The latest multi-player gaming battle isn't on your TV screen but out in the real world. Google, Sony, Apple and other tech behemoths are fighting to dominate a games market that is expected to grow to $160 billion next year. And, as in the games themselves, each player in this contest has distinctive strengths.
Today's most popular games are all-against-all multi-player battles such as Fortnite, made by Epic Games, which has attracted 250 million players worldwide, largely because it works on any platform – PC, console, smartphone or tablet. Fortnite has proved that there's a large market, and money to be made, for a service that can provide the high-quality games of the PC and console world, while drawing in more casual mobile gamers.
Click, stream, play
In March, Google announced plans for just such a service. Stadia, which will launch later this year, will stream video games to any device; just click on a YouTube video and the game will start within five seconds. No expensive console, no downloads, no discs. It's easy to see why gamers were excited. It will also help strengthen YouTube's position in another important gaming market, currently led by Amazon's Twitch service – watching live streams of games being played and streaming your own.
With Stadia, a Google data centre will run the games that are then compressed and streamed to the players. Each button press or flick of the joystick travels the other way, in milliseconds. Importantly, gamers will be able to play against thousands of others simultaneously, regardless of their equipment.
The challenge will be streaming console-quality visuals without “lag” – delays in the time it takes for data to travel between you and the server. If you're playing a soccer game, for instance, and see an opportunity to shoot, the controls must respond instantly. A similar service, OnLive, failed in 2015 because of such lag problems. Technology has improved since and Google says it can stream games in 4K resolution at 60 frames per second. But players will need an internet connection with download speeds of at least 25 megabits per second for Stadia to work.
A bigger question is which games will be on Stadia. Games sell consoles, so Sony, Microsoft and Nintendo cultivate exclusive titles to complement the multi-platform ones. Every platform has EA's soccer game Fifa, for example, but only Microsoft's Xbox offers the Gears of War series.
The console lives
Just weeks after the Stadia announcement, amid reports that consoles were doomed, Sony revealed plans for what would be a PlayStation 5, expected in 2020. The “next-gen console” will offer technical advances on the PS4, from faster processing power to “ray-tracing” technology for super-realistic graphics. Realism is a big selling point for console gamers, whether they want lifelike characters in first-person shooters like The Division 2 or racing cars replicated down to the sponsors' logos, including Pirelli's, in F1 2019. The question is whether consumers see value in buying a console, when they could just click on a YouTube video and play.
It's no secret that new consoles aren't profitable. The money comes from selling games, plus subscriptions for things like online play, then add-ons, such as additional levels or special weapons. In recent years, console makers have been under pressure from mobile games, many of which are free to play and monetised solely by add-ons. Nobody knows yet how Stadia will make money, but Google could certainly put a squeeze on the console business if it can somehow offer its entire service free of charge.
Console makers are dabbling in streaming, just in case. Microsoft will begin trialling its xCloud streaming service later this year. Like Stadia, it's expected to be usable on any device. Sony offers streaming, too, through PlayStation Now, but only to PC users or those who already have a console.
Gaming on the go
PC and console gaming accounts for just over half the industry's revenue, with the rest coming from mobile. Today's best smartphones are powerful enough for console-quality games, however controlling a complex game on a touchscreen can be fiddly, so casual games have tended to dominate.
As with consoles, existing industry players are trying to expand their reach. Tencent, the Chinese conglomerate that part-owns Fortnite, is reportedly considering producing a dedicated gaming smartphone. Snap, which makes the social media app Snapchat, is pushing in-app games.
Meanwhile, Apple is planning a cross-platform offering, albeit one confined to its own devices. Its forthcoming Arcade promises “over 100 new and exclusive games”, for a monthly fee, on iPhone, iPad, Mac and Apple TV. Analysts predict that by 2024, the service could generate more revenue for Apple than its TV or News subscription services.
Mobile and console gamers can already play together, but the opportunity for services like Stadia is to be truly multi-platform – bridging devices with a broad library of games. That would deliver a better experience for gamers and open a wider customer base for service providers.
Stadia faces plenty of competition, both in the high-end PC and console realm and the more mainstream mobile space. In gaming speak, the next 12 months will show whether Google will level up or be forced to restart.
