This blog post has been repurposed and reposted from an earlier version originally published on SamKnows.com. Content may have been updated for clarity and relevance.
How big is cloud gaming going to be?
In January 2022, Microsoft announced its acquisition of Activision Blizzard—the creators of massive game franchises—for a staggering $68.7 billion. That’s about eight times what it paid for Skype in 2011, and nearly three times what it paid for LinkedIn in 2016. Why? Because when you have 25 million Game Pass subscribers to satisfy, content is paramount.
Many of the world's biggest tech firms are heavily investing in cloud gaming, including Microsoft with its Xbox Cloud Gaming, part of the Game Pass subscription, and Nvidia with its GeForce Now. These services allow consumers to access a vast library of titles without needing a console. With just a game controller and a screen, players can enjoy AAA titles in stunning 4K detail without waiting for large updates to download before playing.
However, the rise of cloud gaming services could place significant strain on broadband networks. In addition to the usual demands of gaming—such as low latency, no packet loss, and minimal jitter—these services also require streaming the game itself. Streaming games in 4K can demand 35 Mbits/sec on its own, not to mention the other traffic passing over Internet service providers’ (ISPs’) networks during peak hours.
Cloud gaming services have arrived and attracted millions of eager players. But the question remains: can broadband providers deliver the performance that gamers demand?
Game Latency Comparison by Country and ISP
How Latency Hits Games
The chart in Figure 1 illustrates the level of latency recorded in games across multiple ISPs in two different countries: the U.K. and Singapore. It highlights how the location of game servers can significantly impact latency, with gamers in Singapore experiencing higher latency across several popular titles due to the distance of the servers. Cloud gaming services will encounter similar challenges.
What Gamers Need
Before examining the demands of cloud gaming services, it's important to understand the performance metrics that matter to players of traditional console and PC games, as cloud gaming will need to meet these standards too.
Regular gaming demands low latency, low packet loss, and low jitter. Network responsiveness is crucial, especially in 3D action games where immediate feedback is needed for actions like firing a weapon or scoring a goal. Any noticeable lag can ruin the gaming experience.
Connection stability is also essential. Most online games use the User Datagram Protocol (UDP) for data communication over the Internet. UDP does not require packet retransmission, allowing brief connection interruptions to be tolerated without severe disruption. However, packet loss can still interfere with gameplay, causing brief lag or screen freezes.
This means that any packet loss will likely interfere with the game but allow you to keep playing rather than becoming hopelessly out of sync with the virtual world. Ideally, a single lost packet should not cause a significant slowdown, nor should it require players to wait while the game catches up. Players might experience brief lag, such as a momentary screen freeze or a quick speed-up of game events, before resuming normal play. Nevertheless, these moments are noticeable for gamers, and even a short stutter in an online game can be a matter of virtual life or death.
No broadband network is perfect, and gamers often become frustrated when minor connection interruptions disrupt gameplay. High latency can cause delays between button presses and on-screen actions, making it crucial to minimize this delay for a seamless experience. To address these challenges, game developers employ strategies to enhance network performance.
One strategy is for game clients to predict player actions, creating an impression of smooth, uninterrupted gameplay. This gives the illusion of immediate action on the player's screen, even if communication with the game server hasn't been completed. As a result, what appears on one player's screen might differ slightly from what other players see.
Moving Into the Cloud
So, we’ve established how regular games installed on consoles or computers work and the strategies they use to ensure the gamer gets a smooth experience. But how does that differ for cloud gaming services, where very little is processed locally?
First, it's worth highlighting the various ways in which game streaming services reach players. Let’s take Microsoft’s Xbox Cloud Gaming as an example. Subscribers can play an enormous library of Xbox console games on a wide range of different hardware. You can play through a smartphone application, with a game controller connected via Bluetooth; you can play through a web browser on almost any computer, again with a controller connected wirelessly or plugged into the PC; or you can play on an Xbox game console, streaming the game instead of downloading and installing it on the console itself.
