the request and the response. Here, 5G has a significant edge over its predecessor technologies. It promises very low latency of about 5 milliseconds in contrast to 4G la­tency, which ranges from 30 milliseconds to 100 milliseconds.

Cloud adoption

The growing popularity of cloud infrastructure has resulted in an abundance of co­mputing, storage and communication re­sources that are dependable, cost effective and low maintenance. These cloud compu­ting capabilities may be used for a variety of purposes, with gaming services being one of the fastest growing cloud computing in­dustries. The market is experiencing multiple cloud gaming platform launches.

Smartphone adoption and internet accessibility

The growth of the cloud gaming market can be attributed to the growing proliferation of affordable smartphones and internet penetration. The number of internet users is increasing rapidly. According to a recent report published by the Internet and Mobile Association of India, there will be 900 million internet users in India by 2025. The expansion of the internet market in India is expected to have a positive impact on the market growth of cloud-based gaming. Moreover, India has one of the cheapest internet tariffs in the world. The rapid penetration of smartphones in India, complemented by the cheap internet tariff, is already providing a conducive environment for the cloud gaming industry to thrive.

Youth demographic

India has a significant demographic advantage with 46 per cent of the population being under the age of 25 and 67 per cent being in the working class (ages 15-64). This demographic is considered a major factor in the growth of the gaming industry. According to a survey conducted by KPMG, 75-80 per cent of the respondents in the 18-24 and 25-36 age groups reported playing at least one to three times a week. Engagement is perceived to be higher in the age group of 37-50, with nearly 50 per cent reported to be playing more than four times a week.

Current status

In India, cloud gaming has been witnessing an unprecedented growth in the number of users and average time spent. Acc­or­ding to a report, an estimated $544 million was infused into the gaming sector du­ring the August 2020-January 2021 pe­ri­od. The mobile game app market in In­dia is on an upward trajectory. A growing number of investors is showing a keen in­terest in the Indian gaming industry.

In an industry first, Bharti Airtel, in 2021, conducted a cloud gaming test in Ma­nesar, Gurugram, to become the first telco in India to tap into the cloud gaming space. Following the trend, Reliance Jio launched JioGamesWatch under its Jio­Games offering. JioGamesWatch is a st­re­a­ming platform that provides an immersive and interactive game streaming experience across multiple Jio devices.

Further, Vodafone Idea Limited (Vi) recently partnered with Paris-based Care­­Game to launch 5G mobile cloud ga­ming in India. Making AAA mobile ga­ming acc­essible to Vi users, the partnership will en­able mobile gaming enthusiasts to enjoy high quality mobile games across popular genres on any Android or iOS smartphone device, without any download. In a similar move, Vi has partnered with Maxamtech Digital Ventures and Nazara Technologies Limited to launch multiplayer and competitive gaming content under Vi Games.

Further, Tech Mahindra has launched its cloud gaming-as-a-service offering. This service will be offered through Tech Ma­hindra’s cloud-based platform powered by Ludium Labs. Tech Mahindra and Lu­di­um Lab will promote their cloud gaming services jointly, targeting leading companies in the telecommunications industry, such as mobile originals, cable operators, smart TV original equipment manufacturers, and other organisations seeking to op­timise connectivity for an enhanced ga­ming experience in today’s digital world.

Separately, The Gaming Project, India’s first cloud gaming platform, has raised $500,000 as seed funding from the FAAD Network along with Upsparks, BlackKite, and SucSEED Indovation Fund, among others. The Gaming Project is democratising access to AAA games with its cloud ga­ming platform that allows users to play any video game/AAA game on any device (mo­biles, laptops). Also, in a major thrust to the gaming industry in India, the second edition of the India Gaming Conclave 2022 was held recently. The conclave outlined the industry’s vision for 2022 and beyond, with an eye on global and domestic trends, as well as India’s potential to disrupt the gl­o­bal industry in the near future.

Government intervention

The government is taking active steps towards promoting a secure and conducive environment for the online gaming industry to thrive. In its confidential draft report dated August 31, 2022, a government panel has called for a new regulatory body under the Ministry of Electronics and Informa­tion Technology to determine whi­ch online games qualify as games of skill, and then seek compliance and enforcement. The report asserted th­at India needs a new federal online gam­ing law, which will provide regulatory fle­xi­bility with punishment provisions, along with blocking powers, against prohibited gaming formats. In addition, the government has taken several initiatives to drive growth in the domestic gaming industry. It has set up the Anima­tion, Visual Effects, Gaming and Co­mic Centre of Excellence. In addition, 100 per cent foreign direct investment is per­mitted in the gaming space. India’s fla­g­ship programme, Digital India has escalated the gaming industry to a certain ex­tent. The government’s Digital Village sc­he­me is also aimed at increasing internet usage and smartphone penetration in rural In­dia. In addition, the Ministry of Educa­tion is wor­king on policies to create job opportunities for students in online gaming and toys. Recently, India conducted the Smart India Hackathon to help students showcase their online gaming skills. Also, data cen­t­re pa­r­ks and related initiatives in the country are aimed at providing digital infrastructure for upcoming gaming companies.

Outlook

Going ahead, cloud gaming is a segment that could gain prominence in India once 5G is launched in the country. 5G will re­define cloud gaming by providing a be­tter gaming experience. Consumers can opt to pay more or switch connectivity provi­ders for the new gaming experience. Also, as the gaming industry continues to evolve, advanced 5G and fibre connectivity are expected to create new opportunities for ga­ming innovations such as massive multiplayer augmented reality games on mobile, or untethered, immersive virtual reality games.

Anand Kumar Sah