Subscription and cloud gaming is gaining a firm foothold in the entertainment space, according to a new report from Futuresource Consulting. The firm’s latest figures show global revenues of $5 billion in 2021, with the market on track to hit $13.6 billion in 2026.
“We’re seeing two contrasting business models emerge as the market players settle into their niches,” says Maxym Dmytriyev, a gaming research analyst at Futuresource Consulting. “On the one hand, we have the more traditional route of monthly subscriptions for content or cloud services. This is the domain of GamePass, Playstation Plus, EA Play and Nvidia GeForce Now.
“Then there’s the GPU rental model, where cloud computing is hired out on a per-hour basis through services such as PaperSpace or Maximum Settings. This is primarily the domain of early adopters with a knack for PC gaming customisation. And while less complicated services do exist, consumer awareness is still at a low level, though rising fast.”
Futuresource estimates that 80% of subscription revenues are currently being driven by nine key subscription services, namely .
Launched in 2017, Microsoft’s GamePass is one of the most prominent subscription library services on the market, and the catalyst for many of its competitors. As an early entrant, Microsoft commands a healthy share of the market, exceeding 25 million subscribers at the end of 2021. With aggressive pricing, an expansive library, and day-one releases of its AAA titles, Futuresource estimates that GamePass accounts for a quarter of all subscription and cloud gaming revenue.
And while the rental model captured around 30% of total combined revenues in 2021, Futuresource expects this to decline throughout the forecast period, shedding 10 percentage points by 2026. That’s due to the strength of subscription services, with GamePass the primary driving force.
“Moving forward, 5G rollout will play a pivotal role in the widespread uptake of subscription and cloud gaming services,” says Dmytriyev. “By 2026, we expect to see 2.9 billion active 5G devices installed across consumer electronics and automotive, with smartphones taking a 94% share. This will open the door for streaming services to better compete with traditional hardware-based gaming, particularly in emerging markets where smartphone penetration is relatively high when compared to console penetration.”
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