Sony’s PS Now and Nvidia’s GeForce Now offer a similar range of hardware options to players, and that range of hardware is continually expanding. For instance, at CES 2022, Samsung announced that it would integrate GeForce Now into its range of smart TVs. Microsoft has also hinted at a streaming device similar to what Nvidia Shield TV used to bring GeForce Now to TVs.
In other words, cloud gaming services support a wide range of hardware and various connection technologies: 4G, 5G, the various forms of Wi-Fi, and Ethernet.
Although not essential for regular gaming, a substantial amount of available bandwidth is a prerequisite for cloud gaming. Microsoft’s system requirements state that you’ll need a data connection with a minimum of 10 Mbits/sec for Xbox Cloud Gaming, with some devices demanding 20 Mbits/sec for the best quality. It’s important to note that this isn’t the overall connection speed, but what you’ll need dedicated to the gaming service alone.
It’s a lot more demanding than a video streaming service. A 4K game stream requires much more bandwidth than a 4K Netflix stream because there are limits to what compression can achieve in real-time.
Mitigations are harder to implement as well. Streaming services such as Netflix and Disney+ can bring copies of their most-watched content closer to the consumer through content delivery networks (CDNs). This isn’t possible with cloud gaming—it’s not a fixed file that’s the same for every customer but an ever-changing, dynamic game world that may also be reacting to the actions of other online players. This setup is inherently reactive, as the cloud servers function like game machines. They continuously process information, using graphics cards to compute the game world and respond to user actions.
Peak Hours Demand
There’s another complication here. Peak-time congestion can be challenging in many homes, especially when multiple people are streaming video and music. During these peak hours, many people use the Internet for various activities, including streaming services and gaming, making network issues more pronounced. If cloud gaming takes off, it will place a heavy extra burden on both broadband providers and home router equipment.
Currently, ISPs are not overly concerned, but if cloud gaming becomes as popular as video streaming, they could face significant increases in bandwidth usage. Much of this increased usage would be transmitted over the Internet at a cost to them, competing with existing streaming services for bandwidth. In cloud gaming, any service interruption is immediately noticeable, and ISPs cannot afford increased latency while managing the data load.
Exceeding Expectations
Despite the challenges, one fact remains: if you’re on a solid, high-speed, and preferably wired connection, cloud gaming works, and the experience keeps getting better.
For example, playing Destiny 2 on an Xbox Series X with a standard television results in a total latency of approximately 93 milliseconds. In comparison, using a GeForce Now RTX 3080 membership, which streams at 120 frames per second, reduces the total latency for Destiny 2 to 56 milliseconds. This demonstrates that cloud gaming can offer performance comparable to or even better than traditional gaming setups for many players.
However, outperforming consoles isn’t only a matter of using the best gaming hardware in data centers. It’s also about companies bringing data centers closer to the user. Even if streamed games can’t be cached in the same way a Netflix movie can, latency can still be reduced by bringing the processing closer to the customer.
Efforts are underway in collaboration with data center partners and infrastructure peering networks to ensure low latency for users in major metropolitan areas. The goal is to achieve around 20 milliseconds or less of network latency for users located near these areas.
Strain on the networks?
Companies like Microsoft and Nvidia are making substantial investments in cloud gaming content and infrastructure. As a result, there’s little doubt that their bandwidth-intensive services will put additional strain on broadband networks. Broadband providers, however, view this additional demand as an opportunity to promote next-generation packages and demonstrate the need for faster Internet connections.
For example, BT justified increasing its broadband prices by nearly 10 percent, citing that customers’ data usage had increased considerably, up 90 percent since 2018. If cloud gaming does become mainstream, it will rapidly accelerate data consumption even further.
LG Uplus, an ISP in Korea, used cloud gaming to showcase the advantages of its superfast network. This approach is also applicable to 5G providers.
As broadband providers anticipate increased demand on their networks, they may seek compensation. If an ISP has forecasted usage for the upcoming years, but cloud gaming gains popularity more rapidly than expected, surpassing those predictions, the costs of addressing these challenges could be significant. ISPs might consider seeking a share of the revenue generated from services like cloud gaming due to the additional load on their networks. Consequently, the challenges for cloud gaming may extend beyond just video games.