Top Five Global Players in the Cloud Gaming Market
With the social gaming market’s potential for huge returns, the largest game developers are quickly moving to the cloud. This article explains why.
What is the appeal of social gaming?
According to studies done on the subject, there are three main reasons why people engage in social gaming:
- To entertain themselves when they are bored.
- To be part of a social circle and fit in with their peers.
- As a way of escaping reality.
Many gamers also engage in social games because of the competitive aspect, which is gaining more widespread appeal with better marketing and competitive in-game structures. (A good example of this phenomenon is the incredible popularity of StarCraft in South Korea as a spectator competitive sport.)
Trends in social gaming
Initially, most social games used a pay-to-play subscription model. However, one of the largest trends in social gaming has been the acceptance of a free-to-play model, which still allows companies to quickly monetize in the following ways:
- Some games allow access to all in-game content but sell vanity items and advantages. While it is possible to experience the whole game for free, paying subscribers will have richer, easier and more customized gaming experiences.
- Other kinds of games restrict access to certain parts, but leave enough for free to attract new players. This model of gaming strongly encourages purchase of a subscription to access the full version.
- There are some games (mainly social browser games) that use a completely free to play model and monetize on advertisements and product placement, offering customers a paid version that is ad free.
The top five gaming companies and involvement in cloud gaming
- Activision-Blizzard. This company tops the list with an impressive annual revenue of $4.7 bn from online gaming. It is the second most important game developer in the world and, thanks to the massive popularity of World of Warcraft, the undisputed leader of MMORPGs (Massive Multi-player Online Role Playing Games.) New games released in this genre are inevitably measured against eight years of World of Warcraft – and come up short. World of Warcraft uses a standard subscription model.
- Vale. This company generated $2.25bn in 2011 from online gaming, mostly due to first- person shooter games, starting with their Counterstrike series and continuing to Team Fortress series. Vale pioneered free-to-play movement by switching Team Fortress to this model and selling in-game vanity items.
- Sony. Sony is leading the console race when it comes to online gaming. Revenues of $1.9bn mainly come from implementation of the PlayStation Network (PSN.) This online service has no monthly subscription fee, unlike its competitors’, and has allowed Sony to generate impressive profits from online gaming without releasing as many high profile and expensive game titles.
- Microsoft. Xbox Live Arcade is PSN’s biggest competitor, allowing Microsoft to generate $1.75bn in 2011 alone. Microsoft’s revenue, unlike Sony’s, comes mainly from their popular games including their main cash cow, Halo.
- Zynga. Zynga’s successful integration with social media networks has led to development of incredibly popular games. Although currently experiencing some backlash, their social gaming model is likely to represent the future of online gaming.
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About the Guest Author:
Nida Rasheed is a freelance writer and owner of an outsourcing company, Nida often finds herself wanting to write about the subjects that are closest to her heart. She lives in Islamabad, Pakistan and can be found on Twitter @nidarasheed.
