Gamers, media and industry executives descended on Los Angeles last week for the Electronics Entertainment Expo, more commonly known as E3, the video-game industry’s largest trade event. New games were on display and there was a lot of excitement over a new generation of consoles from Xbox and Playstation. But one of the biggest topics of the week was the potential represented by streaming technology.
After having reduced the barriers to digital music, turning declining music-industry revenue into three years of growth and making movies and TV so easy to watch online that cable cutting has accelerated and piracy declined, streaming is now coming for video games — and it could seriously change how and where we play.
For decades, consoles have determined many players’ access to games. But with the advent of streaming services, the console cycle may not matter as much. Just as Netflix, Amazon Prime and other streaming video services compete primarily with great content, the companies launching game streaming services will be further incentivized to produce fantastic immersive experiences to attract players to their offering.
For decades, consoles have determined many players’ access to games. But with the advent of streaming services, the console cycle may not matter as much.
The Nintendo Wii and smartphones introduced millions to casual gaming, while YouTube and Twitch — owned by Google and Amazon, respectively — allowed people to upload or livestream their gaming experiences for millions more to watch. Up until now, people haven’t been able to play games without good enough hardware, but soon they’ll be able to play whatever they want, whenever they want and wherever they want, as long as they have a good internet connection.
Sony and Microsoft, the makers of Playstation and Xbox, are preparing for this future. Sony’s Playstation Now service, launched in 2015, has around 700,000 subscribers paying $10 per month for access to close to 800 games that can be streamed to Windows PCs or Playstation 4. Sony is pursuing a Netflix model where people pay a monthly fee to access a large library of games, which it intends to expand as it prepares to launch its next console.
Microsoft, on the other hand, has a subscription service called Game Pass, but it has less than half the number of games as Playstation and doesn’t allow streaming; players have to download the game to their console or PC. However, it is planning a slow rollout of its own streaming service called “Project xCloud” in October that will eventually be available on Xbox, PC, mobile platforms and possibly even the Nintendo Switch. Microsoft says xCloud “has the technical capability to stream more than 3,500 games,” but that doesn’t mean it’ll have that many games at launch.
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Game-streaming services require a global network of data centers, so that whenever a player presses a button, it will take mere milliseconds for that instruction to be communicated to the servers. Microsoft, Google and Amazon already have this capability, and Sony and Microsoft announced a partnership in May that will see Sony move its services to Microsoft’s data centers; such additional collaboration between competitors is likely an attempt to fend off Google and Amazon.
Jim Ryan, CEO of Sony Interactive Entertainment, is clear that Playstation and Xbox “will remain separate, with their separate identities and brands and fans,” but given that they’ll be operating on similar hardware, developing games for both platforms will be easier. Plus, being on the same set of data centers could make cross-platform play even more common. These are benefits for players, but such benefits could also boost brand loyalty.
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Amazon has yet to detail its game-streaming plans, but Google has been more open. The search giant’s Stadia streaming service will be closely integrated with YouTube to make it attractive to livestreamers and will eventually have some exclusive games created by a new division within the company.
But unlike Sony and Microsoft’s Netflix-for-games services, Stadia will require users to purchase games before they can be streamed, unless publishers offer libraries of games for an additional fee. Ubisoft, for example, will offer over 100 games for $14.99 per month, but there are more costs to consider. At launch in November, users will have to buy a $129 package including a Chromecast Ultra and Stadia controller and pay a $10 monthly fee. Paying subscribers will have access to a small catalog of free games and a free tier will be available sometime in 2020 with fewer features.
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Google has deep pockets, but it doesn’t have the relationships and track record of Sony and Microsoft. Sony’s first-party development studios have a long-standing reputation for delivering incredible games, which is a major selling point of the Playstation brand, while Microsoft has been making significant investments to grow its in-house studio team. Xbox head Phil Spencer referenced Netflix’s $12 billion content spend in an interview with GamesIndustry.biz, noting that investing in content will be important moving forward.
That doesn’t mean there aren’t potential problems, however. Independent developers are worried about how games will be curated and how they’ll be paid. Privacy advocates have concerns about how streaming services use their users’ data. And YouTube’s controversies regarding algorithms and content-moderation policies could impact its partnership with Stadia.
There are still a few kinks to work out, and it will likely take several years for streaming to ramp up. But between making any game playable without powerful hardware, offering libraries of games for relatively low prices and further incentivizing developers to churn out the best possible experiences, streaming tech offers gamers a lot of reasons to be excited about the future.