Examining the Effect of the Cloud on the Gaming Industry

August 7, 2017 Off By Hoofer
The growth of cloud services is radically altering the gaming industry, while its side effects are rippling through the real world. Let’s examine the effects of the cloud on the gaming industry and its impact on gamers, sports and technology as a whole. We’ll also address the factors that drive game developers to make these shifts to their business model and the benefits of making these changes.

The Shift to Subscription Only Services

The traditional model of selling computer games was selling a cartridge or DVD from which someone installed the game. World of Warcraft became incredibly profitable by offering an immersive, interactive experience for around $20 a month, every month for years. Minecraft offers subscription based versions and server rentals for those who want to run their own, custom Minecraft worlds. Contrarily to Roblox, for instance. In this case, they make money off both subscriptions and renting virtual servers. After being bought by Microsoft in 2014, the company also started selling games for the Xbox, a rare example of a cloud based game becoming a hybrid product available both via the cloud and the traditional installation disk. If you want a complete rundown of what separates Minecraft from its closer competitor, visit this page.

The shift to the cloud for delivering games enables this shift to subscription only services by requiring people to pay to log into the cloud service. In contrast, people become very annoyed when they buy a disk and have to log in via a cloud to access the physical media, which is why Quicken’s parent company trying to require cloud based authentication to access the Quicken application and data stored on one’s own computer generated a backlash.

Game developers favor the cloud based subscription model because it provides a continual stream of income; they don’t have to live in a boom or bust cycle and hope they generate enough revenue to sustain them until the new game comes out. When the game is hosted on a cloud server, releasing new game versions and recruiting beta testers is also easier.

The Growth of "Free" Games

When your game is hosted in the cloud, resources like memory and bandwidth can be scaled up almost immediately based on demand. If you’re small, you can keep the game running with a minimum of ongoing expenses. This enables more "free" games to come onto the market hosted in the cloud, since you only have to market via social media or word of mouth instead of printing packaging and producing installation DVDs.

Why put free in quotes? Because there are costs involved in developing and hosting the game. Some games generate revenue to pay for these costs through advertising, while others make money selling items in game like extra lives, weapons one would otherwise have to complete hours of mindless tasks to earn and access to extra levels. Before you write this off, remember that Candy Crush earned a billion dollars with its "dollar per extra life" charge in an otherwise free game.

A Stronger Gaming Community

When the game takes place online, it is very easy for players to network with each other on social media and create a community, in contrast to people chatting with their friends via the Xbox servers. This creates brand loyalty that you may not see with traditionally available games. Millions play Minesweeper every day, but you don’t see the millions made from merchandising as is done with Minecraft Lego sets, T-shirts and toys. "Call of Duty" has fans, but it doesn’t have a strong enough community to sell merchandise.

A side benefit of cloud services used to host games is the ability to manage users. Yes, online games that let you talk to anyone enables trolling, but a number of gaming services have been able to set up multiple game servers and banish the trolls to game servers populated only by other trolls. You haven’t banned them, which costs you their revenue stream, but you’ve made the gaming experience much better for everyone else.

Gaming as a Sport

Video games as a sport, or esports, is taking off. It is driven in part by an audience used to watching others play video games, fed by the use of services like Twitch to capture, upload and share with the world one’s accomplishments in game whether winning through unusual methods or funny actions taken in the virtual world. The now built in tools for capturing the best moments of a game or live stream game play provides a massive amount of content for online video platforms that one can cull for "best of" segments; this has led to TV shows on the best YouTube videos and the League of Legends reality show announced in Australia in July, 2017.

There are several reasons why variation groups want to promote esports as a professional option. For colleges, it is a low cost way to cultivate "sports" and STEM at the same time. As of March 2017, 17 colleges had varsity esports teams. Game developers want to use the events to promote their new and classic games. The low cost of setting up servers and convention halls to facilitate gaming tournaments compared to new sports stadiums is another reason why gaming is becoming a sport.

Games? There’s an App for That

Cloud services enable the promotion and distribution of apps, including games. Cloud services also host the low cost game development tools that are so easy to use that you don’t have to know how to code to create basic shape sorting, puzzle, stealth shooter and adventure games. Create a new game via tools hosted on the cloud and then pay to port it to an app that you sell for a few dollars per download or offer it for free to your customers in exchange for in-app advertising by the game development platform.

Another benefit of these cloud based software development tools is the fact that they are designed to support nearly every type of device. Using these simple game development services allows you to convert the same game, depending on the service, into apps for the iPhone and Android devices, games available online and even executables one can install on a computer.


Cheap existing infrastructure, a passionate community of followers, and built in technology are facilitating the rise of electronic sports (gaming). The growth of online gaming and apps has led to the similar growth of cloud based game development tools that don’t even require knowing how to program to create cheap little apps delivered via the cloud to one’s device or accessed through a webpage. The expansion of cloud services and links to social media has turned many online games into social communities so passionate that merchandising is a hit, while game developers are shifting to subscription services or selling items in game to raise money, instead of going through the boom and bust cycle of coming out with new games every few years.