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Cloud Gaming Triggers a Vintage Renaissance. Are Handhelds Back for Good?

The gaming industry has long been renowned for its consistent streams of innovation. This latest wave has enabled the concept of cloud gaming to finally become a reality in the last few years. It’s certainly understandable to see why. As games get bigger, they require more internal storage space on both consoles and PCs. Therefore, the simple appeal of being able to store and launch games in the cloud – connection willing – is crystal to gamers.

It's also becoming much clearer to vendors too. Despite Google’s recent announcement that it would shutdown its Stadia game streaming service in January 2023, there are still of registered cloud gamers spread across Xbox Game Pass, Sony’s PS Now, Nvidia’s GeForce and Amazon Luna, further compounding consumer demand for effortless storage and quick-launch gaming.

For vendors looking for a way to harness the mounting momentum for cloud gaming, a re-launch of a classic seemed inevitable – right?

What Better to Propel Cloud Gaming Forward Than a Blast from the Past?

After all, handhelds were once a solid pillar of the gaming community – with lasting appeal. Spearheaded by Nintendo way back in 1979, the eighties, nineties and a solid stretch of the noughties saw a veritable smorgasbord of handheld gaming devices, each vying for consumer attention. However, each came with their own drawbacks – and ultimately – a shelf life, largely triggered by the triple threat of consistent improvements to graphics, blockbuster-style cinematics and online multiplayer gameplay – all requiring much higher specifications and greater hardware.

It was, however, Nintendo that – once again – revived the humble handheld by launching the Switch in 2017. While upgrades on the concept were evident – and its success undeniable – there have still been drawbacks, including the fact that Nintendo has always been a relatively closed ecosystem, which, despite its advantages for Nintendo loyalists, ultimately clashes with the ethos of true cloud gaming.

It's Now Full Steam Ahead for Cloud Gaming

In a move, perhaps unsurprising to seasoned gamers, given the developer’s longevity on the scene, Valve were the first big hitters to announce a handheld device in 2021. However, the main difference is that the Valve Steam Deck is actually a handheld PC that uses a custom AMD chip and can store and run games internally, as well as via the cloud with a Game Pass subscription. This ultimately gives gamers an incredibly flexible device, and is a marked difference between its competitors. The Valve Steam Deck began shipping in February, closely followed by the Logitech G Cloud Gaming Handheld launch this October.

Razer then unveiled its new handheld gaming platform – the Razer Edge – at the annual RazerCon, with shipment expected to begin in January 2023. While the company has advertised the Razer Edge as a cloud gaming platform, given the industry hype, it is worth noting that the device isn’t a strictly cloud gaming device. Ultimately, due to the lack of console tier-games available for mobile at the moment, the Razer Edge allows gamers to download and emulate games to play natively, making the Logitech cloud handheld gaming device the only true cloud gaming device on the market.

The future is certainly looking bright for cloud gaming, and according to Futuresource Consulting’s in-house gaming expert, Max Dmytriyev, these first devices in the cloud gaming handheld device space certainly won’t be the last.

“CES takes place at the beginning of 2023, and I would not be shocked to see more cloud gaming subscription services and handheld device announcements from big brands in attendance,” says Max. “Leveraging the potential of cloud gaming technology and services removes the need for platform specific games, tech and even discs. Games are being served to players on a platter – all they need is a capable enough system to run their preferred game. It is, once again, an exciting time for the gaming industry, for cloud gaming, and for handhelds.”

Once Bitten, Twice Shy? Early Verdicts on Handhelds are Uncertain

Despite its solid history in the gaming industry, the life expectancy of handhelds has always been relatively limited. What’s different this time around? Indeed, there have been some initial questions around why handheld devices are once again entering the heady throes of another gaming renaissance. After all, gaming has gotten much bigger – and more exciting – smartphones are now more than capable of gameplay, so who is the target audience?

Interestingly, with the exception of the Razer Edge, which will have a dedicated 5G connection (exclusively with Verizon), both the Steam Deck and the Logitech Handheld rely on a stable WiFi connection to access the cloud. Perhaps not an issue to the former, given that it is a PC-first device, and while internet connectivity has become much more stable in public in recent years, but there are still limitations to playing games on handheld devices when out and about.

There’s also price to consider. At present, the Logitech Cloud Gaming Handheld has a $349 price tag and requires a separate cloud subscription service to run. While the Steam Decks start at £349 for 64GB of storage. For a heftier amount of storage – 512GB – players are looking at an equally hefty price tag at £569. Of course, as the market begins to saturate with competitor devices, these prices will inevitably decrease and plateau. But for now, it feels that the cloud gaming handheld device appeal lies with a niche group of dedicated gamers, looking to further invest in their hobby and extend their hardware to adapt to their gaming lifestyles.

Handheld Cloud Gaming Shows Promise. But How Will It Evolve?

The gaming industry is fuelled by a blend of consistent consumer demand and waves of innovation. With the likes of Meta marching forth in its quest for a virtual reality, and early reviews for smart glasses and augmented reality gaming being overwhelmingly positive, it does pose the question: how will these cloud gaming handheld devices evolve?

“The demand for cloud gaming is not going to abate, it holds far too much long-term promise for a growing share of casual gaming consumers,” says Max. “The interesting – and perhaps exciting – thing about the revival of handheld games is how vendors will continue to innovate to meet consumer demand, but to also incorporate other innovations being seen across the gaming industry.”

Max continues.

“Pimax recently announced a new project, Pimax Portal, which may be an indication of where the market is headed – although perhaps prematurely? A combination of handheld gaming device, with a virtual reality headset seems like a mammoth task for such a small company.”

He continues.

“Even mid to large size companies often flop focusing on one element alone, and with the likes of Meta in the same space, content may become a problem. To truly stand apart, it would be interesting to see Pimax take the approach Nintendo have with the Switch. Users have the ability to play on the go, and dock at home to resume gameplay on a big screen. It doesn’t seem like the technology is there, if early predictions of the project are anything to go by, but that could be where the market is going in the future.”

There’ll be more insight from our in-house gaming expert, Max, when Futuresource attend CES in early January. Until then, please click here for more of Max’s insight in our recently published gaming headsets & accessories report.

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Maxym Dmytriyev

About the author

Maxym Dmytriyev

Maxym Dmytriyev joined Futuresource as a Research Analyst in 2021, he specializes in research and report production for the whole Gaming Market, and has worked on reports for wider Consumer Electronics. Prior to Futuresource, he graduated with a BA in Business Management from the University of Sheffield.

Vicki Hayward

About the author

Vicki Hayward

Vicki Hayward joined Futuresource in February 2022, joining the marketing team as strategic press, partnership, events and content lead. She gained a first-class English Literature and Film degree and has over a decade of PR, brand communications and marketing experience – as well as 21 years of experience writing award winning content and blogs.

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