Yesterday, gaming giant Electronic Arts acquired Swedish gaming company ESN, which creates web- and cloud-based services for game developers. It’s further proof that EA is bolstering its cloud-gaming services to keep up with its audience, which is now as used to web and mobile social games as it is traditional video games, such as EA’s Fifa or Madden NFL.
Cloud gaming poses a potentially significant threat to gaming industry stalwarts because it makes the need to buy hard copies of video games obsolete. When you’re streaming and playing from the cloud, you don’t need to wait months or years on a lead time for the newest version of a game–it’s simply expected that as developers make improvements, you’ll see those updates reflected in your games much more quickly, the way frequent app updates work on your smartphone. That’s generally great news for gamers as, in theory, it means new games will be the latest and greatest versions of all the time.
But it’s not great news for EA-type games publishers and console makers. Naturally, EA’s not alone in this game of catch-up. Sony is another big player making bets on cloud gaming. In July, Sony acquired streaming video-game maker Gaikai for $380 million to bring its gaming services to the cloud, where it’s free to stream to any device, not just Sony-produced ones such as the PlayStation.
A Global Industry Analysts report projects the cloud gaming market will hit $2 billion by 2018. That may seem paltry compared to the $78.5 billion the global video game market is projected to make in revenue this year, but $2 billion is more significant when you compare it to the much tamer $8.5 billion of total revenue that’s coming from mobile games on smartphones and tablets.